MGMT 481: Ch. 1

d. competitive disadvantage

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

b. strategy

Burger Bomb is a new hamburger restaurant. In order to compete successfully against its many competitors, Burger Bomb has decided to focus on quality and an interesting, unique menu that uses locally sourced, organic ingredients. This is known as Burger Bomb's ______. a. core values statement b. strategy c. competitive parity d. vision

a. Their offerings provide more value for consumers than competitors' offerings. b. Their offerings are of similar quality to competitors' offerings but can be sold at lower prices due to lower costs.

In which of the following situations can a firm providing goods and services gain a competitive advantage? (Check all that apply.) a. Their offerings provide more value for consumers than competitors' offerings. b. Their offerings are of similar quality to competitors' offerings but can be sold at lower prices due to lower costs. c. Their offerings are similar to competitors' offerings at higher prices. d. Their offerings cost more to produce than competitors' offerings.

C. are usually small improvements in products and processes

Incremental innovations _____________. A. are usually highly disruptive B. usually represent technological breakthroughs C. are usually small improvements in products and processes D. nearly always can be patented

b. ethical

Internet privacy, genetic engineering, and stem-cell research are examples of areas in which a firm's ______ responsibilities exceed its legal responsibilities. a. philanthropic b. ethical c. economic d. educational

c. ethical

Starbucks's commitment to fair trade and responsible growing practices indicates that the firm takes its ______ responsibilities seriously. a. legal b. economic c. ethical d. philanthropic

c. provide customers value while controlling costs

Strategic positioning allows managers to ______. a. balance foreign and domestic sales b. eliminate competition in a given industry c. provide customers value while controlling costs d. provide superior customer value regardless of costs

c. the set of actions a firm takes to achieve a competitive advantage

Strategy is ______. a. a decision based on external situational analysis b. a sustainable and dominant market share c. the set of actions a firm takes to achieve a competitive advantage d. a decision based on internal situational analysis

d. stakeholders

The groups or individuals who can impact or be impacted by a firm's actions are known as ______. a. competitors b. shareholders c. expatriates d. stakeholders

a. Economic b. Legal c. Philanthropic d. Ethical

What are the categories of expectations that society has of the business enterprise as described in the CSR framework? (Check all that apply.) a. Economic b. Legal c. Philanthropic d. Ethical e. Aesthetic

a. Analysis

What is the first step in the AFI strategy framework? a. Analysis b. Assurance c. Acceptance d. Application

b. Create an effective guiding policy

What must a firm do after diagnosing its specific competitive challenge? a. Collect investments from stockholders b. Create an effective guiding policy c. Identify its primary competitors d. Implement a set of coherent actions

c. able to influence the company to do something it would otherwise not do

When a stakeholder has power over a company it is ______. a. helping to implement the firm's strategy b. perceived to have a legally valid claim c. able to influence the company to do something it would otherwise not do d. able to get the company to take immediate and urgent action

b. currently have, or could potentially have, a material effect on the firm

When identifying stakeholders, a firm should focus on those stakeholders that ______. a. are directly involved with the production or distribution of the company's products b. currently have, or could potentially have, a material effect on the firm d. can be ignored with no material impact to the firm d. purchase and use its products

d. corporate social responsibility

Which framework helps firms to identify their economic, legal, ethical, and philanthropic obligations to society? a. AFI framework b. strategic management framework c. SWOT analysis d. corporate social responsibility

b. contract enforcement c. property rights

Which of the following legal developments allow business to function as an institution? (Check all that apply.) a. voting rights b. contract enforcement c. property rights d. freedom of speech

b. strategic commitments

Effective guiding policy is supported by and stays consistent through the use of ______. a. trade-offs b. strategic commitments c. social responsibilities d. grandiose statements

Ethical Responsibilities

Match the element of the pyramid of corporate social responsibility with its explanation: Do what is right, just, and fair

a. To manage various stakeholders effectively b. To gain and sustain competitive advantage

Which of the following are aims of stakeholder strategy? (Select all that apply.) a. To manage various stakeholders effectively b. To gain and sustain competitive advantage c. To persuade internal stakeholders to cede control to external stakeholders d. To reduce the number of stakeholders of a firm

b. creating value d. controlling costs

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

b. economic

Which of the four corporate social responsibilities is considered first and foremost for business enterprises? a. philanthropic b. economic c. legal d. ethical

a. the firm's business model and competitive advantages b. the external environment and associated challenges d. the firm's internal strengths and resources e. the role of strategic leadership and the strategy process

Which of the following topics should be considered during the analysis phase of the AFI framework? a. the firm's business model and competitive advantages b. the external environment and associated challenges c. the locations in the world where the firm should complete d. the firm's internal strengths and resources e. the role of strategic leadership and the strategy process

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

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

d. stakeholder strategy

A firm's attempts to manage the web of relationships between internal and external stakeholders in order to create value is known as ______. a. integrative strategy b. shareholder strategy c. happiness management strategy d. stakeholder strategy

d. a legitimate claim

A stakeholder has ______ when its needs are within the bounds of the law or are otherwise relevant to the firm. a. a false claim b. an urgent claim c. power over a company d. a legitimate claim

a. giving investors a return on invested capital b. repaying debts to creditors

Among the various types of responsibilities a business firm has, which are specifically considered to be economic responsibilities? (Check all that apply.) a. giving investors a return on invested capital b. repaying debts to creditors c. doing what society deems just and fair d. obeying consumer protection laws

b. strategic positioning

Andrew's Home Center has created a unique situation for itself in its industry that allows the company to not only provide excellent value to its customers but also control its costs. This is known as ______. a. competitive disadvantage b. strategic positioning c. the competitive challenge d. competitive parity

a. first

In the ______ step of a stakeholder impact analysis, firms identify those stakeholders that currently have, or potentially can have, a material effect on the company. a. first b. fourth c. third d. fifth e. second

c. all types of organizations

To which types of organizations can we apply the principles of strategic management? a. governmental agencies b. nonprofit organizations only c. all types of organizations d. privately owned companies only

a. Stakeholders can affect the firm's actions. d. The actions of the firm can affect stakeholders.

Which of the following are the relationships that a firm has with stakeholders? (Check all that apply.) a. Stakeholders can affect the firm's actions. b. The stakeholders generally have no interest in the firm. c. The firm controls the actions of stakeholders. d. The actions of the firm can affect stakeholders.

a. implementation c. analysis e. formulation

Which of the following elements comprise strategic management? (Check all that apply.) a. implementation b. realization c. analysis d. definition e. formulation

a. legal responsibilities c. economic responsibilities

Which of the following elements of the pyramid of corporate social responsibility are required by society? (Check all that apply.) a. legal responsibilities b. philanthropic responsibilities c. economic responsibilities d. ethical responsibilities

d. stakeholder impact analysis

Which of the following is a tool that managers can use to address the needs of stakeholders while maintaining a competitive advantage? a. group happiness strategy b. corporate citizen strategy c. ethical choice analysis d. stakeholder impact analysis

c. The tasks are very interdependent.

Which of the following statements regarding tasks in the AFI strategy framework is true? a. Only two of the tasks need to be followed for success. b. The tasks happen in sequence as separate steps. c. The tasks are very interdependent. d. The tasks are interchangeable.

a. is assessed relative to other competitors in the industry

A competitive advantage _____. a. is assessed relative to other competitors in the industry b. is based on the return of invested capital over a 15-year period c. takes into consideration globalization and rival factors d. places a firm at a disadvantage in regards to its ROI

A) Value driver

Apple developed iTunes to drive iPod sales. Which aspect of differentiation strategy does this move represent? A) Value driver B) Business model C) First-mover advantage D) Cost driver E) Innovation

b. a sustainable competitive advantage

Based on its long dominance as a coffeehouse chain, Starbucks has ______. a. a competitive disadvantage b. a sustainable competitive advantage c. competitive parity d. an absolute advantage

d. a competitive advantage

Burger Bomb has been outperforming other burger restaurants for a decade. This indicates that Burger Bomb has which of the following? a. strategic leadership b. a superior product c. a statistical advantage d. a competitive advantage

c. two or more firms achieve the same performance results

Competitive parity occurs when ______. a. the performance of two or more firms is superior to the industry average b. two or more firms enter into a strategic alliance c. two or more firms achieve the same performance results d. two or more firms rely on international outsourcing to remain competitive

E) Incremental

Every September, Apple releases new versions of its iPhone, boasting improved functions—for example, a better camera. Which type of innovation does this action reflect? A) Disruptive B) Invention C) Architectural D) Radical E) Incremental

d. 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) ______. a. overperforming norm b. purchasing parity c. competitive parity d. competitive disadvantage

Philanthropic Responsibilities

Match the element of the pyramid of corporate social responsibility with its explanation: Corporate Citizenship

Economic Responsibilities

Match the element of the pyramid of corporate social responsibility with its explanation: Gain and sustain competitive advantage

Legal Responsibilities

Match the element of the pyramid of corporate social responsibility with its explanation: Laws and regulations are society's codified ethics; define minimum acceptable standard

a. competitive parity

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

D) Industry Life Cycle

Smartphone sales have stagnated in developed economies, but they continue to experience high growth in emerging economies. Which aspect of the industry does this trend reflect? A) Incremental innovation B) Architectural innovation C) Invention D) Industry life cycle E) Open innovation

a. Achieve a competitive advantage c. Act as a good corporate citizen

Stakeholder impact analysis is a decision tool that helps a company do which of the following? (Check all that apply.) a. Achieve a competitive advantage b. Describe the role of functional managers in strategy formulation c. Act as a good corporate citizen d. Decide where to compete

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

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

False

T/F: A statement such as, "We will be the biggest company in the world," is an example of strategy.

True

T/F: Firms should obey all the laws, including but not limited to labor, consumer protection, and the environment.

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

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? a. The bulbs must be sold by online retailers only. b. The bulbs must be on the market for a longer period of time than competitors' bulbs. c. The bulbs must be more expensive than competitors' offerings. d. The bulbs must have a lower cost than competitors' bulbs.

responsibility

The concept, or framework, of corporate social ____________ guides firms in identifying and addressing their economic, legal, ethical, and philanthropic obligations to society.

a. strategic management

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

b. perform better than other companies in the same industry

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

c. individuals or groups that can affect and are affected by the actions of the firm

The stakeholders of a firm are ______. a. only those firms that contribute to the production and distribution of a company's products b. only those who directly profit from a firm's success c. individuals or groups that can affect and are affected by the actions of the firm d. individuals or groups who own at least one share of a firm's stock

a. opportunities and threats

The third step of stakeholder impact analysis requires managers to identify the ______ presented by internal and external stakeholders. a. opportunities and threats b. threats and responsibilities c. stakeholder interests and opportunities d. social responsibilities and stakeholder interests

D) Guiding policy

Under Steve Jobs' leadership, Apple shifted away from personal computers to mobile devices. With which element of good strategy does this shift reflect? A) Coherent action B) Open innovation C) Competitive challenge D) Guiding policy E) Entrepreneurship

d. Who are our stakeholders? b. What are our stakeholders' interests? e. What opportunities and threats do our stakeholders present? a. What economic, legal, ethical, and philanthropic responsibilities do we have to our stakeholders? c. What should we do to effectively address the stakeholder concerns?

Place the five steps of the stakeholder impact analysis in order, with the first step at the top: a. What economic, legal, ethical, and philanthropic responsibilities do we have to our stakeholders? b. What are our stakeholders' interests? c. What should we do to effectively address the stakeholder concerns? d. Who are our stakeholders? e. What opportunities and threats do our stakeholders present?

b. success and failure

In a nutshell, strategy is the art and science of ______. a. amassing wealth b. success and failure c. maintaining a work-life balance d. treating people fairly

d. the performance of other firms in its industry

In order to determine if Home Depot has a competitive advantage, we must compare Home Depot's performance to ______. a. only non-US-based firms b. a firm in the technology industry c. its past financial performance d. the performance of other firms in its industry

e. fourth

In the _____ step of the stakeholder impact analysis, firms identify their various social responsibilities to stakeholders. a. third b. second c. fifth d. first e. fourth

a. second

In the ______ step of the stakeholder impact analysis the firm identifies their stakeholders' interests and claims according to the power, legitimacy, and urgency framework. a. second b. third c. fifth d. fourth e. first

d. third

In the ______ step of the stakeholder impact analysis, the firm identifies the opportunities and threats that stakeholders present to the firm. a. second b. first c. fifth d. third e. fourth

a. "How do external forces affect our strategy and competitive advantage?"

In the external analysis phase of the AFI strategy framework, managers should ask, a. "How do external forces affect our strategy and competitive advantage?" b. "What is the relationship between competitive advantage and firm performance?" c. "How does the firm make money? d. "What effects do internal resources, capabilities, and core competencies have on the firm's competitive advantage?"

c. interests and claims

In the second step of the stakeholder impact analysis, managers need to identify and understand stakeholders' ______. a. likelihood of bringing legal action against the firm b. political and cultural affiliations c. interests and claims d. entire investment portfolio