Alfredo Strategy test pt 2

1.

1 point

How a firm positions itself to compete

generic strategy

narrow focus

start up rules

broad

2.

1 point

Create more value (B – C) by offering products that have a lower C

cost leaders

corporations

benefit leaders

start up

3.

1 point

Resources can be non-tradeable, relationship specific, have no value to other firms

competitive use theory

resource based theory of the firm

perfect competition

competitive advantage

4.

1 point

Increase consumer surplus by

1 increasing quality aka willingness to pay 2 lower price

decrease costs, decrease price

increase costs, increase price

1 decreasing quality aka willingness to pay 2 raise price

5.

1 point

_________ ______ are important because they provide: motivation, general direction, an image of the company’s character, tone, and set of attitudes

Board members

mission statements

founders values

operational statement

6.

1 point

Core of the mission statement is

values

founders values

the firms fundamental unique purpose

operational statement

7.

1 point

Porters two types of generic strategies

short term, long term

social, environmental

economic, environmental

broad, narrow focus

8.

1 point

Value chain is comprised of

Primary and support activities

Cost drivers

To achieve competitive advantage

revenue chain

9.

1 point

Describe the firms fundamental unique purpose, indicates how a firm is unique in its scope of operations, products, services, or offerings and it proclaims corporate purpose

operational statement

founders values

values

mission statement

10.

1 point

A cost that is forever lost after it has been paid

sunk costs

revenue chain

fixed costs

Cost drivers

11.

1 point

Earns a higher rate of economic profit compared to average economic profit in the industry

strategic management

family run business

competitive advantage

pharmaceuticals

12.

1 point

If X & Y are ___________ a decrease in the price of X leads to a decrease in the consumption of Y

substititutes

internal rivalry

complements

entry

13.

1 point

A firms superior ability to create value may be obscure and imperfectly understood

social complexity

causal ambiguity

linguine

historical circumstances

14.

1 point

Template that managers can use to analyze value creation

Cost drivers

To achieve competitive advantage

Primary and support activities

Value chain

15.

1 point

Two main types of isolating mechanisms

1 impediments to imitation 2 early mover advantage

1 capital exclusivity 2 talent exclusivity

market inertia, organizational inertia

competitive advantage, capital advantage

16.

1 point

Overconfidence most present in those:

Position of control, high skilled individuals, complex settings

highly educated, argumentative, management

low level workers, highly educated, high IQ

over qualified, low IQ, well paid

17.

1 point

The economic forces that limit the extent to which competitive advantage can be duplicated or neutralized through the resource creation activities of other firms

competitive use theory

competitive advantage

resource based theory of the firm

Isolating mechanisms

18.

1 point

2 distinct effects of mission statement according to economics literature

economic profits, accounting profits

operational statement

opportunity cost mitigation, benefit driver

sorting, productivity

19.

1 point

Refers to competition between firms for market shares

substititutes

entry

complements

internal rivalry

20.

1 point

Mission statements determine a _____ ______ when coping with complex environments

operational statement

firms focus

Board members

founders values

21.

1 point

A firm must produce more value than its rivals. A firm with a wider wedge (B-C) has a competitive advantage in its industry.

To achieve competitive advantage

Value chain

Primary and support activities

Cost drivers

22.

1 point

Revenue – opportunity costs

economic profits

accounting profits

operational statement

opportunity cost

23.

1 point

strategy: constantly rethink how to complete activities and reduce costs

corporations

cost leaders

start up

benefit leaders

24.

1 point

Accounting cost + implicit cost of giving up the best alternative use of resources

operational statement

accounting profits

economic profits

opportunity cost

25.

1 point

Built on interpersonal interactions among managers both within the firm and with suppliers and customers can cause competitive advantage

alfredo

causal ambiguity

historical circumstances

social complexity

26.

1 point

create more value (B – C) by offering products that have a higher B than rivals

benefit leaders

corporations

cost leaders

start up

27.

1 point

Dunne, Roberts, Samuelson found (DRS)

internal rivalry should not be the centre of porters 5 forces as it can change

Entry and exit are pervasive, entrant size varies, entry and exit are highly related, most entrants do not survive 10 years

complements have no effect on large enough businesses

entry is the most pervasive problem in keeping market shares

28.

1 point

The per unit value of the services provided by the network increases as the size of the network grow

causal ambiguity

network effects

historical circumstances

social complexity

29.

1 point

Difference between max consumer is willing to pay and the price

competitive advantage

consumer surplus

consumer surplus * producer surplus

producer surplus

30.

1 point

___________ if profits without sunk costs are positive

consider

accept

bid

reject

31.

1 point

Four types of impediments to imitation

1 c1 legal restrictions 2 superior access to inputs/customers 3 economies of scale 4 intangible barriers apital exclusivity 2 talent exclusivity

there are no impediments to imitation

market inertia, organizational inertia,competitive advantage, capital advantage

1 impediments to imitation 2 early mover advantage, 3 capital exclusivity 4 talent exclusivity

32.

1 point

Access at a price that still allows for profits is important in control of valuable inputs

1 legal restrictions 2 superior access to inputs/customers 3 economies of scale 4 intangible barriers

1 impediments to imitation 2 early mover advantage, 3 capital exclusivity 4 talent exclusivity

superior access

market inertia, organizational inertia,competitive advantage, capital advantage

33.

1 point

Value created =

competitive advantage

consumer surplus - producer surplus

consumer surplus * producer surplus

consumer surplus + producer surplus

34.

1 point

Factors that make the cost of an activity rise or fall

Cost drivers

Primary and support activities

To achieve competitive advantage

revenue chain

35.

1 point

strategy: consistently upgrade differentiated features that customers value

corporations

cost leaders

start up

benefit leaders

36.

1 point

If X & Y are __________ a decrease in the price of X leads to an increase in the consumption of Y

internal rivalry

substititutes

entry

complements

37.

1 point

The factors that determine supplier power are

the importance of the input

entry is the most pervasive problem in keeping market shares

Relative concentration, competitiveness, purchase volume, extent of relationship specific investments, availability of substitute inputs

complements have no effect on large enough businesses

38.

1 point

3 types of intangible barriers to imitation

1 c1 legal restrictions 2 superior access to inputs/customers 3 economies of scale 4 intangible barriers apital exclusivity

market inertia, organizational inertia,competitive advantage,

1 impediments to imitation 2 early mover advantage, 3 capital exclusivity

1 causal ambiguity 2 historical circumstances 3 social complexity

39.

1 point

Four isolating mechanisms of 1st mover advantage

causal ambiguity, social complexity, historical circumstances, network effects

contracts, capital, game theory, competitive advantage

1 patents, 2 capital, 3 information asymmetries, 4 contracts

1 learning curve 2 reputation (your quality known but not your rivals) 3 switching costs 4 network effect

40.

1 point

A cost that does not change as output changes

Cost drivers

fixed costs

revenue chain

sunk costs

41.

1 point

Hurts incumbents by cutting into market share , intensifies rivalry and leads to a decline in price cost margin

substititutes

complements

entry

internal rivalry

42.

1 point

VRIO resources and capabilities can become __________ ___________ and sources of ________ __________ ___________

economies of scale, minimum efficient scale

economies of scope, minimum efficient scale

core competencies, sustained competitive advantage

economies of scale, minimum efficient scope

43.

1 point

Family run firms chosen by ___________ are very badly managed. However when chose from ___ _____ ______ they are no worse off.

primogeniture, all family members

shareholders, board of governors

kool aid man, all the shirtless mascots

fathers, the entire family

44.

1 point

Revenue – cost, reported on income statement

economic profits

opportunity cost

operational statement

accounting profits

45.

1 point

VRIO

Valuable, rare, costly to imitate, organized to be exploited

Valuable, reasonable, interesting, organized

Valuable, rare, easy to imitate, original

Valuable, reasonable, imitate, organize