1. According to the Business community, What is the primary purpose or for the use of a Strategy: A) Being better than rivals no matter the price B) Focusing on satisfying all stakeholders C) Being an excellent “corporate citizen” follow the social responsibility best practices D) Having an end state of success
2. The principal similarity between business and military strategy is that: A) They are both concerned with tactical maneuvers that can establish positions of advantage. B) They share common concepts and principles. C) The nature of leadership is much the same whether in a military or business context. D) They share the same objective: to annihilate rivals.
3. The principal difference between accounting profit and economic profit is: A) Accounting profit is distorted by the arbitrary treatment of depreciation and unusual items B) Economic profit is pure surplus; accounting profit includes the normal return to the providers of equity capital. C) Economic profit is cash flow based and is less subject to manipulation that accounting profit D) Economic profit is endorsed by economists who tend to be more rigorous than accountants.
4. The fundamental problem of any type of performance management system is: A) The tendency for performance management systems to be based entirely on financial targets B) Performance targets always lead to unintended consequences because individuals always “game the system” C) A performance management systems needs short-term measures to assess performance, yet the ultimate goal is to enhance the long-term performance of the firm D) Managerial, political and personal interests need to be taken into account
5. To forecast industry profitability consistently accurately, professional analysts have to: A) Look at the link between industry and structure performance , then, use information on major trends in industry structure to predict their effects upon the forces of competition B) Look at the probability of new entries in the industry, to determine the major trends, and to forecast the probable overall industry profit C) Determine the five larger players in the industry and their relative bargaining power in regards to their buyers and customers, and to identify their strengths and weaknesses D) Develop a deep understanding of how the industry creates value now and in the future, whether they use the tools described in the chapter or not
6. Analyzing key success factors leads one to ask the following two questions: A) What do customers want which we could supply and what should the firm do to survive competition? B) What do customers want and what type of operational changes should a firm implement to survive competition? C) Which of the five forces of competition most threaten a firm’s survival and how could the firm deal with them? D) What should managers do to a information collected from the market and the firm’s operational units?
7. Competitive intelligence, the systematic collection and analysis of information about rival firms, is: A) A practice which, though legal in most countries, is unethical B) Likely to distract firms from their efforts to establish positions of competitive advantage based upon their distinctive strengths C) A useful activity that forms an important element of firm’s environmental scanning and strategic analysis D) A useful activity because it can help firms imitate the strategies of their more successful competitors.
8. When a company has weaknesses relative to competitors among strategically important resources and capabilities, the appropriate strategic response is to: A) Invest heavy in order to upgrade weaknesses B) Diversify in order to find new areas of business where the these resources and capabilities are unimportant to competitive advantage C) Outsource those activities where third parties can offer superior capabilities while positioning the business to reduce vulnerable to remaining weaknesses D) Employ management consultants to seek a solution.
9. The most valuable contribution of strategic planning processes to the success of companies: A) Allowing quantitative analysis to be applied to strategy alternatives B) Introducing the tools and techniques of strategic analysis into companies’ decision making C) Curbing the power of CEOs D) Creating a dialogue for sharing knowledge and ideas, and building consensus.
10.Causal ambiguity allows a firm’s competitive advantage to be sustained because potential rivals are: A) Deterred from directly competing with the advantaged firm B) Unable to identify the sources of the advantaged firm’s superior performance C) Unable to acquire the resources needed to compete against the advantaged firm D) All the above