MGT 4394: EXAM 1 Questions and
Already Passed Answers 2026
Updated.
What is strategic management? - Answer Integrative management field that combines
analysis, formulation and implementation in the quest for competitive advantage.
(Enables you to view a firm in its entirety)
Strategy - Answer A set of goal- directed actions a firm takes to gain and sustain superior
performance relative to competitors.
A good ________________ enables a firm to achieve superior performance - Answer
Strategy
A good strategy consists of: - Answer - A diagnosis of the competitive challenge (firm's
external and internal environment analysis)
- A guiding policy to address the competitive challenge (accomplished through strategy
formulation)
- Set of coherent actions to implement the firm's guiding policy (strategy implementation)
Competitive advantage is always ________________ not absolute - Answer Relative
If a firm that achieves superior performance relative to other competitors in the same industry
or the industry average has a _______ competitive advantage - Answer High
Sustainable competitive advantage - Answer If a firm is able to outperform its competitors or
the industry average over a prolonged period of time.
If a firm underperforms its rivals or the industry average, it has a ____________________ -
Answer competitive disadvantage
If two or more firms perform at the same level, they have ______________________- - Answer
competitive parity
What should a firm do to gain a competitive advantage? - Answer Provide goods or services
consumers value more highly than those of competitors, or goods or services similar to
competitors at a lower price.
,Strategic Positioning (key to successful strategy) - Answer A unique position within an
industry that allows a firm to provide value to customers, while controlling costs
Requires trade offs
How is economic contribution gained? - Answer value creation - cost (high economic
contribution = high competitive advantage)
Strategy is much about deciding what not to do as it is about what to do. (T or F) - Answer
true
What strategy is NOT - Answer - Grandiose statements are not strategy "our strategy is to
win"
- A failure to face a competitive challenge is not strategy
- Operational effectiveness, competitive benchmarking, or other tactical tools are not strategy.
Firm performance is determined primarily by 2 factors: - Answer Firm and industry effects
Industry effects - Answer Underlying economic structure of the industry
They attribute firm performance to the industry in which the firm competes.
How is the structure of industry defined? - Answer Elements common to all industries (such
as entry and exit barriers, number and size of companies, and types of products and services
offered)
20% of firm profitability depends on the industry its in
Firms effect - Answer Attribute firm performance to the actions managers take.
(Manager's actions tend to be more important in determining firm performance than the forces
exerted on the firm by its external environment)
Firms effect and industry effect make up roughly 75% of overall firm performance. (T or F) -
Answer True
, Black swan events - Answer event or occurrence that deviates beyond what is normally
expected of a situation and is extremely difficult to predict.
High impact of high improbable event.
Ex- the fall of a Berlin wall, 9/11 terrorist attack, global financial crisis in 2008
Internal stakeholder vs external stakeholder - Answer Internal includes stockholders,
employees (including executives, managers and workers) and board members
External includes customers, suppliers, alliance partners, creditors, unions, communities,
government and the media
Stakeholder strategy - Answer Integrative approach to managing a diverse set of stakeholders
effectively in order to gain and sustain competitive advantage.
Allows firms to analyze and manage how various external and internal stakeholders interact to
jointly create and trade value
What is the key challenge of stakeholder strategy - Answer Effectively balance the needs of
various stakeholders
Stakeholder impact analysis - Answer Provides a decision tool with which managers can
recognize, prioritize, and address the needs of different stakeholders.
Helps achieve a competitive advantage while acting as a good corporate citizen.
What are the three important stakeholder attributes? - Answer Power (A stakeholder has
power over a company when it can get the company to do something that it would not
otherwise do)
Legitimacy (A stakeholder has a legitimate claim when it is perceived to be legally valid or
otherwise appropriate)
Urgency (A stakeholder has an urgent claim when it requires a company's immediate attention
and response.
Five steps in stakeholder impact analysis (recognizing stakeholders claim) - Answer 1. Identify
stakeholders (either current stakeholders or potential stakeholders)
Already Passed Answers 2026
Updated.
What is strategic management? - Answer Integrative management field that combines
analysis, formulation and implementation in the quest for competitive advantage.
(Enables you to view a firm in its entirety)
Strategy - Answer A set of goal- directed actions a firm takes to gain and sustain superior
performance relative to competitors.
A good ________________ enables a firm to achieve superior performance - Answer
Strategy
A good strategy consists of: - Answer - A diagnosis of the competitive challenge (firm's
external and internal environment analysis)
- A guiding policy to address the competitive challenge (accomplished through strategy
formulation)
- Set of coherent actions to implement the firm's guiding policy (strategy implementation)
Competitive advantage is always ________________ not absolute - Answer Relative
If a firm that achieves superior performance relative to other competitors in the same industry
or the industry average has a _______ competitive advantage - Answer High
Sustainable competitive advantage - Answer If a firm is able to outperform its competitors or
the industry average over a prolonged period of time.
If a firm underperforms its rivals or the industry average, it has a ____________________ -
Answer competitive disadvantage
If two or more firms perform at the same level, they have ______________________- - Answer
competitive parity
What should a firm do to gain a competitive advantage? - Answer Provide goods or services
consumers value more highly than those of competitors, or goods or services similar to
competitors at a lower price.
,Strategic Positioning (key to successful strategy) - Answer A unique position within an
industry that allows a firm to provide value to customers, while controlling costs
Requires trade offs
How is economic contribution gained? - Answer value creation - cost (high economic
contribution = high competitive advantage)
Strategy is much about deciding what not to do as it is about what to do. (T or F) - Answer
true
What strategy is NOT - Answer - Grandiose statements are not strategy "our strategy is to
win"
- A failure to face a competitive challenge is not strategy
- Operational effectiveness, competitive benchmarking, or other tactical tools are not strategy.
Firm performance is determined primarily by 2 factors: - Answer Firm and industry effects
Industry effects - Answer Underlying economic structure of the industry
They attribute firm performance to the industry in which the firm competes.
How is the structure of industry defined? - Answer Elements common to all industries (such
as entry and exit barriers, number and size of companies, and types of products and services
offered)
20% of firm profitability depends on the industry its in
Firms effect - Answer Attribute firm performance to the actions managers take.
(Manager's actions tend to be more important in determining firm performance than the forces
exerted on the firm by its external environment)
Firms effect and industry effect make up roughly 75% of overall firm performance. (T or F) -
Answer True
, Black swan events - Answer event or occurrence that deviates beyond what is normally
expected of a situation and is extremely difficult to predict.
High impact of high improbable event.
Ex- the fall of a Berlin wall, 9/11 terrorist attack, global financial crisis in 2008
Internal stakeholder vs external stakeholder - Answer Internal includes stockholders,
employees (including executives, managers and workers) and board members
External includes customers, suppliers, alliance partners, creditors, unions, communities,
government and the media
Stakeholder strategy - Answer Integrative approach to managing a diverse set of stakeholders
effectively in order to gain and sustain competitive advantage.
Allows firms to analyze and manage how various external and internal stakeholders interact to
jointly create and trade value
What is the key challenge of stakeholder strategy - Answer Effectively balance the needs of
various stakeholders
Stakeholder impact analysis - Answer Provides a decision tool with which managers can
recognize, prioritize, and address the needs of different stakeholders.
Helps achieve a competitive advantage while acting as a good corporate citizen.
What are the three important stakeholder attributes? - Answer Power (A stakeholder has
power over a company when it can get the company to do something that it would not
otherwise do)
Legitimacy (A stakeholder has a legitimate claim when it is perceived to be legally valid or
otherwise appropriate)
Urgency (A stakeholder has an urgent claim when it requires a company's immediate attention
and response.
Five steps in stakeholder impact analysis (recognizing stakeholders claim) - Answer 1. Identify
stakeholders (either current stakeholders or potential stakeholders)
