BUS 3: QUIZ #1----CHAPTER 1 QUIZ

Which of the following scenarios illustrates a firm that has a sustainable competitive advantage?

Bill and Ted Corp. was able to hold its market share of 68 percent in the social networking industry for more than three years.

ABC Tire Company makes a 10% profit margin, while XYZ Tire Company makes a 12% profit margin. Since ABC is profitable, we can conclude that it has a competitive advantage in the industry:

False—competitive advantage is only achieved by generating above average returns, relative to competition.

Which of the following is NOT an important stakeholder attribute? -Legitimacy -Power -Urgency - Profession

Profession

Who are all of a company's stakeholders and why are they important to a company's strategy?

They are individuals or groups who have an interest in the performance of the company and can materially affect the success of the company.

Which of the following is not the role of strategy in a firm's quest for competitive advantage?

To generate financing options for the purchase of capital equipment

Which of the following are NOT stakeholders? -creditors -alliance partners -customers -competitors

competitors

The goal of a good strategy is focused primarily on?

creating superior value while containing costs.

The amount of polyethanal that can be used in household paint is legally limited to 0.03 percent. Anything beyond this amount is hazardous to health and the environment and is considered a legal offense. Consequently, PrismPaints Corp. has vouched to make its products as safe as possible. Therefore, it manufactures polyethanal-free paints even though this increases its costs and reduces the dividends paid to its shareholders in the long run. Which of the following responsibilities is Prism Paints Corp. primarily compromising in this scenario?

economic responsibilities toward its shareholders

Industrial Drills, a company that manufactures industrial tools, incurs higher costs because of its refusal to outsource its manufacturing to countries where labor costs are lower. This reflects Industrial Drills' ________ responsibility.

ethical

After a firm has identified its key stakeholders in stakeholder impact analysis, the immediate next step is to

identify stakeholders' interests and claims.

The first step in stakeholder impact analysis involves

identifying the stakeholders that currently have, or potentially can have, a material effect on a company.

Due to several black swan events in the past, the

implicit trust relationship between the corporate world and society at large has deteriorated.

Which of the following is typically an economic responsibility of a firm?

paying adequate returns to the firm's stockholders on the capital invested by them.

In order to better achieve a competitive advantage, firms must now adopt a holistic approach towards satisfying multiple stakeholders rather than focusing on the needs of their stockholders. This integrative approach is referred to as

stakeholder strategy.

Green and Good Inc., a multinational company, relies on its media partner OmniSignal to regularly advertise its offers, sales, and new products. OmniSignal is invested in this relationship because it generates most of its revenue from advertising Green and Good's products. In this scenario, OmniSignal is Green and Good Inc.'s

supplier.