Question 1

Competitive advantage can be defined as:

Accepted Answer

A) The difference between a firm's return on assets and its return on sales 
B) A firm's ability to earn a persistently higher profit margin than its rivals 
C) A firm's ability to earn a profit rate which is persistently higher than its rivals 
D) A firm's ability to outwit its competitors 
A) The difference between a firm's return on assets and its return on sales 
B) A firm's ability to earn a persistently higher profit margin than its rivals 
C) A firm's ability to earn a profit rate which is persistently higher than its rivals 
D) A firm's ability to outwit its competitors

Question 2

"Causal ambiguity" is the failure to clearly understand the source of a rival's competitive advantages - in particular which of the rival's distinctive features are causes and which are effects of another feature

Accepted Answer

A) True 
 B)False

Question 3

How can a firm obscure its performance?

Accepted Answer

A) By masking its results so that rivals fail to see its success 
B) By avoiding disclosing financial performance 
C) By temporarily lowering prices, so that the firm forgoes short term profits but succeeds in dissuading potential entrants 
D) Any of the above 
A) By masking its results so that rivals fail to see its success 
B) By avoiding disclosing financial performance 
C) By temporarily lowering prices, so that the firm forgoes short term profits but succeeds in dissuading potential entrants 
D) Any of the above

Question 4

For some firms, speed of new product development appears to be the only real source of competitive advantage in today's economy

Accepted Answer

A) True 
 B)False

Question 5

"Strategic innovation" means introducing:

Accepted Answer

A) New products 
B) New markets 
C) New technologies 
D) All of the above, or introducing new ways of doing business 
A) New products 
B) New markets 
C) New technologies 
D) All of the above, or introducing new ways of doing business

Question 6

Porter says that cost leadership and differentiation are the two main sources of competitive advantages

Accepted Answer

A) True 
 B)False

Question 7

Who knows better the nature of a firm's strategic competencies: top managers, employees, or customers?

Accepted Answer

This question is difficult because the n

Question 8

Schumpeter's "gale of creative destruction":

Accepted Answer

A) Helps all firms in an industry equally 
B) Provides equal opportunities for any firm to overtake the market leader 
C) Provides an opportunity for any firm to overturn the competitive advantage of stronger firms 
D) No longer applies, after the internet was invented 
A) Helps all firms in an industry equally 
B) Provides equal opportunities for any firm to overtake the market leader 
C) Provides an opportunity for any firm to overturn the competitive advantage of stronger firms 
D) No longer applies, after the internet was invented

Question 9

The difference between a "generic" and a "contextual" best practice is?

Accepted Answer

A) The concepts are identical in practice 
B) Generic best practices should work for any firm in the industry, while contextual practices work only when combined with the original player's other practices 
C) Generic best practices are rare, whereas contextual practices are beneficial only when combined with other practices 
D) None of the above 
A) The concepts are identical in practice 
B) Generic best practices should work for any firm in the industry, while contextual practices work only when combined with the original player's other practices 
C) Generic best practices are rare, whereas contextual practices are beneficial only when combined with other practices 
D) None of the above

Question 10

What differentiates trading and production markets?

Accepted Answer

Trading markets involve arbitrage across

Question 11

A contrarian is:

Accepted Answer

A) Someone who acts only as a counterparty 
B) Someone who does the opposite of what most people in the market are doing at that time 
C) Someone who believes financial derivatives trading violates God's Laws 
D) A and C above 
A) Someone who acts only as a counterparty 
B) Someone who does the opposite of what most people in the market are doing at that time 
C) Someone who believes financial derivatives trading violates God's Laws 
D) A and C above

Question 12

Overshooting occurs when:

Accepted Answer

A) You set higher targets than others 
B) Someone has created a bandwagon 
C) Firms overreact to rivals' aggressive behavior 
D) Asset prices overreact to new information 
A) You set higher targets than others 
B) Someone has created a bandwagon 
C) Firms overreact to rivals' aggressive behavior 
D) Asset prices overreact to new information

Question 13

For competitive advantage to exist, a firm must operate in a market of "pure and perfect competition", as described by economists

Accepted Answer

A) True 
 B)False

Question 14

Differentiation is defined as:

Accepted Answer

A) A strategy where a firm provides a product perceived as unique and valuable by customers, other than a low price 
B) Offering a low price based on a low cost 
C) A strategy where a firm offers a large range of products to cover all the segments of the market 
D) The opposite of cost leadership: having costs as high as possible while still managing to break even or make a profit 
A) A strategy where a firm provides a product perceived as unique and valuable by customers, other than a low price 
B) Offering a low price based on a low cost 
C) A strategy where a firm offers a large range of products to cover all the segments of the market 
D) The opposite of cost leadership: having costs as high as possible while still managing to break even or make a profit

Question 15

Imperfection in trading markets can be caused by:

Accepted Answer

A) Imperfect availability of information and transaction costs 
B) Overshooting and systematic behavioral trends 
C) Both a and b 
D) Systematic behavior trends, overshooting, and contrarianism 
A) Imperfect availability of information and transaction costs 
B) Overshooting and systematic behavioral trends 
C) Both a and b 
D) Systematic behavior trends, overshooting, and contrarianism

Question 16

A firm can pre-empt imitation by:

Accepted Answer

A) Vigorous legal action 
B) Threatening to imitate its imitators 
C) Introducing new products to fill each niche, investing in capacity ahead of market growth and filing many patents 
D) None of these: imitators should be welcomed. 
A) Vigorous legal action 
B) Threatening to imitate its imitators 
C) Introducing new products to fill each niche, investing in capacity ahead of market growth and filing many patents 
D) None of these: imitators should be welcomed.

Question 17

What does "strategic innovation" mean?

Accepted Answer

Strategic innovation refers to any new w

Question 18

"Momentum trading" means:

Accepted Answer

A) Overshooting 
B) Playing catch-up 
C) Following the herd 
D) Following a contrarian strategy 
A) Overshooting 
B) Playing catch-up 
C) Following the herd 
D) Following a contrarian strategy

Question 19

Competitive advantage emerges from three sources: external, hybrid, and internal sources

Accepted Answer

A) True 
 B)False

Question 20

Entrepreneurship can be defined as the ability to identify and respond to opportunities in the environment

Accepted Answer

A) True 
 B)False

Competitive advantage can be defined as:

"Causal ambiguity" is the failure to clearly understand the source of a rival's competitive advantages - in particular which of the rival's distinctive features are causes and which are effects of another feature

How can a firm obscure its performance?

For some firms, speed of new product development appears to be the only real source of competitive advantage in today's economy

"Strategic innovation" means introducing:

Porter says that cost leadership and differentiation are the two main sources of competitive advantages

Who knows better the nature of a firm's strategic competencies: top managers, employees, or customers?

Schumpeter's "gale of creative destruction":

The difference between a "generic" and a "contextual" best practice is?

What differentiates trading and production markets?

A contrarian is:

Overshooting occurs when:

For competitive advantage to exist, a firm must operate in a market of "pure and perfect competition", as described by economists

Differentiation is defined as:

Imperfection in trading markets can be caused by:

A firm can pre-empt imitation by:

What does "strategic innovation" mean?

"Momentum trading" means:

Competitive advantage emerges from three sources: external, hybrid, and internal sources

Entrepreneurship can be defined as the ability to identify and respond to opportunities in the environment

The Concept of Strategy

Goals, Values and Performance

Industry Analysis: the Fundamentals

Further Topics in Industry and Competitive Analysis

Analyzing Resources and Capabilities

Developing Resources and Capabilities

Organization Structure and Management Systems: the Fundamentals of Strategy Implementation

Cost Advantage

Differentiation Advantage

Industry Evolution and Strategic Change

Technology-Based Industries and the Management of Innovation

Competitive Advantage in Mature Industries

Vertical Integration and the Scope of the Firm

Global Strategies and the Multinational Corporation

Diversification Strategy

Implementing Corporate Strategy: Management of the Multibusiness Firm

Current Trends in Strategic Management

Filters

Exam 8: The Nature and Sources of Competitive Advantage

Competitive advantage can be defined as:

"Causal ambiguity" is the failure to clearly understand the source of a rival's competitive advantages - in particular which of the rival's distinctive features are causes and which are effects of another feature

How can a firm obscure its performance?

For some firms, speed of new product development appears to be the only real source of competitive advantage in today's economy

"Strategic innovation" means introducing:

Porter says that cost leadership and differentiation are the two main sources of competitive advantages

Who knows better the nature of a firm's strategic competencies: top managers, employees, or customers?

Schumpeter's "gale of creative destruction":

The difference between a "generic" and a "contextual" best practice is?

What differentiates trading and production markets?

A contrarian is:

Overshooting occurs when:

For competitive advantage to exist, a firm must operate in a market of "pure and perfect competition", as described by economists

Differentiation is defined as:

Imperfection in trading markets can be caused by:

A firm can pre-empt imitation by:

What does "strategic innovation" mean?

"Momentum trading" means:

Competitive advantage emerges from three sources: external, hybrid, and internal sources

Entrepreneurship can be defined as the ability to identify and respond to opportunities in the environment

The Concept of Strategy

Goals, Values and Performance

Industry Analysis: the Fundamentals

Further Topics in Industry and Competitive Analysis

Analyzing Resources and Capabilities

Developing Resources and Capabilities

Organization Structure and Management Systems: the Fundamentals of Strategy Implementation

Cost Advantage

Differentiation Advantage

Industry Evolution and Strategic Change

Technology-Based Industries and the Management of Innovation

Competitive Advantage in Mature Industries

Vertical Integration and the Scope of the Firm

Global Strategies and the Multinational Corporation

Diversification Strategy

Implementing Corporate Strategy: Management of the Multibusiness Firm

Current Trends in Strategic Management

Filters