Test Bank for Concepts Strategic Management and Competitive Advantage 3rd Edition Barney

One of the central questions that all strategic managers must address, regardless of the industry they work in, is "What is our competition going to do next?" 1) _______ 2) There is complete consensus among strategic managers and academic researchers about what a "strategy" is. 2) _______ 3) For the purposes of this book, a firm's strategy is defined as its theory about how to gain competitive advantages. 3) _______ 4) A "good strategy" does not necessarily have to create a competitive advantage. 4) _______ 5) The greater the extent to which a firm's assumptions and hypotheses accurately describe how the competition in the industry is likely to evolve, and how that evolution can be exploited to earn a profit, the more likely it is that a firm will gain a competitive advantage from implementing its strategies. 5) _______ 6) It is usually possible to know for sure that a firm is choosing the right strategy. 6) _______ 7) The strategic management process is a sequential set of analyses and choices that can increase the likelihood that a firm will choose a good strategy that generates competitive advantages. 7) _______ Full file at 8) The second step in the strategic management process is the definition of a firm's mission. 8) _______ 9) A firm's mission defines both what it wants to be in the long run and what it wants to avoid in the meantime. 9) _______ 10) Mission statements often contain so many common elements that even if a firm's mission statement does not influence behavior throughout an organization, it is likely to have a significant impact on a firm's actions. 10) ______ 11) Firms whose mission statement is central to all they do are known as missionary firms. 11) ______ 12) Visionary firms earn substantially higher returns than average firms because they acknowledge that profit maximizing is their primary reason for existence. 12) ______ 13) Mission statements that are very inwardly focused and are defined only with reference to the personal values and priorities of its founders and top managers can hurt a firm's performance. 13) ______ 14) Objectives are the specific measurable targets a firm can use to evaluate the extent to which it is realizing its mission. 14) ______ 15) High quality objectives are tightly connected to the elements of a firm's mission but tend to be relatively difficulty to measure and track over time. Full file at 15) ______ 16) By conducting an external analysis, a firm identifies the critical threats and opportunities in the industry's competitive environment. 16) ______ 17) Corporate level strategies are actions firms take to gain competitive advantages in a single market or industry. 17) ______ 18) Business level strategies are actions firms take to gain competitive advantages by operating in multiple markets or industries simultaneously. 18) ______ 19) Strategy implementation occurs when a firm adopts organizational policies and practices that are consistent with its strategy. 19) ______ 20) In general, a firm has a competitive advantage when it is able to create more economic value than rival firms. 20) ______ 21) The size of a firm's competitive advantage is the sum of the economic value a firm is able to create and the economic value rivals are able to create. 21) ______ 22) A sustained competitive advantage is virtually permanent. 22)