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Administration Policy & Strategy Learn Smart > Learn Smart 6 > Flashcards

Learn Smart 6 Flashcards

1
Q

The new owners of a long established clothing retailer have experience in garment manufacturing and as a result they decide to expand into that business. this type of business growth is called

A

backward vertical integration

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2
Q

what is a sign that a leading firm may be vulnerable to an offensive strategy attack?

A

the firms use of ageing technology and outdated equipment

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3
Q

if the face to market leadership in a particular industry is a marathon

A

there may be enough time for fast followers and late movers

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4
Q

What are common objectives of merger and acquisition strategies?

A
  • Expanding geographic coverage
  • Extending business into new product categories
  • gaining quick access to new technologies
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5
Q

In a strategic alliance, a company’s proprietary knowledge and trade secrets are most vulnerable when the partnership involves

A

collaborative research and development

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6
Q

what are reasons for a company to favor internet retailing?

A
  • To increase brand recognition
  • To lower costs for end users
  • To lower distribution costs
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7
Q

which statement about strategic alliances in industries experiencing rapid technological advances is true?

A

Many companies find strategic alliances an essential way to keep pace with technological change

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8
Q

In industries with changing boundaries, a company may pursue an acquisition strategy in order to

A
  • Be prepared t orespond to the various directions the industry might take
  • Become mroe flexible in its capacity to respond to buyers’ changing needs
  • Expand into new geographic regions
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9
Q

A strategic alliance can be defined as a formal; agreement between two or more separate companies in which

A

the parties agree to work collaboratively toward one strategically relevant objective

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10
Q

what are some of the negative effects that merger and acquisitions can have on personnel

A

-Difficulty coping with new management may lead to lower morale

  • Employees may resist efforts to mesh the cultures of the two companies
  • managers may make mistakes when deciding which systems to integrate
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11
Q

A company that aggressively pursues and online sales strategy risks

A

-threatening crucial relationships with distribution allies

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12
Q

The best strategic offensives for companies involve which of the following?

A
  • Strive to convert a competitive advantage into a sustainable advantage
  • Overwhelming rivals with swift and decisive action
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13
Q

the term “blue ocean” refers to a market space in which

A

an industry does not yet exists and the market space is untainted by competition

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14
Q

outsourcing typically ____ the scope of a business operations

A

narrows

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15
Q

which statements are true about concerning horizontal scope?

A
  • It can be expanded through company mergers and acquisitions
  • it is the range of the product and serviced segments that a firm serves within its product and service market
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16
Q

what are reasons that merger and acquisitions sometimes fail?

A
  • cost savings are less than anticipated

- Gains in competitive advantage materialize more slowly than was anticipated

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17
Q

T?F
for a company making a strategic move, being a fast follower or a late mover is always better in the long run than being a first mover

A

F

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18
Q

Expanding along the value chain into products and services that are closer to the end user is called

A

forward vertical integration

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19
Q

The drawbacks of strategic alliances include the possibility that a company will

A
  • Overestimate the potential for sustaining a positive relationship
  • Accidentally receal knowledge that allows a pernter to match core strengths
  • Become too dependent on a partner
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20
Q

which statement are true concerning vertical scope?

A
  • It is defined by the range of activities that may extend from initial production to after- sale customer service.
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21
Q

when should a company undertake a strategic offensive?

A
  • When the company has no option other than to try to lessen a strong rivals competitive advantage
  • When the company identifies a chance to improve it market share at a competitors expense
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22
Q

Which statements about strategic alliances are generally true?

A
  • All parties of the alliance contribute resources
  • Financial responsibility is shared among all parties of the alliance
  • The alliances involve mutual dependence and shared risk
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23
Q

which statements concerning strategic alliances are accurate?

A
  • Strategic alliances are used by companies as a way of managing outsourcing
  • Strategic alliances are used by some companies to extend their scope of operations internationally
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24
Q

Which statements about strategic alliances among large corporations is true?

A
  • Large coporations can be well-served by managing their strategic alliance like a profolio
  • It is not uncommon for large corporations to have up to 50 strategic alliances
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25
Q

A business guerrilla offensive is best suited for

A

small companies that lack the capacity to launch a full strategic offensive against better established rivals

26
Q

Strategic alliances can be a viable alternative to

A
  • Horizontal mergers and acquisitions
  • Vertical integration strategies
  • Traditional price-oriented contracts
27
Q

what are recommended strategies for companies that manage a large number of strategic alliances?

A
  • To break relationships that have produced meager results
  • To continue to seek promising new alliances
  • To restructure alliances to optimize collaborative effort
28
Q

the benefits of forward vertical integration include

A
  • Differentiating a company from its competitors
  • Giving manufacturers better access to end users
  • Improving a companys market visablility
29
Q

In some cases, backward vertical integration can increase efficiency by

A

coordinating production flows and preventing bottlenecks

30
Q

Approximately what percent of a strategic business alliances fail each year?

A

60% to 70%

31
Q

which statement about entering the supply stage of the value chain as part of a vertical integration strategy is true?

A

matching a suppliers production efficiency often requires significant investment in research and development

32
Q

Zipcar located new ares of demand for rented cars by targeting

A

people who live in urban centers and need short term rentals

33
Q

what would be an example of a firm pursuing vertical integration?

A

the owner of a poultry farm expanding into food distrisbution

34
Q

In many cases, strategic alliances are preferable to vertical integration strategies , as well as horizontal mergers and aquisitions, because strategic alliances

A
  • Are more flexible and allow for swifter responses to changing market conditions
  • can be deployed more rapidly in attempt to gain first-mover advantages
  • Can lower investment costs by requiring partners to pool resources
35
Q

Companies in successful business alliances understand that collaborative arrangements should be

A
  • Capable of responding to shifting market changes

- Flexible enough to keep pace with changing customer requirements

36
Q

Some companies have adopted forward vertical integration strategies to

A
  • Supplement to their core product line with iconography and memorabilia
  • Facilitate the sale of overstocked and slow moving items
  • Decrease dependence on sales agents, wholesalers and retailers
37
Q

The defective approach that companies use most frequently to defend their market position is

A

to block avenues that competitors might use to launch a strategic offensive

38
Q

A company that acquires another comapny in the same industry may be able to cut costs by

A
  • Combining and downsizing administrative activities

- Closing inefficient plants

39
Q

Contract-based outsourcing can introduce problems because

A
  • Issues arising from delays and budget overruns may be difficult to resolve
  • The outside company may lack incentive to meet the needs of the outsourcing company
  • A company may have a difficult time monitoring the work of the outside company
40
Q

in a winner take all type of market

A

first mover advantages can insulate a company from competition

41
Q

Which statement about establishing the technical standard in an industry is true?

A

Establishing a technical standard is an experience based advantage that can grow over time

42
Q

which statements concerning strategic alliances are accurate?

A
  • Strategic alliances are used by some companies to extend their scope of operations internationally
  • Strategic alliances are used by some companies as a way of managing outsourcing
43
Q

In a strategic alliance between companies, the decision making process should

A

-allow partners to keep pace with developments in the market

44
Q

Vertically integrated companies may face challenges realizing economies of scale because

A
  • Their production levels often fall below the minimum efficient scale
  • The company is too small
45
Q

Comapnies that outsource strategically important run the risk of

A

weakening their ability to sustain their competitive advantage in ares vital to the company’s success

46
Q

In which situation do adept followers have an advantage over first movers?

A
  • When first movers products do not perform well
  • When imitators can achieve the same benefits as pioneers with lower costs
  • When market uncertainties make it difficult to predict which products will succeed.
47
Q

A merger can be defined as

A

the combining of two or more companies into a single corporate entity

48
Q

A company that expands its geographic coverage typically

A
  • enhances its name recognition and brand awareness

- increase its bargaining power with suppliers and buyers

49
Q

Price cutting can be an effective strategy for companies that

A

have already achieved a cost advantage

50
Q

what are examples of ways that companies signal would be challengers that retaliation is likely ?

A
  • publicly announcing a commitment to maintaining market share
  • Maintaining cash reserves and marketable securities to fun countermeasures
51
Q

combinded companies may be able to reduce supply chain costs because

A

expanded operating capacity may increase the companys bargaining power with suppliers

52
Q

A merger or acquisition that extends business into new product categories

A
  • helps a company fill gaps in its product line

- Can be more cost effective than developing the product on its own

53
Q

when buyer preferences shift a vertically integrated company

A

may have difficulty adjusting its product lines to meet new demand

54
Q

A company can achieve which of the following by signaling would be business challengers that retalliation is likely in the event of any strategic attack?

A
  • Diverting challengers to less threatening competition

- Dissuading challengers from attacking altogether

55
Q

Zipcar competes against entrenched rivals in the rental car insdustry by

A
  • Keeping the cars it rents in conventialty located parking spaces
  • Renting cars by the hour or day to members who pay a yearly fee
56
Q

Under which of the following circumstances might backward vertical integration lower costs?

A
  • When there are few suppliers in the market

- When the item being supplied is a major component of the final product

57
Q

A company that acquires another company in the same industry may be able to cut costs by

A
  • Combining and downsizing administrative activities

- Closing inefficient plants

58
Q

When there are improvements in technology at the supply stage of the value chain, a vertically integrated company

A
  • May need to continue producing suboptimal products rather than upgrading its technology
  • May be required to incur high cots for abandoning old technologies in an effort to keep pace with suppliers
59
Q

A vertically integrated firm

A

Participates in multiple stages of an industry value chain system

60
Q

first-movers are likely to experience significant advantages when

A
  • Switching costs discourage a first movers customers from seeking a different vendor
  • Being first in a new market builds strong brand loyalty and enhances a firms reputation

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