Business Capstone Exam 1 COMPLETE QUESTIONS AND CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+||BRAND NEW VERSION!!

Business Capstone Exam 1 COMPLETE QUESTIONS AND CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+||BRAND NEW VERSION!! Based on an analysis of the five forces that increase or decrease competitive pressures in an industry, in which of the following industries is profitability likely to be lowest? a. Pizza restaurants b. Wireless lighting systems c. Delivery services using drones d. Wearable fitness and health monitors e. Pharmaceuticals a. Pizza restaurants Explanation As a rule, the strongest competitive forces determine the extent of the competitive pressure on industry profitability. All other things being equal and as a rule, the stronger the collective impact of the five competitive forces, the lower the combined profitability of industry participants—and this is particularly true of the saturated, mature pizza restaurant industry in comparison with the others listed, each of which have mitigated the power of some competitive forces to achieve above-average returns. Rivalry among competing sellers tends to be less intense when a. industry conditions tempt competitors to use price cuts or other competitive weapons to boost unit c. industry rivals are not particularly aggressive in drawing sales and market share away from rivals. Explanation See Figure 3.7. Rivalry is less in industries where there is growth in demand and rivals are more or less satisfied with their competitive and market share positions. sales. b. buyer demand is weak and many sellers have excess capacity and/or inventory. c. industry rivals are not particularly aggressive in drawing sales and market share away from rivals. d. rivals have diverse strategies and objectives, and are located in different countries. e. rival sellers have weakly differentiated products. The bargaining leverage of suppliers is greater when a. only a small number of suppliers exist and when it is difficult for industry members to switch to attractive substitutes. b. industry members incur low costs in switching their purchases from one supplier to another. c. industry members purchase in large quantities and thus are important customers of the suppliers. d. it makes good economic sense for industry members to vertically integrate backward. e. the supplier industry is composed of a large number of relatively small suppliers. a. only a small number of suppliers exist and when it is difficult for industry members to switch to attractive substitutes. Explanation See Figure 3.5. When the number of suppliers of inputs is limited, suppliers tend to have stronger bargaining power and can charge industry members higher prices (passing costs on to them) and limit opportunities to find better deals via switching. An industrial air-conditioner manufacturing giant decides to outsource its operations to a new geographical location with cheaper labor amidst ongoing labor strikes in a few of its existing locations (due to proposed job cuts and relocation of the plant offshore). This draws criticism in its home market and affects its current market position and productivity. Which of the following would be an appropriate reactive (emergent) strategy while moving forward? a. Hiring and training new talent to begin operations in the emerging market b. Acquiring a local computer chip marketing and distribution specialist firm in the new location c. Canceling the idea of outsourcing and retaining the existing workforce to run operations d. Shifting the existing e. Canceling the job cuts till the market situation and entry operations stabilize Explanation Canceling the job cuts for the time being to solidify its market position is a reactive strategy to ensure that new operations and current productivity are not affected. This crisis intervention is not a permanent solution, but a reactive strategy to maintain current balance. Options A and B are proactive strategies. Options C and D are either nonviable or high-risk reactive strategies. workforce to the new geographical location and paying them according to new standards e. Canceling the job cuts till the market situation and entry operations stabilize e. A focused differentiation strategy Amy's Drive-Thru, a fast food facility near a college campus, offers healthy, sustainably grown vegetarian and vegan fast-food at higher prices than its competitors in the market and has a drive-through and indoor-seated, casual dining operation. What strategy is Amy's Drive-Thru using to gain a competitive advantage? a. A best-cost provider strategy b. A low-cost provider strategy c. A focused low-cost provider strategy d. A broad differentiation strategy e. A focused differentiation strategy Explanation Amy's Drive-Thru focuses on healthy fast food for nonmeat eaters. It caters to drive- through and casual dining customers seeking healthy alternatives and generates profits by offering products and services that rivals do not or cannot provide, and by focusing on a narrow customer base. Proficient strategy execution a. directly involves only the CEO and board of directors of the firm. b. is achieved unevenly, coming quickly in some areas and more slowly in others. c. entails accomplishing desired outcomes and then examining what went right and what went wrong. d. is an every-now-and-then task. e. is always the product of much organizational learning. e. is always the product of much organizational learning. Explanation Good strategy execution requires managers to pay careful attention to how key internal business processes are performed and see to it that employees' efforts are directed toward the accomplishment of desired operational outcomes. The task of implementing and executing the strategy also necessitates an ongoing analysis of the efficiency and effectiveness of a company's internal activities and a managerial awareness of new developments that might improve business processes. The payoff of good scouting reports on rivals is improved ability to a. predict what strategic moves rivals are likely to make next, thereby allowing a company to prepare defensive countermoves and develop strategies to exploit rivals' missteps. b. determine which rivals are in the best strategic group. c. figure out how many key success factors a rival has. d. determine whether a rival is gaining or losing market share, whether rivals are increasing or decreasing R&D spending, and what new marketing promotions are in the works. e. determine whether a rival has the best strategy and is the industry leader. a. predict what strategic moves rivals are likely to make next, thereby allowing a company to prepare defensive countermoves and develop strategies to exploit rivals' missteps. Explanation Unless a company pays attention to the strategies and situations of competitors and has some inkling of what moves they will be making, it ends up flying blind into competitive battle. As in sports, scouting the business opposition is an essential part of game plan development. A company is unlikely to develop an emergent strategy due to a. strategic moves by rival firms. b. unexpected shifts in customer preferences. c. fast-changing technological developments. d. new market opportunities. e. rivals' value chain deficiencies. e. rivals' value chain deficiencies. Explanation Novel strategic moves on the part of rival firms, unexpected shifts in customer preferences, fast changing technological developments, and new market opportunities call for unplanned, reactive adjustments that form the company's emergent strategy. Rivals' value chain deficiencies generally result in planned strategies. The strategy formulation, strategy execution process a. is usually delegated to members of a company's board of directors so as not to infringe on the time of busy executives. b. includes establishing a company's mission, developing a business model aimed at making the company an industry leader, and crafting a strategy to implement and execute the business model. c. embraces the tasks of developing a strategic vision, objectives, crafting a strategy, implementing and executing the strategy, and then monitoring developments and initiating corrective adjustments in light of experience, changing conditions, and new opportunities. d. is principally concerned with sizing up an c. embraces the tasks of developing a strategic vision, setting objectives, crafting a strategy, implementing and executing the strategy, and then monitoring developments and initiating corrective adjustments in light of experience, changing conditions, and new opportunities. Explanation The process consists of the five steps outlined in Figure 2.1. Management's decisions that are made in the strategic management process are shaped by the prevailing economic conditions and competitive environment and the company's own internal resources and competitive capabilities, also shown in Figure 2.1 and described in detail in Table 2.1.