Competitive Advantage
Review Questions
Course Introduction
This course explores the foundations and strategies that organizations use to achieve and sustain a competitive advantage in todays dynamic business environment. Students will examine key concepts such as core competencies, value creation, industry structure, and strategic positioning. Through the analysis of real-world case studies, frameworks like Porters Five Forces, and discussions on innovation and resource-based perspectives, learners will develop a comprehensive understanding of how firms differentiate themselves and respond to competitive pressures. The course emphasizes both theoretical approaches and practical applications, enabling students to identify and implement strategies that foster long-term success and superior performance.
Recommended Textbook
Strategic Management and Competitive Advantage 4th Edition by Jay B. Barney
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11 Chapters
1100 Verified Questions
1100 Flashcards
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Chapter 1: What Is Strategy and the Strategic Management
Process?
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) A firm that earns its cost of capital is said to be earning
A) above normal economic performance.
B) normal economic performance.
C) below normal economic performance.
D) normal accounting performance.
Answer: B
Q2) What are objectives,what role do they play in the strategic management process and what differentiates high quality objectives from low quality objectives?
Answer: Objectives are specific measurable targets a firm can use to evaluate the extent to which it is realizing its mission.High quality objectives are tightly connected to elements of a firm's mission and are relatively easy to measure and track over time.Low quality objectives either do not exist or are not connected to elements of a firm's mission,are not quantitative,are difficult to measure or are difficult to track over time.
Q3) Corporate level strategies are actions firms take to gain competitive advantages in a single market or industry.
A)True
B)False
Answer: False
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Chapter 2: Evaluating a Firm's External Environment
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100 Flashcards
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Sample Questions
Q1) Culture is the values,beliefs and norms that guide a behavior in a society,and culture is largely the same across the world.
A)True
B)False
Answer: False
Q2) ________ make a wide variety of raw materials,labor and other critical assets available to firms.
A) Buyers
B) Rivals
C) Suppliers
D) Substitutes
Answer: C
Q3) A fragmented industry is an industry that has experienced an absolute decline in unit sales over a sustained period of time.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Evaluating a Firm's Internal Capabilities
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100 Flashcards
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Sample Questions
Q1) If a resource or capability is valuable and rare but not costly to imitate,exploiting this resource will generate a sustainable competitive advantage for a firm.
A)True
B)False
Answer: False
Q2) If in the process of maximizing its performance,a firm engages in activities that pollute the environment,the impact of that pollution is a(n)
A) capability.
B) externality.
C) competitive advantage.
D) weakness.
Answer: B
Q3) Resources that generate a temporary competitive advantage are
A) valuable,rare and costly to imitate.
B) valuable but neither rare nor costly to imitate.
C) valuable and either rare or costly to imitate.
D) valuable and rare but not costly to imitate.
Answer: D
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Chapter 4: Cost Leadership
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Sample Questions
Q1) ________ are any supplies used by a firm in conducting its business activities.
A) Productive assets
B) Productive inputs
C) Productive outputs
D) Productive inventory
Q2) Firms for whom the price of the products or services they sell is determined by market conditions and not by the individual decisions of the firms themselves are known as price makers.
A)True
B)False
Q3) Cost leadership and product differentiation are so widely recognized that they are often called generic business strategies.
A)True
B)False
Q4) The link between cumulative volumes of production and cost has been formalized in the concept of the learning curve.
A)True
B)False
Q5) Discuss the difference between the learning curve and economies of scale.
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Chapter 5: Product Differentiation
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Sample Questions
Q1) A ________ exists when firms are committed to engage in several related product-differentiation strategies simultaneously.
A) policy of substitution
B) policy of extrapolation
C) policy of exploration
D) policy of experimentation
Q2) Given that the leather handbag market that Coach largely competes in can be considered a mature market,Coach should focus its product-differentiation efforts on
A) exploiting a first-mover advantage as a basis of product differentiation.
B) introducing radically new technologies as a basis of product differentiation.
C) seeking a viable market niche that will enable it to survive.
D) refining products as a basis of product differentiation.
Q3) To the extent that differences in product complexity lead customers to conclude that the products of some firms are more valuable than the product of other firms,then product complexity can be a basis of product differentiation.
A)True
B)False
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Chapter 6: Vertical Integration
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Sample Questions
Q1) Which committee in a U-form organization meets monthly and usually consists of the CEO and each of the heads of the functional areas included in a firm?
A) Executive committee
B) Functional committee
C) Operations committee
D) Managerial committee
Q2) According to the flexibility-based explanations of vertical integration,which of the following would be the most appropriate type of compensation to support strategy implementation?
A) Stock options for individual performance
B) Stock grants for individual performance
C) Stock grants for corporate performance
D) Cash bonuses for individual performance
Q3) Which of the explanations of vertical integration is the oldest and has received the greatest empirical support?
A) Opportunism-based
B) Flexibility-based
C) Firm capabilities-based
D) Alliance-based
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Page 8
Chapter 7: Corporate Diversification
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Sample Questions
Q1) A firm has implemented a strategy of ________ when all or most of its activities fall within a single industry and geographic market.
A) limited corporate diversification
B) related diversification
C) unrelated diversification
D) related-linked diversification
Q2) In 2001,if Peach Computers did not want to employ a diversification strategy to enter the personal electronics industry,it could use which substitute for diversification?
A) Backward vertical integration
B) Product differentiation
C) Strategic alliances
D) Forward vertical integration
Q3) When a firm operates in multiple industries simultaneously,it is said to be implementing a
A) product diversification strategy.
B) product-differentiation strategy.
C) geographic market diversification strategy.
D) geographic market differentiation strategy.
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9
Chapter 8: Organizing to Implement Corporate
Diversification
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Sample Questions
Q1) One of the strengths of using a hurdle rate to measure the performance of divisions in a diversified firm is that if the corporation has a single hurdle rate,there is little ambiguity about the performance objectives of divisions.
A)True
B)False
Q2) The divisions of an M-form organization are true
A) profit-and-loss centers.
B) functional units.
C) matrix teams.
D) organic structures.
Q3) The title chairman of the board often,but not always,identifies the firm's senior executive.
A)True
B)False
Q4) Corporate spin-offs are different from asset divestitures.
A)True
B)False
Q5) Describe the multidivisional,or M-form structure,and how it is used to implement a corporate diversification strategy.
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Chapter 9: Strategic Alliances
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Sample Questions
Q1) Strategic alliances can create economic value through helping firms improve their current operations by
A) facilitating the development of technology standards.
B) facilitating tacit collusion.
C) exploiting economies of scale.
D) managing uncertainty.
Q2) The use of strategic alliances to manage economic exchanges has grown substantially over the last several years.
A)True
B)False
Q3) Consistent with a real options perspective,firms in new and uncertain environments are likely to
A) avoid using strategic alliances.
B) develop numerous strategic alliances.
C) develop few strategic alliances.
D) engage in vertical integration.
Q4) Identify and discuss the three ways alliances can create economic value by helping firms improve the performance of their current operations.
Q5) What is the connection between strategic alliances and real options?
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Chapter 10: Mergers and Acquisitions
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Sample Questions
Q1) When the assets of two similar-sized firms are combined,this is known as a merger.
A)True
B)False
Q2) Despite the popularity of conglomerate mergers in the 1960s,most mergers and acquisitions among strategically related firms are divested shortly after they are completed.
A)True
B)False
Q3) The value that a bidding firm brings to a target firm through an acquisition should be discounted by the cost of strategizing to implement an acquisition.
A)True
B)False
Q4) When acquiring a publicly traded firm a bidder has to release all the information it has about the potential value of that target in combination with itself.
A)True
B)False
Q5) How are poison pills different from shark repellents?
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Page 12
Chapter 11: International Strategies
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Sample Questions
Q1) To optimize both local responsiveness and international integration,Agrestal has to move to a ________ structure.
A) matrix
B) transnational
C) operational
D) coordinated federation
Q2) Describe the transnational strategy.
Q3) An important economy of scope for Agrestal in pursuing international opportunities is
A) technology.
B) access to raw materials.
C) organizational learning.
D) synergy.
Q4) In a ________,strategic and operational decisions are delegated to divisions/country companies.
A) transnational structure
B) decentralized federation
C) coordinated federation
D) centralized hub
Q5) Discuss the four structural options for firms pursuing international strategies.
Page 13
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