Foundations of Strategy 2nd Edition By Grant - Test Bank

Foundations of Strategy 2nd Edition By Grant – Test Bank

 

Instant Download – Complete Test Bank With Answers

 

 

Sample Questions Are Posted Below

 

1. Change in industries is driven chiefly by the forces of technology, market demand and economics.

@Pages and References: Page 152

*a. T

1. F

 

2. Massive and unpredictable changes occur in some industries, but less so in others.

@Pages and References: Page 152

*a. T

1. F

 

3. Firms are continually trying to erode the competitive advantage of rivals, and to build and maintain their own competitive advantage.

@Pages and References: Page 152

*a. T

1. F

 

4. The industry life cycle comprises 4 stages: introduction, growth, maturity, decline – so is indistinguishable from the product life cycle.

@Pages and References: Pages 157-158

1. T

*b. F

 

5. Two main factors drive industry evolution: demand growth and the production and diffusion of knowledge.

@Pages and References: Pages 157-158

*a. T

1. F

 

6. The introduction to maturity phases of the industry life cycle curve is characteristically U-shaped.

@Pages and References: Page 157-158

1. T

*b. F

 

7. The industry life cycle consists of four stages: 1) Introductory, 2) Growth, 3) Plateau, and 4) Rejuvenation.

@Pages and References: Pages 157-160

1. T

*b. F

 

9. The duration of the industry life cycle varies greatly from one industry to another.

@Pages and References: Pages 157-160

*a. T

1. F

 

10. Over time, industry life cycles become longer and longer.

@Pages and References: Pages 157-160

1. T

*b. F

 

11. A dominant design is one which is the most noticeable, or receives the most publicity.

@Pages and References: Pages 157-160

1. T

*b. F

 

12. The emergence of a dominant product design tends to coincide with a shift towards process innovation

@Pages and References: Pages 157-160

*a. T

1. F

 

13. A dominant design defines the look, functionality and production method for a product and becomes accepted by the industry as a whole.

@Pages and References: Pages 157-160

*a. T

1. F

 

 

14. Technical standards have the most dramatic effect in markets exhibiting network effects because users not adopting the standard risk isolation.

@Pages and References: Pages 157-160

*a. T

1. F

 

15. Emphasis often shifts from product innovation to process innovation, once a dominant design emerges.

@Pages and References: Pages 159-160

*a. T

1. F

 

 

16. Firms often imitate each other’s strategies in order to gain legitimacy

@Pages and References: Pages 167-168

1. T

*b. F

 

17. Anderson and Tushman point out that all technological change is “competence destroying”

@Pages and References: Pages 168-170

1. T

*b. F

 

18. Established firms often find it difficult to adapt to new technologies even though they are well aware of these technologies

@Pages and References: Pages 169-170

*a. T

1. F

 

19. The emphasis of organizational development is upon individual organizational units and bottom-up change

@Pages and References: Pages 170-171

*a. T

1. F

 

20. A firm is said to be “ambidextrous” when it is able to exploit its existing technology successfully

@Pages and References: Pages 170-171

1. T

*b. F

 

21. Change in the industry environment faced by a firm is:

@Pages and References: Page 153

1. Massive and unpredictable
2. Gradual and predictable

*c. Could be either answer a or b, depending on the industry and the prevailing conditions

1. Easier for large firms to cope with

 

22. Change in an industry is the result of:

@Pages and References: Page 153

1. The forces of technology, consumer preferences, and economic growth

*b. Both external forces and the incumbents’ competitive strategies

1. The effect of the “5 forces” model of competition
2. Economic and psychological factors

 

 

23. The industry life cycle:

@Pages and References: Pages 157-160

1. Is an extension of the concept of the product life cycle
2. Uses the same stages as the product life cycle
3. Often lasts much longer than a typical product life cycle

*d. All of the above

 

24. The text claims that two factors are fundamental to the industry life cycle. One of these is:

@Pages and References: Pages 157-160

*a. The production and diffusion of knowledge

1. Industrial production and the diffusion of knowledge
2. Demand during the growth phase
3. Demand for growth in the diffusion of knowledge

 

25. The decline phase of the industry life cycle is caused by:

@Pages and References: Pages 157-160

*a. The emergence of a radically better substitute product, representing a new industry

1. Tired old firms running out of new ideas
2. Existing firms leaving the industry to move to a more profitable one
3. Excessive market saturation

 

26. A new industry life cycle begins when:

@Pages and References: Pages 157-160

1. A very large gap in the market emerges
2. Another industry dies

*c. New knowledge manifests itself in the guise of a sufficiently radical product innovation

1. There are sufficient entrepreneurs

 

27. A dominant design is:

@Pages and References: Pages 157-160

1. One which has won the most industrial design awards

*b. An emergent de facto industry standard broad product format

1. The one advertised most strongly by the market leader
2. The latest new product which gains the most media attention

 

28. A technical standard:

@Pages and References: Pages 157-160

1. Only occurs in computing when there is a network effect
2. Emerges when there are interconnectivity and interface compatibility issues
3. Can emerge for safety and other reasons from standards bodies

*d. Answers b and c

 

29. The different stages of the industry life cycles are characterised by:

@Pages and References: Pages 157-160

*a. The evolution of the industry growth rate over time

1. The evolution of the competition in the industry
2. The evolution of a firm’s market share
3. None of the above

 

30. An industry life cycle:

@Pages and References: Pages 157-160

1. Always follows the theoretical pattern

*b. May never enter the decline phase in industries supplying basic essential products or services

1. Must be the same everywhere, due to globalisation
2. Can never really experience a resurgence

 

31. The PC industry clearly began in the 1970’s because:

@Pages and References: Pages 159-160

1. It did not exist at all prior to this time
2. The introduction phase was typical: no mass market, many product variants, small firms
3. By the 1980’s, the growth phase had begun, with a design standard emerging

*D. All of the above

 

 

32. As the industry life cycle progresses, overall strategies need to:

@Pages and References: Pages 160-163

1. Stay steady and not waver; don’t change anything

*b. Change in most major aspects

1. Primarily focus on cost-cutting
2. None of the above

 

33. Start-up firms in a new industry are also sometimes known as:

@Pages and References: Page 163

1. de alio entrants

*b. de novo entrants

1. de bono entrants
2. de facto entrants

 

34. Firms entering a new industry who were already established in a related industry are sometimes known as:

@Pages and References: Page 163

*a. de alio entrants

1. de novo entrants
2. de facto entrants
3. Both b and c

 

35. The basis of entering a new industry at the Introduction phase is:

@Pages and References: Page 163

*a. Effective product innovation

1. Effective process innovation
2. Effective promotional material
3. Effective sales people

 

36. A “born global” company is one which:

@Pages and References: Page 163

*a. Interacts across the world from the outset – especially regarding selling

1. Is a “virtual” company
2. Is spun out of an existing global company
3. Has an international cultural appreciation

 

37. Often, to succeed in the evolution from introduction to growth a firm:

@Pages and References: Page 224

1. Needs to acquire an injection of cash from a venture capital company

*b. Needs to be closely associated with the dominant design which emerges

1. Needs to buy a major competitor
2. Needs to pull back on product innovation

 

38.The key challenges for firms entering the growth phase of the industry life cycle is

@Pages and References: Pages 163-164

1. “scaling up” its output
2. obtaining sufficient resources and capabilities to support effective scaling-up of operations
3. adapting their product designs and manufacturing capabilities to accommodate large-scale production

*d. All of the above

 

39. To survive going into the maturity phase of the industry life cycle a firm needs to:

@Pages and References: Page 164

1. Outsource all production
2. Get rid of all research and development staff

*c. Emphasise cost efficiency

1. Cut wages

 

40. With the onset of the maturity stage, the number of firms in most industries:

@Pages and References: Page 164

1. Remains relatively stable

*b. Tends to decrease significantly

1. Increases significantly
2. Decreases or increases, depending on the industry

 

 

 

41. The typical cause of the decline phase in an industry is:

@Pages and References: Page 165

1. Technological substitution e.g. the horse and cart replaced by the car
2. Local regional decline due to low-cost foreign competition
3. Changing consumer tastes e.g. tobacco

*d. Any of the above

 

42. Key features of the decline phase of the industry life cycle typically include:

@ Pages and References: Page 165

*a. aggressive price competition and a declining number of competitors

1. aggressive price competition and an increasing number of competitors
2. excess capacity and rapid technical change
3. shortages in capacity and a lack of technical change

 

43. The determining factors of how calamitous the decline phase turns out to be are:

@Pages and References: Pages 165

*a. The way capacity is dismantled as demand declines, and how dramatic is the decline in demand

1. Whether a price war breaks out, and how many firms remain
2. The actions of foreign competition, and how fast workers can be fired
3. How quickly the new industry can ramp up production, and what prices they sell at

 

44. The key success factor in the Introduction phase of the industry is:

@Pages and References: Pages 165-166

*a. Effective product innovation i.e. getting new products launched and in front of customers

1. Making sure the workforce is multi-skilled
2. Having a committed workforce, e.g. prepared to work weekends for no extra wages
3. Just being creative

 

45. The key success factor for leading firms in the Growth phase is:

@Pages and References: Pages 165-166

1. Knowing what competitors are doing – even resorting to espionage
2. Taking business away from rivals
3. Employing a commission-oriented sales force

*d. Being able to scale up volume production and operations effectively and efficiently

 

46. The key success factor for firms surviving in the Maturity phase is:

@Pages and References: Pages 165-166

1. Buying as many competitors as you can

*b. Maintaining cost efficiency that matches or exceeds that of competitors

1. “Two for One” deals and other special offers
2. All of the above

 

 

47. Which of the following elements function as limitations for organizational change?

@Pages and Reference: Page 167

1. anthem quest for satisfactory rather than optimal performance
2. Managers limiting the scope of options they are able or willing to consider
3. Preference for exploitation rather than exploration

*d. All of the above

 

48. The fact that some firms such as BASF, Exxon, and General Electric have been leaders in their industries for almost a century, indicates that:

@Pages and References: Pages 168-170

*a. Some firms have built the capability to adapt themselves to change in their environment time after time

1. Economies of scale are the most powerful drivers of performance
2. Size is the key predictor for success
3. A firm’s age is the critical variable for profitability

 

49. Firms that create new products or services are often not the ones that successfully market them. The reason is that:

@Pages and References: Pages 168-170

*a. The capabilities needed for invention are different and even conflict with those required for commercialization

1. There is a connection between the stage of the industry life cycle and the age of firm
2. Large companies steal their ideas.
3. The innovators have shifted their strategic orientations to different products or services

 

50. Disruptive technologies are:

@Pages and References: Pages 168-170

*a. Innovations that threaten existing industry leaders and generally offer potentially superior performance at lower price than existing products

1. Innovations that radically change the product or service
2. Innovations that overcome existing barriers to entry in the industry
3. Quite normal in an industry’s life

 

51. The starting point for managing change is:

@pages and References: Pages 170-172

*a. For managers to recognize the sources of inertia or barriers to change

1. That managers do not let their own agenda supersede the firm’s overall interest
2. To possess enough resources to implement change
3. That managers exhibit enough courage and will to change

 

52. Some firms create new organizational units instead of modifying the existing structure, because:

@Pages and References: Pages 170-172

*a. Existing structures are often locked into existing routines

1. There is not enough time to transform existing structures
2. These firms want a fresh start
3. These firms do not plan; they manage change reactively

 

53. A firm can simultaneously pursue dual strategies:

@Pages and References: Pages 170-172

1. This goes against all the theory on strategy

*b. It can, so long as it maintains separate organizations to pursue each strategy

1. This is impossible
2. This is only possible in large multinational firms.

 

54. Radical top-down organizational change:

@Pages and References: Pages 172-173

1. Is usually only successfully implemented if the workforce is convinced that a crisis looms
2. Often should be implemented in advance of a crisis occurring
3. Is typically only undertaken following declining performance.

*d. All of the above

 

55. Dynamic capabilities:

@Pages and References: Pages173-174

*a. Are the capacity to learn new capabilities

1. Can be acquired through ‘reverse takeovers’
2. Develop rapidly in some industries, then die
3. Answers b and c

 

56. Scenario analysis is usually used to deal with:

@Pages and References: Pages 174-176

1. What a firm might do in the long-term future
2. The uncertainty and consequences of radically different possible futures
3. How flexibly managers should think in coping with uncertain futures

*d. All of the above

 

57. The value of the scenario analysis lies in:

@Pages and References: pages 174-176

1. The results of the analysis

*b. The process of managers being involved in the analysis

1. The practical implications of the results
2. Its low cost

 

58. A succession of management gurus including Tom Peters to Gary Hamel have argued that the key to achieving competitive advantage is:

@Pages and References: Pages 176-177

1. adapting quickly to external change
2. changing incrementally

*c. initiating change and achieving internal “revolution”

1. adapting to change in an orderly fashion

 

59. The statement that organizational capabilities are path dependent means that:

@Pages and References: Page 177

1. past circumstances influenced past capabilities

*b. a company’s capabilities today are the result of its history

1. a company needs to plan how it develops new capabilities
2. Both a and c

 

60. The building for developing new capabilities include:

@Pages and References: Pages 179-180

1. creating mechanisms that facilitate “learning by doing”
2. locating the people that can contribute to the capability in the same organizational unit
3. ensuring the components of the capability are aligned

*d. all of the above

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