1.

A statement about what a company does is known as:

a. its vision. b. its values. c. its major goals. d. its mission. e. its value chain. 2.

The bargaining power of a manufacturing industry's suppliers is greater when:

a. the supply industry is fragmented. the manufacturers face high switching costs to b. change suppliers. suppliers sell a large quantity of their product to a c. few large manufacturers. d. many substitutes are available. manufacturers can threaten to produce their own e. supplies. 3.

An oligopoly is

a. a fragmented structure. b. characterized by one dominant firm. characterized by high interdependence among c. companies. d. more likely when entry barriers are very low. e. when an industry has only a single competitor. 4.

A tangible resource is something physical.

True False
5.

The marketing and sales function of a company is a support activity on the value chain.

True

False
6.

Functional-level strategies are those aimed at improving the effectiveness of a company's operations, efficiency, quality, innovation, and customer responsiveness.

True False
7.

Wake Up Coffee Company has decided to enter the coffee machine manufacturing business for a six-month trial run. They are likely to have the same unit costs of manufacturing as the other established competitors in this industry.

True False
8.

Ryanair initially competed by offering low cost fares and flying only a single route--London to Dublin. This is an example of:

a. cost leadership. b. focus cost leadership. c. differentiation. d. focus differentiation. e. the generic strategy. 9.

A cost leader would likely be the first to offer theater-quality sound in a DVD player.

True False
10. Market penetration is when a company concentrates on expanding market

share in its existing product markets.

True False
11. Customers who are inherently conservative and technophobic, often

refusing to adopt new technology even if the benefits are obvious, are referred to as:

a. innovators. b. early adopters. c. the early majority. d. the late majority. e. laggards. 12. Standards emerge because there are economic benefits associated with

them.

True False
13. The body of scientific knowledge used in the production of goods or services

is called technology.

True False
14. The success rate for international strategic alliances is high.

True False
15. MTV had to adapt its programming to the demands of viewers in different

nations in order to avoid losing market share to local competitors. MTV thus employed:

a. a global standardization strategy. b. an international strategy. c. a transnational strategy. d. a localization strategy. e. none of these choices. 16. If Coors opened up its own brewpubs where they served sandwiches and

Coors beer, this would be an example of:

a. forward vertical integration. b. backward vertical integration. c. horizontal integration. d. product bundling. e. cross-selling. 17. Product bundling involves offering customers the opportunity to buy a

complete range of products they need at a single combined price.

True False
18. A commonality is an attribute shared by two or more business units that

allows them to create more value when they operate together.

True False
19. HP used its competencies in developing printers to create a new product line

of home photo printers for digital cameras. Which diversification strategy did HP use?

Transferring competencies between business units a. in different industries. Leveraging competencies to create business units in b. new industries. Sharing resources between business units to realize c. economies of scope. d. Using product bundling. Utilizing general organizational competencies that increase the performance of all the company's e. business units. 20. Which of the following is a classic example of an agency relationship?

The relationship between stockholders and senior a. managers. b. The relationship between a firm and its suppliers. c. The relationship between two different customer

groups. The relationship between bondholders and d. stockholders. e. None of these choices. 21. Ethics officers are responsible for:

making sure that all employees are trained to be a. ethically aware. making sure that ethical considerations enter the b. business decision-making process. making sure the company's code of ethics is c. adhered to. d. investigating complaints from employees. e. all of these choices. 22. Integrating mechanisms help coordination take place among people,

functions, and divisions throughout the hierarchy of authority.

True False
23. Allison runs the paper products division of a major firm. The division makes

130 different paper products sold through two national distributors. Two distributors sell those paper products to several hundred retail outlets nationwide. Three people report directly to Allison: Katherine, Jim, and Roger. Katherine, Jim, and Roger each manage twelve people, for a total of thirty-six people in Allison's division. Allison's span of control refers to:

a. the 130 different paper products. b. the two national distributors. c. Katherine, Jim, and Roger. d. the thirty-six employees that work in the division. e. the several hundred retail outlets. 24. Which of the following is true about a multidivisional structure?

Each division is in charge of a major function (e.g., a. engineering, R and D, sales) of the firm. b. Each division may have a different structure.

c. All of the divisions have the same structure. Each division reports to a different corporate d. headquarters. e. None of these choices. 25. Each division with the full set of all the value-chain functions is called a self-

contained division.

True False