Strategic Management Chapter 5 and 6

Higher product value tends to go along with which of the following items?

ALL OF THESE

A generic business strategy is more likely to help a cost-leadership firm achieve competitive advantage when it does which one of the following?

Allows a firm to perform similar activities differently than its rivals with resulting lower costs

A firm's _________ captures the historical costs of a firm's assets.

Book value

When the focus of competition is on differentiation, a firm tends to use all of these levers EXCEPT:

Cost input factors.

In Strategy Highlight 6.2, Ryanair is aggressively pursuing a cost-leadership position in Europe. Which of the following cost drivers are primarily used by Ryanair in the text?

Cost-of-input factors

From an accounting profitability perspective, competitive advantage is achieved by the firm that does which of the following?

Delivers the most positive profitability metrics.

Tesla Motors, maker of electric cars, is an example of a firm using what type of generic business strategy?

Focused Differentiation

As noted in Chapter 5, Microsoft is many times larger than Google and records higher net income, return on assets, and return on equity in absolute terms when it comes to accounting profitability. However, when looking at normalized stock returns, Google has outperformed both Microsoft and the NASDAQ-100 index by a wide margin over the 2005-2010 time period. Suppose you were a manager for Microsoft. Evaluating this information would tell you that:

Google has a sustained competitive advantage from a shareholder value creation framework.

Macroeconomic factors such as the unemployment rate and economic contraction:

Have a direct bearing on a firm's stock price.

All of the following are tools typically used to achieve cost-leadership EXCEPT:

Learning by doing.

When the CEO of Whole Foods, John Mackey, had to make decisions about the company's cost structure and value position he was:

Making strategic trade-offs.

Generic business-level strategies that a firm can adopt include all of the following EXCEPT:

Market differentiation strategy.

One of the drawbacks to the accounting profitability approach to measuring competitive advantage is that it does not consider:

Off-balance sheet items such as pension obligations.

The types of assets that are the primary focus of accounting data but are no longer most important to competitive advantage are:

Tangible.

Value creating is important to competitive advantage because

The product or service that is value the highest by the customer can charge the highest price.

Under the economic value creation framework, producer surplus is important in the quest for competitive advantage because:

This is the profit that a firm captures when producing and selling a good or service.

The ___________ is the difference between value creation and cost.

Value gap

_____ drivers are as important to a differentiation strategy as ________ drivers are to a cost-leadership strategy.

Value; cost

Hyundai's reputation for quality is an asset that:

all of these

What is one of the challenges of measuring competitive advantage using the economic value creation approach?

All Of These

The concept of differentiation parity is important in low-cost leadership. A cost leader can gain a competitive advantage when it has lower costs than the competition AND has achieved differentiation parity. What is differentiation parity?

Creating the same value as the competition.

When a firm offers products with unique features and higher value for customers than that of the competition, it is implementing a:

Differentiation strategy.

Assets such as innovation and quality are ________ assets that contribute to growth potential but are typically not included in a firm's book value.

Intangible

Under the accounting profitability framework to competitive advantage, comparing return on revenue (ROR) between companies is important because:

It adjusts for size differences and provides a relative comparison.

Rolex focuses on a small market segment, affluent consumers who want to present a certain image. What is the appropriate name for Rolex's scope of competition?

Narrow