1

Strategy implementation occurs when a firm adopts organizational policies and practices that are consistent with its strategy.

true

Green Frog is an environmentally friendly firm in the cosmetics industry. Even though Green Frog is environmentally friendly, the strategic planning team had decided that financial performance is one of the company's top priorities. Which of the following is the best example of an objective the company might use to help it achieve its goal of superior financial performance? A) increasing profitability B) growing market share annually C) improving product quality every quarter D) growth in earnings per share averaging 15% or better annually for the next five years

D)

If the average ROE in the heating and cooling industry is 10.1%, and Thermacorp's ROE is 17.3%, Thermacorp is said to have

above average accounting performance

Using ratio analysis, a firm earns ________ when its performance is greater than the industry average.

above average accounting performance

A firm that is able to attract additional capital because debt holders and equity holders will scramble to make additional funds available for it is likely earning ____

above normal economic performance

A firm's ________ is a measure of its competitive advantage calculated using information from a firm's published profit and loss and balance sheet statements.

accounting performance

Actions firms take to gain competitive advantages in a single market or industry are known as ___

business level strategies

If TechnoGeek and VarsityBlue compete in the same market for the same customer and TechnoGeek generates $900 of economic value each time it sells a product or service while VarsityBlue generates $400 of economic value each time it sells a product or service, TechnoGeek has a(n) ________ of $500.

competitive advantage

When a firm is able to create more economic value than rival firms it is said to have a(n) ____

competitive advantage

Actions firms take to gain competitive advantages by operating in multiple markets or industries simultaneously are known as ___

corporate level strategies

Green Frog is an environmentally friendly firm in the cosmetics industry. If Green Frog were considering expanding beyond the cosmetics industry into pharmaceuticals in order to gain competitive advantages by operating in multiple markets and industries, this would be an example of which type of strategy?

corporate level strategy

The strategic management process begins when a firm ___

defines its mission

Green Frog is an environmentally friendly firm in the cosmetics industry that has decided to undertake a strategic planning project. It wants to ensure that it performs the process correctly and so intends to start the process with the first step of the strategic planning process, which is

defining its mission

By conducting a(n) ________, a firm identifies the critical threats and opportunities in its competitive environment.

external analysis

A "good strategy" does not necessarily have to create a competitive advantage.

false

A sustained competitive advantage is virtually permanent.

false

All firms have almost entirely emergent strategies.

false

Business level strategies are actions firms take to gain competitive advantages by operating in multiple markets or industries simultaneously.

false

Corporate level strategies are actions firms take to gain competitive advantages in a single market or industry.

false

High quality objectives are tightly connected to the elements of a firm's mission but tend to be relatively difficult to measure and track over time.

false

It is usually possible to know for sure that a firm is choosing the right strategy.

false

Johnson & Johnson's introduction of "Johnson's Toilet and Baby Powder" as a result of customers asking to purchase the talcum powder is an example of a planned strategy.

false

The greatest disadvantage of accounting measures of competitive performance is that they are relatively difficult to compute.

false

There is complete consensus among strategic managers and academic researchers about what a "strategy" is

false

When a firm earns above average accounting performance, it is said to enjoy competitive parity.

false

Fed Ex entered their market with a well-defined mission and objectives, making strategic choices and implementing those strategies. This is an example of which type of strategy?

intended

________ helps a firm understand which of its resources and capabilities are likely to be sources of competitive advantage.

internal analysis

A firm's ________ is its long-term purpose that defines both what it aspires to be in the long run and what it wants to avoid in the meantime.

mission

________ are specific measurable targets a firm can use to evaluate the extent to which it is realizing its mission.

objectives

Thermacorp's 17.3% ROE is an example of a(n) ________ ratio.

profitability

A sequential set of analyses and choices that can increase the likelihood that a firm will choose a strategy that generates competitive advantages is the ____

strategic management process

A firm's ________ is defined as its theory about how to gain competitive advantages.

strategy

From 1926 to 1995, visionary firms earned ________ returns compared to firms that were not visionary firms.

substantially higher

The mission statements of visionary firms _____

suggest that profit maximizing, while an important corporate objective, is not their primary reason for existence.

A competitive advantage that lasts a very short period of time is known as a ________ competitive advantage.

temporary

A firm that earns below average accounting performance generally experiences a competitive disadvantage.

true

By conducting an external analysis, a firm identifies the critical threats and opportunities in the industry's competitive environment.

true

Objectives are the specific measurable targets a firm can use to evaluate the extent to which it is realizing its mission.

true

One of the central questions that all strategic managers must address, regardless of the industry they work in, is "How is the industry likely to evolve?"

true

The greater the extent to which a firm's assumptions and hypotheses accurately describe how the competition in the industry is likely to evolve, and how that evolution can be exploited to earn a profit, the more likely it is that a firm will gain a competitive advantage from implementing its strategies.

true

The strategic management process is a sequential set of analyses and choices that can increase the likelihood that a firm will choose a good strategy that generates competitive advantages.

true

The ultimate objective of the strategic management process is to enable a firm to choose and implement a strategy that leads to a competitive advantage.

true