Strategic MGMT prep

D. perfect competition

4. In which of the following industry competitive structures do selling firms have the lowest pricing power? A. monopoly B. monopolistic competition C. oligopoly D. perfect competition

D. suppliers provide products that are differentiated.

5. The relative bargaining power of suppliers is high when A. incumbent firms can credibly threaten to backward integrate into the industry. B. suppliers depend heavily on the industry for a large portion of their revenues. C. incumbent firms face low supplier switching costs. D. suppliers provide products that are differentiated.

A. capital requirements are low.

2. In an industry, the threat of entry is high when A. capital requirements are low. B. switching costs are high. C. technological know-how is industry specific. D. expected returns are high.

D. analysis.

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

A. trade-offs that work against each other

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

A. sustainable competitive advantage

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? A. sustainable competitive advantage B. long-term capital gain C. strategic positioning D. consistent power position

D. legitimacy

Which of the following is a stakeholder attribute that managers should consider at every step in a stakeholder impact analysis? A. literacy B. solvency C. supremacy D. legitimacy

D. events that are considered highly unexpected and highly impactful when they do occur.

The metaphor of a black swan best applies to A. low profitable strategic business units within a large enterprise that are best divested or liquidated. B. highly profitable business units in low growth markets that are to be sustained solely for revenue generation. C. small businesses that become successful enough to raise capital through initial public offering. D. events that are considered highly unexpected and highly impactful when they do occur.

D. the strategic actions taken by managers of a firm in the industry

Which of the following forces are most closely related to firm effects within a pharmaceutical industry? A. the types of products and the services offered within the industry B. the entry and exit barriers existing within the industry C. the number and the size of the firms in the industry D. the strategic actions taken by managers of a firm in the industry

A. board members

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

C. suppliers

Which of the following groups will not be considered a company's internal stakeholder? A. shareholders B. managers C. suppliers D. board members

D. Competition must be defined in a broad way to incorporate all of the key factors that influence profit potential.

1. Which of the following statements about Porter's five forces model is accurate? A. The potential profit of a company is caused by two forces: threat of substitutes and rivalry among existing firms. B. Competition must be defined narrowly to focus on the closest competitors and plan ways increase profit potential. C. The potential profit of a company is caused mostly by random factors instead of by industry-specific factors. D. Competition must be defined in a broad way to incorporate all of the key factors that influence profit potential.

A. Profitability varies between different strategic groups.

10. Which of the following statements is true about strategic groups? A. Profitability varies between different strategic groups. B. Companies within the same strategic group are complementors to each other. C. It is not possible to have two different strategic groups within the same industry. D. Rivalry within the same strategic group tends to be lower than rivalry between different strategic groups.

C. PESTEL framework

3. The _____ allows the scanning, monitoring, and evaluating of changes and trends in a firm's macro environment. A. SWOT analysis B. BCG matrix C. PESTEL framework D. VRIO framework

A. complementor

6. A company is best described as a _____ to an existing company if customers value the existing company's product or service offering more when they are able to combine it with the other company's product or service. A. complementor B. strategic equivalent C. competitor D. shareholder

D. the threat of substitutes

7. When fashion magazines face competition from fashion blogs on the web, which of the following forces in Michael Porter's five forces model primarily gets stronger? A. the bargaining power of suppliers B. the availability of complements C. the emergence of entry barriers D. the threat of substitutes

D. The weaker the five forces, the greater the industry's profit potential—making the industry more attractive.

8. What is the rule of thumb behind Porter's five forces model? A. The stronger the five forces, the lower the industry's profit potential—making the industry more attractive. B. The stronger the five forces, the greater the industry's profit potential—making the industry less attractive. C. The weaker the five forces, the lower the industry's profit potential—making the industry less attractive. D. The weaker the five forces, the greater the industry's profit potential—making the industry more attractive.

B. industry convergence

9. With the emergence of smartphones, users no longer have to carry a separate music player, a video game, a laptop, or a magazine to keep themselves entertained when traveling. A smartphone is loaded with a variety of applications to satisfy all the customer needs that different industries or products individually satisfied earlier. As a result, the smartphone industry has been posing a threat to a lot of other unrelated industries. What is this phenomenon best known as? A. customer myopia B. industry convergence C. product differentiation D. backward integration

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

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

D. External analysis will help understand the industry effects that determine a firm's performance.

Which of the following statements with regard to determining firm performance is true? A. Industry effects attribute firm performance to the actions managers take within a chosen industry. B. Industry effects are more important than firm effects in determining a firm's performance. C. Firm and industry effects are independent of each other. D. External analysis will help understand the industry effects that determine a firm's performance.