MGMT 4513 QUESTIONS AND VERIFIED ANSWERS
The hierarchy of organizational goals is in this order (least specific to most specific): -
Answers - mission statements, vision statements, strategic objectives.
Some excellent examples of mission statements are: "To be the happiest place on
earth" (Disney) and "restoring patients to full life" (Medtronic). T/F - Answers - False
Organizational goals and objectives should be vague in order to allow changes in
strategy. - Answers - False
Increasingly larger numbers of women entering the workforce since the early 1970s is
an example of... - Answers - Sociocultural changes
An industry is defined as: - Answers - a group of firms producing products that are close
substitutes
The five forces model (buyers/suppliers/new entrants/substitutes/rivalry) is a firm-level
analytical model which explains difference in performance between the firms that
compete in one industry. T/F - Answers - False
Which is considered a force in the "Five-Forces" model? - Answers - Rivalry among
competing forms
Because the Internet lowers barriers to entry in most industries, it... - Answers -
Increases the threat of new entrants
Which of the following is NOT an entry barrier to an industry? - Answers - Bargaining
power of suppliers
Industries characterized by high economies of scale typically attract fewer new entrants.
T/F - Answers - True
Which of the following firms would likely pose the least competitive threat? - Answers -
A competitor to your product where a high switching cost exists
The bargaining power of suppliers is enhanced under the following market condition -
Answers - dominance by a few suppliers.
A certain marble quarry provides a unique type of marble that is richly colored and
strikingly veined. It has been used for churches and public buildings throughout the
world. The architect of a new headquarters for a prestigious Fortune 500 firm has
specified the use of this marble, and this marble only, for this project. Which of the
, following statements is most likely to be true? - Answers - The cost of the marble will be
expensive because of the bargaining power of the supplier.
Supplier power tends to be highest in industries where products are vital to buyers,
where switching from one supplier to another is very costly, and where there are many
suppliers. T/F - Answers - False
The most intense rivalry results from - Answers - Numerous equally balanced
competitors, slow industry growth, high fixed or storage costs.
Upper limits on the prices a firm can charge are impacted by: - Answers - the cost of
substitute products.
Which of the following is not one of the reasons the internet increases the intensity of
competitive rivalry? - Answers - The internet has made it more difficult to imitate the
product quality advantages achieved by competitors.
Firms would be most likely to face intense rivalry with competitors when they - Answers
- have high fixed costs, in a slow growth industry with high exit barriers.
If you believed in a pure five forces model of above-average returns, which of the
following things is LEAST important? - Answers - analysis of resources, capabilities,
and core competencies
Industry A is characterized by high advertising and R&D expenses (as a proportion of
revenues) or, said differently, high differentiation. Industry B has a low advertising and
R&D expenses. Which industry would tend to have a higher threat of new entrants?
Higher degree of rivalry? - Answers - Industry B; Industry B
A manufacturing business pursuing cost leadership will most likely - Answers - rely on
experience effects to raise efficiency.
Convincing rivals not to enter a price war, protection from customer pressure to lower
prices, and the ability to better withstand cost increases from suppliers characterize
which type of competitive strategy? - Answers - Overall cost leadership
High product differentiation is generally accompanied by - Answers - decreased
emphasis on competition based on price
A firm can achieve differentiation through all of the following means except - Answers -
offering lower prices to frequent customers.
Which statement regarding competitive advantages is true? - Answers - If several
competitors pursue similar differentiation tactics, they may all be perceived as equals in
the mind of the customer.
The hierarchy of organizational goals is in this order (least specific to most specific): -
Answers - mission statements, vision statements, strategic objectives.
Some excellent examples of mission statements are: "To be the happiest place on
earth" (Disney) and "restoring patients to full life" (Medtronic). T/F - Answers - False
Organizational goals and objectives should be vague in order to allow changes in
strategy. - Answers - False
Increasingly larger numbers of women entering the workforce since the early 1970s is
an example of... - Answers - Sociocultural changes
An industry is defined as: - Answers - a group of firms producing products that are close
substitutes
The five forces model (buyers/suppliers/new entrants/substitutes/rivalry) is a firm-level
analytical model which explains difference in performance between the firms that
compete in one industry. T/F - Answers - False
Which is considered a force in the "Five-Forces" model? - Answers - Rivalry among
competing forms
Because the Internet lowers barriers to entry in most industries, it... - Answers -
Increases the threat of new entrants
Which of the following is NOT an entry barrier to an industry? - Answers - Bargaining
power of suppliers
Industries characterized by high economies of scale typically attract fewer new entrants.
T/F - Answers - True
Which of the following firms would likely pose the least competitive threat? - Answers -
A competitor to your product where a high switching cost exists
The bargaining power of suppliers is enhanced under the following market condition -
Answers - dominance by a few suppliers.
A certain marble quarry provides a unique type of marble that is richly colored and
strikingly veined. It has been used for churches and public buildings throughout the
world. The architect of a new headquarters for a prestigious Fortune 500 firm has
specified the use of this marble, and this marble only, for this project. Which of the
, following statements is most likely to be true? - Answers - The cost of the marble will be
expensive because of the bargaining power of the supplier.
Supplier power tends to be highest in industries where products are vital to buyers,
where switching from one supplier to another is very costly, and where there are many
suppliers. T/F - Answers - False
The most intense rivalry results from - Answers - Numerous equally balanced
competitors, slow industry growth, high fixed or storage costs.
Upper limits on the prices a firm can charge are impacted by: - Answers - the cost of
substitute products.
Which of the following is not one of the reasons the internet increases the intensity of
competitive rivalry? - Answers - The internet has made it more difficult to imitate the
product quality advantages achieved by competitors.
Firms would be most likely to face intense rivalry with competitors when they - Answers
- have high fixed costs, in a slow growth industry with high exit barriers.
If you believed in a pure five forces model of above-average returns, which of the
following things is LEAST important? - Answers - analysis of resources, capabilities,
and core competencies
Industry A is characterized by high advertising and R&D expenses (as a proportion of
revenues) or, said differently, high differentiation. Industry B has a low advertising and
R&D expenses. Which industry would tend to have a higher threat of new entrants?
Higher degree of rivalry? - Answers - Industry B; Industry B
A manufacturing business pursuing cost leadership will most likely - Answers - rely on
experience effects to raise efficiency.
Convincing rivals not to enter a price war, protection from customer pressure to lower
prices, and the ability to better withstand cost increases from suppliers characterize
which type of competitive strategy? - Answers - Overall cost leadership
High product differentiation is generally accompanied by - Answers - decreased
emphasis on competition based on price
A firm can achieve differentiation through all of the following means except - Answers -
offering lower prices to frequent customers.
Which statement regarding competitive advantages is true? - Answers - If several
competitors pursue similar differentiation tactics, they may all be perceived as equals in
the mind of the customer.
