exam 2

Question 1

Disruptive innovation is typically engineered by larger incumbent companies in an industry. Choices: a) True b) False

Answer 1

False

Question 2

The least risky way to grow the business is by: a) pursuing a low cost strategy b) expanding internationally c) pursuing innovation d) reinvesting in existing capabilities and customer markets e) none of the above

Answer 2

none of the above

Question 3

Amplifying innovation is riskier than incremental innovation because it is less certain how existing resources and the value chain can be applied to new markets and segments. Choices: a) True b) False

Answer 3

True

Question 4

Process innovation is associated with all of the following except: a) new activity sets or capabilities b) improvements in efficiency, utilization, quality, or speed c) higher likelihood of competitive imitation d) later stages of the organizational life cycle e) all of the above

Answer 4

higher likelihood of competitive imitation

Question 5

The best way to stifle innovation is: a) encourage departments to compete for the best ideas b) create innovation teams using different guidelines c) cooperate with other companies d) make sure senior management is aware of what people are trying e) get Human Resources involved in the program

Answer 5

encourage departments to compete for the best ideas

Question 6

Radical innovation involves: a) extending or leveraging value chain and resources for unknown markets b) developing new value chain and resources for unknown markets c) using existing value chain and resources in new markets d) developing new value chain and resources for existing markets

Answer 6

developing new value chain and resources for unknown markets

Question 7

Disruptive and radical innovation both depend on tapping into known information sources and established methods of analysis to identify new opportunities. Choices: a) True b) False

Answer 7

False

Question 8

The ‘value trap’ occurs when there is only fit between parenting characteristics and parenting opportunities. Choices: a) True b) False

Answer 8

True

Question 9

Diversification is nearly as likely to destroy shareholder value as it is to create shareholder value. Choices: a) True b) False

Answer 9

True

Question 10

One impetus for growth as a reason to diversify comes from: a) desire to reduce complexity b) desire to enter an industry c) benefits to management and employees d) need to spread risk

Answer 10

benefits to management and employees

Question 11

Operational fit occurs when an acquiring corporation can take advantage of synergies stemming from support activities of the value chain. Choices: a) True b) False

Answer 11

False

Question 12

Within a diversified company, a set of businesses sharing similar strategies or challenges is called: a) related group b) planning group c) strategic group d) strategic business unit

Answer 12

strategic business unit

Question 13

Horizontal diversification occurs when a merger combines companies in different industries but with the same customers. Choices: a) True b) False

Answer 13

False

Question 14

Corporate strategy answers ‘What businesses should we be in?’ while business strategy answers ‘How should we compete in this business?’ Choices: a) True b) False

Answer 14

True

Question 15

To succeed in another country, managers must always follow the rules and cultural norms of that country. Choices: a) True b) False

Answer 15

False

Question 16

Which of the following is not a motive for expanding internationally? a) new geographic revenue opportunities b) avoiding environmental regulations c) spreading risk d) achieving location advantages

Answer 16

avoiding environmental regulations

Question 17

As the cell phone industry matures, the optimal route to sustained performance is: a) changing how value is created b) becoming the low-cost manufacturer c) acquiring competitors for scale d) leveraging capabilities into other devices

Answer 17

changing how value is created

Question 18

A transnational international strategy is appropriate when value is added downstream near the customer and efficiencies of scale are important. Choices: a) True b) False

Answer 18

True

Question 19

When entering a new country, competitive advantage depends on: a) appropriate resources and capabilities b) addressing key success factors c) fit with market, policies, and industries d) all of the above

Answer 19

all of the above

Question 20

The most challenging aspect of doing business abroad is the geographic distance in managing operations. Choices: a) True b) False

Answer 20

False

Question 21

This company type is intensive on few key criteria, analyzes costs, and defends its position: a) Prospector b) Defender c) Reactor d) Analyzer

Answer 21

Defender

Question 22

In high exit barrier industries, a failing competitor is likely to: a) Compromise and avoid b) Acquiesce and compromise c) Manipulate and avoid d) Defy and manipulate

Answer 22

Defy and manipulate

Question 23

It is ethically questionable to attend an industry conference with talks from competitors’ senior managers. Choices: a) True b) False

Answer 23

False

Question 24

Excellent competitor intelligence requires: a) industry analysis b) studying competitor behavior c) examining financials d) developing future views e) all of the above

Answer 24

all of the above

Question 25

Competitive response to threat by co-opting or forming standards is called: a) shaping b) containment c) neutralization d) annulment

Answer 25

shaping

Question 26

The only way to understand competitors is to examine historical behavior. Choices: a) True b) False

Answer 26

False

Question 27

Managing employees based on their operations is: a) direct supervision b) standardization of work processes c) outcome oversight d) standardization of skills

Answer 27

standardization of work processes

Question 28

Key components in organizational structuring include the core, admin support, and value chain activities. Choices: a) True b) False

Answer 28

False

Question 29

Commercial airline pilots are in the: a) techno structure b) strategic core c) policy group d) centralized core

Answer 29

techno structure

Question 30

Coordination where everyone adapts based on full knowledge of operations is: a) adhocracy b) mutual adjustment c) flattened email d) phone tree

Answer 30

mutual adjustment

Question 31

Structure with both a functional home and divisional home is a: a) m-form b) matrix c) dual d) integrated

Answer 31

matrix

Question 32

Groups directly responsible for competitive advantage are called the core. Choices: a) True b) False

Answer 32

False

Question 33

Coordination becomes harder as business becomes more multidimensional. Choices: a) True b) False

Answer 33

True

Question 34

ROE is a good metric for any company to use. Choices: a) True b) False

Answer 34

False

Question 35

Biggest problem with balanced scorecard is: a) relying on soft measures b) getting commitment c) understanding strategy logic d) using it in one SBU

Answer 35

understanding strategy logic

Question 36

'Style' in McKinsey 7-S includes dress code and employee behavior. Choices: a) True b) False

Answer 36

True

Question 37

“Systems” in McKinsey 7-S refers to: a) quality control b) performance reviews c) policies and procedures d) all of the above

Answer 37

all of the above

Question 38

Balanced scorecard is most valuable because: a) excellent financial reports b) useful for shareholders c) useful reports for management d) complements strategic plans

Answer 38

useful reports for management

Question 39

Metrics should be all except: a) translated to functional level b) tied to mission c) balanced d) appropriate for stakeholders e) based on reliable measures

Answer 39

appropriate for stakeholders

Question 40

Metrics representing expected results are: a) lead b) expectational c) lag d) prospective

Answer 40

lag