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Questions 1 to 25: Select the best answer to each question. Note that a question and its answers may be split across a page
break, so be sure that you have seen the entire question and all the answers before choosing an answer.
2. The two tests of a resource's competitive power that determine whether a company's competitive
advantage can be sustained in the face of active competition are whether the resource or capability is
A. competitively valuable and/or is something that rivals lack.
B. rare and/or is hard to copy.
C. hard to copy and/or can be trumped by different types of resources and capabilities.
D. competitively valuable and/or there are good substitutes available for the resource.
3. The concept of strategic groups is relevant to industry and competitive analysis because
A. the profit potential of firms in the same strategic group is usually very similar.
B. strategic group maps help identify each company's market position and its closest competitors.
C. competition grows in intensity as the number and diversity of the strategic groups in an industry increases.
D. firms in the same strategic groups are rarely close competitorsa firm's closest competitors are usually in distant strategic
groups.
5. Which of the following is not a major question to ask when thinking strategically about competitive
conditions in a given industry?
A. What forces are driving changes in the industry, and what impact will these changes have on competitive intensity and industry
profitability?
B. Does the outlook for the industry present the company with sufficiently attractive prospects for profitability?
C. How many companies in the industry have good track records for revenue growth and profitability?
D. What strategic moves are rivals likely to make next?
7. Which of the following choices is not a good example of a marketing-related key success factor?
A. Courteous, personalized customer service
B. Product research and development (R&D) capabilities and expertise in product design
C. Breadth of product line and product selection
D. A well-known, well-respected brand name
8. The competitive threat that outsiders will enter a market is weaker when
A. buyers have little loyalty to the brands and product offerings of existing industry members.
B. the industry is characterized by the lack of sizable scale economies and learning/experience curve effects.
C. the industry's market growth is rapid.
D. financially strong industry members send strong signals that they'll launch strategic initiatives to combat the entry of
newcomers.
11. Which one of the following does not cause the rivalry among competing sellers to be weak?
A. High buyer switching costs
B. Low barriers to entry
C. Industry conditions that tempt rivals to use price cuts or other competitive weapons to boost unit sales
D. Rapid growth in buyer demand
12. Having good competitive intelligence about rivals' strategies, latest actions and announcements,
resource strengths and weaknesses, and moves to improve their situation is important because it
A. enables company managers to determine which rival has the worst strategy and avoid making the same strategy mistakes.
B. enables more accurate predictions about how long it will take a particular rival to copy most of what the strategy leader is
doing.
C. identifies who the industry's current market-share leaders are.
D. helps a company to craft its own strategic moves with some confidence about what market maneuvers to expect from its
rivals.
13. In analyzing a company's resources, internal circumstances, and competitiveness, which of the
following questions is most important to ask?
A. What are the company's resource strengths and weaknesses and its external opportunities and threats?
B. Is the company's present strategy better than the strategies of its closest rivals based on such performance measures as
earnings per share, ROE, dividend payout ratio, and average annual increase in the common stock price?
C. Are the company's key success factors more dominant than the key success factors of close rivals?
D. Does the company have the industry's most efficient and effective value chain?
15. A much-used and potent managerial tool for determining whether a company performs particular
functions or activities in a manner that represents the "best practice" when both cost and effectiveness are
taken into account is
A. activity-based costing.
B. competitive strength analysis.
C. resource cost mapping.
D. benchmarking.
16. The nature and strength of the competitive forces that prevail in an industry are generally a joint
product of
A. All of the above.
B. the pressures induced by the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the
industry.
C. the attempts of companies in other industries to win buyers over to their own substitute products.
D. competitive pressures stemming from the bargaining power of both suppliers and buyers.
19. Using the five-forces model of competition to determine what competition is like in a given industry
involves which of the following steps?
A. Evaluating whether competition is being intensified or weakened by the industry's driving forces and key success factors
B. Assessing whether the collective impact of all five forces is weak enough to allow industry members to go on the offensive or
use a defensive strategy to insulate against fierce competitive pressures
C. Building the picture of competition in two steps: (1) determining which rival has the biggest competitive advantage and (2)
assessing whether the competitive advantages possessed by various industry members allow most industry members to earn
above-average profits.
D. Building the picture of competition in three steps: (1) identifying the specific competitive pressures associated with each of the
five competitive forces; (2) evaluating how strong the pressures comprising each competitive force are; and (3) determining
whether the collective impact of all five competitive forces is conducive to earning attractive profits.
20. Which one of the following is not part of a company's macro environment?
A. The company's resource strengths, resource weaknesses, and competitive capabilities
B. The industry and competitive environment in which the company operates
C. Population demographics, societal values, and lifestyles
D. Technological factors, governmental regulations, and legislation
21. Which of the following is not one of the five questions that comprise the task of evaluating a company's
resources and competitive position?
A. Are the company's prices and costs competitive?
B. How well is the company's present strategy working?
C. Is the company competitively stronger or weaker than key rivals?
D. What are the company's most profitable geographic market segments?
22. Which of the following is not part of the task of identifying the strategic issues and problems that merit
front-burner managerial attention?
A. Surveying the company's board members, managers, select employees, and key investors regarding what strategic issues they
think the company faces
B. Assessing what challenges the company has to overcome to be financially and competitively successful in the years ahead
C. Evaluating the company's own resources and competitive position
D. Analyzing the company's external environment
23. In which of the following instances is the competitive position of suppliers that industry members deal
with not weakened?
A. When the cost of switching from one supplier to another is low
B. When the items purchased from suppliers are in short supply
C. When industry members pose a credible threat of backward integration into the business of suppliers
D. When the buying firms purchase in large quantities, and thus are important customers of the suppliers
24. Why is identifying the strategic issues a company faces and compiling a "worry list" of problems and
roadblocks an important component of company situation analysis?
A. Without a precise fix on what problems and roadblocks a company confronts, managers are less clear about what value-chain
activities to benchmark.
B. The "worry list" sets management's agenda for taking actions to improve the company's performance and business outlook.
C. Without a precise fix on what problems and issues a company confronts, managers can't know what the industry's key
success factors are.
D. The "worry list" helps company managers clarify their thinking about how best to modify the company's value chain.
25. Which of the following is not a component of evaluating a company's resources and competitive
position?
A. Scanning the environment to determine a company's best and most profitable customers
B. Evaluating how well the present strategy is working
C. Assessing whether the company's costs and prices are competitive
D. Evaluating whether the company is competitively stronger or weaker than key rivals
End of exam