Strategic CH 1 Exam Prep PDF

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1. Which of the following statements about globalization is true? a. It has led to lower performance standards with respect to multiple competitive dimensions. b. It is the increasing economic interdependence among countries and their organizations as reflected in the flow of products, financial capital, and knowledge across country borders. c. It is a product of a small number of large firms competing against one another in an increasing number of global economies. d. It decreases the range of opportunities for companies competing in the current competitive landscape. 2. Guinness Enterprises is a multinational corporation (MNC) that was established 75 years ago. One of the goals of Harry Walker, the new Chief Executive Officer (CEO), is to make the firm strategically flexible. Harry should know that: a. it is impossible to develop strategic flexibility in all areas of an organization's operations. b. a firm's focus and past core competencies can help expedite strategic flexibility. c. the most effective way to implement strategic flexibility is through intermittent training courses. d. building strategic flexibility is not easy, largely because of inertia that can build over time. 3. Which of the following criterion is most likely to be used to measure the success of a small, new company, Hippolite Mud Resort, which opened six months ago? a. Return on assets b. Speed of growth c. Beginning stock price d. Strategies 4. Ranger Landscaping's website states the following: "Ranger Landscaping is a service-oriented business that provides lawn care and landscape design, installation, and maintenance. We are committed to a professional approach to our business and to providing our customers with individualized attention and 100 percent satisfaction." This statement represents Ranger Landscaping's: a. tagline. b. mission. c. vision. d. code of ethics. 5. Which of the following statements about technology and innovation is true?

a. Evidence suggests that large established firms have trouble innovating. b. A disruptive technology can create a new industry. c. The rate of technological diffusion has increased the competitive benefits of patents. d. Typically, it takes years for firms to gather information about their competitors' research and development (R&D). 6. _____ is a set of capabilities firms use to respond to various demands and opportunities existing in today's dynamic and uncertain competitive environment. a. Strategic flexibility b. Strategic competitiveness c. Perpetual innovation d. Organizational culture 7. Pete is a manager at Green Mountain Sporting Goods. Pete would be considered part of Green Mountain's _____ stakeholders. a. organizational b. capital market c. service market d. product market 8. Which of the following specifies the businesses in which the firm intends to compete and the customers it intends to serve? a. Vision b. A code of ethics c. Organizational culture d. A mission 9. Biolab Pharmaceuticals has just discovered a new medication for multiple sclerosis. In order to protect proprietary technology, Biolab should apply for: a. certification. b. a trademark. c. a patent. d. a copyright.

10. Research suggests that overconfidence can lead to: a. knowledge spillovers. b. competitive advantage. c. long-term profitability. d. excessive risk taking. 11. Which of the following refers to the complex set of ideologies, symbols, and core values that individuals throughout the firm share and that influence how the firm conducts business? a. Vision b. Strategic management process c. Organizational culture d. Mission 12. The strategic management process involves all of the following EXCEPT: a. analysis. b. strategy. c. identification. d. performance. 13. Tom Bellinger is the chief executive officer (CEO) of Bellinger Bakery. He has decided to revise the firm's vision. In order to get the most effective vision statement for the organization, experience shows that Tom should: a. write it entirely by himself. b. work with other stakeholders in the organization when writing it. c. hire a marketing firm to write it. d. delegate the task to a lower-level manager. 14. Core competencies are often visible in the form of organizational: a. functions b. value. c. culture. d. symbols.

15. In order to develop a competitive advantage, JBH Corporation and Starr Enterprises have decided to form a partnership to share their resources and capabilities. JBH and Starr have formed a(n) _____ strategy. a. corporate-level b. business-level c. cooperative d. international 16. The five forces model of competition suggests that firms can earn above-average returns by using either a _____ strategy or a _____ strategy. a. cost leadership; focus b. cost leadership; differentiation c. focus; consolidation d. differentiation; focus 17. Which of the following statements about the current competitive landscape is NOT true? a. A challenge for firms is to integrate digitalization effectively into their strategies. b. The traditional managerial mind-set is unlikely to lead a firm to strategic competitiveness. c. Conventional sources of competitive advantage such as economies of scale and large advertising budgets are more effective than they once were in terms of helping firms earn above-average returns. d. The conditions of the competitive landscape result in a perilous business world. 18. Tony Rush is the Chief Executive Officer (CEO) of Smithson Enterprises, a U.S.based multinational corporation (MNC). Due to his company's success domestically, Tony has decided to enter the global market by opening operations in China and Brazil. Which of the following statements about Smithson's decision to enter the global market is true? a. Smithson will face decreased competition from emerging-market MNCs. b. Smithson's performance may suffer initially in both China and Brazil due to the amount of time required to learn to compete successfully in a new global market. c. Smithson should consider entering into more global markets in addition to China and Brazil.

d. Because of its established success in the United States, Smithson will not need to make effective use of the strategic management process in its international operations. 19. Which of the following is an assumption of the industrial organization (I/O) model? a. Organizational decision makers are rational individuals who are committed to acting in the firm's best interests. b. Resources and capabilities are not highly mobile across firms. c. Differences in firms' performances across time are due primarily to their unique resources and capabilities. d. The internal environment imposes pressures and constraints that determine the firm's strategies. 20. Which of the following is an example of a disruptive technology? a. Waterproof bandages b. Tablet computers c. Orange and vanilla flavored Coca-Cola d. Quick-dry nail polish 21. According to the industrial organization (I/O) model, all of the following are industry characteristics that determine the actions a firm should take to operate profitably EXCEPT: a. barriers to market entry. b. diversification. c. patents. d. economies of scale. 22. Ben is a line manager at a food distribution company. He often works more than 50 hours a week, and his work is usually filled with ambiguous decision situations. Ben's fellow employees would say that he is a hard worker, is tenacious, is brutally honest, and always pushes them to hit their goals and become the best workers possible. Based on this description, Ben is a: a. strategic leader. b. product market stakeholder.

c. global manager. d. capital market stakeholder. 23. Which of the following are two primary drivers of the nature of today's competitive landscape? a. Emerging local economies and technology b. Knowledge and research and development (R&D) c. Tariffs and emerging local economies d. An emerging global economy and technology 24. Which of the following statements about information technology (IT) is true? a.IT contributes positively to product innovation efforts for firms in virtually all industries. b. The pace of change in IT and its diffusion is expected to slow down over the next 10 to 20 years. c. The number of personal computers sold annually is expected to increase from now through 2023. d. The most successful firms envision information technology-derived innovations as threats to the markets they serve currently. 25. The chief executive officer (CEO) and other top-level managers often involve other people to develop the mission statement because: a. the mission deals more directly with product markets and customers. b.it is viewed as a task that can easily be delegated. c. the mission deals more directly with capital markets and shareholders. d. forming the mission is typically not the final responsibility of the CEO or other top-level managers. 26. In today's competitive landscape, only companies capable of _____ typically earn above-average returns. a. meeting, if not exceeding, global standards b. introducing disruptive technologies c. achieving economies of scale as a competitive advantage d. developing all of their resources and capabilities into a competitive advantage

27. Snowtrail Ski Resort has earned only average returns for the past year. As a result: a. it lacks the capacity to satisfy the minimal expectations of all stakeholder groups. b. its objective should become satisfying each stakeholder group's minimal expectations. c. it should focus on satisfying its capital market stakeholders and organizational stakeholders rather than its product market stakeholders. d. it should focus on satisfying its product market stakeholders and organizational stakeholders rather than its capital market stakeholders. 28. When a firm earns below-average returns, it: a. is able to maximize the interests of all stakeholders. b. should reward those stakeholders who have the least power. c. should try to minimize the amount of support lost from stakeholders. d. should treat all stakeholders the same. 29. Motorvate is a start-up rental car company. Its owners have decided to use the resource-based model to pursue strategic competitiveness and earn above-average returns. Motorvate's first step in using the model would be to: a. determine the firm's capabilities. b. locate an attractive industry. c. study the external environment, especially the industry environment. d. identify the firm's resources. 30. Kristine Woods and her husband, Liam, own a café, Simply Healthy, in their hometown. Simply Healthy offers only natural and healthy options on its menu and uses only locally grown food. It charges slightly higher prices than the other restaurants in town, but health-conscious customers are willing to pay a premium. Simply Healthy operates using a _____ strategy. a. differentiation b. focus c. cost leadership d. consolidation

31. An organization can be confident that its strategy yields a competitive advantage after: a. competitors' efforts to duplicate it have failed. b. it has earned above-average returns for at least two years in a row. c. it becomes too complex to understand and manage. d. its returns are enough to at least minimally satisfy its stakeholders. 32. Resources have a greater likelihood of being a source of competitive advantage when: a. they are tangible in nature. b. they are intangible in nature. c. they are integrated to form a capability. d. they are implemented by top management. 33. Toy Joy Company is a start-up toy company. Its owners have decided to use the industrial organization (I/O) model to pursue strategic competitiveness and earn above-average returns. Toy Joy's first step in using the model would be to: a. locate an industry with high potential for above-average returns. b. study the external environment, especially the industry environment. c. identify the firm's resources. d. identify a strategy. 34. Rubin Collins opened a coffee and sandwich shop, Rubin's Coffee Shop, in his local hometown five years ago. Rubin's has earned above-average returns for the past three years and has outperformed the local Dunkin' Donuts and Subway in terms of sales. Rubin credits low overhead costs and offering high-quality products at low prices as the reason why his shop is so successful. Because of the success of Rubin's Coffee Shop in his hometown, Rubin plans to expand operations and open three new locations in neighboring cities. Based on these facts, it can be concluded that Rubin's has achieved: a. hyper-competition. b. strategic flexibility. c. competitive risk. d. strategic competitiveness.

35. One of the long-term goals of Boss Manufacturing, a U.S.-based company, is to expand its operations and enter the global market sometime between 2020 and 2030. Based on current data, which of the following countries would offer the best opportunities for growth? a. Germany b. India c. France d. United Kingdom 36. Walmart and Amazon are examples of organizations that earn above-average returns by using a _____ strategy. a. cost leadership b. focus c. differentiation d. consolidation 37. The risks of competing outside a firm's domestic markets in the global economy are labeled a(n): a. "danger of competition." b. "disruption to knowledge." c. "liability of foreignness." d. "internationalization of domesticity." 38. Resources are _____ when they allow a firm to take advantage of opportunities or neutralize threats in its external environment. a. rare b. costly to imitate c. valuable d. non-substitutable 39. Which of the following technological inventions took the longest to penetrate 25 percent of the homes in the United States? a. Telephone b. Television c. Radio

d. Personal computers 40. Ishanti wants to open her own business. She has several interests, so she wants to select an industry that has the best profitability potential. Which of the following models should she use to identify the most attractive industry for her financial goals? a. Five forces model b. Resource-based model c. Strategic competitiveness model d. I/O model 41. Which of the following would be considered to be part of Seaside Bar & Grill's capital market stakeholders? a. Shareholders b. Customers c. Suppliers d. Employees 42. A firm's resources are typically classified into all of the following categories of capital EXCEPT: a. occupational capital. b. human capital. c. organizational capital. d. physical capital. 43. Hyper-competition is a condition of rapidly escalating competition based on all of the following EXCEPT: a. competition to produce a competitive advantage based on economies of scale. b. price-quality positioning. c. competition to create new know-how and establish first-mover advantage. d. competition to protect or invade established product and/or geographic markets. 44. _____ is composed of information, intelligence, and expertise. a. Knowledge b. Technology

c. Skill d. Experience 45. In order to analyze its external environment and internal organization, a firm should: a. set performance benchmarks. b. formulate a business-level strategy. c. implement a resource-based model. d. perform a SWOT analysis. 46. According to the industrial organization (I/O) model, an attractive industry is one: a. with fierce competition. b. in which a company can use a focus strategy rather than a cost leadership or differentiation strategy. c. with opportunities that can be exploited by the firm's resources and capabilities. d. whose structural characteristics suggest above-average returns. 47. Which of the following statements about a firm's vision and mission is true? a. A firm's vision is more concrete than its mission. b. A firm's vision tends to be enduring while its mission can change with new environmental conditions. c. The mission is the foundation for the firm's vision. d. The vision and mission should be developed solely by top-level managers. 48. All of the following are considered to be product market stakeholders of a firm EXCEPT: a. host communities. b. managers. c. unions. d. suppliers. 49. A strategy: a. is a picture of what the firm wants to be and, in broad terms, what it wants to achieve.

b. is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage. c. specifies the businesses in which the firm intends to compete and the customers it intends to serve. d. refers to the complex set of ideologies, symbols, and core values that individuals throughout the firm share and that influence how the firm conducts business. 50. The basis of competition has shifted from _____ to _____. a. experience; tangible resources b. customer satisfaction; management c. tangible assets; intangible resources d. employee skills; technology innovation 51. _____ returns are returns in excess of what an investor expects to earn from other investments with an _____ amount of risk. a. Above-average; similar b. Average; similar c. Above-average; greater d. Average; greater 52. The focus of _____ strategy is determining the businesses in which the company intends to compete as well as how it will manage those businesses. a. corporate-level b. cooperative c. acquisition d. business-level 53. Which of the following statements about a firm's customers is true? a. Customers are the most obvious stakeholders, at least in U.S. organizations. b. Customers are part of its capital market stakeholders. c. Customers are more important than its other product market stakeholders. d. Customers prefer that investors receive a maximum return on their investments. 54. HD Construction, Inc. subscribes to the industrial organization (I/O) model of above-average returns. HD would most likely attribute its success to which I/O model factor?

a. The skills of its employees b. Capital equipment c. Product differentiation d. Finances 55. Joplin Tires' corporate website states "Joplin Tires strives to be the top-selling tire manufacturer in the United States." This statement is Joplin Tires': a. mission. b. statement of organizational culture. c. code of ethics. d. vision. 56. In some industries, firms can reduce competitive rivalry and erect barriers to entry by: a. forming joint ventures. b. franchising. c. licensing. d. not applying for patents. 57. Which of the following statements about strategic leaders is true? a. To deal with change effectively, strategic leaders must promote innovation in their organization. b. Strategic leaders must think and act globally. c. Strategic leaders can best leverage partnerships when their organizations are highly centralized. d. Strategic leaders must have a fixed mind-set. 58. An effective vision statement tends to be: a. long and detailed. b. more concrete than a firm's mission. c. short and concise. d. founded from the firm's mission. 59. All of the following are VISTA countries EXCEPT

a. Vietnam. b. India. c. Turkey. d. Argentina. 60. Jonathan works for a multinational corporation (MNC) in a country that has the largest economy in the world. Jonathan works in: a. the United States. b. Japan. c. China. d. Germany. 61. Which of the following is an assumption of the resource-based model? a. Resources and capabilities are not highly mobile across firms. b. A firm's performance across time is due primarily to the industry's structural characteristics rather than to the firm's unique resources and capabilities. c. Most firms competing within an industry or within a segment of that industry are assumed to control similar strategically relevant resources and to pursue similar strategies in light of those resources. d. Organizational decision makers are assumed to be rational individuals who are committed to acting in the firm's best interests, as shown by their profit-maximizing behaviors. 62. Hocus Pocus Smoked Ribs has only one location and wants to exploit its competitive advantage, a very popular recipe for smoked meats. This means that it wants to: a. form multiple business-level strategies. b. create a single business-level strategy. c. implement a cooperative strategy. d. establish a global strategy. 63. Which of the following statements about an organization's stakeholders is true? a. Not all organizations have stakeholders. b. Stakeholders have enforceable claims on the firm's performance.

c. All stakeholders have t...