MGMT 485 EXAM QUESTIONS & ANSWERS
When Rollie's car wash began to lose business to rivals, Rollie read publications for car-
wash owners to learn the best practices in the industry. Then he implemented the best
practices. Rollie is using __________ to improve his car wash.
a.Specialized assets
b.Benchmarking
c.The VRIO framework
d.Organizational inertia
e.Intellectual property - Answer -Benchmarking
Efficiency is
A. defined as the time it takes to produce a product.
B. defined as the cost of inputs required to produce a given output.
C. pursued only by cost leaders.
D. measured by looking at a product's price.E. lower when the output is high-quality. -
Answer -B. defined as the cost of inputs required to produce a given output.
Which of the following is one of the basic building blocks of competitive advantage? -
Answer -Innovation
Mike works as a corporate trainer, teaching new employees how to perform
manufacturing tasks. In which value-chain activity does Mike work? - Answer -Human
resources
Ray, a toymaker, knits a stuffed unicorn for Belle. Which function of the value chain is
illustrated in this scenario?
a.Marketing and sales
b.Distribution
c.Research and development
d.Production
e.Customer service - Answer -Production
The VRIO model is designed to help companies assess the quality of their resources
and identify sources of competitive advantage. - Answer -True
Successful innovation cannot transform the nature of industry competition. - Answer -
False
In Porter's Five Forces model, as each of the five forces grows stronger, it limits the
ability of established companies to raise prices and earn greater profits. - Answer -True
Which of the following statements about government regulations in the context of entry
barriers of an industry is true?
, a. Government deregulation in an industry results in significant reduction in competition.
b. Government regulation is not a major entry barrier for any industries.
c. Falling entry barriers due to government deregulation results in higher competition
and lower industry profitrates.
d. The threat of new entrants reduces when the government deregulates an industry.
e. Companies that enjoy brand loyalty and have significant scale economies are the
ones who face major threat of competition due to government deregulation. - Answer -
c. Falling entry barriers due to government deregulation results in higher competition
and lower industry profitrates.
Companies facing higher exit barriers find it harder to reduce capacity and face a
greater threat of severe price competition. - Answer -True
As an industry enters the shakeout stage,:
A.rivalry among companies declines.
B.demand is still growing at a high rate.
C.prices rise.
D.excess capacity emerges.
E. new entrants come into the market. - Answer -D.excess capacity emerges.
A company's closest competitors are those in its strategic group. - Answer -True
In a declining industry, a company may utilize a harvest strategy and:
(A) significantly increase its investment in a business.
(B) extract maximum profits from its investments.
(C) venture into new market segments with new products.
(D) expand the number of stores or outlets for its products.
(E) significantly increase its advertising expenditure. - Answer -(B) extract maximum
profits from its investments.
__________ is a market growth factor that refers to the degree to which the results of
using and enjoying a new product can be seen and appreciated by other people.
(A) complexity
(B) relative advantage
(C) compatibility
(D) trialability
(E) observability - Answer -(B) relative advantage
Tom tends to be ignorant about technological advancements. He was reluctant to own a
smartphone even when they were well established and familiar in the market. However,
Thomas slowly got used to the idea of a smartphone when his job demanded him to be
connected to the office network all the time. Thomas is most likely to fall under which of
the following categories of customers?
a. Early majority
b. Late majority
c. Laggards
When Rollie's car wash began to lose business to rivals, Rollie read publications for car-
wash owners to learn the best practices in the industry. Then he implemented the best
practices. Rollie is using __________ to improve his car wash.
a.Specialized assets
b.Benchmarking
c.The VRIO framework
d.Organizational inertia
e.Intellectual property - Answer -Benchmarking
Efficiency is
A. defined as the time it takes to produce a product.
B. defined as the cost of inputs required to produce a given output.
C. pursued only by cost leaders.
D. measured by looking at a product's price.E. lower when the output is high-quality. -
Answer -B. defined as the cost of inputs required to produce a given output.
Which of the following is one of the basic building blocks of competitive advantage? -
Answer -Innovation
Mike works as a corporate trainer, teaching new employees how to perform
manufacturing tasks. In which value-chain activity does Mike work? - Answer -Human
resources
Ray, a toymaker, knits a stuffed unicorn for Belle. Which function of the value chain is
illustrated in this scenario?
a.Marketing and sales
b.Distribution
c.Research and development
d.Production
e.Customer service - Answer -Production
The VRIO model is designed to help companies assess the quality of their resources
and identify sources of competitive advantage. - Answer -True
Successful innovation cannot transform the nature of industry competition. - Answer -
False
In Porter's Five Forces model, as each of the five forces grows stronger, it limits the
ability of established companies to raise prices and earn greater profits. - Answer -True
Which of the following statements about government regulations in the context of entry
barriers of an industry is true?
, a. Government deregulation in an industry results in significant reduction in competition.
b. Government regulation is not a major entry barrier for any industries.
c. Falling entry barriers due to government deregulation results in higher competition
and lower industry profitrates.
d. The threat of new entrants reduces when the government deregulates an industry.
e. Companies that enjoy brand loyalty and have significant scale economies are the
ones who face major threat of competition due to government deregulation. - Answer -
c. Falling entry barriers due to government deregulation results in higher competition
and lower industry profitrates.
Companies facing higher exit barriers find it harder to reduce capacity and face a
greater threat of severe price competition. - Answer -True
As an industry enters the shakeout stage,:
A.rivalry among companies declines.
B.demand is still growing at a high rate.
C.prices rise.
D.excess capacity emerges.
E. new entrants come into the market. - Answer -D.excess capacity emerges.
A company's closest competitors are those in its strategic group. - Answer -True
In a declining industry, a company may utilize a harvest strategy and:
(A) significantly increase its investment in a business.
(B) extract maximum profits from its investments.
(C) venture into new market segments with new products.
(D) expand the number of stores or outlets for its products.
(E) significantly increase its advertising expenditure. - Answer -(B) extract maximum
profits from its investments.
__________ is a market growth factor that refers to the degree to which the results of
using and enjoying a new product can be seen and appreciated by other people.
(A) complexity
(B) relative advantage
(C) compatibility
(D) trialability
(E) observability - Answer -(B) relative advantage
Tom tends to be ignorant about technological advancements. He was reluctant to own a
smartphone even when they were well established and familiar in the market. However,
Thomas slowly got used to the idea of a smartphone when his job demanded him to be
connected to the office network all the time. Thomas is most likely to fall under which of
the following categories of customers?
a. Early majority
b. Late majority
c. Laggards
