MGMT 4900 EXAM 2 QUESTIONS & ANSWERS
How has Apple been able to sustain its competitive advantage in the smartphone
industry? - Answer -by regularly introducing incremental improvements in its products
Which of the following is NOT a characteristic of a red ocean strategy? - Answer -Make
the value cost tradeoff
Lillypad Toys is a manufacturer of educational toys for children. Six months ago, the
company's research and development division came up with an idea for a unique
touchscreen device that can be used to introduce children to a number of foreign
languages. Three months ago, the company produced a working prototype, and last
month the company successfully launched its new device on the commercial market.
What should Lillypad's managers prepare for next? - Answer -increased competition
from imitators
Which of the following is an example of an external transaction cost? - Answer -the cost
of searching for a contract manufacturer
Edna Gomez is the founder of the restaurant chain Good and Green. She ensures that
the products in her stores are ethically and responsibly sourced. Most products are
therefore 100 percent organic and all packaging is manufactured from recycled material.
Also, her company sources ingredients from farms within 100 miles from her locations.
Edna's belief is that her restaurants should be able to support the community at large.
Which of the following terms best describes Edna Gomez? - Answer -social
entrepreneur
Horizontal integration may yield disappointing financial results because: - Answer -A &
B
A strategic alliance differs from a joint venture in that a strategic alliance: - Answer -is a
cooperative arrangement between two or more organizations that does not involve the
creation of a new entity.
While cell phones with holographic keyboards are currently in the introduction stage of
the industry life cycle, tablet computers are in the growth stage. In the context of this
scenario, which of the following statements is true? - Answer -While the industry for cell
phones with holographic keyboards will focus more on product innovation, the tablet
industry will focus more on process innovation.
A multidivisional structure can be costly because, when a company has seven divisions
like GE that each require special skills and knowledge, it can reduce a company's profit
margin. In GE's case, departments devoted to important aspects of public relations,
business development, legal, global research, human resources, and finance are
, maintained centrally to provide services to all seven divisions. This creates ________
and saves money. - Answer -efficiency
TL & Co. is following a related-linked diversification strategy, and Soar Inc. is following a
related-constrained diversification strategy. How do the two firms differ from each other?
- Answer -TL & Co. will share fewer common competencies and resources between its
various businesses when compared to Soar Inc.
As you have noticed, the demand for flip phones has drastically reduced, and there are
only a few consumer electronics companies selling them at extremely low prices. Also,
the current buyers of flip phones are mainly categorized under laggards. Which of the
following stages of the industry life cycle is the flip phone industry in currently? -
Answer -decline stage
DigitalHealth Electronics Inc. is a company that builds diagnostic devices. It was the first
company to develop a compact MRI scanner by reconfiguring the components of the
MRI technology. This smaller and user-friendly version of the huge MRI scanner created
demand from small hospitals, nursing homes, and private practice doctors who were
earlier dependent on the scanning machines in large hospitals. Which of the following
types of innovations does this scenario best illustrate? - Answer -architectural
innovation
Which of the following businesses is most likely to disrupt an existing industry? (new
tech, existing market) - Answer -Closer Connex developed an earphone that receives
emails and text messages and converts them to voice messages. The first models had
poor reception, but they rapidly improved over time.
Amazon.com decided to enter the college bookstore market. The goal of "Amazon
Campus" is to offer co-branded university-specific web sites that offer textbooks and
paraphernalia, such as logo sweaters and baseball hats. This development shows
Amazon's relentless pursuit of - Answer -product diversification.
Anita has been named CEO of a popular sports apparel company. As CEO, she is
tasked with setting the firm's corporate strategy. Which of the following decisions is
Anita most likely to make? - Answer -what range of products the firm should offer
Best Burger is a major fast food chain. Its managers are motivated to grow the firm in
order to increase their market power and change the industry structure in their favor.
Which of the following strategies is most associated with their motive for growth? -
Answer -purchasing competitors
Threadless allows customers to submit their own designs and to vote on which designs
they would like to see printed on a T-shirt. This business uses a ________ technique. -
Answer -crowdsourcing
How has Apple been able to sustain its competitive advantage in the smartphone
industry? - Answer -by regularly introducing incremental improvements in its products
Which of the following is NOT a characteristic of a red ocean strategy? - Answer -Make
the value cost tradeoff
Lillypad Toys is a manufacturer of educational toys for children. Six months ago, the
company's research and development division came up with an idea for a unique
touchscreen device that can be used to introduce children to a number of foreign
languages. Three months ago, the company produced a working prototype, and last
month the company successfully launched its new device on the commercial market.
What should Lillypad's managers prepare for next? - Answer -increased competition
from imitators
Which of the following is an example of an external transaction cost? - Answer -the cost
of searching for a contract manufacturer
Edna Gomez is the founder of the restaurant chain Good and Green. She ensures that
the products in her stores are ethically and responsibly sourced. Most products are
therefore 100 percent organic and all packaging is manufactured from recycled material.
Also, her company sources ingredients from farms within 100 miles from her locations.
Edna's belief is that her restaurants should be able to support the community at large.
Which of the following terms best describes Edna Gomez? - Answer -social
entrepreneur
Horizontal integration may yield disappointing financial results because: - Answer -A &
B
A strategic alliance differs from a joint venture in that a strategic alliance: - Answer -is a
cooperative arrangement between two or more organizations that does not involve the
creation of a new entity.
While cell phones with holographic keyboards are currently in the introduction stage of
the industry life cycle, tablet computers are in the growth stage. In the context of this
scenario, which of the following statements is true? - Answer -While the industry for cell
phones with holographic keyboards will focus more on product innovation, the tablet
industry will focus more on process innovation.
A multidivisional structure can be costly because, when a company has seven divisions
like GE that each require special skills and knowledge, it can reduce a company's profit
margin. In GE's case, departments devoted to important aspects of public relations,
business development, legal, global research, human resources, and finance are
, maintained centrally to provide services to all seven divisions. This creates ________
and saves money. - Answer -efficiency
TL & Co. is following a related-linked diversification strategy, and Soar Inc. is following a
related-constrained diversification strategy. How do the two firms differ from each other?
- Answer -TL & Co. will share fewer common competencies and resources between its
various businesses when compared to Soar Inc.
As you have noticed, the demand for flip phones has drastically reduced, and there are
only a few consumer electronics companies selling them at extremely low prices. Also,
the current buyers of flip phones are mainly categorized under laggards. Which of the
following stages of the industry life cycle is the flip phone industry in currently? -
Answer -decline stage
DigitalHealth Electronics Inc. is a company that builds diagnostic devices. It was the first
company to develop a compact MRI scanner by reconfiguring the components of the
MRI technology. This smaller and user-friendly version of the huge MRI scanner created
demand from small hospitals, nursing homes, and private practice doctors who were
earlier dependent on the scanning machines in large hospitals. Which of the following
types of innovations does this scenario best illustrate? - Answer -architectural
innovation
Which of the following businesses is most likely to disrupt an existing industry? (new
tech, existing market) - Answer -Closer Connex developed an earphone that receives
emails and text messages and converts them to voice messages. The first models had
poor reception, but they rapidly improved over time.
Amazon.com decided to enter the college bookstore market. The goal of "Amazon
Campus" is to offer co-branded university-specific web sites that offer textbooks and
paraphernalia, such as logo sweaters and baseball hats. This development shows
Amazon's relentless pursuit of - Answer -product diversification.
Anita has been named CEO of a popular sports apparel company. As CEO, she is
tasked with setting the firm's corporate strategy. Which of the following decisions is
Anita most likely to make? - Answer -what range of products the firm should offer
Best Burger is a major fast food chain. Its managers are motivated to grow the firm in
order to increase their market power and change the industry structure in their favor.
Which of the following strategies is most associated with their motive for growth? -
Answer -purchasing competitors
Threadless allows customers to submit their own designs and to vote on which designs
they would like to see printed on a T-shirt. This business uses a ________ technique. -
Answer -crowdsourcing
