Chapter 1 Quiz

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

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

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.

Organizational core values are the answer to which of the following questions? - How do we accomplish our goals? - Which of the value chain activities are primary? - What is the value added to a good or service at each step in the production? - What is the company's customer lifetime value?

How do we accomplish our goals?

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 direct investment in the other firms. - It has a competitive advantage over the other firms. - It has an exchange relationship with the other firms. - It has competitive parity with the other firms.

It has a competitive advantage over the other firms.

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.

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. - Quick Eats will be able to create higher value for its customers. - Quick Eats will be better placed to gain a competitive advantage in the industry. - Quick Eats will not face any direct competition in the industry.

Quick Eats will face low profit potential.

If a company chooses to keep its vision customer-oriented rather than product-oriented, what will be the implication of that decision? - The company will tend to be more flexible when adapting to changing environments. - The company will clearly define how it means to satisfy a customer need. - The company will fail to establish a positive relationship between its vision statement and performance. - The company will have a short-term, unidirectional focus.

The company will tend to be more flexible when adapting to changing environments.

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.

Which of the following statements is true of customer-oriented visions? - They tend to force managers to take a myopic view of the business environment. - They define a business in terms of providing solutions to people's needs. - They are inflexible with regard to adapting to changing environments. - They state an organization's goals in terms of a good or service provided to customers.

They define a business in terms of providing solutions to people's needs.

Which of the following statements accurately brings out the difference between an organization's vision and mission? - Mission is the organization's aspirations for the future and vision is about how these aspirations can be made true over time. - Vision is short-term: oriented and related to the organization's present, whereas the mission is futuristic. - Vision is valid at the functional level of the organization, whereas mission covers the entire organization. - Vision defines what the organization wants to accomplish ultimately, whereas the mission defines the means by which vision is accomplished.

Vision defines what the organization wants to accomplish ultimately, whereas the mission defines the means by which vision is accomplished.

Which of the following actions of an automobile firm will be considered as a strategic commitment? - the firm launching an existing model of a car in red as a limited edition for six months - the firm investing eight years and $4 billion to develop a range of hybrid cars with which it will compete in the future - the firm spending $100,000 on renting a manufacturing facility to meet the temporary demand for its cars - the firm promoting its new model of coupe through a free European trip worth $15,000 to be won as an early-bird offer

the firm investing eight years and $4 billion to develop a range of hybrid cars with which it will compete in the future

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

analysis

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.

Which of the following statements is true of strategy? - Statements of desire, on their own, are strategy. - Tactical tools that are a part of a firm's functional and global initiatives are strategy. - Operational effectiveness and competitive benchmarking are strategy. - Actions that allow a firm to address a competitive challenge are strategy.

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

Product-oriented vision statements provide managers with - goals for employee development. - goals to improve service. - strategic flexibility. - ways to solve customer problems.

goals to improve service.

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.

An organization's _____ describes what the organization actually does—the products and services it plans to provide, and the markets in which it will compete. - mission - vision - promissory note - code of conduct

mission

When a firm integrates the competitive strategies of cost-leadership and differentiation, it will most likely result in - a 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 company's vision primarily states - how the company plans to accomplish its goals. - what the company actually does to generate revenues. - what the company wants to ultimately accomplish. - how the company plans to compete in its industry.

what the company wants to ultimately accomplish.