Question 1(1 point)

A business-level strategy has to do with exploiting core competencies and gaining a competitive advantage in specific product markets.

Question 1 options:

True

False

Question 2(1 point)

A key drawback of the integrated cost leadership/differentiation strategy is that it is riskier than either the cost leadership or differentiation strategies.

Question 2 options:

True

False

Question 3(1 point)

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The location advantages associated with locating facilities in other countries can include all of the following EXCEPT

Question 3 options:

lower cost labor

access to customers

access to critical supplies

evasion of host country governmental regulations

Question 4(1 point)

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John Smith is starting a company that provides tax advice to small companies. In order to position his company differently from the existing competitors, he must

Question 4 options:

offer tax advice at a price lower than the cheapest competitor

offer tax advice at a higher quality than the best competitor

analyze the reach, richness, and affiliation the company must have with its customers.

provide tax advice either in a different manner or to provide a different kind of tax service than competitors

Question 5(1 point)

Saved

Cost-Less Ceramics, Inc., provides reasonable quality, inexpensive ceramic tile to builders of institutional buildings. It has always competed on a cost leadership basis. Most of its products are purchased by a few commercial construction firms, so it is fairly dependent on these construction firms for selling its product. Cost-Less Ceramics's next most-efficient competitor Durable Ceramics, Inc., earns average returns, while Cost-Less Ceramics earns above-average returns. The commercial construction firms are putting pressure on Cost-Less Ceramics to reduce its prices. If Cost-Less Ceramics reduces its prices below those of Durable's prices, it is likely that

Question 5 options:

Cost-Less Ceramics will be unable to absorb the lower cost, and will go out of business

Durable will go out of business, and Cost-Less Ceramics will gain higher power over its customers

both Durable and Cost-Less will devise additional ways to become more efficient in their production processes

both Cost-Less and Durable will go out of business, leaving the customers with fewer alternative sources of low-cost tile

Question 6(1 point)

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Evidence suggests that acquisitions often harm the acquiring firm financially.

Question 6 options:

True

False

Question 7(1 point)

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Wm. Wrigley Jr. Company bought Life Savers and Altoids from Kraft. Thus, Wrigley

Question 7 options:

is integrating vertically

probably plans to restructure these companies and sell them off

as become a conglomerate since Life Savers and Altoids are unrelated businesses.

is abandoning its traditional dominant-business strategy

Question 8(1 point)

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A large domestic market can provide the country's industries a chance at dominating the world market because

Question 8 options:

the upstream and downstream industries will have been developed

they already developed economies of scale at home

they have learned from diversification domestically

large markets encourage labor force flexibility

Question 9(1 point)

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Which of the following is a value-reducing reason for diversification?

Question 9 options:

conforming to antitrust regulation

achieving economies of scale

achieving economies of scope

expanding the business portfolio to enhance top management's compensation

Question 10(1 point)

Saved

Ethnic origin would be an appropriate basis for segmenting the market for a radio station.

Question 10 options:

True

False

Question 11(1 point)

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In countries with small domestic markets, globalization is the only way for manufacturing firms to achieve economies of scale.

Question 11 options:

True

False

Question 12(1 point)

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The higher the barriers to entry, the less likely firms will use acquisition as a means to enter a market.

Question 12 options:

True

False

Question 13(1 point)

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As an international entry mode, licensing combines low cost and high control for the licensor.

Question 13 options:

True

False

Question 14(1 point)

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In response to COVID-19, a nation-wide alliance of independent hospitals has formed to do group purchasing of emergency medical supplies. Group purchasing allows the alliance to negotiate speedy delivery and lower prices because of the large quantity of materials ordered. This is an example of the advantage of ____ resulting from an alliance.

Question 14 options:

tacit collusion

market power

explicit collusion

economies of scale

Question 15(1 point)

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Although both companies have Internet access to potential customers, the most striking difference between Barnes and Noble's access to customers and Amazon.com's access to customers is the difference in the ____ dimension of relationships with customers.

Question 15 options:

Responsiveness

Affiliation

Reach

Richness

Question 16(1 point)

Saved

International strategy is a(an)

Question 16 options:

action plan to compete against foreign companies operating in the domestic market.

action plan to cope with global competition

strategy through which the firm sells products in markets outside the firm's domestic market.

strategy that firms use to dominate global markets

Question 17(1 point)

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The acquisition of Volvo by Geely Holding of China will probably result in activity sharing because Geely has a reputation for technology transfer. This is an example of

Question 17 options:

virtual integration

operational relatedness

vertical integration

corporate relatedness

Question 18(1 point)

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To be successful, corporate-level strategy should result in the businesses in the corporate portfolio being worth more under the management of the corporation than they would be under any other ownership.

Question 18 options:

True

False

Question 19(1 point)

Saved

Because of the lack of protection of intellectual property in some foreign countries, licensing arrangements are ineffective for firms to protect their technologies from being appropriated by potential competitors.

Question 19 options:

True

False

Question 20(1 point)

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Researchers have found that following the acquisition, shareholders of the acquisition targets often

Question 20 options:

earn above-average returns

earn below-average returns

earn close to zero as a result of the acquisition

are not affected by the acquisition

Question 21(1 point)

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International strategic alliances are more risky than domestic strategic alliances due to diversification across countries.

Question 21 options:

True

False

Question 22(1 point)

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In principle, competitive advantage is based either on low cost or uniqueness.

Question 22 options:

True

False

Question 23(1 point)

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When two or more firms join together to create an independent firm, they enter a nonequity strategic alliance.

Question 23 options:

True

False

Question 24(1 point)

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The code-sharing arrangement between Delta and Aeroflot was a cooperative alliance between airlines that involved no investment in a separate entity. This is an example of a(an)

Question 24 options:

nonequity-based vertical complementary alliance

nonequity-based horizontal complementary alliance

equity-based vertical complementary alliance

equity-based horizontal complementary alliance

Question 25(1 point)

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An international strategy that gives equal weight to global integration and local responsiveness is called

Question 25 options:

Equilibrium strategy

Transnational strategy

Global strategy

Multidomestic strategy

Question 26(1 point)

Saved

Which of the following is TRUE?

Question 26 options:

As customer loyalty increases, customers are more sensitive to price increases.

Customer loyalty is fragile and cannot be reliably considered a factor in firm success.

Customer loyalty is of importance only to firms using a differentiation strategy.

None of the above

Question 27(1 point)

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The means of entry into international markets that offers the lowest control is

Question 27 options:

joint ventures

greenfield ventures

licensing

acquisitions

Question 28(1 point)

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Acquisitions may reduce the cost of new product development and increase speed to market.

Question 28 options:

True

False

Question 29(1 point)

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The majority of R&D intensive firms internationalize because

Question 29 options:

scientific talent is scattered across many nations

major investments necessitate large markets for earning above-average returns

imitation is fast and firms must pursue international market immediately

of governmental pressure

Question 30(1 point)

Saved

Having a competitive advantage in ____ creates more value in the cost leadership strategy than it does in the differentiation strategy.

Question 30 options:

human resource management

research and development

financing

inbound and outbound logistics

Question 31(1 point)

Saved

When managers become overly focused on making acquisitions, it is

Question 31 options:

because competitors have already made similar moves

because acquisitions improve financial performance

because the skills of top executives are better used in major corporate decisions than in daily organization operations

because it provides more excitement than running the company on a daily basis

Question 32(1 point)

Saved

Consumer research shows that the taste of premium-priced tequilas and inexpensive tequilas are indistinguishable even to regular drinkers of tequila. But the sales of premium tequilas are thriving. This is an example of

Question 32 options:

the importance of high-quality raw materials when using the differentiation strategy

the perception of uniqueness being important to firms following the differentiation strategy

the risk of product imitation by competitors

the danger counterfeiting holds for firms pursuing the differentiation strategy

Question 33(1 point)

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A(an) ____ occurs when one firm buys a controlling, or 100% interest, in another firm

Question 33 options:

spin-off

Merger

Acquisition

Restructuring

Question 34(1 point)

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In multidomestic strategies, the ability to customize for the specific market comes at a cost of sacrificing economies of scale.

Question 34 options:

True

False

Question 35(1 point)

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Acquisitions are a preferred means of new product development because they do not subject the acquiring firm to any risks.

Question 35 options:

True

False

Question 36(1 point)

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Cross-border acquisitions are typically made to

Question 36 options:

increase a firm's market power through concentration

take advantage of higher education levels of labor in developed countries

Speed up the cost of new product development.

Work around entry barriers in another country.

Question 37(1 point)

Saved

Expanding a firm's portfolio of businesses tends to increase top managers pay.

Question 37 options:

True

False

Question 38(1 point)

Saved

The main difference between the related constrained level of diversification and the related linked level of diversification is

Question 38 options:

the percentage of total organizational revenue that comes from the dominant business.

whether the diversification is value-creating or value-neutral.

whether the diversification is vertical or horizontal.

the level of sharing of resources and activities among the businesses

Question 39(1 point)

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Each of the following is a rationale for acquisitions EXCEPT

Question 39 options:

positioning the firm for a tactical competitive move

achieving greater market power

increasing speed of market entry

overcoming significant barriers to entry

Question 40(1 point)

Saved

The three main luxury hotels in a major tourist destination keep very close track of their competitors' room pricing, restaurant offerings, tour packages, and special services such as airport transportation and spa privileges. When one hotel makes adjustments in prices or offerings, the other hotels follow suit. It is possible that these hotels are

Question 40 options:

monitoring business competitors for opportunistic behaviors

following a competitive response strategy

engaging in tacit collusion

following uncertainty reducing strategies

Question 41(1 point)

Saved

Diversification is only beneficial to top-level managers when it provides benefits to shareholders.

Question 41 options:

True

False

Question 42(1 point)

Saved

India's Tata Motors' acquisition of Jaguar, a U.K.-owned car company, is an example of both a cross-border acquisition and a

Question 42 options:

merger of equals

horizontal acquisition

forward vertical acquisition

backward vertical acquisition.

Question 43(1 point)

Saved

Alliances are a good way to test whether the partners would benefit from a future merger.

Question 43 options:

True

False

Question 44(1 point)

Saved

Firms that have selected a related diversification corporate-level strategy seek to exploit

Question 44 options:

economies of scope across business units

market power

speed of communication among business-unit managers

adjustment for seasonal effects

Question 45(1 point)

Saved

Unlike mergers, takeovers are always hostile.

Question 45 options:

True

False

Question 46(1 point)

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Tacit collusion between the firms is an example of:

Question 46 options:

Complementary cooperative strategy

Uncertainty-reducing cooperative strategy

Competition-reducing cooperative strategy

Competition response cooperative strategy

Question 47(1 point)

Saved

Geographic proximity is one of the factors explaining success of network cooperative strategies among Silicon Valley firms.

Question 47 options:

True

False

Question 48(1 point)

Saved

The use of alliances

Question 48 options:

may be too restrictive to facilitate entry into new markets

is unlikely to yield success if partnering firms are headquartered in the same country

is increasing, especially among large global firms

usually increases the investment necessary to introduce new products

Question 49(1 point)

Saved

Which type of strategic alliance is best at passing tacit knowledge between firms?

Question 49 options:

joint ventures

nonequity strategic alliances

equity strategic alliances

cooperative networks

Question 50(1 point)

Saved

General Motors finds itself with excess capacity in its plant and equipment for car manufacturing. This excess capacity will be useful in

Question 50 options:

corporate restructuring

related diversification projects

multipoint competition

unrelated diversification