Ch 1 Quiz

The metaphor of a black swan best applies to

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

The greater the difference between value creation and cost, the

greater a firm's economic contribution.

Which of the following statements with regard to determining firm performance is true?

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

Widgets Inc. is a vendor who supplies machine parts to an appliance manufacturing company. In return, Widgets 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

Revved Rider 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 Revved Rider Inc. from this scenario?

It has a competitive advantage over the other firms.

A firm is likely to have a competitive advantage when it

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

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?

Sustainable Competitive Advantage

Which of the following statements will effectively guide a strategist?

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

Which of the following groups will not be considered a company's internal stakeholder?

suppliers

Which of the following groups is most likely to be considered a firm's internal stakeholder?

board members

Quick Eats 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, Quick Eats also wants to adopt the same strategy. Which of the following will be a likely implication of this decision?

Quick Eats will face low profit potential.

Which of the following is a stakeholder attribute that managers should consider at every step in a stakeholder impact analysis?

legitimacy

When a firm integrates the competitive strategies of cost-leadership and differentiation, it will most likely result in

trade-offs that work against each other.

The annual net profit after taxes for RSL 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?

shareholders

Which of the following statements about competitive advantage is not true?

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

Which of the following statements is true of strategy?

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

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.

How has Threadless staked out a unique strategic position?

by providing customers a voice in product design

Which of the following is a philanthropic responsibility of a firm?

corporate citizenship

A diagnosis of the competitive challenge, an element of a good strategy, is primarily accomplished through strategy

Analysis