MAN 4720 chapter 1

In which of the following cases was a company at a major competitive disadvantage? Facebook hired Sheryl Sandberg because Mark Zuckerberg, Facebook's founder, lacked important business skills. Without a clear strategic position, Sears tried to be too many things for too many types of customers. Sam's Club decided to prescreen its customers via required membership to establish creditworthiness. Strategy executives at UPS used scenario planning to identify issues critical to shaping the firm's future.

Without a clear strategic position, Sears tried to be too many things for too many types of customers.

The greater the difference between value creation and cost, the less likely a firm will gain competitive advantage. greater a firm's economic contribution. greater a firm's competitive parity. less likely that a firm's strategic position will be competitive.

greater a firm's economic contribution

What is the overall purpose of strategic management? Perform risk analysis Gain competitive advantage Respond to globalization Create competitive transparency Calculate parity performance measures

Gain competitive advantage

Which of the following has contributed to Tesla's competitive advantage in terms of stock appreciation? copying the most popular features of competitors' vehicles reinvesting profits to continually design and produce better electric vehicles keeping its proprietary technologies secret using inexpensive materials to keep costs low

reinvesting profits to continually design and produce better electric vehicles

Which of the following statements will effectively guide a strategist? It is necessary to isolate the key stakeholders and their needs when formulating a strategy. Industry and firm effects that determine firm performance are independent of each other. Strategy is all about competitive benchmarking and operational effectiveness. The principles of strategic management can be applied universally to all organizations.

The principles of strategic management can be applied universally to all organizations.

Too Fast Inc., a motorcycle company, is the market leader due to its superior engine technology and service orientation. These unique qualities have helped the company generate revenues that are consistently higher than other firms in the same industry. Which of the following can be concluded about Too Fast Inc. from this scenario? It has a direct investment in the other firms. It has a competitive advantage over the other firms. It has an exchange relationship with the other firms. It has competitive parity with the other firms.

It has a competitive advantage over the other firms.

Which of the following does a firm possess when it can outperform other firms in the same industry or the industry average over a prolonged period of time? consistent power position long-term capital gain strategic positioning sustainable competitive advantage

sustainable competitive advantage

Which of the following statements about competitive advantage is not true? A firm will have a sustainable competitive advantage when it outperforms its competitors over a prolonged period of time. A firm can gain a competitive advantage by providing goods similar to its competitors' goods at a lower price. A firm's competitive advantage is always absolute, not relative. A firm's past performance does not guarantee its future performance.

A firm's competitive advantage is always absolute, not relative.

Which statement about strategies is true? Vision and mission statements cannot lay the foundation for good strategies. A statement of desire on its own often leads to goal conflict. "We will be the best!" is an example of a strategy. Statements of desire typically address economic fundamentals.

A statement of desire on its own often leads to goal conflict.

Which of the following statements is true of strategy? Statements of desire, on their own, are strategy. Tactical tools that are a part of a firm's functional and global initiatives are strategy. Operational effectiveness and competitive benchmarking are strategy. Actions that allow a firm to address a competitive challenge are strategy.

Actions that allow a firm to address a competitive challenge are strategy.

________ is an important tool because it allows a manager to recognize, prioritize and address the needs of various stakeholders. Stockholder appreciation Shareholder voting proxies Stakeholder impact analysis Shareholder Right's Plan

Shareholder impact analysis

The overall purpose of a firm's strategy is to ______. sell all existing inventory of a given product generate significant interest from foreign investors perform better than other companies in the same industry determine demand for new product ideas

perform better than other companies in the same industry

EatNow is a fast-food restaurant that has recently entered the hospitality industry. Since most of its competitors are pursuing a low-cost position and doing well, EatNow also wants to adopt the same strategy. Which of the following will be a likely implication of this decision? EatNow will face low profit potential. EatNow will be able to create higher value for its customers. EatNow will be better placed to gain a competitive advantage in the industry. EatNow will not face any direct competition in the industry.

EatNow will face low profit potential.

All of the following are examples of internal stakeholders except. employees. stockholders. board members. suppliers.

suppliers

Which of the following statements is true about Tesla, the manufacturer of all-electric cars? It has a product-oriented vision statement. It has manufactured only two car models. It has a high market valuation. Its strategy is to create a unique product available only to a few.

It has a high market valuation.

When a firm implements a strategy that leads to superior performance relative to other companies in the same industry, it is said to have achieved ______. fiscal debilitation combined ideology a competitive advantage prolonged management

a competitive advantage

Which of the following is the best indicator that Tesla's startup master plan has worked as intended? Tesla provided cars to some of its employees. Tesla generated 500,000 preorders for an unseen model. Many Americans are still unaware that Tesla exists. Tesla's models outsell all other automobiles in the United States.

Tesla generated 500,000 preorders for an unseen model.

The Bright Bulb light bulb company produces a line of LED bulbs that customers consider very similar to competitors' LED bulbs. Which of the following conditions must be true for Bright Bulb to have a competitive advantage? The bulbs must have a lower cost than competitors' bulbs. The bulbs must be more expensive than competitors' offerings. The bulbs must be on the market for a longer period of time than competitors' bulbs. The bulbs must be sold by online retailers only.

The bulbs must have a lower cost than competitors' bulbs.

Why are black swan events such as accounting scandals and the global financial crisis perceived as caused by cheap credit and subprime mortgages offered by financial institutions, bad for business? They allow companies to gain a competitive advantage unfairly. They erode the implicit trust between the corporate world and society. They contribute to competitive parity, which hinders economic growth. They foster a false sense of prosperity, which results in economic depression.

They erode the implicit trust between the corporate world and society.

Which of the following statements related to a firm's stakeholders is not true? While external stakeholders are those who make contributions toward the firm, internal stakeholders are those who reap all the benefits. If internal or external stakeholders withhold participation in the firm's exchange relationships, it can have severe negative performance implications. A firm's stakeholders include organizations and groups along with individuals who can affect or be affected by the firm's actions. Effective stakeholder management is an example of how managers can act to enhance a firm's competitive advantage.

While external stakeholders are those who make contributions toward the firm, internal stakeholders are those who reap all the benefits.

A diagnosis of the competitive challenge, an element of a good strategy, is primarily accomplished through strategy implementation formulation analysis control

analysis

Which of the following groups is most likely to be considered a firm's internal stakeholder? creditors customers alliance partners board members

board members

How has Walmart staked out a unique strategic position? by paying high wages to attract the most talented employees by providing excellent customer service in a luxury setting by cutting costs to offer lower prices than competitors by investing 100% of profits in community development programs

by cutting costs to offer lower prices than competitors

A(n) ______ occurs when a firm performs below the industry average or is outperformed by its competitors. competitive parity negative advantage competitive disadvantage purchasing parity underperforming norm

competitive disadvantage

If a firm has a 10% return on invested capital while the industry average return on invested capital is 18%, the firm has a(n) ______. purchasing parity competitive parity competitive disadvantage overperforming norm

competitive disadvantage

Michael's Deli is able to perform at the same level as its primary competitor. Michael's Deli has ______. competitive parity a competitive advantage a competitive disadvantage a noncompetitive business

competitive parity

Which of the following are primary strategy objectives? (Check all that apply.) strengthening relationships controlling costs creating value maximizing sales

controlling costs creating value

All of the following below are examples of external stakeholders except employees. government. communities. customers.

employees

Which of the following is a philanthropic responsibility of a firm? not infringing on other firms' patents providing products at appropriate prices exhibiting corporate citizenship obeying government regulations

exhibiting corporate citizenship

Gadgets n' Stuff Inc. is a vendor who supplies machine parts to an appliance manufacturing company. In return, Gadgets n' Stuff Inc. relies on the company for its revenue and is affected by any decisions taken by the company. In this scenario, Gadgets n' Stuff Inc. is a(n) _________ for the appliance manufacturing company. external stakeholder focus group representative sample internal stakeholder

external stakeholder

Which of the following is a stakeholder attribute that managers should consider at every step in a stakeholder impact analysis? legitimacy supremacy literacy solvency

legitimacy

Sustainable competitive advantage exists when a firm ______. formulates and implements strategy is self-regulated and self-motivated starts up and competes for existing market share in the industry maintains superior performance relative to its industry over a long period of time

maintains superior performance relative to its industry over a long period of time

A firm is likely to have a competitive advantage when it performs at a level similar to the other firms in the industry. provides goods similar to those of its competitors, but at a higher price. provides services that consumers will value more than those of its rivals. minimizes the difference between value creation and the costs involved.

provides services that consumers will value more than those of its rivals.

The annual net profit after taxes for Tele Corp., a multinational conglomerate, is $5.5 billion. As legal owners, which of the following stakeholder groups has the most legitimate claim on this profit? managers shareholders local communities government

shareholders

The field of management that focuses on attaining competitive advantage by combining analysis, formulation, and implementation is known as ______. human resources management strategic management management of foundational behavior management of stakeholder impact

strategic management

Which of the following groups will not be considered a company's internal stakeholder? suppliers board members shareholders managers

suppliers

A competitive advantage that lasts for a long period of time is said to be ______. theoretical accurate geographic sustainable topical

sustainable

Managers often have to make decisions between two conflicting strategic options, otherwise known as ______. bad choices managerial dilemmas hot-points trade-offs

trade-offs

When a firm integrates the competitive strategies of cost-leadership and differentiation, it will most likely result in a competitive advantage through superior performance. trade-offs that work against each other. an increase in the firm's economic contribution. competitive parity with firms that have adopted either of the strategies.

trade-offs that work against each other

A good strategy should be able to provide products and services to customers at an attractive price point while maintaining internal costs, resulting in value creation. shareholder appreciation. competitive benchmarking. sustainable competitive advantage.

value creation