MGMT 434 Chapter 1

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

A firm is likely to have a competitive advantage when it A. performs at a level similar to the other firms in the industry. B. provides goods similar to those of its competitors, but at a higher price. C. provides services that consumers will value more than those of its rivals. D. minimizes the difference between value creation and the costs involved.

greater a firm's economic contribution

The greater the difference between value creation and cost, the A. less likely a firm will gain competitive advantage. B. greater a firm's economic contribution. C. greater a firm's competitive parity. D. less likely that a firm's strategic position will be competitive.

legitimacy

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

analysis

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

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. a competitive advantage through superior performance. B. trade-offs that work against each other. C. an increase in the firm's economic contribution. D. competitive parity with firms that have adopted either of the strategies.

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

by providing customers a voice in product design

How has Threadless staked out a unique strategic position? A. by providing more discounts than other T-shirt companies B. by providing faster service than other T-shirt companies C. by providing customers a voice in product design D. by providing higher quality T-shirts than other companies

Quick Eats will face low profit potential

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? A. Quick Eats will face low profit potential. B. Quick Eats will be able to create higher value for its customers. C. Quick Eats will be better placed to gain a competitive advantage in the industry. D. Quick Eats will not face any direct competition in the industry.

It has a competitive advantage over the other firms.

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? A. It has a direct investment in the other firms. B. It has a competitive advantage over the other firms. C. It has an exchange relationship with the other firms. D. It has competitive parity with the other firms.

stakeholders can affect or be affected by a firm's actions

The black swan events in the past have demonstrated that A. stakeholders can affect or be affected by a firm's actions. B. capitalism as an economic system is highly reliable. C. companies can successfully integrate cost-leadership and differentiation strategies. D. globalization has reduced the need for standardized corporate ethics.

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

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

board members

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

suppliers

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

corporate citizenship

Which of the following is a philanthropic responsibility of a firm? A. competitive parity B. competitive disadvantage C. corporate citizenship D. strategic positioning

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

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

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

Which of the following statements will effectively guide a strategist? A. It is necessary to isolate the key stakeholders and their needs when formulating a strategy. B. Industry and firm effects that determine firm performance are independent of each other. C. Strategy is all about competitive benchmarking and operational effectiveness. D. The principles of strategic management can be applied universally to all organizations.

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

the Environmental Protection Agency (EPA) banning BP from any new contracts with the U.S. government

Which of the following would be most likely to directly put an organization like BP at a major competitive disadvantage? A. the fact that BP caused an environmental disaster despite being recognized as having high business integrity B. the Environmental Protection Agency (EPA) banning BP from any new contracts with the U.S. government C. the claims it faces by many small business owners in the tourism and seafood industries D. the fact that the small business owners along the Gulf coast have become powerful BP stakeholders

They erode the implicit trust between the corporate world and society

Why are black swan events often bad for business? A. They allow companies to gain a competitive advantage unfairly. B. They erode the implicit trust between the corporate world and society. C. They contribute to competitive parity, which hinders economic growth. D. They foster a false sense of prosperity, which results in economic depression.

external stakeholder

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. A. external stakeholder B. focus group C. representative sample D. internal stakeholder