105. Circuit Corp. is a manufacturer of a broad range of consumer electronics products. These consumer products are all highly profitable. The firm also manufactures a low-cost component which is an essential differentiating feature for most of its consumer products. The costs to manufacture this component have risen sharply in recent months. Internal cost accounting estimates now indicate the company is breaking even on the manufacture of this component. Which of the following is most likely? a. Circuit will likely continue to manufacture the component, even at a loss, due to low supplier power. b. Circuit will likely continue to manufacture the component, even at a loss, due to high strategic stakes. c. Circuit will likely discontinue manufacture of the component due to low strategic stakes. d. Circuit will likely discontinue manufacture of the component due to high supplier stakes. b ANSWER: 1 POINTS: Medium DIFFICULTY: 58–59 REFERENCES: STMA.HITT.13. - 1.4 LEARNING OBJECTIVES: AACSB: Reflective Thinking Skills | Management: Environmental Influence NOTES: | Dierdorff & Rubin: Managing the task environment | Bloom: Comprehension 106. Exit barriers to a firm include all of the following EXCEPT a. generic assets. b. loyalty to employees. c. governmental concern job loss. d. restrictive labor agreements. a ANSWER: 1 POINTS: Medium DIFFICULTY: 59 REFERENCES: STMA.HITT.13.Knowledge - Application LEARNING OBJECTIVES: AACSB: Business Knowledge & Analytical Skills | Management: Environmental NOTES: Influence | Dierdorff & Rubin: Managing the task environment | Bloom: Knowledge 107. An owner of a stable of racehorses has been earning below-average returns for more than 15 years. To a colleague, he expressed his determination to stay in horse racing until he died because "racing is in my blood." This individual is probably still racing horses because of a. high barriers to exit. b. high switching costs. c. high fixed costs. d. low levels of competitive rivalry. a ANSWER: 1 POINTS: Hard DIFFICULTY: 59 REFERENCES: STMA.HITT.13. - 1.4 LEARNING OBJECTIVES: AACSB: Business Knowledge & Analytical Skills | Management: Environmental NOTES: Influence | Dierdorff & Rubin: Managing the task environment | Bloom: Application
105. Circuit Corp. is a manufacturer of a broad range of consumer electronics products. These consumer products are all highly profitable. The firm also manufactures a low-cost component which is an essential differentiating feature for most of its consumer products. The costs to manufacture this component have risen sharply in recent months. Internal cost accounting estimates now indicate the company is breaking even on the manufacture of this component. Which of the following is most likely? a. Circuit will likely continue to manufacture the component, even at a loss, due to low supplier power. b. Circuit will likely continue to manufacture the component, even at a loss, due to high strategic stakes. c. Circuit will likely discontinue manufacture of the component due to low strategic stakes. d. Circuit will likely discontinue manufacture of the component due to high supplier stakes. ANSWER: b POINTS: 1 DIFFICULTY: Medium REFERENCES: 58–59 LEARNING OBJECTIVES: STMA.HITT.13. - 1.4 NOTES: AACSB: Reflective Thinking Skills | Management: Environmental Influence | Dierdorff & Rubin: Managing the task environment | Bloom: Comprehension 106. Exit barriers to a firm include all of the following EXCEPT a. generic assets. b. loyalty to employees. c. governmental concern job loss. d. restrictive labor agreements. ANSWER: a POINTS: 1 DIFFICULTY: Medium REFERENCES: 59 LEARNING OBJECTIVES: STMA.HITT.13.Knowledge - Application NOTES: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence | Dierdorff & Rubin: Managing the task environment | Bloom: Knowledge 107. An owner of a stable of racehorses has been earning below-average returns for more than 15 years. To a colleague, he expressed his determination to stay in horse racing until he died because "racing is in my blood." This individual is probably still racing horses because of a. high barriers to exit. b. high switching costs. c. high fixed costs. d. low levels of competitive rivalry. ANSWER: a POINTS: 1 DIFFICULTY: Hard REFERENCES: 59 LEARNING OBJECTIVES: STMA.HITT.13. - 1.4 NOTES: AACSB: Business Knowledge & Analytical Skills | Management: Environmental Influence | Dierdorff & Rubin: Managing the task environment | Bloom: Application
test-bank-strategic-management-11th-edition-hitt.docx