MGMT 4513 PRACTICE QUESTIONS AND VERIFIED
ANSWERS
Which of the following would be the most difficult to assess?
-The legitimacy and reputation of a firm.
-The liquidity position of a firm.
-Market share growth.
-The deficiency with which a firm utilizes its assets. - Answers - The legitimacy and
reputation of a firm.
A newly acquired business must always have products that are similar to the existing
businesses' products to benefit from the corporation's core competence.
-True
-False - Answers - False
A crash R&D program by one firm cannot replicate a successful technology developed
by another firm when research findings cumulate. This is an example of
-casual ambiguity
-physical uniqueness
-path dependency
-social complexity - Answers - path dependency
Although firm infrastructure is often viewed only as an overhead expense, it can
become a source of competitive advantage. Examples include all of the following
except:
-Top management providing a key role in collaborating with important customers.
-Marketing expertise increasing a firm's revenues and enabling it to enter new markets.
-Negotiating and maintaining ongoing relations and regulatory bodies.
-Effective information systems contributing significantly to a firm's overall cost
leadership strategy. - Answers - Marketing expertise increasing a firm's revenues and
enabling it to enter new markets.
A resource is valuable and rare but neither difficult to imitate nor without substitutes.
This should enable the firm to attain
-a temporary competitive advantage.
-competitive parity.
, -a sustainable competitive advantage.
-no competitive advantage. - Answers - a temporary competitive advantage.
Establishing a customer service hotline to handle customer complaints would be
considered a primary activity in value chain analysis.
-False
-True - Answers - True
Which statement regarding competitive advantages is true?
-If several competitors pursue similar differentiation tactics, they may all be perceived as
equals in the mind of the consumers.
-Attaining multiple types of competitive advantage is a recipe for failure.
-In the long run, a business with one or more competitive advantage is probably
destined to earn normal profits.
-With an overall cost leadership strategy, firms need not be concerned with parity on
differentiation. - Answers - If several competitors pursue similar differentiation tactics,
they may all be perceived as equals in the mind of the consumers.
The downsides or limitations of mergers and acquisitions include all of the following
except:
-it is a slow means to enter new markets and acquire skills and competences.
-difficulties in integrating the activities and resources of the acquired firm into a
corporation's on-going operations.
-expensive premiums that are frequently paid to acquire a business.
-there can be many cultural issues that can doom an otherwise promising acquisition. -
Answers - it is a slow means to enter new markets and acquire skills and competences.
Portfolio management should be considered as the primary basis for formulating
corporate-level strategies.
-True
-False - Answers - False
It may be advantageous to vertically integrate when
-lower transaction costs and improved coordination are vital and achievable through
vertical integration.
-flexibility is reduced, providing a more stationary position in the competitive
environment.
-the minimum efficient scales of two corporations are different.
-various segregated specializations will be combined. - Answers - lower transaction
costs and improved coordination are vital and achievable through vertical integration.
ANSWERS
Which of the following would be the most difficult to assess?
-The legitimacy and reputation of a firm.
-The liquidity position of a firm.
-Market share growth.
-The deficiency with which a firm utilizes its assets. - Answers - The legitimacy and
reputation of a firm.
A newly acquired business must always have products that are similar to the existing
businesses' products to benefit from the corporation's core competence.
-True
-False - Answers - False
A crash R&D program by one firm cannot replicate a successful technology developed
by another firm when research findings cumulate. This is an example of
-casual ambiguity
-physical uniqueness
-path dependency
-social complexity - Answers - path dependency
Although firm infrastructure is often viewed only as an overhead expense, it can
become a source of competitive advantage. Examples include all of the following
except:
-Top management providing a key role in collaborating with important customers.
-Marketing expertise increasing a firm's revenues and enabling it to enter new markets.
-Negotiating and maintaining ongoing relations and regulatory bodies.
-Effective information systems contributing significantly to a firm's overall cost
leadership strategy. - Answers - Marketing expertise increasing a firm's revenues and
enabling it to enter new markets.
A resource is valuable and rare but neither difficult to imitate nor without substitutes.
This should enable the firm to attain
-a temporary competitive advantage.
-competitive parity.
, -a sustainable competitive advantage.
-no competitive advantage. - Answers - a temporary competitive advantage.
Establishing a customer service hotline to handle customer complaints would be
considered a primary activity in value chain analysis.
-False
-True - Answers - True
Which statement regarding competitive advantages is true?
-If several competitors pursue similar differentiation tactics, they may all be perceived as
equals in the mind of the consumers.
-Attaining multiple types of competitive advantage is a recipe for failure.
-In the long run, a business with one or more competitive advantage is probably
destined to earn normal profits.
-With an overall cost leadership strategy, firms need not be concerned with parity on
differentiation. - Answers - If several competitors pursue similar differentiation tactics,
they may all be perceived as equals in the mind of the consumers.
The downsides or limitations of mergers and acquisitions include all of the following
except:
-it is a slow means to enter new markets and acquire skills and competences.
-difficulties in integrating the activities and resources of the acquired firm into a
corporation's on-going operations.
-expensive premiums that are frequently paid to acquire a business.
-there can be many cultural issues that can doom an otherwise promising acquisition. -
Answers - it is a slow means to enter new markets and acquire skills and competences.
Portfolio management should be considered as the primary basis for formulating
corporate-level strategies.
-True
-False - Answers - False
It may be advantageous to vertically integrate when
-lower transaction costs and improved coordination are vital and achievable through
vertical integration.
-flexibility is reduced, providing a more stationary position in the competitive
environment.
-the minimum efficient scales of two corporations are different.
-various segregated specializations will be combined. - Answers - lower transaction
costs and improved coordination are vital and achievable through vertical integration.
