Ch01
Student: ___________________________________________________________________________
1. A firm that formulates and implements a strategy that leads to superior performance has competitive
advantage.
True False
2. Competitive advantage is an absolute measure of superior firm performance.
True False
3. The essential core of strategy is doing the same thing as your rivals but being more effective at it.
True False
4. The term strategy is meant to describe the firm's overall quest for competitive advantage.
True False
5. Assumptions have no major role in the development of strategies for an organization.
True False
6. Industry effects clearly are more significant than firm-level effects on firm performance.
True False
7. Business strategy concerns the choice of strategy in terms of where to compete.
True False
8. A business model is not directly connected to how a firm makes money.
True False
9. IBM as a U.S. company has a majority of its revenues from the United States.
True False
10. BRIC countries include Britain, Russia, Ireland, and Chile and are likely to be the fastest-growing
economies in the world.
True False
11. Firms will refer to the "bottom of the pyramid" of the global economy for significant business
opportunities, thus improving the living standard of the world's poorest.
True False
12. Crowdsourcing is where a group of people voluntarily performs tasks that were traditionally completed
by a firm's employees.
True False
13. The AOL TimeWarner merger is viewed as beneficial for shareholder value.
True False
14. Stakeholders cannot exert a powerful influence on firms.
True False
15. The AFI Strategy Framework is used by managers to implement a human resource strategy for all
employees within a firm.
True False
,16. Google's initial competitive advantage over AltaVista and Yahoo was what?
A. Its location in Menlo Park
B. The PageRank algorithm
C. Brand recognition
D. The Keywords product
17. What might Microsoft have used their 1998 purchase of LinkExchange to build a competitive advantage
in?
A. Online search and advertising
B. Cloud storage
C. Business Intelligence Tools
D. Server Virtualization
18. Microsoft is building up its share of the search engine market by partnering with which firm?
A. AltaVista
B. Yahoo
C. Google
D. LinkExchange
19. Microsoft is partnering with Yahoo for what major purpose?
A. To improve their search speeds
B. To remove Yahoo as a competitor
C. To build market share for its Bing search engine
D. To compete with Apple
20. Which of the following is NOT a major component of the overarching integrative management field of
strategic management?
A. Financial investment strategy
B. Implementation
C. Analysis
D. Formulation
21. The Oakland A's used new metrics to assess player potential. This gave them an ability to do what?
A. Use their high-salary athletes to their best advantage
B. Publish new metrics in the Oakland Tribune newspaper
C. Launch a new advertising campaign for season tickets
D. Field low-cost teams that were still competitive
22. It appears that Google has a sustained competitive advantage because _________.
A. They are highly profitable and growing
B. They have outperformed rivals consistently over time
C. They currently have the leading online search engine
D. They are willing to take on the Chinese government
23. Duke basketball winning by two points over Butler in the 2010 NCAA championship game is an example
of what?
A. A competitive parity
B. A sustained competitive advantage
C. A temporary competitive advantage
D. A competitive business model
24. If Smith Pharmaceuticals has a 15% return on invested capital (RoIC), what do you need to know to
determine if it has a competitive advantage?
A. It must be compared to the RoIC of the competitors and industry.
B. Nothing, 15% is a terrific return for the shareholders.
C. It must be evaluated for depreciation of the capital.
D. It must be compared to the history of the firm's RoIC over a number of years.
,25. When competitors cooperate with one another to achieve strategic objectives, this is called?
A. Co-opetition
B. A merger
C. Functional tasks
D. A strategic initiative
26. The ups and downs within industries and corporations suggest that competitive advantage
__________.
A. Will remain constant
B. Will fail rapidly
C. Will likely be transitory
D. Will not be affected by industry cycles
27. Strategy is primarily about ____________.
A. Maximizing firm profits
B. Deriving operation effectiveness
C. Creating superior value
D. Competitive benchmarking
28. Co-opetition seems to be on the increase. Which of the following would be a good definition of co-
opetition?
A. Competitors cooperating with one another to achieve strategic objectives
B. Suppliers working with their customers to improve product quality
C. Firms from different industries forming strategic alliances for a common goal
D. Customers offering their services voluntarily on the Internet
29. Which of the following is not an aspect of the book's definition of strategy?
A. It is goal-directed.
B. It is profit-seeking.
C. It is about competitive advantage.
D. It is sustained over time.
30. Strategic __________ is staking out a unique and valuable spot that allows the firm to meet customer
demands.
A. Positioning
B. Advantage
C. Goal
D. Segmentation
31. JCPenney and Neiman Marcus these firms have different business strategies. They both accomplish this
by providing value to their customers while controlling costs. This is known as __________.
A. Co-opetition
B. Complementary business models
C. A competitive advantage
D. Differential strategic positioning
32. Business managers test their theories in the marketplace. An accurate set of assumptions will yield
enhanced strategic decisions. When the Apple Newton product failed in 1993, what feedback did Apple
(and its alert competitors) collect from the experience?
A. It was too early for personal mobile products.
B. The price and bulkiness were not right for the PDA market then.
C. The color and styling of the device were not well liked.
D. It was not possible to have a competitive advantage then.
33. The never-ending cycle of analysis, formulation, implementation, and feedback is called what?
A. The strategic management process
B. A sustained competitive advantage
C. The cycle of the bottom of the pyramid
D. The interaction of firm and industry effects
, 34. The difference in managerial theories can have a large impact on the success or failure of businesses.
In the automobile industry, what effect has the difference in assumptions between U.S. and Japanese
manufacturers had on the market?
A. The Japanese market was so small they needed to expand to reach economies of scale.
B. Lower fuel prices in the U.S. have yielded a sustained competitive advantage for U.S. firms thus far in
the 21st century.
C. Fuel pricing differences have pushed the market to competitive parity.
D. Higher gas prices in Japan drove the market toward more fuel-efficient products sooner than in the
U.S.
35. Determining firm performance is a complex interaction of firm effects and industry effects, with other
factors also considered. Based on historical analysis, what do we know about firm and industry effects?
A. Managerial actions rather than firm effects have a large role in firm performance.
B. Macro environmental effects such as a recession have more impact than either firm or industry effects.
C. Firm effects have more impact on performance than industry effects.
D. Industry effects have more impact on performance than firm effects.
36. The textbook divides the impacts explaining superior firm performance into three categories: Industries
Effects, Firm Effects, and Other Effects. Which is the smallest of the effects?
A. Industry Effects
B. Unexplained Variance
C. Other Effects
D. Firm Effects
37. The term "strategy" has grown in usage in a variety of fields today. Which of the following is the best use
of the term for this course?
A. Competitive benchmarking to improve the firm's position
B. The firm's efforts to gain and sustain competitive advantage
C. Implementing a company-wide Six Sigma program to strategically lower costs
D. Aligning with key corporations to form a competitive landscape of co-opetition
38. Which of the following does not support the book's definition of strategy?
A. It is about being different from your rivals.
B. It requires long-term commitments that are often not easily reversible.
C. It is about deciding what to do and what not to do.
D. It is about raising prices while containing costs.
39. Strategy formulation and implementation affect the organization at every level. What is the top level of
strategy within an organization?
A. Business
B. Functional
C. Corporate
D. Production
40. What is a standalone division of a larger conglomerate, with its own profit-and-loss responsibility?
A. A strategic business element
B. A strategic business unit
C. A business model
D. A corporate division
41. The General Manager of a strategic business unit (SBU) would be mostly concerned with questions of
____________.
A. How to compete
B. Where to compete
C. How to implement a business strategy
D. How to form strategic alliances
Student: ___________________________________________________________________________
1. A firm that formulates and implements a strategy that leads to superior performance has competitive
advantage.
True False
2. Competitive advantage is an absolute measure of superior firm performance.
True False
3. The essential core of strategy is doing the same thing as your rivals but being more effective at it.
True False
4. The term strategy is meant to describe the firm's overall quest for competitive advantage.
True False
5. Assumptions have no major role in the development of strategies for an organization.
True False
6. Industry effects clearly are more significant than firm-level effects on firm performance.
True False
7. Business strategy concerns the choice of strategy in terms of where to compete.
True False
8. A business model is not directly connected to how a firm makes money.
True False
9. IBM as a U.S. company has a majority of its revenues from the United States.
True False
10. BRIC countries include Britain, Russia, Ireland, and Chile and are likely to be the fastest-growing
economies in the world.
True False
11. Firms will refer to the "bottom of the pyramid" of the global economy for significant business
opportunities, thus improving the living standard of the world's poorest.
True False
12. Crowdsourcing is where a group of people voluntarily performs tasks that were traditionally completed
by a firm's employees.
True False
13. The AOL TimeWarner merger is viewed as beneficial for shareholder value.
True False
14. Stakeholders cannot exert a powerful influence on firms.
True False
15. The AFI Strategy Framework is used by managers to implement a human resource strategy for all
employees within a firm.
True False
,16. Google's initial competitive advantage over AltaVista and Yahoo was what?
A. Its location in Menlo Park
B. The PageRank algorithm
C. Brand recognition
D. The Keywords product
17. What might Microsoft have used their 1998 purchase of LinkExchange to build a competitive advantage
in?
A. Online search and advertising
B. Cloud storage
C. Business Intelligence Tools
D. Server Virtualization
18. Microsoft is building up its share of the search engine market by partnering with which firm?
A. AltaVista
B. Yahoo
C. Google
D. LinkExchange
19. Microsoft is partnering with Yahoo for what major purpose?
A. To improve their search speeds
B. To remove Yahoo as a competitor
C. To build market share for its Bing search engine
D. To compete with Apple
20. Which of the following is NOT a major component of the overarching integrative management field of
strategic management?
A. Financial investment strategy
B. Implementation
C. Analysis
D. Formulation
21. The Oakland A's used new metrics to assess player potential. This gave them an ability to do what?
A. Use their high-salary athletes to their best advantage
B. Publish new metrics in the Oakland Tribune newspaper
C. Launch a new advertising campaign for season tickets
D. Field low-cost teams that were still competitive
22. It appears that Google has a sustained competitive advantage because _________.
A. They are highly profitable and growing
B. They have outperformed rivals consistently over time
C. They currently have the leading online search engine
D. They are willing to take on the Chinese government
23. Duke basketball winning by two points over Butler in the 2010 NCAA championship game is an example
of what?
A. A competitive parity
B. A sustained competitive advantage
C. A temporary competitive advantage
D. A competitive business model
24. If Smith Pharmaceuticals has a 15% return on invested capital (RoIC), what do you need to know to
determine if it has a competitive advantage?
A. It must be compared to the RoIC of the competitors and industry.
B. Nothing, 15% is a terrific return for the shareholders.
C. It must be evaluated for depreciation of the capital.
D. It must be compared to the history of the firm's RoIC over a number of years.
,25. When competitors cooperate with one another to achieve strategic objectives, this is called?
A. Co-opetition
B. A merger
C. Functional tasks
D. A strategic initiative
26. The ups and downs within industries and corporations suggest that competitive advantage
__________.
A. Will remain constant
B. Will fail rapidly
C. Will likely be transitory
D. Will not be affected by industry cycles
27. Strategy is primarily about ____________.
A. Maximizing firm profits
B. Deriving operation effectiveness
C. Creating superior value
D. Competitive benchmarking
28. Co-opetition seems to be on the increase. Which of the following would be a good definition of co-
opetition?
A. Competitors cooperating with one another to achieve strategic objectives
B. Suppliers working with their customers to improve product quality
C. Firms from different industries forming strategic alliances for a common goal
D. Customers offering their services voluntarily on the Internet
29. Which of the following is not an aspect of the book's definition of strategy?
A. It is goal-directed.
B. It is profit-seeking.
C. It is about competitive advantage.
D. It is sustained over time.
30. Strategic __________ is staking out a unique and valuable spot that allows the firm to meet customer
demands.
A. Positioning
B. Advantage
C. Goal
D. Segmentation
31. JCPenney and Neiman Marcus these firms have different business strategies. They both accomplish this
by providing value to their customers while controlling costs. This is known as __________.
A. Co-opetition
B. Complementary business models
C. A competitive advantage
D. Differential strategic positioning
32. Business managers test their theories in the marketplace. An accurate set of assumptions will yield
enhanced strategic decisions. When the Apple Newton product failed in 1993, what feedback did Apple
(and its alert competitors) collect from the experience?
A. It was too early for personal mobile products.
B. The price and bulkiness were not right for the PDA market then.
C. The color and styling of the device were not well liked.
D. It was not possible to have a competitive advantage then.
33. The never-ending cycle of analysis, formulation, implementation, and feedback is called what?
A. The strategic management process
B. A sustained competitive advantage
C. The cycle of the bottom of the pyramid
D. The interaction of firm and industry effects
, 34. The difference in managerial theories can have a large impact on the success or failure of businesses.
In the automobile industry, what effect has the difference in assumptions between U.S. and Japanese
manufacturers had on the market?
A. The Japanese market was so small they needed to expand to reach economies of scale.
B. Lower fuel prices in the U.S. have yielded a sustained competitive advantage for U.S. firms thus far in
the 21st century.
C. Fuel pricing differences have pushed the market to competitive parity.
D. Higher gas prices in Japan drove the market toward more fuel-efficient products sooner than in the
U.S.
35. Determining firm performance is a complex interaction of firm effects and industry effects, with other
factors also considered. Based on historical analysis, what do we know about firm and industry effects?
A. Managerial actions rather than firm effects have a large role in firm performance.
B. Macro environmental effects such as a recession have more impact than either firm or industry effects.
C. Firm effects have more impact on performance than industry effects.
D. Industry effects have more impact on performance than firm effects.
36. The textbook divides the impacts explaining superior firm performance into three categories: Industries
Effects, Firm Effects, and Other Effects. Which is the smallest of the effects?
A. Industry Effects
B. Unexplained Variance
C. Other Effects
D. Firm Effects
37. The term "strategy" has grown in usage in a variety of fields today. Which of the following is the best use
of the term for this course?
A. Competitive benchmarking to improve the firm's position
B. The firm's efforts to gain and sustain competitive advantage
C. Implementing a company-wide Six Sigma program to strategically lower costs
D. Aligning with key corporations to form a competitive landscape of co-opetition
38. Which of the following does not support the book's definition of strategy?
A. It is about being different from your rivals.
B. It requires long-term commitments that are often not easily reversible.
C. It is about deciding what to do and what not to do.
D. It is about raising prices while containing costs.
39. Strategy formulation and implementation affect the organization at every level. What is the top level of
strategy within an organization?
A. Business
B. Functional
C. Corporate
D. Production
40. What is a standalone division of a larger conglomerate, with its own profit-and-loss responsibility?
A. A strategic business element
B. A strategic business unit
C. A business model
D. A corporate division
41. The General Manager of a strategic business unit (SBU) would be mostly concerned with questions of
____________.
A. How to compete
B. Where to compete
C. How to implement a business strategy
D. How to form strategic alliances
