QUESTION 1
1 points Saved
Apple is considering backward integration into manufacture
of their products. Currently Foxconn in China handles most of their manufacturing
but Apple has some concerns about quality.
Apple operates in a high tech industry where products change
rapidly. Should they backward integrate and why?
A. Yes, it will weaken the power of suppliers.
B. No, Foxconn can do it better.
C. Yes, they will become more profitable.
D. No, they will have less flexibility to adapt their
products.
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QUESTION 2
1
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How does vertical integration compare with outsourcing?
A.
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Vertical integration and outsourcing both allow the company
to focus more on core competencies.
D. Vertical integration and outsourcing both allow the
company to reduce risk exposure to changing technology.
QUESTION 3 1
points Saved
You want to sell shoes in Indonesia where they have high
import duties that make your products 33% more costly however there
is no charge for locally produced products. The country
favors partnerships with local businesses and has a highly skilled workforce.
What is your best entry strategy?
A. Franchising B. Greenfield C. Exporting
D. Strategic alliance
QUESTION 4
1 points Saved
India has become a popular place to move information
technology functions to because of their large highly skilled IT workforce. Companies
keep their IT functions in a few locations. What is the most likely reason?
A. India has superior resources.
B. The cost of IT is lower.
C. There is a steep learning curve.
D. Buyer related activities must take place close to the
market.
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QUESTION 5
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Centralized organizations adapt more quickly.
C. Frontline workers lack critical knowledge for work
decisions.
D. Decentralized organizations make it too easy to place
blame.
QUESTION 6
1 points Saved
High uncertainty in competitive markets
A.
makes alliances among firms less attractive because the
markets’ profits are lower.
B. encourages firms to form alliances to share risks.
C. erodes alliances because uncertainty motivates
opportunistic behaviors by alliance partners.
D. increases the number of alliances because uncertainty
leads to synergy.
QUESTION 7 1
points Saved
In France, fine dressmaking and tailoring have been a
tradition predating Queen Marie Antoinette. Cloth manufacturers, design
schools, craft apprenticeship programs, modeling agencies, and so forth; all
exist to supply the clothing industry. This is an example of
A. outsourcing
B. strategic alliances
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D. complementary industries
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Nickelodeon and Nick Jr. and Walt Disney’s Company’s Disney
Channel. From the perspective of Comcast Corp., it is most likely to be:
A. Horizontal non-equity, uncertainty reduction
business-level, diversifying corporate-level strategic alliance.
B. Vertical equity, competition reduction business-level,
licensing corporate-level strategic alliance.
C. Vertical non-equity, complementary business-level,
diversifying corporate-level strategic alliance.
D. Horizontal non-equity, competition response business-
level, synergistic corporate-level strategic alliance.
QUESTION 9
1 points Saved
Glorietta Manufacturing specializes in making luxury leather
goods from exotic skins, such as snake, lizard, and alligator. In the last few
years it has been increasingly difficult to obtain high quality, unblemished
alligator skins. Its main source of alligator skins, Gator- Rama Ranch, has a
number of other customers. So, Glorietta’s management has decided to enter
acquisition negotiations with Gator- Rama in order to gain control over
Gator-Rama’s output. This is an example of a
A. vertical acquisition
B. hostile takeover
C. merger
D. horizontal acquisition
QUESTION 10
1 points Saved
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Revlon, best known as a cosmetics manufacturer also makes
bath
products, sunscreen and other non cosmetics. Approximately
76% of their revenue comes from their cosmetics. Further, Revlon receives
42% of their revenues from international sales. They operate
wholly owned subsidiaries in Australia, South Africa, and the United
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C. dominant business, Greenfield strategy
D. related linked diversification, acquisition international
strategy
QUESTION 11
1 points Saved
Dow Corning Corp was incorporated in 1943 by Dow Chemicals
and Corning Glass Works with the purpose of developing polymers and materials
based on silicon chemistry. This company operates overseas through its wholly
owned subsidiaries through which it also conducts sales. The alliance and global
strategies are most likely
A. equity venture, global strategy
B. Joint venture, transnational strategy
C. Joint venture, international strategy
D. non-equity, multidomestic strategy
QUESTION 12
1 points Saved
Pinnacle Inc. makes video editing hardware for the
television and movie industries. Their business comes primarily from the United
States but they want to engage in foreign direct investment in India.
Unfortunately, this industry is not well developed in India and the Indian
labor force is not familiar with this type of manufacturing. Pinnacle’s best
choice is
A. Acquisition
B. Multidomestic strategy
C. Strategic alliance
D. Greenfield venture
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QUESTION 13
1 points Saved
Your company has recently developed a patented process that
safely
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exporting B. alliance C. licensing
D. acquisition
QUESTION 14
1 points Saved
Toyota matched their corporate strategy to produce
reasonably priced high reliability vehicles using just in time inventory
management in which necessary components were not acquired until needed. They
also developed the philosophy of kaizen or continuous improvement in which all
employees participate in finding production improvements.
A. Toyota is involved in process innovation and corporate
entrepreneurship.
B. Toyota is engaged in radical innovation through corporate
entrepreneurship and internal innovation.
C. Toyota is engaged in incremental innovation through
internal innovation.
D. Toyota is developing an disruptive innovation through
their corporate culture.
QUESTION 15
1 points Saved
Tata motors in India recently acquired Jaguar and Land Rover
from Ford for 1.7 billion dollars. The price was considerably lower than the
price Ford had paid for these companies originally. These acquisitions allow
Tata to grow quickly and gain access to luxury markets. Which is NOT a reason
for the acquisition?
A. Gain market share.
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Learn from the design and engineering expertise of
Jaguar and Land Rover engineers.
C. Develop new markets.
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1 points
Saved
Coca Cola is divided into five international divisions:
Eurasia and Africa, Europe, North America, Latin America, and Pacific. They
make over 3500 beverage products and 80% of their revenue comes from their
beverage division. Their diversification and international strategy are:
Related constrained and multidomestic.
Related linked and transnational.
Related linked and global.
Dominant business and multidomestic.
QUESTION 17
1 points Saved
Revlon, best known as a cosmetics manufacturer also makes
bath products, sunscreen and other non cosmetics. Approximately 69% of their
revenue comes from their cosmetics. Further, Revlon receives 42% of their
revenues from international sales. They operate wholly owned subsidiaries in
Australia, South Africa, and the United Kingdom. Revlon can best be described
as
A. Related constrained/licensing
B. related linked/Greenfield
C. unrelated diversification/franchising
D. dominant business/turnkey
QUESTION 18
1 points Saved
Goldman Sachs likes to acquire firms that they believe are
undervalued. They hire a management team to oversee the acquisitions operations
and make improvements to the new
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acquisition is strong, they sell it off at a profit. This is
an example of:
A. Unrelated diversification
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QUESTION 19
1 points Saved
You are contemplating opening a manufacturing plant in
Nigeria. Labor is relatively cheap and you would have access to the African market
through your presence on the continent. However, Nigeria has experienced
government instability. Bribery has become a way of getting things done and the
government has taken over three companies in the last ten years. You should:
A. Franchise.
B. Choose an alliance entry strategy with a company already
based in Nigeria to gain access to local knowledge.
C. Choose an acquisition entry strategy to gain access to
local knowledge.
D. Choose a Greenfield venture so that you will have
control.
QUESTION 20
1 points Saved
Your company has recently developed a patented process that
safely and cheaply makes pharmaceutical grade vitamins. You would like to
expand your business overseas and are trying to decide on the best option.
Labor is relatively cheap overseas and most countries are happy to see foreign
direct investment by American companies. Your products are basically the same
for everyone since vitamins have value to people throughout the world. You
would like to retain control over your operations however since the process is
proprietary. Your best strategy and entry options are:
A. Multidomestic/Acquisition.
B. Transnational/Acquisitions.
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C. Multidomestic/Alliance.
D. Global-Standardization/Greenfield.
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military and rescue operations, he started a new venture
where he could customize these flying drone cameras to fit the specific needs
of the buyers and sell them. Joe can be best described as a(n)
A. entrepreneur. B. early adopter. C. inventor.
D. technology enthusiast.
QUESTION 22
1 points Saved
Which of the following is a competitive benefit experienced
by the first mover firm in an industry?
A. The first mover may be able lock in key suppliers.
B. The first mover will be able to achieve a less steep
learning curve.
C. The first mover will not need to find distribution
networks.
D. The first mover will be able to reduce the switching
costs.
QUESTION 23
1 points Save Answer
Jane Doe is the founder of a chain of coffee shops. She pays
a fair price for her coffee beans even though she could pay less and uses some
of the money to build roads and hospitals in poor regions where the beans come
from. Jane’s belief is that her company should be
able to support the community at large. Which of the
following terms best describes Georgia Ray?
A. entrepreneurial mindset
B. inventor
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social entrepreneur
D. innovator
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They are seeking to stake out a strong strategic position.
B. There are
only a few competitors in the holographic phones market.
C. Market size is moderate.
D. Process
innovation is increasing.
QUESTION 25
1 points Save Answer
IMFriends is an instant messaging application for
smartphones. New smartphone users find it easier to connect with friends and
relatives through this mobile app when compared to other similar instant
messaging applications. Hence, it has the largest user base in the industry.
Thus, MFriendsapp’s value has increased primarily due to its
A. First mover advantages.
B. Network effects.
C. First mover disadvantages.
D. Disruptive innovation.
QUESTION 26
1
points Save Answer
Which of the following best illustrates a process innovation
as opposed to product innovation?
A. a consumer electronics company launching holographic
televisions.
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C. an automobile company using computer-aided design in its
production.
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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?
A. The industry for cell phones with holographic keyboards
will face greater competition than the tablet industry
B. While the industry for cell phones with holographic
keyboards will focus on product innovation, the tablet industry will focus on process
innovation.
C. The industry for cell phones with holographic keyboards
will face price competition, whereas, in the tablet industry, the mode of
competition will be non-price.
D. While the industry for cell phones with holographic
keyboards can reap the benefits of economies of scale, the tablet industry will
experience no such benefits.
QUESTION 28
1 points Save Answer
The compact disk (CD) industry is in the maturity phase of
its industry life cycle. What conditions prevail for an industry in this stage?
A. The industry structure is an oligopoly with only a few
large firms.
B. The mode of competition at this stage will be based on
non- price factors.
C. The type of buyers at this stage will be early adopters.
D. The market growth is positive or high at this stage.
QUESTION 29
1 points Save Answer
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between technology enthusiasts and early adopters?
A. While early adopters make up the smallest market segment,
technology enthusiasts make up the mass market.
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While the customer segment in the introduction stage
consists of early adopters, the customers entering the market in the growth
stage are technology enthusiasts.
D. Unlike technology enthusiasts, early adopters’ demand is
fueled more by intuition and vision rather than technology concerns.
QUESTION 30
1 points Save Answer
At the time when Kevin decided to purchase a tablet
computer, the product had just become accessible to the mass market. He
purchased the tablet only after he was completely convinced that the benefits
it would offer him would far exceed its price. Also, he waited for his friends
to try the product and popular gadget television shows to endorse it. Which of
the following customer segments does Kevin best represent?
A. laggards
B. technology enthusiasts
C. early majority
D. early adoopters
QUESTION 31
1 points Save Answer
How is the early majority section of consumers different
from the late majority section?
A. The late majority enters the market in the decline stage,
whereas the early majority enters the market during the maturity stage.
B. While the late majority prefers buying from unknown new
ventures, the early majority relies only on well-established brands.
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a new technology, the late majority is not.
D. While the early majority makes up the mass market, the
late majority is the smallest market segment.
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1 points Save
Answer
Food Inc. is creates and markets new meals sold in
supermarkets. It has released a new meal package sold directly to restaurants.
Which of the following types of innovations does this scenario best illustrate?
A. disruptive innovation
B. radical innovation
C. architectural innovation
D. incremental innovation
QUESTION 33
1 points Save Answer
Red Hat gives away open source software for free but charges
a support fee to those customers who rely on Red Hat for maintenance, support,
and installation. Red Hat is benefiting from
A. open innovation model.
B. experience-curve effects.
C. razor–razor-blade business model.
D. economies of scope.
QUESTION 34 1
points Save Answer
Researchers at Games First Inc. spent several months coming
up with a fun game for toddlers that incorporates a new idea in preschool
education. They then marketed it to parents of those toddlers. This scenario
describes step of the
innovation process.
A. three
B. four
C. two
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D. one
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B. radical innovation.
C. incremental innovation.
D. architectural innovation.
QUESTION 36
1 points Save Answer
Widgets Inc. has decided to vertically integrate by
supplying their own parts. Widgets will not supply those parts to any other
company? The new employees in this department have expertise and knowledge that
the parent company lacks. What are the issues and problems.
A. Lack of high powered incentives and information asymmetry
B. High powered incentives and moral hazard C. Increased
administrative and search costs D. Flexibility and opportunism
QUESTION 37
1 points Save Answer
Which of the following firms is most integrated?
A. a firm that enters a joint venture with another company
to develop a new technology
B. a firm that buys all the required raw materials from
multiple external vendors
C. A firm that manufactures and distributes its products
D. a firm that owns production subsidiaries across the globe
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All Answer1s tpoosinatvse all answers.
Hitoro Inc. developed a superior touch screen technology for
tablet computers that enabled multiple users to operate the screen at the same
time. The technology was leased to Revox Inc., a consumer
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C. franchising
D. bootlegging
QUESTION 39
1 points Save Answer
Dow entered into a joint venture with Corning to jointly
produce and market products. They believed that the joint investment would
increase cooperation and trust. This is an example of a
A. parent-subsidiary relationship.
B. credible commitment.
C. corrective action.
D. cartel.
QUESTION 40
1 points Save Answer
Neon Electronics Inc. manufactures tablet computers, cell
phones, and televisions. They have been selling through retail outlets such as
Walmart and Best Buy but don’t believe that their product is being presented
adequately. What is their best alternative?
A. conglomerate diversification.
B. crowdsourcing.
C. backward vertical integration.
D. forward vertical integration.
QUESTION 41
1 points Save Answer
Which of the following best illustrates physical-asset
specificity?
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A. a machine solely designed to give a candy its trademarked
shape
B. a generic machine that can be used to churn different
mixtures
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QUESTION 42
1 points Save Answer
Which of the following best illustrates site specificity?
A. investment made to train employees to operate computers
B. investment made in human capital to master procedures of
a specific organization
C. bottling machinery to manufacture bottles with
trademarked shapes
D. equipment necessary for mining bauxite and aluminum
smelting >
QUESTION 43
1 points Save Answer
Dog Houses Inc. sources raw materials from a number of
suppliers to manufacture their dog houses. However they also own land with some
of these resources as part of their supply chain. They are using
A. horizontal integration
B. taper integration
C. oncentric integration
D. conglomerate integration
QUESTION 44 1 points Save Answer
Apples Inc sells makes a number of household organic
products sold only in the United States including laundry detergent and floor
cleaners. This is an illustration of
A. geographic diversification.
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C. process diversification.
D. market diversification.
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Honda entered the American market making small engines for
lawnmowers and motorcycles. They later developed a line of cars by using their
motors to diversify into new markets. Honda is
A. building new core competencies to protect and extend
current market position and incremental innovation.
B. leveraging existing core competencies to target the chasm
between the early adopter and early majority market segment.
C. building new core competencies to create and compete in
future markets.
D. redeploying and recombining existing core competencies to
compete in future markets and architectural innovation.
QUESTION 46 1 points Save Answer
Berkshire Hathaway. is a large multinational conglomerate.
As a single business unit, the company’s stock price is estimated to be
$216,280. However, by adding the actual market stock prices
of each of its individual business units, the stock price of the company as one
unit would be $300,00. What is Berkshire Hathaway experiencing in this
scenario?
A. diversification premium
B. learning-curve effects C. diversification discount D.
experience-curve effects
QUESTION 47
1 points Save Answer
PrimoDisk Inc has developed a new data storage technology
which can hold more data in a small space. However, PrimoDisk has not been able
to penetrate the storage market even though they have a
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answers.
matrix, PrimoDisk will be categorized under
A. cash cows.
B.
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QUESTION 48
1 points Save Answer
The top management team of Supersonic Inc. have used their
knowledge to make an acquisition which is not in the company’s best interest.
This is an example of
A. Influence costs and information asymmetry
B. Administrative costs and moral hazard
C. Coordination costs and information asymmetry
D. Coordination costs and information asymmetry
QUESTION 49
1 points Save Answer
RoboToys, Inc. is involved in the production of robotic
toys. This firm produces the raw materials, including metals and oils for
plastic; creates the integrated circuits, displays, and batteries; and
assembles the toys. Which of the following stages of the industry value chain
is RoboToys involved in?
A. stages 2, 3, and 5
B. stages 2, 3, and 4
C. stages 1, 2, and 4
D. stages 1, 2, and 3
QUESTION 50
1 points Save Answer
Canon Inc. merged with its competitor Kyocera Inc. This
allowed Kyocera to use its technological competencies along with Canon’s
marketing capabilities to capture a larger market share than what the two
entities individually held. What does this scenario best illustrate?
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A. backward integration
B. forward integration
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QUESTION 51
1 points Save Answer
Organic Inc.’s decision to acquire a chain of restaurants
proved to be ill-fated because its managers had overestimated their abilities
and skills. They believed that they had the skills to manage such diversified
businesses and create additional shareholder value. However, the acquisition
failed to create the anticipated synergies
because the managers’ capabilities were restricted to the
organic food industry. What does this scenario best illustrate?
A. managerial hubris
B. managerial empathy C. managerial capitalism D. managerial
feasibility
QUESTION 52
1
points Save Answer
Honda Inc., a manufacturer of automobiles, has entered into
a 15-year partnership with a software company to develop sophisticated
operating systems and innovative mobile applications for its vehicles. This
would mean that both the companies will have to mutually share their resources,
knowledge, and capabilities to develop a superior product. What is the
relationship between Honda and the software company best referred to as in this
scenario?
A. a strategic alliance
B. an acquisition
C. a leveraged buyout
D. a proprietorship
QUESTION 53
1 points Save Answer
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