WPC 470 FINAL EXAM
A company can earn above-average returns only when the value it
creates is:
a.equal to the costs incurred to create that value.
b.less than the costs incurred to create that value.
c.greater than the costs incurred to create that value.
d.both rare and substitutable. – ANSWER- greater than the costs
incurred to create that value.
People buy products from Soco Outfitters because it is a brand name
they know and trust. Soco’s costly-to-imitate capabilities arise from:
a.an ambiguous cause.
b.social complexity.
c.a historical source.
d.interpersonal relationships. – ANSWER- a historical source
Core competencies are often visible in the form of organizational:
a.functions.
b.value.
c.culture.
d.symbols. – ANSWER- functions
Outsourcing allows a firm to nurture a smaller number of capabilities,
which:
a.increases the potential loss in its ability to innovate.
b.decreases opportunities for competitive advantage.
c.decreases the loss of jobs within the firm.
d.prevents the firm from becoming overextended. – ANSWER- prevents
the firm from becoming overextended.
RXL and NuVal are two major telecommunications companies. They
are in advanced talks for RXL to acquire NuVal, and RXL has hired an
investment bank to exclusively complete the due-diligence process.
RXL’s acquisition performance will likely _ because of this decision. a.not be affected b.increase c.decrease d.fail – ANSWER- decrease Managing the business units of a geographically diverse multinational firm requires skill, not only in managing a set of businesses, but
also coordinating __ points of view emerging from businesses
located in countries and regions.
a.decentralized; diverse
b.centralized; diverse
c.centralized; analogous
d.decentralized; analogous – ANSWER- decentralized, diverse
Your small company makes a product that your European cousins
believe will be popular in their country. You have no foreign
manufacturing expertise, but you can manufacture the product here in
your firm’s domestic facility and ship it to your cousins in Europe,
whose firm will market and distribute the product for you. This is an
example of:
a.a greenfield venture.
b.a strategic alliance.
c.licensing.
d.exporting. – ANSWER- exporting
What are the two things that firms can share to create operational
relatedness?
a.Primary or support activities
b.Tangible or intangible resources
c.Related or unrelated diversification
d.Plans or implementations – ANSWER- primary or support activities
While U.S. firms use downscoping as a restructuring strategy,
a.the current trend in Europe, Latin America, and Asia is to build
conglomerates.
b.they still use this strategy less frequently than do European companies.
c.many Asian and Latin American conglomerates have also chosen to
downscope.
d.it is a trend that is expected to diminish with increasing globalization. –
ANSWER- many Asian and Latin American conglomerates have also
chosen to downscope.
Coyle Enterprises is a small company that recently entered the lawn
equipment industry. In response, its main competitor, a large and wellestablished company in the industry, has increased its sales presence in
the market. Coyle learns of this move, but does not respond. A lack of
which of the following would likely be the primary reason that Coyle
does not respond?
a.Awareness
b.Market commonality
c.Ability
d.Motivation – ANSWER- ability
Zed Company is considering spinning off one of its divisions into a new
company. What long-term outcomes can it expect?
a.Reduced debt costs
b.Higher risk
c.Higher performance
d.Reduced labor costs – ANSWER- higher performance
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