Ch.1 Quiz

Which of the following summarizes the difference between a firm's vision and mission?

A vision states what a firm wants to accomplish; a mission states how a firm plans to accomplish this vision.

The ________ is a model that links strategy analysis, strategy formulation, and strategy implementation, which together helps managers plan and implement a strategy that can improve performance and result in competitive advantage.

AFI strategy framework

Why is it better for firms to keep their vision statements customer-oriented rather than product-oriented?

Customer-oriented visions tend to be more flexible when adapting to changing environments.

The average cost of production for a bottle of vitamin water in the industry is $4 while its average price is $7. StoreAll Inc. manufactures the same product for $3 per bottle and sells it for $7 per bottle. Which of the following statements is most likely true of StoreAll Inc. in this scenario?

It has a competitive advantage in the industry.

Which of the following statements about strategy is not true?

Operational effectiveness and competitive benchmarking should be treated as strategy.

Which of the following scenarios illustrates a firm that has a sustainable competitive advantage?

Zhang Corp. was able to hold its market share of 68 percent in the social networking industry for more than three years.

The Scoop, Ltd. is a magazine publishing company whose average return on invested capital is approximately 5 percent. Because magazine publishing is a declining industry, the industry average has been negative (-5 percent) for the last few years. In this scenario, The Scoop Ltd. has a

competitive advantage.

Underperformance relative to other firms in the same industry or the industry average results in a(n) ________ for a firm.

competitive disadvantage

Which of the following is a customer-oriented vision?

to enable people throughout the globe to identify their capabilities

During strategy implementation, managers primarily focus on deciding the

type of corporate governance that is most effective and ways in which it can put the formulated strategy into practice.