MGMT 4513 EXAM 1 QUESTIONS AND VERIFIED
ANSWERS
The hierarchy of organizational goals is in this order (least specific to most specific):
A) Mission statements, vision statements, strategic objectives
B) Vision statements, strategic objectives
C) Vision statements, mission statements, strategic objectives
D) Mission statement, strategic objectives, vision statements - Answers - A
T or F: Some excellent examples of mission statements are: "To be the happiest place
on Earth" (Disney), and "restoring patients to full life" (Medtronic). - Answers - False
T or F: Organizational goals and objectives should be vague in order to allow changes
in strategy. - Answers - False
Increasingly larger numbers of women entering the work force since the early 1970s is
an example of
A) demographic changes.
B) political and legal environmental changes.
C) sociocultural chamges.
D) technological developments. - Answers - C
An industry is defined as:
A) Firms producing items that sell through the same distribution channels.
B) Firms that have the same seven digit standards industrial code.
C) A group of firms producing the same item.
D) A group of firms producing products that are close substitutes. - Answers - D
T or F: 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. - Answers - False
Which is considered a force in the "Five-Forces" model?
A) The threat of government intervention
B) Recent technological innovation
C) Rivalry among competing firms
D) Increased deregulation in an industry - Answers - C
Because the Internet lowers barriers to entry in most industries, it
, A) Increases supplier power.
B) Decreases the threat of new entrants.
C) Increases the threat of new entrants.
D) Makes it easier to build customer loyalty. - Answers - C
Which of the following is NOT an entry barrier to an industry?
A) bargaining power of suppliers
B) customer product loyalty
C) expected competitor retaliation
D) economies of scale - Answers - A
T or F: Industries characterized by high economies of scale typically attract fewer new
entrants. - Answers - True
Which of the following firms would likely pose the least competitive threat?
A) A firm in the same industry and in the nearest strategic group looking to join your
group
B) A firm in the same industry and in the same strategic group
C) A competitor to your product where a high switching cost exists.
D) A firm that produces substitute goods to your product line. - Answers - C
A manufacturing business pursuing cost leadership will likely
A) rely on experience effects to raise efficiency.
B) put heavy emphasis on product engineering
C) use advertising to build brand image.
D) focus on a narrow market segment. - Answers - A
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?
A) Overall cost leadership
B) Differentiation focus
C) Cost leadership focus
D) Differentiation - Answers - A
High product differentiation is generally accompanied by
A) significant economies of scale
B) decreased emphasis on competition based on price
C) higher market share
D) high-profit margins and lower costs - Answers - B
ANSWERS
The hierarchy of organizational goals is in this order (least specific to most specific):
A) Mission statements, vision statements, strategic objectives
B) Vision statements, strategic objectives
C) Vision statements, mission statements, strategic objectives
D) Mission statement, strategic objectives, vision statements - Answers - A
T or F: Some excellent examples of mission statements are: "To be the happiest place
on Earth" (Disney), and "restoring patients to full life" (Medtronic). - Answers - False
T or F: Organizational goals and objectives should be vague in order to allow changes
in strategy. - Answers - False
Increasingly larger numbers of women entering the work force since the early 1970s is
an example of
A) demographic changes.
B) political and legal environmental changes.
C) sociocultural chamges.
D) technological developments. - Answers - C
An industry is defined as:
A) Firms producing items that sell through the same distribution channels.
B) Firms that have the same seven digit standards industrial code.
C) A group of firms producing the same item.
D) A group of firms producing products that are close substitutes. - Answers - D
T or F: 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. - Answers - False
Which is considered a force in the "Five-Forces" model?
A) The threat of government intervention
B) Recent technological innovation
C) Rivalry among competing firms
D) Increased deregulation in an industry - Answers - C
Because the Internet lowers barriers to entry in most industries, it
, A) Increases supplier power.
B) Decreases the threat of new entrants.
C) Increases the threat of new entrants.
D) Makes it easier to build customer loyalty. - Answers - C
Which of the following is NOT an entry barrier to an industry?
A) bargaining power of suppliers
B) customer product loyalty
C) expected competitor retaliation
D) economies of scale - Answers - A
T or F: Industries characterized by high economies of scale typically attract fewer new
entrants. - Answers - True
Which of the following firms would likely pose the least competitive threat?
A) A firm in the same industry and in the nearest strategic group looking to join your
group
B) A firm in the same industry and in the same strategic group
C) A competitor to your product where a high switching cost exists.
D) A firm that produces substitute goods to your product line. - Answers - C
A manufacturing business pursuing cost leadership will likely
A) rely on experience effects to raise efficiency.
B) put heavy emphasis on product engineering
C) use advertising to build brand image.
D) focus on a narrow market segment. - Answers - A
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?
A) Overall cost leadership
B) Differentiation focus
C) Cost leadership focus
D) Differentiation - Answers - A
High product differentiation is generally accompanied by
A) significant economies of scale
B) decreased emphasis on competition based on price
C) higher market share
D) high-profit margins and lower costs - Answers - B
