MGMT 4842 Exam 1

Of the following components of the external environment, which is the most likely to effect all firms, regardless of their specific industry?

Economic

Which of the following are true of competitive advantage (CA) and sustainable competitive advantage (SCA)?

-CA will eventually be overcome by competitors; SCA is extremely difficult for competitors to overcome -SCA gives customers long-run reasons to prefer the products of services of a company over its competitors -Turning CA into SCA typically involves leveraging competitively valuable expertise and/or organizational capabilities that cannot be easily imitated by rivals

The three different types of competence:

-Competence: an activity that a company has learned to perform with proficiency -Distinctive competence: capability that enables a company to perform a particular set of activities better than its rivals -Core competence: activity a company performs proficiently and that is also central to its strategy

Which of the following tests would you employ to determine if a strategy is effective?

-The Fit Test -The Competitive Advantage Test -The Performance Test

What are some factors that make a capability distinctive and/or hard to copy?

-Unique -when they must be built over time in ways that are difficult to imitate -entail financial outlays or large scale operations -high level of social complexity

VRIN framework:

-Valuable: must be relevant to a company's strategy -Rare: something rivals lack -Inimitable: hard to copy -Non-substitutable: invulnerable to the threat of substitution

Which of the following is an example of both financial and strategic objectives?

1) Increase revenues from $72 billion in 2012 to more than $13o billion in 2016, and 2) derive 10% of revenues from sales of new products introduced within the last ten years

What are the 5 forces?

1) Rivalry among competitors 2) bargaining power of customers/buyers 3) bargaining power of suppliers 4) new entrants 5) substitutes

The three indicators for assessing a firm's strategy:

1) Whether the company is achieving its stated financial and strategic objectives 2) Whether its financial performance is above industry average 3) Whether it is gaining customers and market share

The difference between a core competence and a distinctive competence is best described as which of the following statements:

A core competence is central to a firms ability to survive in a given industry, while a distinctive competence is something the firm does substantially better than rivals and that provides foundation for a competitive advantage

What is the difference between a resource and a capabilities?

A resource is a productive input or competitive asset that is OWNED/CONTROLLED by the firm and a capability is the capacity of a firm to perform some INTERNAL activity competently

Which of the following best describe the two main roads for achieving competitive advantage?

Beating competitors through lower costs or beating competitors through higher perceived value

Which of the following statements is true regarding the difference between corporate-level strategy and business-level strategy? Assume that corporate strategy in this case is not a single-business focused strategy.

Corporate strategy is concerned with gaining synergies from a portfolio of businesses, while business strategy is concerned with increasing market position and gaining competitive advantage

Which of the following examples is NOT a good example of product substitution?

Drinking a mountain lightning instead of a mountain dew

Which of the following statements best describes the notion of casual ambiguity?

It addresses the difficulty other firms experience in understanding how a given complex resource and its deployment enhance another firms competitive advantage, making it difficult to imitate

"We define a compelling, sustainable future and create the path to achieve it." Above is the vision statement of the Heinz corporation. Why is this an ineffective vision statement?

It is not graphic, it's too vague on where the company is going and how it intends to prepare for the future

Which of the following statements is true regarding profit formula?

It's the formula used to determine if the firms cost structure will allow it to fulfill its value proposition while generating an acceptable profit margin

Which of the following statements is true of customer value proposition?

It's the way in which a company plans to effectively meet buyer demands

Which of the following mission statements most effectively answers the questions of who we are, what we do, and why we are here?

Our mission is to give our customers the best food and beverage values that they can find anywhere...

What does the acronym PESTEL stand for?

P: Political E: Economic S: Social T: Technological E: Environmental L: Legal/regulatory

Which of the following is true regarding strategic intent?

Strategic intent is when a company concentrates the full force of its resources and competitive actions toward achieving an ambitious strategic objective

Which of the following is the best example of a socioeconomic factor affecting a firm?

The "eat local" movement drives more customers to buy food from farmer's markets and through co-ops, cutting into the revenues of Albertson's

Which of the following statements is TRUE regarding intangible resources?

They are often more important than tangible resources, but usually harder to identify