Exam 1: What Is Strategy and the Strategic Management Process

One of the central questions that all strategic managers must address, regardless of the industry they work in, is "How is the industry likely to evolve?"

Green Frog is an environmentally friendly firm in the cosmetics industry. If Green Frog undertook an analysis to help it understand which of its resources and capabilities are likely to be sources of competitive advantage and which are less likely to sources of such advantages it would be performing a(n)

The difference between the perceived benefits gained by a customer who purchases a firm's products or services and the full economic cost of these products or services is the (Note: Porter was deleted from this edition)

The strategic management process begins when a firm

Actions firms take to gain competitive advantages in a single market or industry are known as

Firms whose mission statement is central to all they do are known as missionary firms.

A sustained competitive advantage is virtually permanent.

Which of the following is a reason why it is important for students to study strategy and the strategic management process?

The correlation between economic and accounting measures of competitive advantage is generally low.

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.

Objectives are the specific measurable targets a firm can use to evaluate the extent to which it is realizing its mission.

Business level strategies are actions firms take to gain competitive advantages by operating in multiple markets or industries simultaneously.

Johnson & Johnson's introduction of "Johnson's Toilet and Baby Powder" as a result of customers asking to purchase the talcum powder is an example of a planned strategy.

Corporate level strategies are actions firms take to gain competitive advantages in a single market or industry.

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.

What are objectives, what role do they play in the strategic management process and what differentiates high quality objectives from low quality objectives?

The second step in the strategic management process is the definition of a firm's mission.

Applying accounting measures of competitive advantage for firms that are headquartered in different has become less challenging today with the globalization of business.

High quality objectives are tightly connected to the elements of a firm's mission but tend to be relatively difficult to measure and track over time.

For the purposes of this book, a firm's strategy is defined as its theory about how to gain competitive advantages.