MGMT 4513 MIDTERM FINAL EXAM QUESTIONS &
ANSWERS
The hierarchy of organizational goals is in this order
A. Vision statements, mission statements, strategic objectives.
B. Mission statements, vision statements, strategic objectives.
C. Mission statements, strategic objectives, vision statements.
D. Vision statements, strategic objectives, mission statements. - answer -b. 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) - answer -false
Organizational goals and objectives should be vague in order to allow changes in
strategy (t/f) - answer -false
Increasingly larger numbers of women entering the work force since the early 1970s is
an example of
A. Technological developments.
B. Political and legal environmental changes.
C. Demographic changes.
D. Sociocultural chamges - answer -d. Sociocultural changes
An industy is defined as
A. A group of firms producing products that are close substitutes.
B. Firms producing items that sell through the same distribution channels.
C. Firms that have the same seven digit standards industrial code.
D. A group of firms producing the same item. - answer -a. 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 differences in performance between the firms that
compete in on industry (t/y) - answer -false
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 firms 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?
A. The cost of the marble will be moderate because of economies of scale.
B. The cost of the marble will be expensive because of the bargaining power of the
supplier.
,C. The cost of the marble will be expensive because of the high strategic stakes
involved.
D. The cost of the marble will be moderate because of the bargaining power of the
buyer. - answer -b. 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) - answer -false
The most intense rivalry results from
A. A high level of differentiation.
B. Numerous equally balanced competitors, slow industry growth, high fixed or storage
costs.
C. Few competitors, slow industry growth, lack of differentiation, high fixed or storage
costs.
D. Numerous equally balanced competitors, manufactuing capacity increases only in
large increments, low exit barriers. - answer -b. Numerous equally balanced
competitors, slow industry growth, high fixed or storage costs.
Upper limits on the prices a firm can charge are impacted by:
A. Expected retaliation from competitors.
B. Customers' high switching costs.
C. The cost of substitute products.
D. Variable costs of production. - answer -c. The cost of substitute products.
Which of the following is not one of the reasons the internet increases the intensity of
competitive rivalry?
A. The internet makes it more difficult for firms to differentiate themselves.
B. The internet has made it more dificult to imitate the product quality advantages
achieved by competitors.
C. The internet has eliminated the importance of location by making geographically
distant products available online.
D. The internet has commoditized products that previously were regarded as rare or
unique. - answer -b. 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
A. Have low exit barriers for easy transition to another industry.
B. Have high fixed costs, in a slow growth industry with high exit barriers.
C. Are in a high growth industry with low fixed costs.
D. Are in a protected market. - answer -b. Have high fixed costs, in a slow growth
industry with high exit barriers.
Which is considered a force in the "five-forces" model?
A. Increased deregulation in an industry
, B. The threat of government intervention
C. Rivalry among competing firms
D. Recent technological innovation - answer -c. Rivalry among competing firms
Because the internet lowers barriers to entry in most industries, it
A. Decreases the threat of new entrants.
B. Increases the threat of new entrants.
C. Increases supplier power.
D. Makes it easier to build customer loyalty. - answer -b. Increases the threat of new
entrants
Which of the following is not an entry barrier to an industry
A. Economies of scale
B. Customer product loyalty
C. Expected competitor retaliation
D. Bargaining power of suppliers - answer -c. Bargaining power of suppliers
Industries characterized by high economies of scale typically attract fewer new entrants
(t/y) - answer -true
Which of the following firms would likely pose the least competitive threat?
A. A competitor to your product where a high switching cost exists.
B. A firm in the same industry and in the nearest strategic group looking to join your
group
C. A firm in the same industry and in the same strategic group
D. A firm that produces substitute goods to your product line. - answer -a. A competitor
to your product where high switching cost exists
The bargaining power of suppliers is enhanced under the following market condition:
A. No threat of forward integration
B. Low differentiation of the suppliers' products
C. Greater availability of substitute products
D. Dominance by a few suppliers - answer -d. Dominance by a few suppliers.
If you believed in a pure five forces model of above-average returns, which of the
following things is least important?
A. Analysis of general environment
B. All are equally important
C. Competitor analysis
D. Industry analysis
E. Analysis of resources, capabilities, and core competencies - answer -e. 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
ANSWERS
The hierarchy of organizational goals is in this order
A. Vision statements, mission statements, strategic objectives.
B. Mission statements, vision statements, strategic objectives.
C. Mission statements, strategic objectives, vision statements.
D. Vision statements, strategic objectives, mission statements. - answer -b. 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) - answer -false
Organizational goals and objectives should be vague in order to allow changes in
strategy (t/f) - answer -false
Increasingly larger numbers of women entering the work force since the early 1970s is
an example of
A. Technological developments.
B. Political and legal environmental changes.
C. Demographic changes.
D. Sociocultural chamges - answer -d. Sociocultural changes
An industy is defined as
A. A group of firms producing products that are close substitutes.
B. Firms producing items that sell through the same distribution channels.
C. Firms that have the same seven digit standards industrial code.
D. A group of firms producing the same item. - answer -a. 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 differences in performance between the firms that
compete in on industry (t/y) - answer -false
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 firms 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?
A. The cost of the marble will be moderate because of economies of scale.
B. The cost of the marble will be expensive because of the bargaining power of the
supplier.
,C. The cost of the marble will be expensive because of the high strategic stakes
involved.
D. The cost of the marble will be moderate because of the bargaining power of the
buyer. - answer -b. 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) - answer -false
The most intense rivalry results from
A. A high level of differentiation.
B. Numerous equally balanced competitors, slow industry growth, high fixed or storage
costs.
C. Few competitors, slow industry growth, lack of differentiation, high fixed or storage
costs.
D. Numerous equally balanced competitors, manufactuing capacity increases only in
large increments, low exit barriers. - answer -b. Numerous equally balanced
competitors, slow industry growth, high fixed or storage costs.
Upper limits on the prices a firm can charge are impacted by:
A. Expected retaliation from competitors.
B. Customers' high switching costs.
C. The cost of substitute products.
D. Variable costs of production. - answer -c. The cost of substitute products.
Which of the following is not one of the reasons the internet increases the intensity of
competitive rivalry?
A. The internet makes it more difficult for firms to differentiate themselves.
B. The internet has made it more dificult to imitate the product quality advantages
achieved by competitors.
C. The internet has eliminated the importance of location by making geographically
distant products available online.
D. The internet has commoditized products that previously were regarded as rare or
unique. - answer -b. 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
A. Have low exit barriers for easy transition to another industry.
B. Have high fixed costs, in a slow growth industry with high exit barriers.
C. Are in a high growth industry with low fixed costs.
D. Are in a protected market. - answer -b. Have high fixed costs, in a slow growth
industry with high exit barriers.
Which is considered a force in the "five-forces" model?
A. Increased deregulation in an industry
, B. The threat of government intervention
C. Rivalry among competing firms
D. Recent technological innovation - answer -c. Rivalry among competing firms
Because the internet lowers barriers to entry in most industries, it
A. Decreases the threat of new entrants.
B. Increases the threat of new entrants.
C. Increases supplier power.
D. Makes it easier to build customer loyalty. - answer -b. Increases the threat of new
entrants
Which of the following is not an entry barrier to an industry
A. Economies of scale
B. Customer product loyalty
C. Expected competitor retaliation
D. Bargaining power of suppliers - answer -c. Bargaining power of suppliers
Industries characterized by high economies of scale typically attract fewer new entrants
(t/y) - answer -true
Which of the following firms would likely pose the least competitive threat?
A. A competitor to your product where a high switching cost exists.
B. A firm in the same industry and in the nearest strategic group looking to join your
group
C. A firm in the same industry and in the same strategic group
D. A firm that produces substitute goods to your product line. - answer -a. A competitor
to your product where high switching cost exists
The bargaining power of suppliers is enhanced under the following market condition:
A. No threat of forward integration
B. Low differentiation of the suppliers' products
C. Greater availability of substitute products
D. Dominance by a few suppliers - answer -d. Dominance by a few suppliers.
If you believed in a pure five forces model of above-average returns, which of the
following things is least important?
A. Analysis of general environment
B. All are equally important
C. Competitor analysis
D. Industry analysis
E. Analysis of resources, capabilities, and core competencies - answer -e. 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
