GLOBAL STRATEGIC ANALYSIS, Test 03, 2021

Winter 2021/22 30 Minutes Page1/5

Name: Albert Adusei Brobbey

Matr.Nr.:

Points

Industry Evolution and Strategic Change

Multiple Choice Questions

1. The main forces driving industry evolution are:

a. Technology and demand

b. Technology and globalization

c.The quest for cost and differentiation advantage

d.Government policies and global financial flows

2. The different stages of the industry life cycles are defined primarily on the basis of:

a. The rate of growth of industry sales

b. The characteristics of competition within the industry

c. The pace of innovation within the industry

d. None of the above

3. The characteristic profile of an industry life cycle has an 'S' shaped curve because:

a. It is modeled on the Product Life Cycle, which is also 'S' shaped

b. It is generated by a quadratic function

c. It reflects the changing pace at which technology is diffused

d. It is the result of changes in rates of growth of market demand

4. Which of the following developments is not a typical feature of the transition from the "introductory" to the "growth" phase of the industry life cycle?

a.The emergence of a dominant design

b.The shift from product to process innovation

c.The shift of production from advanced to emerging countries

d.Rapid market penetration

5. The duration of the industry life cycle:

a. Typically extends over a century or more

b. Is determined by the longevity of the firms within the industry

c. Has become compressed as the pace of technological change has accelerated

d. Depends upon the ability of the industry to sustain innovation

6. A dominant design is best described as:

a. A technical standard

b. The product design chosen by the leading firm in an industry

c. A common product architecture

d. The culmination of the process of commodification that accompanies industry evolution

7. A technical standard tends to emerge in an industry if:

a. Economies of scale are present

b. The industry has converged around a dominant design

c. The industry is subject to economies of learning

d. Network effects exist

8. Which statement best describes the extent to which different industries conform to the same life cycle pattern?

a. The duration of the life cycle varies from industry to industry

b. The same stages exist whatever the industry

c. All industries have experienced a shortening of the stages of their life cycle

d. Different industries go through a renewal of their fife cycle at different stages of their development

9. The transition from the introduction to growth phase of the industry life cycle features:

a. Increasing product differentiation

b. Declining innovation

c. Offshoring of production

d. Product innovation giving way to process innovation

10. Firm entry rates tend to be highest during the growth stage of an industry life cycle because:

a. Shortage of production capacity keeps margins attractive

b. The propensity for entrepreneurs and venture capitalists to imitate one another

c. Growing legitimacy of the industry attracts resources to the industry

d. Both (a) and (c)

11. The history of the retail sector over the past 150 years points to:

a. The tendency for retailing to follow the same pattern of growth, maturity and decline as most other industries

b. Increasing globalization

c. Revitalization through continuous strategic innovation

d. Increasing commoditization as differentiation declines

12. Industries change is mainly a result of:

a. Government policies

b. The death of existing firms and the birth of new firms

c. Continuous adaptation by a constant population of firms

d. Changing customer preferences

13. "Shakeout"--a period when many firms exit from an industry following a period of intense competitioncharacterizes an industry's transition from:

a.Introduction to growth stage

b.From growth to maturity

c.From maturity to decline

d.From product innovation to process innovation

14. With the onset of the maturity stage, the number of firms in most industries:

a. Remains stable

b. Decreases significantly, then stabilizes

c. Rises

d. Rises sharply until shake-out is triggered

15. The term "competency trap", refers to:

a. The hubris that affects the senior managers of successful firms

b. The tendency for firms with competitive advantage based in one industry to fail when they diversify into a new industry

c The tendency for capabilities based on highly developed organizational routines to be a source of inflexibility

d. The tendency for managers to be reluctant to change the strategies that brought them their initial success

16. According to institutional sociologists, the propensity for organizations to adopt similar structures ("institutional isomorphism") is primarily a result of

a. Common key success factors within an industry

b. Bounded rationality

c. The complementarity among different managerial practices within firms' "activity systems"

d. The propensity of firms to imitate one another as they seek legitimacy

17. An organizational routine is:

a. A stable, repeatable, pattern of coordinated activity among organizational members

b. A lower-level, operational capability, as opposed to a dynamic capability which tends not to be routinized

c. The resource needed to create a new capability

d. A new capability after it has been institutionalized within an organization

18. The field of "organizational ecology" studies:

a.Companies' contributions to environmental sustainability

b.Changes in the population of firms in an industry

c.The process of competition between different types of firms

d.Management practices that promote the evolutionary adaptation of firms.

19. Which of the following is not a source of organizational inertia?

a. The tendency for organizations to limit themselves to local search

b. Organizational routines

c. Complementarities between the different activities of a firm

d. The hierarchical structure of large firms

20. When an industry is subject to technological change, the ability of new entrants to displace incumbent firms will be increased if:

a. The technological change represents an architectural innovation rather than component innovation

b. The technological change is competence enhancing rather than competence destroying

c. Incumbent firms are insufficiently attentive to the industry's largest customers

d. Incumbent firms are geographically dispersed

21.The reluctance of shipping companies to switch from sail to steam propulsion can be attributed to the fact that:

a.The owners of shipping company were resistant to new technology

b.For several decades after the introduction of steam ships, sailing ships were faster, cheaper, and more reliable

c.Complementary resources such as engineers and coaling stations were scarce

d.Shipping company owners were over the environmental impact of coal burning ships

22. When a company places its new businesses or new products into separate organizational units from its established business activities, this is an example of:

a. Contextual ambidexterity

b. Structural ambidexterity

c. Both contextual and structural ambidexterity

d. Effective change management

23. The experience of Xerox Corporation with its Palo alto research Center and GM with its Saturn division points to:

a. The disadvantages of geographically-separated business units

b. The folly of mixing contextual and structural ambidexterity

c. The difficulty of transferring innovation developed in a separate exploration unit back to the main company

d. The need for chief executives to be more closely involved in R&D

24. Changing a company's organizational structure can facilitate strategic change because:

a. It can help break down established power centers

b. It provides a means for CEOs to centralize decision making power

c. It can convince investment analysists that real change is taking place

d. It can improve the alignment of organizational capabilities with organizational units. The managers which head different organizational capabilities need to have clear lines of reporting

25. The main reason why a firm's distinctive capabilities reflect the conditions that the firm faced during the early years of its development is because:

a. Most managers adhere to the old adage: "If it ain't broke, don't fix it"

b. Capabilities that develop early become embedded in a firm's organizational culture

c. Exploitation tends to dominate exploration

d. Managers' bounded rationality

26. IBM, 3M, and General Electric are companies that demonstrate, over periods of several decades, the capacity to adapt to multiple changes in their external environment. These companies are characterized by:

a. Dynamic, entrepreneurial CEOs

b. Corporate cultures that value and celebrate risk taking

c. Business processes that sense and seize opportunities

d. Embracing diversity

27. The capabilities of "craft enterprises" are based upon the tacit knowledge of skilled employees. The capabilities of "industrial enterprises" are based upon systematized knowledge located within processes. The key advantage of industrial enterprises over craft enterprises is that:

a. They can replicate their capabilities at low cost in multiple locations

b. They are less vulnerable to shortages of skilled workers

c. They can standardize their offerings

d. They can automate their production.