2 Intra-industry profitability varies due to industry structure differences. [T/F] 3 Added value is "the size of pie (you are in the game) MINUS the size of pie (you are out of the game)". [T/F] 4 Milton Friedman argument that "There is one and only one social responsibility of business-to use its resources and engage in activities designed to increase its profit so long as it stays within the rules of game" is not challenged by stakeholder view of the firm. [T/F] 5 Competitive advantage is the sequence of activities or discrete economic functions a company performs to design, product, sell, deliver and support its products. [T/F] 6 The firm's position in business landscape shapes the business model. [T/F] 7 Innovator-woodcutter-sailmaker cooperating on the outrigger led to exclusive agreements that made "the more outrigger sales, the more special timber and the more sails repairs revenues" possible. [T/F] 8 Southwest had a better connection to different cities than rival airlines because of the centralized "hub-and-spoke" logistics system. [T/F] 9 Collins and Porras argued that "the fundamental defining characteristics of the most enduring and successful companies is that they preserve a cherished core ideology while simultaneously stimulating progress and change in everything that is not part of their core ideology". [T/F] 10 Information asymmetry and lemons problems are important post- acquisitions surprises. [T/F] 11 IKEA's large stores, location and low price, each of these decisions was made in a way of making the other easier to execute thus reduces overall cost. [T/F] 12 Walmart charged a slightly higher price than the rival retailers for its higher quality products. [T/F] 13 Strategy process works effectively when strategy formation and execution as two separate process. [T/F] 14 People criticized that Walmart worsened the poverty in some rural areas. [T/F] 15 Strategic positioning idea is about how to carve out a position by aligning internal and external fronts altogether. [T/F] 16 Southwest airline's unique value proposition was pivotal in its success in otherwise not so profitable airline industry. [T/F] 17 If a firm doesn't have a plan for dealing with market participants who want a share of profit, the firm does not have a strategy. [T/F] 18 Aligning organizational, structures, processes and capabilities to sustain competitive advantage is the idea of strategy formulation. [T/F] 19 Monitoring and evaluation of unfamiliar operations increases the cost of vertical integration. [T/F] 20 Inertia builds up because of the previous success. [T/F] 21 That IKEA's Kivik sofas and Billy bookcases are offered in 46 countries in the same way shows an example of development strategy. [T/F] 22 The market shares, product diversity and use of preservatives are the key cost drivers for outbound logistics in Canadian snack cake market, [T/F] 23 Walmart had a friendly relationship with its labor unions. [T/F] 24 United Airlines and American Airlines compete on many same routes but purchase aircrafts together thus reducing costs is a good example of competitve interactions. [T/F] 25 Value capture concept asks "how big is the pie?". [T/F] 26 Michael Porter's player analysis framework includes the player's current strategy and capabilities and future goals and assumptions. [T/F] 27 A quantified shortfall between actual results and targeted results is performance gap. [T/F] 28 Assumptions of rationality in game theory are always well observed in actual business decisions. [T/F] 29 WTP is the minimum amount of money a customer is willing to pay in order to obtain the product or service. [T/F] 30 Walmart was more successful in the e-commerce retailing over other rivals such as Amazon. [T/F] 31 Apple's platform strategy in the PC industry was cooperative because it involved many outside third party developers. [T/F] 32 If buyers are more concentrated, the bargaining power of buyers will increase over the industry that they buy from. [T/F] 33 In the early 20 th century, large scale investments became possible and profitable, then companies sought to grow bigger to enjoy "economies of scale" and "economies of scope". [T/F] 34 In the fishing village case, the innovator changed the players' value created and captured substantially. [T/F] 35 Singapore airline is not a good example of dual advantage. [T/F] 36 Business schools became popular because they educate strategic thinkers, not functional administrators. [T/F] 38 Operating margins of publicly traded US firms (1990-2011) show not much difference between domestic and globalized firms. [T/F] 39 The better-off test is about "when deciding whether to own a set of assets, a firm should have reason to believe that ownership will enable it to create value by deploying these assets in ways that would be impossible or very costly to implement if it did not own them". [T/F] 40 Institutional voids can lead to the choices for ownership mode over spot transactions. 41 Which of the below is an incorrect statement on Linkedln's strategy? (1) Linkedln is not so successful in keeping the users on the site with attractive applications (2) Linked In's P/E ratio is above 800 (3) Linkedin's main method of attracting members is viral marketing (4) Linkedln's largest revenue source is premium membership 42 Which is the correct statement on Cafe Coffee Day (CCD)? (1) CCD formed a joint venture with Tata in order to defend itself from Starbuck's entry (2) Average revenue per store of CCD was quite low ( $240/ day). (3) CCD's price was almost equal to Starbucks. (4) CCD showed a low turnover of employees. 43 Which is an incorrect statement on Cafe Coffee Day? (1) CCD is targeting middle aged people (30-50 yrs) from middle, upper-middle class (2) "a place between home and work" is the positioning (3) Its stores are usually 800-1000 sq ft, bright red logo, "a lot can happen here" (4) CCD was challenged by Starbuck's entry into into Indian market 44 Which of the below is NOT a correct statement? (1) Corporate intranet is viewed as new opportunities for business expansion (2) Linkedin faces potential competition with Facebook and Google+ (3) Monetizing global markets is much easier than the US market (4) Customer switching cost is relatively low for Linedln's service