Question 1

While the favorable demographics of the U.S.and most developed economies would seem to provide significant business opportunities in health care,managers must balance this with the risk from what?
A) Under health care reform, the government is going to ration health care.
B) The "flat world" tells us that even medical care will be sent off-shore.
C) The reimbursement rates for specific procedures will likely go down.
D) The weight of competition will keep profit margins low.

Accepted Answer

The reimbursement rates for specific procedures will likely go down in the coming years for U.S. health care.

Question 2

Stakeholder power and influence will vary by industry.In investment banking,skilled human capital is important.This means one of the key stakeholders for firms in this industry will be ________.
A) Alliance partners
B) Creditors
C) Employees
D) Communities

Accepted Answer

Employees are a key stakeholder for investment banks.

Question 3

Business opportunities in the clean-tech economy have much potential.Production of solar panels in China has brought the prices down by 50%,while many countries are providing incentives to invest in the field.However,in strategy we must always look at both opportunities and threats.Which of the following is NOT a threat to the growth of the clean-tech economy?
A) The energy sector is rapidly growing worldwide.
B) It is not currently cost-competitive with coal and oil.
C) The U.S. has 30% of the world's known coal reserves.
D) Market externalities are not priced into current fossil fuels.

Accepted Answer

Several threats exist for the growth of clean energy: cost-competitiveness, externalities, and large coal reserves are among these factors.

Question 4

One of the key aspects of the Threadless business strategy is the use of ____________.
A) Volume discounts
B) Nationwide retail locations
C) Network effects
D) Free shipping

Accepted Answer

Network effects are key for Threadless to leverage the online community and keep growing its markets.

Question 5

The increasing interactivity and collective intelligence available on the Internet is called what?
A) The Internet strategy
B) Bottom of the pyramid
C) Web 2.0
D) Electronic commerce

Accepted Answer

Web 2.0 is considered the increasing interactivity and collective intelligence available on the Internet.

Question 6

Given current trends,several industries promise significant potential for value creation and thus career opportunities.Which of the following is not one of them described by the text?
A) Health care
B) The green economy
C) Web 2.0
D) Petroleum

Accepted Answer

The book highlights health care, the green economy, and Web 2.0 as future growth-oriented industries.

Question 7

Individuals or groups that can affect or be affected by the actions of a firm are called _________.
A) Stakeholders
B) Senators
C) Associates
D) Competitors

Accepted Answer

Stakeholders are individuals or groups that can affect or be affected by the actions of a firm.

Question 8

If some stakeholder groups are able to extract significant value,the firm's competitive advantage may not be realized when compared to its rivals.This situation can place the firm in a ________________.
A) Competitive advantage
B) Competitive disadvantage
C) Competitive position
D) Competitive paralysis

Accepted Answer

When one stakeholder group extracts significant value, this can leave the firm at a competitive disadvantage.

Question 9

How does Web 2.0 help improve Google's search engine results?
A) Google's algorithm is based on highly sophisticated software.
B) The PageRank algorithm relies on feedback from prior search results.
C) Customers using Google search will e-mail them with questions.
D) It makes the results run faster on the hardware servers.

Accepted Answer

Google's PageRank algorithm relies on Web 2.0 interactions for continuing improvement of the search results.

Question 10

Stakeholder power and influence will vary by industry.In the ________,one of the most powerful external stakeholders has historically been unions.
A) Hospitality industry
B) Health care industry
C) Computer industry
D) Automotive industry

Accepted Answer

The unions have been an important stakeholder in the automobile industry for several decades.

Question 11

All of the following are considered an internal stakeholder within a firm except for which of the following?
A) Stockholders
B) Customers
C) Employees
D) Board members

Accepted Answer

Customers are external stakeholders for the firm.

Question 12

All of the following are considered an external stakeholder within a firm except which of the following?
A) Alliance partners
B) Governments
C) Employees
D) Creditors

Accepted Answer

Employees are an internal, NOT an external, stakeholder.

Question 13

Threadless is an online apparel store.Its business model is quite different from most other apparel stores.Threadless leverages Web 2.0 capabilities by using crowdsourcing.How does this benefit Threadless in their T-shirt design process?
A) Only professional designs are considered.
B) It both lowers the cost and ensures the popularity of selected designs.
C) The quality of the submissions is high.
D) It streamlines the production process.

Accepted Answer

Crowdsourcing both lowers the cost and ensures the popularity of selected designs.

Question 14

In today's economic activity,carbon-based energy sources come with certain costs for business and consumers,some of which include,but are not limited to,CO₂ emissions,air pollution,and global warming.These costs are described as ____________. A) Environmental economics B) Moral hazards C) Systematic risks D) Externalities

Accepted Answer

Externalities are side effects of production and consumption that are not reflected in the price of a product.

Question 15

Health care became the largest industry in the U.S.when it grew to 16% of the total economic activity.Projections are that the sector will grow to 20% of the economy by 2019.As compelling as the size and growth of the industry,what other reason does the text provide for businesses to expand into this arena?
A) Much of the wealth in the U.S. is in the aging baby-boomer population.
B) Medical providers like doctors can afford more services from business.
C) There is a social good in improving health care.
D) Government regulations provide a stable business climate in the U.S.

Accepted Answer

The aging baby-boomer generation has much of the wealth in the U.S. economy and will likely spend much of it on health care.

Question 16

The vast majority of today's economic activity around the globe is powered by carbon-based sources of energy.Which of the following is not considered a carbon-based source of energy?
A) Oil
B) Coal
C) Wind
D) Natural gas

Accepted Answer

Wind is a renewable energy and not carbon-based.

Question 17

The idea to let consumers work for you and form a hybrid between producers and consumers is called ___________.
A) Professional consumers
B) Consumer employees
C) Prosumers
D) Consumer innovators

Accepted Answer

Prosumers is a term for a hybrid between producers and consumers used by firms such as Threadless.

Question 18

All of the following are external stakeholders except which of the following?
A) Alliance partners
B) Customers
C) Creditors
D) Competitors

Accepted Answer

Competitors are not considered internal or external stakeholders in the firm.

Question 19

One firm has announced a major initiative in the health care field called healthymagination.This initiative is geared to draw on existing expertise in other business units to find new emerging opportunities in health care.What firm has launched this initiative?
A) International Business Machines (IBM)
B) Siemens
C) General Electric (GE)
D) 23andMe

Accepted Answer

GE has launched a major initiative in the health care field called healthymagination.

Question 20

Creating prosumers is the idea of allowing consumers to work for you,which forms a hybrid between consumer and producer.Which of the following companies exploits prosumers in their business model?
A) eBay
B) Amazon
C) General Electric
D) Threadless

Accepted Answer

Threadless exploits a hybrid between consumer and producer called a prosumer.

Quiz 1: What Is Strategy and Why Is It Important

While the favorable demographics of the U.S.and most developed economies would seem to provide significant business opportunities in health care,managers must balance this with the risk from what?

Stakeholder power and influence will vary by industry.In investment banking,skilled human capital is important.This means one of the key stakeholders for firms in this industry will be ________.

One of the key aspects of the Threadless business strategy is the use of ____________.

The increasing interactivity and collective intelligence available on the Internet is called what?

Given current trends,several industries promise significant potential for value creation and thus career opportunities.Which of the following is not one of them described by the text?

Individuals or groups that can affect or be affected by the actions of a firm are called _________.

If some stakeholder groups are able to extract significant value,the firm's competitive advantage may not be realized when compared to its rivals.This situation can place the firm in a ________________.

How does Web 2.0 help improve Google's search engine results?

Stakeholder power and influence will vary by industry.In the ________,one of the most powerful external stakeholders has historically been unions.

All of the following are considered an internal stakeholder within a firm except for which of the following?

All of the following are considered an external stakeholder within a firm except which of the following?

Threadless is an online apparel store.Its business model is quite different from most other apparel stores.Threadless leverages Web 2.0 capabilities by using crowdsourcing.How does this benefit Threadless in their T-shirt design process?

In today's economic activity,carbon-based energy sources come with certain costs for business and consumers,some of which include,but are not limited to,CO2 emissions,air pollution,and global warming.These costs are described as ____________.

The vast majority of today's economic activity around the globe is powered by carbon-based sources of energy.Which of the following is not considered a carbon-based source of energy?

The idea to let consumers work for you and form a hybrid between producers and consumers is called ___________.

All of the following are external stakeholders except which of the following?

One firm has announced a major initiative in the health care field called healthymagination.This initiative is geared to draw on existing expertise in other business units to find new emerging opportunities in health care.What firm has launched this initiative?

Creating prosumers is the idea of allowing consumers to work for you,which forms a hybrid between consumer and producer.Which of the following companies exploits prosumers in their business model?

In today's economic activity,carbon-based energy sources come with certain costs for business and consumers,some of which include,but are not limited to,CO₂ emissions,air pollution,and global warming.These costs are described as ____________.