BMGT 301 STUDY GUIDE TEST QUESTIONS
AND CORRECT ANSWERS SUCCESS
RESOURCE
●● What are the two ways to gain competitive advantage?
Answer: 1. Operational effectiveness - performing the same tasks better
than rivals (e.g., lower cost). 2. Strategic positioning - performing
different tasks than rivals (e.g., higher value/revenue).
●● What are the two ways to measure competitive advantage?
Answer: 1. Accounting profits - good measure for firms in
identical/similar markets. 2. Stock price - reflects values not shown in
accounting tables.
●● What is the resource-based theory of competitive advantage?
Answer: True sustainable advantage comes from assets and models that
are valuable, rare, hard to imitate, and hard to substitute.
●● What are examples of powerful resources under resource-based
theory?
Answer: Imitation-resistant value chains, brand, scale, switching costs,
data, differentiation, network effects, distribution channels, patents.
, ●● What are scale advantages and economies of scale?
Answer: As businesses grow in size, they gain scale advantages.
Economies of scale = cost of investment is spread across increasing
units of production or a growing customer base.
●● What are strategic frameworks used for?
Answer: Help managers describe the competitive environment a firm
faces and brainstorm responses to industry competition.
●● What is a fast follower?
Answer: Occurs when rivals: Watch pioneers' efforts, Learn from
successes and missteps, Quickly enter market with comparable/superior
product at lower cost, Do so before the first mover dominates.
●● What is straddling?
Answer: When a firm tries to match benefits of a successful position
while still maintaining its existing position.
●● What role does technology play in competitive advantage?
Answer: Enables imitation-resistant value chains, strengthens brand,
collects useful data, establishes switching costs, creates network effects,
enhances scale advantage, enables differentiation, provides unique
distribution channels.
AND CORRECT ANSWERS SUCCESS
RESOURCE
●● What are the two ways to gain competitive advantage?
Answer: 1. Operational effectiveness - performing the same tasks better
than rivals (e.g., lower cost). 2. Strategic positioning - performing
different tasks than rivals (e.g., higher value/revenue).
●● What are the two ways to measure competitive advantage?
Answer: 1. Accounting profits - good measure for firms in
identical/similar markets. 2. Stock price - reflects values not shown in
accounting tables.
●● What is the resource-based theory of competitive advantage?
Answer: True sustainable advantage comes from assets and models that
are valuable, rare, hard to imitate, and hard to substitute.
●● What are examples of powerful resources under resource-based
theory?
Answer: Imitation-resistant value chains, brand, scale, switching costs,
data, differentiation, network effects, distribution channels, patents.
, ●● What are scale advantages and economies of scale?
Answer: As businesses grow in size, they gain scale advantages.
Economies of scale = cost of investment is spread across increasing
units of production or a growing customer base.
●● What are strategic frameworks used for?
Answer: Help managers describe the competitive environment a firm
faces and brainstorm responses to industry competition.
●● What is a fast follower?
Answer: Occurs when rivals: Watch pioneers' efforts, Learn from
successes and missteps, Quickly enter market with comparable/superior
product at lower cost, Do so before the first mover dominates.
●● What is straddling?
Answer: When a firm tries to match benefits of a successful position
while still maintaining its existing position.
●● What role does technology play in competitive advantage?
Answer: Enables imitation-resistant value chains, strengthens brand,
collects useful data, establishes switching costs, creates network effects,
enhances scale advantage, enables differentiation, provides unique
distribution channels.
