Strat Mgmt Test 2

A SWOT analysis would provide a definitive answer as to whether a firm's growing footprint in overseas markets is a strength or weakness.

False

Accounting, human resources, and research and development (R&D) are examples of primary activities that add value directly to the value chain.

False

Firms within the same industry automatically belong to the same strategic group.

False

How does causal ambiguity act as an isolating mechanism for organizations?

It makes it difficult for the competitors to understand why a company has been so successful.

The owners of Always Baked bakery want to open a second retail outlet. Which of the following scenarios is most likely to yield a competitive advantage?

Open a shop on an inexpensive piece of land near a new mixed-use residential and business district currently under construction.

Which of the following statements is true about strategic groups?

Profitability varies between different strategic groups.

According to the resource-based view, a firm that differentiates itself from its competitors through its personalized approach to customer service is likely to sustain its competitive advantage for a long time.

True

Silvio is a manager at a software firm. The CEO tells him that the industry as a whole has become increasingly profitable over the past five years. Based on this information, Silvio is most likely to expect

increased competition in the future and therefore he should recommend that the company upgrade its products to slow the entry of rival companies.

PESTEL Analysis

Political Economic Social Technological Environmental Legal

In the context of SWOT analysis, which of the following best exemplifies a firm's internal weakness?

decline in the firm's market share

When automobile magazines face competition from automobile blogs on the web, which of the following forces in Michael Porter's five forces model primarily gets stronger?

the threat of substitutes

Porter's Five Forces

threat of entry, threat of substitute, supplier power, buyer power, and competitive rivalry

Which of the following is a drawback of the SWOT analysis?

A problem with this framework is that a strength can also be a weakness, and that an opportunity can also simultaneously be a threat.

Managers at SunTrustUs Properties are surprised to hear that interest rates are likely to remain low for the next six months. Which of the following is an implication of low interest rates?

Consumer demand will increase.

Which of the following applies to the Strength-Threats quadrant of the SWOT matrix?

The local fast-food chain Easy Hot Dogs used its wholesome image to maintain its competitive advantage against stiff competition.

In the context of the resource-based model of competitive advantage, if a successful firm exhibits resource immobility it means that the

firm will have a sustained competitive advantage because of its unique resources that are difficult for others to replicate.

Business managers are often concerned that just one of their company's activities will make or break their company's competitive advantage. However, you know that

their company's success depends on an array of many key activities, not just one activity.