Strategic Mgnt - Exam #1 Practice Questions

The ________ allows the scanning, monitoring, and evaluating of changes and trends in a firm's macro environment.

PESTEL framework

Which of the following is the best characterization of sociocultural forces?

a society's culture, norms, and values

Organizational and managerial skills that find their expression in a company's structure, routines, and culture are referred to as

capabilities

In an industry, the threat of entry is high when

capital requirements are low

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

decline in the firm's market share

Which of the following statements accurately brings out the difference between monopolistic competition and an oligopoly?

in monopolistic competition, many firms compete against each other; in an oligopoly, there are few large firms competing against each other

________ are barriers to imitation that prevent rivals from competing away the advantage a firm may enjoy.

isolating mechanisms

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

Economies of scale are cost advantages that accrue for firms with

larger output

Which of the following is a macroeconomic factor that can affect a firm's strategy?

levels of employment

According to the value chain analysis, which of the following is a primary activity?

marketing and sales

________ describes a process in which the options one faces in a current situation are limited by decisions made in the past.

path dependence

The competitive advantage that one firm has will be short-lived in an industry in which

perfect competition exists

Keeping in mind the five forces in the airline industry, which of the following best explains the difficulty airlines have in generating a profit?

substitutes are readily available in the form of trains, buses, and cars, thus reducing the profit potential in the industry

Which of the following statements accurately brings out the difference between tangible and intangible resources?

tangible assets can be bought on the open market by anyone with the necessary cash, whereas intangible assets cannot be easily purchased

Amazon.com's network of distribution centers allow it to drastically reduce its delivery times compared to other online retailers. These distribution centers are examples of Amazon's

tangible resources

A firm's strategic position is likely to be strong when

the gap between the value the firm's product generates and the cost to produce it is large

Which of the following is likely to happen due to horizontal mergers between competitors such as Delta and Northwest airlines?

the overall industry profitability will increase

The management of a company is assessing the value of all the tangible resources the company owns. Which of the following will be included in this assessment?

the punch presses that produce parts

The primary objective of Porter's five forces model is to

understand the profit potential of industries