WPC 470 Final Exam Questions and
Answers Latest Update
Wallingford Company is trying to determine optimal ways to collect and distribute
knowledge throughout the firm. This is an activity for which support function in the value
chain?
a. Human resources
b. Finance
c. Management information systems
d. Distribution - Answer-Management Information Systems
Vendors across the country offer sunglasses that look virtually identical to those made
by Chanel, Prada, Gucci, and other luxury brands—including the trademark logos—but
cost far less. These products are the result of:
A .competition.
b .imitation.
c. counterfeiting.
d. evolving consumer preferences. - Answer-counterfeiting
JoAnn Tucker recently took over as Chief Executive Officer (CEO) of Burger-Rama, Inc.
Burger-Rama has seen declining profits over the past five years and has struggled to
remain competitive in the fast-food industry. In order to achieve strategic
competitiveness, JoAnn must:
a. .conduct training programs and hire educated and experienced employees.
B .invest in sophisticated technology in relevant knowledge areas.
c. fire the current board of directors and start afresh.
D .shift the company's focus to marketing and develop an extensive advertising
campaign. - Answer-conduct training programs and hire educated and experienced
employees
Firms failing to perform the value-chain activities and support functions in an optimum
manner when implementing the _____ strategy become "stuck in the middle."
a. cost leadership
b .focus
c. differentiation
d. integrated cost leadership/differentiation - Answer-integrated cost
leadership/differentiation
The chief executive officer (CEO) and other top-level managers often involve other
people to develop the mission statement because:
A .the mission deals more directly with product markets and customers.
b.it is viewed as a task that can easily be delegated.
c. the mission deals more directly with capital markets and shareholders.
,d. forming the mission is typically not the final responsibility of the CEO or other top-
level managers. - Answer-The mission deals more directly with product markets and
customers
A firm should outsource only activities where it:
a. has the probability of developing core competencies.
b. has developed the ability to innovate.
c. cannot match up a value chain activity with a support function.
d. cannot create value or where it is at a substantial disadvantage compared to
competitors. - Answer-cannot create value or where it is at a substantial disadvantage
compared to competitiors
Which of the following strategies helps a firm concentrate on understanding its
customers and their needs with greater clarity as a foundation for innovation?
a. Market segmentation strategy
b. Business model strategy
c. Digital strategy
d. Cost leadership strategy - Answer-Digital strategy
When a firm earns below-average returns, it:
a.is able to maximize the interests of all stakeholders.
B .should reward those stakeholders who have the least power.
c. should try to minimize the amount of support lost from stakeholders.
d. should treat all stakeholders the same. - Answer-should minimize the amount of
support lost from stakeholders
Which of the following statements about a flexible manufacturing system (FMS) is NOT
true?
a. Used properly, an FMS allows the firm to increase its effectiveness in responding
to changes in its customers' needs, while retaining low-cost advantages and
consistent product quality.
B .An FMS is a computer-controlled process that allows firms to produce a variety of
products in moderate, flexible quantities with a minimum of manual intervention.
c. The goal of an FMS is to eliminate the "low cost versus product variety" trade-off that
is inherent in traditional manufacturing technologies.
d. An FMS allows a manufacturer to connect with its suppliers, distributors, and
customers, which enables it to satisfy customer expectations in terms of product quality
and delivery speed. - Answer-An FMS allows a manufacturer to connect with its
suppliers, distributors, and customers, which enables it to satisfy customer expectations
in terms of product quality and delivery speed.
Which of the following statements about a firm's resources and capabilities is true?
a. All of a firm's resources and capabilities have the potential to be the foundation for a
competitive advantage.
b. It is difficult to achieve and sustain a competitive advantage based on resources
alone.
,c. As a source of competitive advantage, a capability must be exceedingly complex to
understand and manage.
d. When a resource is rare and valuable, it becomes a core competency. - Answer-It is
difficult to achieve and sustain a competitive advantage based on resources alone
When examining the component of Future Objectives for a competitor analysis, which of
the following is NOT a question that is addressed?
a. How do our goals compare with our competitors' goals?
b. Where will emphasis be placed in the future?
C .What is the attitude toward risk?
d. What is our future break-even point? - Answer-What is our future break-even point?
A _____ competitive advantage exists only when competitors are unable to duplicate
the benefits of a firm's strategy or when they lack the resources to attempt imitation.
a. profitable
b. temporary
c. rare
d. sustainable - Answer-sustainable
Powerful customers can force a cost leader to reduce its prices, but not below the level
at which the cost leader's:
a. next-most-efficient industry competitor can earn average returns.
b. least efficient industry competitor can earn average returns.
C .next-most-efficient industry competitor can earn above-average returns.
d. next-most-efficient industry competitor can earn below-average returns. - Answer-
next-most-efficient industry competitor can earn average returns.
A firm combines individual tangible and intangible resources to create:
a. assets.
b. capabilities.
c. competencies.
d .advantages. - Answer-capabilities
The main competitive advantage of a particular major U.S. technology firm is sourcing
and procurement of raw materials. This company is facing increasing competition on
price and is strongly considering outsourcing as a means of reducing costs. The LAST
function this firm should consider outsourcing is:
A .operations.
b. supply-chain management.
c. research and development.
d. distribution. - Answer-Supply chain management
Which of the following statements about a firm's customers is true?
A .Customers are the most obvious stakeholders, at least in U.S. organizations.
b. Customers are part of its capital market stakeholders.
c. Customers are more important than its other product market stakeholders.
, d. Customers prefer that investors receive a maximum return on their investments. -
Answer-Customers are more important than its other product market stakeholders.
Joplin Tires' corporate website states "Joplin Tires strives to be the top-selling tire
manufacturer in the United States." This statement is Joplin Tires':
A .mission.
b. statement of organizational culture.
c. code of ethics.
d. vision. - Answer-Vision
When examining the Assumptions component for a competitor analysis, which of the
following is a question that is addressed?
a. Do we assume the future will be volatile?
b. How are we currently competing?
c. How do we rate compared to our competitors?
D .What are our strengths and weaknesses? - Answer-Do we assume the future will be
volatile?
Which of the following is NOT an implication of strategic groups?
A .Because firms within a group offer similar products to the same customers, the
competitive rivalry among them can be intense.
b. The strengths of the five forces differ across strategic groups.
c. The closer the strategic groups are in terms of their strategies, the greater is the
likelihood of rivalry between the groups.
d. Strategic groups have less threats to each firm's profitability. - Answer-Strategic
groups have less threats to each firm's profitability.
Which of the following statements about determining which customer needs to satisfy is
NOT true?
a. In a general sense, needs are related to a product's benefits and features.
b. Customers prefer to buy customized products.
c. The most effective firms strive continuously to anticipate changes in customers'
needs.
d. The generalized forms of value that products provide are either high cost with
acceptable features or similar features with acceptable cost. - Answer-The generalized
forms of value that products provide are either high cost with acceptable features or
similar features with acceptable cost
Which of the following is an assumption of the industrial organization (I/O) model?
a. Organizational decision makers are rational individuals who are committed to acting
in the firm's best interests.
b. Resources and capabilities are not highly mobile across firms.
c. Differences in firms' performances across time are due primarily to their unique
resources and capabilities.
Answers Latest Update
Wallingford Company is trying to determine optimal ways to collect and distribute
knowledge throughout the firm. This is an activity for which support function in the value
chain?
a. Human resources
b. Finance
c. Management information systems
d. Distribution - Answer-Management Information Systems
Vendors across the country offer sunglasses that look virtually identical to those made
by Chanel, Prada, Gucci, and other luxury brands—including the trademark logos—but
cost far less. These products are the result of:
A .competition.
b .imitation.
c. counterfeiting.
d. evolving consumer preferences. - Answer-counterfeiting
JoAnn Tucker recently took over as Chief Executive Officer (CEO) of Burger-Rama, Inc.
Burger-Rama has seen declining profits over the past five years and has struggled to
remain competitive in the fast-food industry. In order to achieve strategic
competitiveness, JoAnn must:
a. .conduct training programs and hire educated and experienced employees.
B .invest in sophisticated technology in relevant knowledge areas.
c. fire the current board of directors and start afresh.
D .shift the company's focus to marketing and develop an extensive advertising
campaign. - Answer-conduct training programs and hire educated and experienced
employees
Firms failing to perform the value-chain activities and support functions in an optimum
manner when implementing the _____ strategy become "stuck in the middle."
a. cost leadership
b .focus
c. differentiation
d. integrated cost leadership/differentiation - Answer-integrated cost
leadership/differentiation
The chief executive officer (CEO) and other top-level managers often involve other
people to develop the mission statement because:
A .the mission deals more directly with product markets and customers.
b.it is viewed as a task that can easily be delegated.
c. the mission deals more directly with capital markets and shareholders.
,d. forming the mission is typically not the final responsibility of the CEO or other top-
level managers. - Answer-The mission deals more directly with product markets and
customers
A firm should outsource only activities where it:
a. has the probability of developing core competencies.
b. has developed the ability to innovate.
c. cannot match up a value chain activity with a support function.
d. cannot create value or where it is at a substantial disadvantage compared to
competitors. - Answer-cannot create value or where it is at a substantial disadvantage
compared to competitiors
Which of the following strategies helps a firm concentrate on understanding its
customers and their needs with greater clarity as a foundation for innovation?
a. Market segmentation strategy
b. Business model strategy
c. Digital strategy
d. Cost leadership strategy - Answer-Digital strategy
When a firm earns below-average returns, it:
a.is able to maximize the interests of all stakeholders.
B .should reward those stakeholders who have the least power.
c. should try to minimize the amount of support lost from stakeholders.
d. should treat all stakeholders the same. - Answer-should minimize the amount of
support lost from stakeholders
Which of the following statements about a flexible manufacturing system (FMS) is NOT
true?
a. Used properly, an FMS allows the firm to increase its effectiveness in responding
to changes in its customers' needs, while retaining low-cost advantages and
consistent product quality.
B .An FMS is a computer-controlled process that allows firms to produce a variety of
products in moderate, flexible quantities with a minimum of manual intervention.
c. The goal of an FMS is to eliminate the "low cost versus product variety" trade-off that
is inherent in traditional manufacturing technologies.
d. An FMS allows a manufacturer to connect with its suppliers, distributors, and
customers, which enables it to satisfy customer expectations in terms of product quality
and delivery speed. - Answer-An FMS allows a manufacturer to connect with its
suppliers, distributors, and customers, which enables it to satisfy customer expectations
in terms of product quality and delivery speed.
Which of the following statements about a firm's resources and capabilities is true?
a. All of a firm's resources and capabilities have the potential to be the foundation for a
competitive advantage.
b. It is difficult to achieve and sustain a competitive advantage based on resources
alone.
,c. As a source of competitive advantage, a capability must be exceedingly complex to
understand and manage.
d. When a resource is rare and valuable, it becomes a core competency. - Answer-It is
difficult to achieve and sustain a competitive advantage based on resources alone
When examining the component of Future Objectives for a competitor analysis, which of
the following is NOT a question that is addressed?
a. How do our goals compare with our competitors' goals?
b. Where will emphasis be placed in the future?
C .What is the attitude toward risk?
d. What is our future break-even point? - Answer-What is our future break-even point?
A _____ competitive advantage exists only when competitors are unable to duplicate
the benefits of a firm's strategy or when they lack the resources to attempt imitation.
a. profitable
b. temporary
c. rare
d. sustainable - Answer-sustainable
Powerful customers can force a cost leader to reduce its prices, but not below the level
at which the cost leader's:
a. next-most-efficient industry competitor can earn average returns.
b. least efficient industry competitor can earn average returns.
C .next-most-efficient industry competitor can earn above-average returns.
d. next-most-efficient industry competitor can earn below-average returns. - Answer-
next-most-efficient industry competitor can earn average returns.
A firm combines individual tangible and intangible resources to create:
a. assets.
b. capabilities.
c. competencies.
d .advantages. - Answer-capabilities
The main competitive advantage of a particular major U.S. technology firm is sourcing
and procurement of raw materials. This company is facing increasing competition on
price and is strongly considering outsourcing as a means of reducing costs. The LAST
function this firm should consider outsourcing is:
A .operations.
b. supply-chain management.
c. research and development.
d. distribution. - Answer-Supply chain management
Which of the following statements about a firm's customers is true?
A .Customers are the most obvious stakeholders, at least in U.S. organizations.
b. Customers are part of its capital market stakeholders.
c. Customers are more important than its other product market stakeholders.
, d. Customers prefer that investors receive a maximum return on their investments. -
Answer-Customers are more important than its other product market stakeholders.
Joplin Tires' corporate website states "Joplin Tires strives to be the top-selling tire
manufacturer in the United States." This statement is Joplin Tires':
A .mission.
b. statement of organizational culture.
c. code of ethics.
d. vision. - Answer-Vision
When examining the Assumptions component for a competitor analysis, which of the
following is a question that is addressed?
a. Do we assume the future will be volatile?
b. How are we currently competing?
c. How do we rate compared to our competitors?
D .What are our strengths and weaknesses? - Answer-Do we assume the future will be
volatile?
Which of the following is NOT an implication of strategic groups?
A .Because firms within a group offer similar products to the same customers, the
competitive rivalry among them can be intense.
b. The strengths of the five forces differ across strategic groups.
c. The closer the strategic groups are in terms of their strategies, the greater is the
likelihood of rivalry between the groups.
d. Strategic groups have less threats to each firm's profitability. - Answer-Strategic
groups have less threats to each firm's profitability.
Which of the following statements about determining which customer needs to satisfy is
NOT true?
a. In a general sense, needs are related to a product's benefits and features.
b. Customers prefer to buy customized products.
c. The most effective firms strive continuously to anticipate changes in customers'
needs.
d. The generalized forms of value that products provide are either high cost with
acceptable features or similar features with acceptable cost. - Answer-The generalized
forms of value that products provide are either high cost with acceptable features or
similar features with acceptable cost
Which of the following is an assumption of the industrial organization (I/O) model?
a. Organizational decision makers are rational individuals who are committed to acting
in the firm's best interests.
b. Resources and capabilities are not highly mobile across firms.
c. Differences in firms' performances across time are due primarily to their unique
resources and capabilities.
