Innovation Strategies
________Blank is best described as the transformation of an idea into a new product or process, or the modification and recombination of existing ones.
A) Invention
B) Direct imitation
C) Bootstrapping
D) Lean manufacturing
A) Invention
Corporate strategy provides answers to which key question?
A) What is the firm’s chain of command?
B) Where should the firm compete?
C) How should the firm compete within each SBU?
D) What are the firm’s boundaries?
B) Where should the firm compete?
There are many reasons why firms need to grow. Which of the following reasons is strongly influenced by economies of scale?
A) increasing profits
B) lowering costs
C) reducing risk
D) motivating managers
B) lowering costs
Globalization is defined as
A) a process of closer integration and exchange between different countries, businesses, and peoples worldwide, made possible by falling trade and investment barriers, advances in telecommunications, and reductions in transportation costs.
B) additional costs of doing business in an unfamiliar cultural and economic environment and of coordinating across geographic distances.
C) the collective mental and emotional “programming of the mind” that differentiates human groups.
D) cultural disparity between an internationally expanding firm’s home country and its targeted host country.
A) a process of closer integration and exchange between different countries, businesses, and peoples worldwide, made possible by falling trade and investment barriers, advances in telecommunications, and reductions in transportation costs.
Online shoe retailer Zappos has customer service as its core competency. For example, the company deliberately avoids having its customer service reps follow a detailed script when responding to customer calls and empowers lower-level employees to make decisions and solve problems. Zappos is what type of organization?
A) decentralized
B) centralized
C) formalized
D) specialized
A) decentralized
A patent is a form of
A) intellectual property.
B) electronic payment.
C) permanent monopoly.
D) economic market.
A) intellectual property.
In class we described that Vail Resorts growth through acquisitions of other ski mountains was primarily aimed to?
A) expand their customer base by increasing prices
B) vertically integrate to control supplier costs
C) expand their geographical reach while achieving economies of scope
D) diversify their portfolio so they are less subject to risk in any particular market sector
C) expand their geographical reach while achieving economies of scope
The process of merging with a competitor at the same stage of the industry value chain is best described as ________Blank integration.
A) vertical
B) horizontal
C) forward
D) taper
B) horizontal
Multinational enterprises will often make foreign direct investments (FDI), which is a firm’s investments in ________Blank abroad. Hint: this would be the case for Tesla making direct investments in mining companies for critical resources for electric batteries.
A) financial markets
B) the host country
C) value chain activities
D) lobbying foreign governments
C) value chain activities
A high degree of formalization in an organization is most likely to
A) improve customer service.
B) slow down decision making.
C) produce inconsistent results.
D) increase creativity and innovation.
B) slow down decision making.
Which of the following best describes entrepreneurship?
A) a business model in which companies can obtain a large part of their revenues by selling a small number of units from among almost unlimited choices
B) the commercialization of any new product or process, or the modification and recombination of existing ones
C) the process by which change agents undertake economic risk to innovate—to create new products, processes, and sometimes new organizations
D) the pursuit of social goals while creating a profitable business
C) the process by which change agents undertake economic risk to innovate—to create new products, processes, and sometimes new organizations
Nguyen Autos currently sources components such as airbags, upholstery, and brake pads from various suppliers in the industry value chain. In order to lower costs and reduce the risk of interruptions in the supply of components, Nguyen should pursue
A) product diversification.
B) forward integration.
C) backward integration.
D) geographic diversification.
C) backward integration.
In class we showed that which type of diversification is the best performing on average
A) single business
B) related diversification
C) unrelated diversification
D) dominant business
B) related diversification
Teresa wants to take her firm internationally but is concerned with the________, which refers to the possibility of higher costs of doing business in an unfamiliar cultural and economic environment.
A) geopolitical climate
B) foreign direct investment
C) liability of foreignness
D) transactional strategy
C) liability of foreignness
The University of Central Florida has a typical College of Business that houses several specific mini-departments such as management, marketing, finance, accounting, economics, and real estate. This College of Business best resembles a(n)________ structure.
A) simple
B) functional
C) multidivisional
D) holarchy
B) functional
Which of the following is not an advantage when it comes to “first-mover advantages”?
A) First movers may be able to lock in key suppliers.
B) First movers may benefit from network effects.
C) First movers must educate potential customers about the product.
D) First movers may hold important intellectual property such as critical patents.
C) First movers must educate potential customers about the product.
Because Facebook receives almost all of its revenues from online advertising, we would conclude that it would be characterized as a(n)________ firm, which has the lowest levels of corporate diversification.
A) single business
B) dominate business
C) related diversification
D) unrelated diversification
A) single business
Tree Corporation recently acquired a smaller competitor, Branch and Associates, which specializes in issues not previously covered by Tree Corporation, such as intellectual property cases. Given the increase in the firm’s size and complexity, it is likely that its internal transaction costs will
A) be eliminated.
B) decrease.
C) transition to external transaction costs.
D) increase.
D) increase.
Walmart sells live animals (snakes, eels, toads, etc.) for food preparation in China, whereas IKEA sells kimchi refrigerators and metal chopsticks in South Korea. These examples illustrate the need for________, which often requires the competing firm to tailor their products and services to meet the needs of the market in which they are competing.
A) cost-leadership
B) international strategy
C) local responsiveness
D) globalization hypothesis
C) local responsiveness
Jerry is one of the SBU managers for a firm that has been in business for over 50 years. The external environment in which the firm has operated has changed significantly in the past decade, but it is still operating under a “business as usual” mantra. Jerry can’t seem to convince the upper-level executives to reorganize the firm’s structure and formal reporting relationships. This firm is probably experiencing
A) a failed strategy.
B) organizational inertia.
C) a change in leadership.
D) increased morale due to their organizational culture.
B) organizational inertia.
The type of customers vital to a firm introducing a new innovation are the________, who are willing to buy early into new technology or product concept.
A)laggards
B) Early Majority
C) Early Adopters
D) Late Majority
C) Early Adopters
How is an equity alliance different from a joint venture?
A) An equity alliance involves ownership that facilitates transaction-specific ventures; a joint venture involves taking ownership by buying stock.
B) An equity alliance involves taking ownership in a partner; a joint venture involves two or more entities owning a firm.
C) An equity alliance involves taking ownership in a partner; a joint venture involves taking ownership by buying stock.
D) An equity alliance involves partners contributing equity to a joint venture; a joint venture involves two or more entities owning a firm.
B) An equity alliance involves taking ownership in a partner; a joint venture involves two or more entities owning a firm.
A primary advantage of organizing economic activity within firms is the?
A) low administrative costs because of reduced bureaucracy.
B) eradication of the principal-agent problem.
C) high-powered incentive to work as salaried employees for an existing firm.
D) ability to coordinate highly complex tasks to allow for specialized division of labor.
D) ability to coordinate highly complex tasks to allow for specialized division of labor.
Mars Tennis Equipment, Inc. wishes to pursue international markets such as Spain and France. In order to do this, it may wish to consider a possible
A) government partnership that may lead to lobbying.
B) joint venture with another firm already established in those markets.
C) hostile takeover with a firm operating in the United States.
D) marketing strategy that strengthens the international value chain.
B) joint venture with another firm already established in those markets.
Elvira is the CEO of All Things Inc. Her company employs a matrix structure, which is the combination of the________ and________ structure.
A) functional; M-form
B) simple; functional
C) M-form; simple
D) network; functional
A) functional; M-form