Deck 5: Business Mission and Strategy

Question 1

To be most effective, a mission statement should be complex and universal.

Answer 1

False

Question 2

A mission must have direct applicability to even the most entry-level employee for it to be utilized effectively by every member of the company.

Answer 2

True

Question 3

All individual competitive advantages eventually disappear as industries change and competitors adapt.

Answer 3

True

Question 4

A mission statement of a firm that states "to make money" would be very effective.

Question 5

A quantitative measure is the corporate culture of an organization.

Question 6

A mission statement should be specific and establish measurable goals for the business to accomplish.

Question 7

An example of a qualitative measure could be customer service reviews.

Question 8

It is critical for a new business to conserve its resources and focus on areas that have the potential to maximize the firm's success.

Question 9

A metric is a type of measurement used to evaluate whether a person or firm is meeting its goals.

Question 10

A mission statement is a long narrative used to summarize a business.

Question 11

An orthodox scale is a measure to evaluate whether a person or firm is meeting stated goals.

Question 12

The key to the ability to communicate a mission easily is that the statement be simple, direct, and appropriate.

Question 13

An example of a quantitative measure could be the financial goals of an organization.

Question 14

As a business grows, it gets progressively more difficult to change its direction.

Question 15

An advantage of a well-developed mission statement is that it is able to guide everyone in the organization toward the goals that the owners have set.

Question 16

A sustainable competitive advantage is an advantage that other firms cannot immediately copy.

Question 17

A mission statement needs to be known to all the employees, not just the top management.

Question 18

Unlike large companies, new businesses can afford to have people who just follow procedures rather than use all of their skills and creative abilities.

Question 19

A mission statement can keep a small business away from areas that sound promising and profitable.

Question 20

The mission of a business needs to be actionable, that is, it should provide employees with the information they need to make decisions.

Question 21

A small business owner must understand what the customer values and how much money the customer is willing to pay to obtain the firm's product or service.

Question 22

If a business's resource or capability is matched by one of its competitors, it becomes the standard expectation in the industry.

Question 23

One way of having a competitive advantage is to have a close working relationship with your vendors.

Question 24

It is easy for large organizations to develop a compelling personal relationship with customers.

Question 25

The time lag between the introduction of a competitive advantage and the point where competitors can match an entrepreneur's advantage is the window where a new business can earn unique returns.

Question 26

The mission is the foundation on which a firm's strategy is built.

Question 27

The computers in a company are an example of tangible assets.

Question 28

Michael Porter describes a differentiation approach as one where a firm seeks to be the lowest-cost competitor in the industry.

Question 29

Economic rents exist when a company matches the industry average in ordinary returns.

Question 30

Christina started a business that created a new lemon-peppermint shampoo that was so popular the customers became loyal to the product.This is considered a first-mover advantage.

Question 31

Intangible assets are the capabilities and skills of the founder(s)and employees.

Question 32

Patents are considered to be intangible assets.

Question 33

Gators is a business that created a shoe that is a knock-off of the famous Crocks shoes.Gators is called a follower.

Question 34

A firm's first step in identifying a sustainable competitive advantage is to evaluate its unique resources or capabilities.

Question 35

Economic rents refer to the financial gains made from an asset that is in excess of the ordinary returns in a particular industry.

Question 36

Michael Porter describes a low-cost strategy as a company seeking to be the lowest-cost firm in the industry.

Question 37

The cornerstone of building a competitive advantage is a deep understanding of your customer's needs.

Question 38

One example of a key tangible asset is a strong working relationship with a vendor.

Question 39

The time lag between the introduction of the competitive advantage and the point where competitors can match an entrepreneur's advantage is the window where the new business can earn unique returns.

Question 40

A strategy is a broad approach used by a small business to accomplish its mission.

Question 41

A mission statement can also be described as ________.

A)the overall strategy
B)goals
C)simple rules
D)All of these

Question 42

Larry is the owner of an instant noodle manufacturing company.His company has created a special combination of ingredients that makes his product tastier than the ones currently existing in the market.Larry knows that this combination of ingredients cannot be easily copied.This is an example of ________.

A)entrepreneurial breakeven
B)sustainable competitive advantage
C)benchmarking
D)bootstrap marketing

Question 43

Acme Corporation has introduced a new probiotic product in the market.It has the benefit of being the first to introduce a probiotic product in the market and has gained tremendous customer loyalty.This is an example of ________.

A)a harvest plan
B)entrepreneurial breakeven
C)sustainable competitive advantage
D)bootstrap marketing

Question 44

________ are items that include equipment or location.

A)Critical assets
B)System assets
C)Tangible assets
D)Intangible assets

Question 45

Which of the following is NOT a characteristic of a sustainable competitive advantage?

A)It does not impact the implementation of the mission statement.
B)It requires a deep understanding of customers' needs.
C)It should be maintained in the business as long as possible.
D)It cannot be copied immediately by others.

Question 46

________ summarize how and where the firm will compete in the industry.

A)Core values
B)Mission statements
C)Strategies
D)Goal statements

Question 47

Which of the following is a characteristic of a mission statement?

A)The statement must be understandable and memorable for all those who come in contact with it.
B)The statement must be worded in a complex fashion in order to have the maximum impact.
C)The statement must include lots of adjectives and descriptive language about how the company will accomplish its mission.
D)The statement must be like a tome that describes everything that the founder has done and might do.

Question 48

A business owner should never change the mission statement or strategy of the business.

Question 49

________ provide(s)you with the opportunity to make money when other businesses cannot easily copy your advantages.

A)Orthodox practices
B)Unorthodox practices
C)Sustainable competitive advantage
D)Tangible assets

Question 50

The book mentions that organizations should develop quantitative measures of success.Which of the following are characteristic of quantitative measures?

A)They are tied to the strategic or financial goals of an organization.
B)They are not easy to develop.
C)They can be difficult to implement.
D)They are specific in nature.

Question 51

All of these are steps in identifying a sustainable competitive advantage EXCEPT

A)develop a list of the business assets and capabilities.
B)develop a list of all potential customers.
C)break the list of capabilities into standard and unique.
D)evaluate the unique resources.

Question 52

According to the book, the greatest source of sustainable advantage is ________.

A)personal relationships with customers
B)location
C)staffing
D)relationships with vendors

Question 53

The mission of any business needs to be ________.

A)measurable
B)actionable
C)dynamic
D)stagnant

Question 54

Globex Corporation is considered to be a pioneer in robotics engineering.Products developed by their R & D division are used for a variety of purposes, ranging from defense to infrastructure development.It is the only organization in the country that simultaneously generates revenue and contributes to society with its business.This is an example of ________.

A)sustainable competitive advantage
B)benchmarking
C)bounded rationality
D)organizational slack

Question 55

Jane has developed a special Italian sauce for pizza.The sauce cannot be easily copied.This is a(n)________.

A)orthodox practice
B)unorthodox practice
C)sustainable competitive advantage
D)tangible asset

Question 56

________ are resources that combine to allow a firm to do things better than its competitors.

A)Trade-outs
B)Measurable goals
C)Analytical tools
D)Capabilities

Question 57

What are the two measures used to evaluate whether a person or firm is meeting its goals?

A)Orthodox and unorthodox
B)Quantitative and qualitative
C)Actionable and nonactionable
D)Tangible and intangible

Question 58

A firm's mission statement

A)helps the business by targeting its efforts in specific areas.
B)helps the business specify what the business does best.
C)helps the business stay away from things that sound promising but away from its focus.
D)all of these.

Question 59

Denny is the owner of a popular ice-cream parlor.He also has a retail distribution network in the form of ice-cream vans that go around the city.With the help of this distribution network, Denny is able to efficiently manage the movement of goods and keep the costs lower than other ice-cream shops.This is an example of ________.

A)bounded rationality
B)organizational slack
C)entrepreneurial breakeven
D)sustainable competitive advantage

Question 60

Sterling Corporation is a market leader in producing cancer medicines.Its produces top-quality products that are popular in markets around the world.Due to its brand image, it is able to manipulate prices and gain huge profits while maintaining market share.In addition, it has a highly skilled innovations team that produces unique products.This is an example of ________.

A)benchmarking
B)sustainable competitive advantage
C)bootstrap marketing
D)organizational slack

Question 61

Jamie's hamburger restaurant had financial gains from an asset or capability that are in excess of the ordinary returns in that industry.This is called a(n)________.

A)extraordinary asset
B)venture capability
C)good business decision
D)economic rent

Question 62

Which of the following is an example of intangible assets?

A)Previous start-up experience
B)Unique knowledge of the industry
C)Skill set of founder(s)
D)All of these

Question 63

Which of the following is an example of intangible assets?

A)Inventory
B)Name branding
C)Building location
D)Initial financing

Question 64

All of these are ways to establish value EXCEPT:

A)developing rapport with the customer.
B)charging more.
C)obtaining more customers.
D)reducing costs to the customer.

Question 65

________ are firms that enter a market after the first mover.

A)Second movers
B)Followers
C)Nonleaders
D)Market movers

Question 66

Which of the following is an example of tangible assets?

A)Industry experience
B)Contacts
C)Education
D)All of these

Question 67

________ are the capabilities and skills of the founder(s)or employees.

A)System assets
B)Critical assets
C)Tangible assets
D)Intangible assets

Question 68

Sally copies Jamie's hamburger restaurant by starting her own hamburger restaurant on the other side of town.This is an example of a ________.

A)second mover
B)follower
C)nonleader
D)market mover

Question 69

Strategy is a ________ field of study.

A)simple
B)complex
C)varied
D)convoluted

Question 70

Richard is the owner of a very popular burger joint in his locality.He knows that his burger joint's location and excellent customer service give him a competitive advantage over other burger joints.He is conducting a research to understand if there are other burger joints that provide the same sort of services that his joint does.He also intends to know if his competitors have the financial means to do so and if they seem to care about what his joint offers.In the context of the components of resource-based analysis, Richard is trying to understand if his product or service is ________.

A)valuable
B)rare
C)durable
D)nonsubstitutable

Question 71

All of these are criteria in deciding extraordinary resources in a company EXCEPT:

A)elastic.
B)rare.
C)valuable.
D)durable.

Question 72

In the context of the components of resource-based analysis, if a firm's resource or capability cannot be replaced easily by something else then it is said to be ________.

A)valuable
B)nonsubstitutable
C)durable
D)rare

Question 73

Keith is setting up a new bar in his locality.He knows that there are only a handful of bars in the area where he wishes to conduct business.He locates his bar at one of the four corners at a busy intersection.The other three corners are occupied by a clothing outlet, a restaurant, and a library, respectively.Keith knows that his bar's location gives him a competitive advantage.In the context of the components of resource-based analysis, Keith is able to achieve competitive advantage because his product or service is ________.

A)rare
B)nonsubstitutable
C)durable
D)valuable

Question 74

Gareth is the owner of a popular car wash facility.He has a small cafe set up beside the facility where customers can have a quick snack while waiting for their vehicles.Also, he ensures that each and every customer gets the best service in town.Customers do not mind paying extra because of these reasons.In fact, Gareth noticed that in the last 6 months, he has received several new customers who were previously engaged with his competitors.In the context of the components of resource-based analysis, Gareth's product or service is ________.

A)rare
B)nonsubstitutable
C)durable
D)valuable

Question 75

Which of the following is NOT a characteristic of firms that are followers?

A)They do not get the loyalty of customers.
B)They can benefit by learning from the first movers.
C)They are the firms that enter the market after the first mover.
D)They are often more successful than the first-mover firms because they do not repeat their predecessor's mistakes.

Question 76

James has the benefit of gaining customer loyalty by being the first company to bring out a new gourmet burger.This is a form of ________.

A)sustainable competitive advantage
B)first-mover advantage
C)leader advantage
D)tangible assets advantage

Question 77

All of these are intangible items EXCEPT

A)industry experience.
B)education.
C)initial financing.
D)name branding.

Question 78

All of these are tangible assets EXCEPT

A)location.
B)industry experience.
C)computer systems.
D)business license.

Question 79

Identify a true statement about competitive advantage.

A)Successful businesses generally have only one source of competitive advantage.
B)Businesses must develop an effective mission statement before developing a list of what might constitute its competitive advantage.
C)An effective mission statement and sustainable advantage are mutually independent of each other.
D)The predominant approach used by strategists to gain competitive advantage is the resource-based perspective.

Question 80

Which of the following is an example of tangible assets?

A)Education
B)Previous start-up experience
C)Software and systems for business
D)Unique knowledge of the industry