Quiz of Strategic Management and Agile Enterprises

Class: YP 67C
Date: Wednesday, August 30, 2023
Name:
NIM:

Chapter 2 and Chapter 3: Strategic Input

MULTIPLE CHOICE

1. According to the chapter’s Opening Case on Philip Morris International, the company’s joint venture
with Swedish Match to market smokeless tobacco is a move to address which segment of the general
environment?
a. Political/legal.
b. Global.
c. Technological.
d. Sociocultural.

2. As the Opening Case in chapter 2 notes, Philip Morris International’s commitment to sustainable
tobacco farming, efficient use of natural resources, reducing waste in manufacturing, eliminating child
labor, and giving back to its communities is part of its actions in the ________________segment of the
general environment.
a. Physical
b. political/legal
c. Sociocultural
d. Industry

3. Analysis of the _____________segment of the general environment led Philip Morris International to
conclude that fewer people would risk disease by consuming tobacco products.
a. political/legal
b. Physical
c. Demographic
d. Sociocultural

4. The three parts of the external environment which affect a firms strategic actions are
a. economic, political, and legal
b. general, industry, and competitor
c. industry, business, and product
d. local, national, and global

5. The ____ environment is composed of dimensions in the broader society that can influence an industry
and the firms within it.
a. General
b. Competitor
c. Sociocultural
d. Industry
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 6. The environmental segments that comprise the general environment typically will NOT include
a. demographic factors.
b. sociocultural factors.
c. substitute products or services.
d. technological factors.

7. Which of the following is NOT an activity used in the external environmental analysis process?
a. Scanning
b. Decrypting
c. Monitoring
d. Assessing

8. Analyzing income distribution would include all of the following EXCEPT

a. the purchasing power of various age groups.
b. the discretionary income of various ethnic groups.
c. wage differentials between male and female employees working for a large manufacturer.
d. how income is distributed among regions of the U.S.

9. Demographic changes include variations in income distribution. Which of the following statements is
true?
a. Firms are most interested in the consumers comprising the top ten percent of the
household income.
b. Consumers’ real income has been increasing steadily since 1976.
c. The general loss in real income has been somewhat offset by the increase in dual-career
couples.
d. Workforce diversity is making the concept of average income obsolete.

10. An analysis of the economic segment of the external environment would include all of the following
EXCEPT
a. interest rates.
b. international trade.
c. the strength of the U.S. dollar.
d. the move toward a contingent workforce.

11. The political/legal segment of an environment represents

a. the political preferences of different ethnic groups in the society.
b. the technological values of different political entities in society.
c. how organizations and governments mutually try to influence each other.
d. the system of regulations governments at all levels place on businesses.

12. All of the following are aspects of the political/legal segment of the general environment EXCEPT
a. antitrust laws.
b. attitudes and values.
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 c. free trade agreements between nations.
d. industries chosen for deregulation.

13. An analysis of society’s attitudes and values would be conducted when studying the ____ segment of
the general environment.
a. sociocultural
b. global
c. demographic
d. economic

14. The observation that in mid-2009, the global automobile industry had the capacity to build 94 million
vehicles per year, 34 million more than actually needed, is an aspect of the ____ segment of the
general environment.
a. demographic
b. global
c. physical
d. technological
15. Global warming and energy consumption trends are aspects of the _____________ segment of the
general environment that firms should monitor.
a. technological
b. physical
c. sociocultural
d. economic
16. Green restaurant design, sustainable packaging, waste management, and energy efficiency are aspects
of the ______________ segment of the general environment that McDonald’s has sought to address.
a. technological
b. political/legal
c. global
d. physical
17. The likelihood of entry of new competitors is affected by ____ and ____.
a. barriers to entry, expected retaliation of current industry organizations
b. the power of existing suppliers, buyers
c. the profitability of the industry, the market share of its leading firm
d. the demand for the product, the profitability of the competitors

18. Which of the following is NOT an entry barrier to an industry?

a. expected competitor retaliation
b. economies of scale
c. customer product loyalty
d. bargaining power of suppliers
19. New entrants to an industry are more likely when
a. it is difficult to gain access to distribution channels.
b. economies of scale in the industry are high.
c. product differentiation in the industry is low.
d. capital requirements in the industry are high.

20. Economies of scale refer to the fact that as the

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 a. quantity of product produced in a given time period increases, the cost of manufacturing
each unit increases.
b. quantity of product produced in a given time period increases, the cost of manufacturing
each unit remains constant.
c. quantity of product produced in a given time period increases, the cost of manufacturing
each unit decreases.
d. quantity of product produced in a given time period decreases, the cost of manufacturing
each unit decreases.

21. Switching costs refer to the

a. cost to a producer to exchange equipment in a facility when new technologies emerge.
b. cost of changing the firm’s strategic group.
c. one-time costs suppliers incur when selling to a different customer.
d. one-time costs customers incur when buying from a different supplier.

22. In the case of a retail business dependent on drive-in customers, the major cost disadvantage
independent of scale would be
a. favorable locations are not available.
b. other competitors have proprietary product technology.
c. access to raw materials is difficult.
d. other competitors have government subsidies.

23. Suppliers are powerful when

a. satisfactory substitutes are available.
b. they sell a commodity product.
c. they offer a credible threat of forward integration.
d. they are in a highly fragmented industry.
24. The aircraft industry has long been dominated by two large aircraft manufacturers, Boeing and Airbus.
The demand for major aircraft is low, and Boeing and Airbus aggressively compete for orders from
airlines. What effect will these conditions have on the domestic airline industry?
a. It will make the airline industry more attractive because of decreased supplier power.
b. It will make the airline industry less attractive because of decreased supplier power.
c. It will make the airline industry more attractive because of increased supplier power.
d. It will make the airline industry more attractive because of a new entrant.

25. Buyers are powerful when

a. there is a threat of forward integration.
b. they purchase a small proportion of the supplier’s output.
c. switching costs are low.
d. the buyers’ industry is fragmented.
26. The highest amount a firm can charge for its products is most directly affected by
a. expected retaliation from competitors.
b. the cost of substitute products.
c. variable costs of production.
d. customers’ high switching costs.

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27. The threat from substitutes is high when
a. switching costs are high.
b. the substitute product’s price is lower than the industry product’s price.
c. the quality of the substitute product is lower than the quality of the industry’s product.
d. the substitute product stimulates new process innovations within the industry.

28. The existence of high exit barriers such as ownership of specialized assets (e.g., large aircraft) in the
airline industry indicates that
a. customers are relatively weak because of the high switching costs created by frequent
flyer programs.
b. the industry is moving toward differentiation of services.
c. the competitive rivalry in the industry is severe.
d. the economic segment of the external environment has shifted, but airline strategies have
not changed.

29. Rivalry between Dell, Hewlett-Packard, and other computer manufacturers is intense in part because
a. low geographic saturation of the market.
b. the high differentiation among competing products.
c. the low threat of supplier forward integration.
d. lack of differentiation among competing products.

30. The competition within each strategic group is

a. more intense than is the competition between strategic groups.
b. less intense than is the competition between strategic groups.
c. typically very low.
d. an unknown factor in the analysis of competitive practices within a firm’s strategic group.

31. Firms within strategic groups

a. follow dissimilar strategies.
b. follow similar strategies across certain dimensions.
c. typically engage in greater amounts of intergroup rivalry than intragroup rivalry.
d. exist almost exclusively in the manufacturing sector.

32. Competitor analysis focuses on

a. firms with which the company competes directly.
b. firms that produce products that are substitutes.
c. all firms in the industry.
d. companies that might enter the industry.
33. Which of the following pairs of companies would be least likely to be examined together as part of
competitive analysis?
a. Home Depot and Lowe’s
b. Boeing and Airbus
c. IBM and Microsoft
d. Coca Cola and PepsiCo

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34.____ is/are the source of a firm’s ____, which is/are the source of the firm’s ____.
a. Resources, capabilities, core competencies
b. Capabilities, resources, core competencies
c. Capabilities, resources, above average returns
d. Core competencies, resources, competitive advantage

35. By emphasizing core competencies when formulating strategies, companies learn to compete primarily
on the basis of
a. intangible resources.
b. their primary activities.
c. firm-specific differences.
d. efficiency of production.

36. Competitive advantage typically comes from

a. individual resources.
b. one unique resource.
c. several outstanding resources used independently.
d. the unique bundling of several resources.

37. Compared to tangible resources, intangible resources are

a. of less strategic value to the firm.
b. not the focus of strategic analysis.
c. a superior source of core competencies.
d. more likely to be reflected on the firm’s balance sheet.

38. Compared to tangible resources, intangible resources are ____ and ____.
a. less visible; more difficult to copy.
b. less visible; less difficult to copy.
c. more visible; more difficult to copy.
d. more visible; less difficult to copy.

39. Southwest Airlines has a complex interrelationship between its culture and staff that adds value in ways
that other airlines cannot (such as jokes on flights or the cooperation between gate personnel and
pilots). These examples illustrate which of the following criteria for sustainable competitive
advantage?
a. valuable.
b. rare.
c. costly to imitate.
d. nonsubstitutable.

40. Examples of support activities include all of the following EXCEPT

a. technology development.
b. human resource management.
c. service after the sale.
d. procurement.

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41. Which of the following is TRUE about outsourcing?
a. Outsourcing allows firms to be more flexible, and requires minimal coordination.
b. Outsourcing allows firms to concentrate on those areas in which they can create value.
c. Outsourcing strengthens the creative and innovative functions within the firm.
d. Outsourcing is only effective when it includes all support activities.