MGMT 481 Ch 1

Too Fast Inc., a motorcycle company, is the market leader due to its superior engine technology and service orientation. These unique qualities have helped the company generate revenues that are consistently higher than other firms in the same industry. Which of the following can be concluded about Too Fast Inc. from this scenario? - It has a direct investment in other firms. - it has a competitive advantage over the firms - it has an exchange relationship with the other firms - it has a competitive parity with the other firms

It has a competitive advantage over the other firms.

Which of the following statements will effectively guide a strategist? - It is necessary to isolate the key stakeholders and their needs when formulating a strategy. - Industry and firm effects that determine firm performance are independent of each other. - Strategy is all about competitive benchmarking and operational effectiveness. - The principles of strategic management can be applied universally to all organizations.

The principles of strategic management can be applied universally to all organizations.

Why are black swan events such as accounting scandals and the global financial crisis perceived as caused by cheap credit and subprime mortgages offered by financial institutions, bad for business? -They allow companies to gain a competitive advantage unfairly. - They erode the implicit trust between the corporate world and society. - They contribute to competitive parity, which hinders economic growth. - They foster a false sense of prosperity, which results in an economic depression.

They erode the implicit trust between the corporate world and society.

Which of the following statements about competitive advantage is NOT true? - A firm will have a sustainable competitive advantage when it outperforms its competitors over a prolonged period of time. - A firm can gain a competitive advantage by providing goods similar to its competitors' goods at a lower price. - A firm's competitive advantage is always absolute, not relative. - A firm's past performance does not guarantee its future performance.

A firm's competitive advantage is always absolute, not relative.

Which of the following statements is true of strategy? - EatNow will not face any direct competition in the industry. - Tactical tools that are a part of a firm's functional and global initiatives are strategy. - Operational effectiveness and competitive benchmarking are strategies. - Actions that allow a firm to address a competitive challenge are strategy.

Actions that allow a firm to address a competitive challenge are strategy.

EatNow is a fast-food restaurant that has recently entered the hospitality industry. Since most of its competitors are pursuing a low-cost position and doing well, EatNow also wants to adopt the same strategy. Which of the following will be a likely implication of this decision? - EatNow will face low-profit potential. - EatNow will be able to create higher value for its customers. - EatNow will be better placed to gain a competitive advantage in the industry. - EatNow will not face any direct competition in the industry.

EatNow will face low profit potential.

Which of the following statements related to a firm's stakeholders is not true? - While external stakeholders are those who make contributions toward the firm, internal stakeholders are those who reap all the benefits. - If internal or external stakeholders withhold participation in the firm's exchange relationships, it can have severe negative performance implications. - A firm's stakeholders include organizations and groups along with individuals who can affect or be affected by the firm's actions. - Effective stakeholder management is an example of how managers can act to enhance a firm's competitive advantage.

While external stakeholders are those who make contributions toward the firm, internal stakeholders are those who reap all the benefits.

In which of the following cases was a company at a major competitive disadvantage? - Facebook hired Sheryl Sandberg because Mark Zuckerberg, Facebook's founder, lacked important business skills. - Without a clear strategic position, Sears tried to be too many things for too many types of customers. - Sam's Club decided to prescreen its customers via required membership to establish creditworthiness. - Strategy executives at UPS used scenario planning to identify issues critical to shaping the firm's future.

Without a clear strategic position, Sears tried to be too many things for too many types of customers.

A diagnosis of the competitive challenge, an element of a good strategy, is primarily accomplished through strategy - implementation - formulation - analysis - control

analysis

Which of the following groups is most likely to be considered a firm's internal stakeholder? - creditors - customers - alliance partners - board members

board members

How has Walmart staked out a unique strategic position? - by paying high wages to attract the most talented employees - by providing excellent customer service in a luxury setting - by cutting costs to offer lower prices than competitors - by investing 100% of profits in community development programs

by cutting costs to offer lower prices than competitors

All of the following below are examples of external stakeholders except - employees - government - communities - customers

employees.

Which of the following is a philanthropic responsibility of a firm? - not infringing on other firms' patents - providing products at appropriate prices - exhibiting corporate citizenship - obeying government regulations

exhibiting corporate citizenship

Gadgets n' Stuff Inc. is a vendor who supplies machine parts to an appliance manufacturing company. In return, Gadgets n' Stuff Inc. relies on the company for its revenue and is affected by any decisions taken by the company. In this scenario, Widgets Inc. is a(n) _________ for the appliance manufacturing company. - external stakeholder - focus group - representative sample - internal stakeholder

external stakeholder

The greater the difference between value creation and cost, the - less likely a firm will gain competitive advantage. - greater a firm's economic contribution. - greater a firm's competitive parity. - less likely that a firm's strategic position will be competitive.

greater a firm's economic contribution.

Which of the following is a stakeholder attribute that managers should consider at every step in a stakeholder impact analysis? - legitimacy - supremacy - literacy - solvency

legitimacy

A firm is likely to have a competitive advantage when it - performs at a level similar to the other firms in the industry. - provides goods similar to those of its competitors, but at a higher price. - provides services that consumers will value more than those of its rivals. - minimizes the difference between value creation and the costs involved.

provides services that consumers will value more than those of its rivals.

Which of the following has contributed to Tesla's competitive advantage in terms of stock appreciation? - copying the most popular features of competitors' vehicles - reinvesting profits to continually design and produce better electric vehicles - keeping its proprietary technologies secret - using inexpensive materials to keep costs low

reinvesting profits to continually design and produce better electric vehicles

The annual net profit after taxes for Tele Corp., a multinational conglomerate, is $5.5 billion. As legal owners, which of the following stakeholder groups has the most legitimate claim on this profit? - managers - shareholders - local communities - government

shareholders

________ is an important tool because it allows a manager to recognize, prioritize and address the needs of various stakeholders. - Stockholder appreciation - Shareholder voting proxies - Stakeholder impact analysis - Shareholder Right's Plan

stakeholder impact analysis.

Which of the following groups will not be considered a company's internal stakeholder? - suppliers - board members - shareholders - managers

suppliers

All of the following are examples of internal stakeholders except. - employees - stockholders - board members - suppliers

suppliers.

Which of the following does a firm possess when it can outperform other firms in the same industry or the industry average over a prolonged period of time? - consistent power position - long-term capital gain - strategic positioning - sustainable competitive advantage

sustainable competitive advantage

When a firm integrates the competitive strategies of cost-leadership and differentiation, it will most likely result in - competitive advantage through superior performance. - trade-offs that work against each other. - an increase in the firm's economic contribution. - competitive parity with firms that have adopted either of the strategies.

trade-offs that work against each other.

A good strategy should be able to provide products and services to customers at an attractive price point while maintaining internal costs, resulting in - value creation. - shareholder appreciation. - competitive benchmarking. - sustainable competitive advantage.

value creation.