STR 581 Week 6 Capstone Final Exam

1. A(n) ________ market share of exactly 100 percent means that a company is tied for the market lead. A rise in relative market share means the company is gaining on its leading competitor.

· potential

· relative

· served

· overall

2. The typical risks of a cost leadership strategy include___________.

· loss of customer loyalty

· excessive differentiation to the point where the customer base is too small

· the inability to balance high differentiation and low price

· production and distribution processes becoming obsolete

3. The likelihood of entry of new competitors is affected by and ___________.

· the power of existing suppliers; buyers

· the profitability of the industry; the market share of its leading firm

· barriers to entry; expected retaliation of current industry organizations

· the demand for the product; the profitability of the competitors

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4. In general, compared with firms which compete in only one market, among firms which face one another in multiple markets there is__________.

· similar competitive rivalry

· more competitive rivalry

· less competitive rivalry

· no competitive rivalry

5. The three parts of the external environment which affect a firm's strategic actions are__________.

· economic, political, and legal

· industry, business, and product

· local, national, and global

· general, industry, and competitor

6. The proper matching of what a firm can do with what a firm might do__________.

· balances the internal characteristics of the firm with the characteristics of the external environment

· overcomes the rigidity and inertia resulting from a history of success

· develops core competencies based on human knowledge

· yields insights the firm requires to select its strategy

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7. Gordon Jones is considering purchasing a computer from Best Buy. He has created a scale for rating eight different computers on three different characteristics. He plans to make a short list of only those computers that score at least a 7 on his scale on all three characteristics. Which of the following choice heuristics has he chosen?

· anchoring and adjustment heuristic

· elimination-by-aspects heuristic

· conjunctive heuristic