41) For a particular company’s resource or capability to have real competitive power and perhaps
qualify as a basis for competitive advantage, it should
A) be hard to copy, be rare and something rivals lack, be competitively valuable, and not be
easily trumped by substitute resource strengths possessed by rivals.
B) be something that a company does internally rather than in collaborative arrangements with
outsiders.
C) be patentable.
D) be an industry key success factor and occupy a prime position in the company’s value chain.
E) have the potential for lowering the firm’s unit costs.
42) The competitive power of a company’s resource strength is not measured by which one of the
following tests?
A) Is the resource rare and something rivals lack?
B) Is the resource strength something that a company has internally rather than in collaborative
arrangements with outsiders?
C) Is the resource strength easily trumped by the substitute resources/capabilities of rivals?
D) Is the resource strength hard to copy?
E) Is the resource strength competitively valuable, having the potential to contribute to a
competitive advantage?
43) A company requires a dynamically evolving portfolio of resources and capabilities to
A) assist the strategic planning team in overall direction.
B) sustain complex manufacturing systems as a strategic recall.
C) sustain its competitiveness and help drive improvements in its performance.
D) sustain benefits of high market share as an interest in growth strategies.
E) transform knowledge into a management style supporting competition in a globally diverse
world.
44) A company’s dynamic capability is not manifested by its
A) capacity to improve existing resources and capabilities
B) ability to upgrade its R&D resources to drive product innovation
C) capacity to add new resources and capabilities to the competitive asset portfolio
D) ability to replace degraded resources with acquired capabilities
E) ability to keep antiquated resources by disregarding innovative capabilities
45) A dynamic capability is the
A) ongoing capacity to modify existing resources and capabilities to create new ones.
B) improvement evaluation process for eliminating waste in the firm.
C) functional and operating resources management process.
D) ongoing capability to understand and establish a commitment to resource alignment.
E) improvement evaluation process for repurposing waste in the firm.
46) ________ identifies and assesses a company’s resource strengths and weaknesses and its
external opportunities and threats.
A) A SWOT analysis
B) A competitive asset/liability analysis
C) A competitive positioning analysis
D) A strategic resource assessment
E) Company resource mapping
47) A first-rate SWOT analysis
A) is a way to measure whether a company’s value chain is longer or shorter than the chains of
key rivals.
B) is a tool for benchmarking whether a firm’s strategy is closely matched to industry key
success factors.
C) reveals whether a company is competitively stronger than its closest rivals.
D) provides a good basis for crafting a strategy.
E) identifies the reasons a company’s strategy is or is not working very well.
48) Which one of the following is not part of conducting a SWOT analysis?
A) identifying a company’s resource strengths and competitive capabilities
B) benchmarking the company’s resource strengths and competitive capabilities against industry
key success factors
C) identifying a company’s market opportunities
D) drawing conclusions about the company’s overall business situation
E) matching the company’s strategy to its resource strengths and market opportunities, correcting
problematic weaknesses, and defending against worrisome threats
49) SWOT analysis is a simple but powerful tool for
A) gauging whether a company has a cost-competitive value chain.
B) sizing up a company’s resources and capabilities, strengths and deficiencies, its market
opportunities, and the external threats to its future well-being.
C) evaluating whether a company is in the most appropriate strategic group.
D) determining a company’s competitive strength vis-à-vis close rivals.
E) identifying the market segments in which a company is strongly positioned and weakly
positioned.
50) A company’s strengths are important because they
A) pave the way for establishing a low-cost advantage over rivals.
B) represent the quality of its competitive assets that enhance its competitiveness in the
marketplace.
C) provide extra muscle in helping lengthen the company’s value chain.
D) give it competitive protection against the industry’s driving forces.
E) provide extra organizational muscle in turning a core competence into a key success factor.
51) When an activity becomes something a company has learned to perform proficiently and
capably, the company is said to have a
A) competence.
B) competitive advantage over rivals.
C) key value chain proficiency.
D) distinctive capability.
E) resource advantage.
52) When a company has a proficiency in performing a strategically and competitively important
value chain activity better than its rivals, it is said to have a
A) company competence.
B) core competence.
C) distinctive competence.
D) key value chain proficiency.
E) competitive advantage over rivals.
53) The difference between a core competence and a distinctive competence is that a
A) distinctive competence refers to a company’s strongest resource or competitive capability,
whereas a core competence refers to a company’s lowest-cost and most efficiently executed
value-chain activity.
B) core competence usually resides in a company’s base of intellectual capital, whereas a
distinctive competence stems from the superiority of a company’s physical and tangible assets.
C) core competence is a competitively and strategically relevant activity that a firm performs
well compared to its other activities, whereas a distinctive competence is a competitively
relevant activity a firm performs well compared to other rival firms.
D) core competence represents a resource strength, whereas a distinctive competence is achieved
by having more resource strengths than rival companies.
E) core competence usually resides in a company’s technology and physical assets, whereas a
distinctive competence usually resides in a company’s know-how, expertise, and intellectual
capital.
54) A core competence
A) detracts from a company’s arsenal of competitive capabilities and competitive assets and is
not a resource strength considered to be genuine.
B) is typically results-based, residing in a company’s tangible physical assets on the balance
sheet.
C) is often grounded in a single department’s set of knowledge and expertise.
D) is an activity that a firm performs proficiently that is also central to its strategy and
competitive success.
E) is a proficiently performed external activity.
55) A core competence
A) is a more competitively valuable strength than a competence because of the key role the
activities play in the company’s strategy.
B) typically has competitive value, the amount of which is reflected in the physical and tangible
assets on a company’s balance sheet.
C) usually is grounded in the technological expertise of a particular department or work group.
D) is more difficult for rivals to copy than a distinctive competence.
E) refers to a company’s lowest-cost and most efficiently executed value-chain activity.
56) An example of an external threat to a company’s future profitability does not include
A) lack of a distinctive competence
B) potential of a hostile takeover
C) adverse changes in foreign exchange rates
D) unfavorable demographic shifts
E) introduction of restrictive trade policies in countries where the company does business
57) When a company performs a particular competitively important activity truly well in
comparison to its rivals, it is said to have a
A) company competence.
B) strategic resource.
C) distinctive competence.
D) core competence.
E) key success factor.
58) ________ does not represent a potential core competence.
A) Skills in manufacturing a high-quality product at a low cost
B) Know-how in creating and operating systems for cost-efficient supply chain management
C) The capability to fill customer orders accurately and swiftly
D) Having a sprawling factory
E) The capability to speed new or next-generation products to the marketplace
59) A distinctive competence is not
A) a competitively important activity that a company performs better than its rivals.
B) typically less restrictive for rivals to copy than a core competence.
C) a basis for sustainable competitive advantage.
D) considered as a superior internal strength.
E) capable of delivering stand-out value to customers (in the form of lower prices, better product
performance, or superior service).
60) Starwood Hotels’ company resource strengths consist of
A) its core competencies in site selection, construction, reservations systems, and operations.
B) the magnitude of its unit sales, revenues, and market share vis-à-vis those of key hotel
industry rivals.
C) the magnitude of its profit margins and return on investment vis-à-vis those of key hotel
industry rivals.
D) whether it has more primary activities in its value chain than close rivals and a better overall
value chain than its rivals in the hotel industry.
E) whether it has a more profitable business model than close rivals in the hotel industry.
61) A company resource weakness or competitive deficiency
A) represents a problem that needs to be turned into a strength because weaknesses prevent a
firm from being a winner in the marketplace.
B) causes the company to fall into a lower strategic group than it otherwise could compete in.
C) prevents a company from having a distinctive competence.
D) is something a company lacks or does poorly (in comparison to rivals) or a condition that puts
it at a disadvantage in the marketplace.
E) usually stems from having a missing link or links in the industry value chain.
62) The external market opportunities which are most relevant to a company are the ones that
A) can increase market share.
B) are reinforced by the overall business strategy and reflect the business model.
C) match up well with the firm’s competitive assets, offer the best prospects for growth and
profitability, and present the most potential for competitive advantage.
D) qualify to correct its internal weaknesses and resource deficiencies.
E) are relevant for defending against the external threats to its well-being.
63) The market opportunities most relevant to a low-cost provider of mobile phones are those
that
A) offer the best prospects for growth and profitability in emerging markets.
B) provide a strong defense against threats to the company’s profitability.
C) embrace the most potential for product innovation.
D) provide differentiation features to take market share away from close rivals.
E) hold the most potential to reduce dropped calls.
64) An external threat to a company’s future profitability does not include
A) the lack of a distinctive competence
B) new legislation that entails burdensome and costly government regulations
C) slowdowns in market growth
D) more intense competitive pressures
E) the introduction of restrictive trade policies in countries where the company does business
65) External threats to a company’s future profitability and well-being do not include
A) the likely entry of potent new competitors
B) the lack of a well-known brand name with which to attract new customers and help retain
existing customers
C) shifts in buyer needs and tastes away from the industry’s product
D) costly new regulatory requirements
E) growing bargaining power on the part of the company’s major customers and major suppliers
66) External threats may pose various degrees of adversity upon the company and can surface
from many sources and examples, except for
A) the advent of cheaper or better technologies.
B) the entry of lower-cost foreign competitors and restrictive foreign trade policies.
C) new burdensome regulations.
D) higher overall unit costs relative to those of key competitors.
E) rising prices on key inputs (such as energy costs).
67) The payoff of doing a thorough SWOT analysis is
A) identifying whether the company’s value chain is cost-effective vis-à-vis the value chains of
rivals.
B) helping strategy makers benchmark the company’s resource strengths against industry key
success factors.
C) enabling a company to assess its overall competitive position relative to its key rivals.
D) revealing whether a company’s market share, measures of profitability, and sales compare
favorably or unfavorably vis-à-vis key competitors.
E) assisting strategy makers in crafting a strategy that is well-matched to the company’s
resources and capabilities, its market opportunities, and the external threats to its future well-
being.
68) Examples of a potential resource weakness or competitive deficiency for a company do not
include
A) less productive R&D efforts than rivals
B) having a single, unified functional strategy instead of several distinct functional strategies
C) lack of a strong brand image and reputation (as compared to rivals)
D) higher overall unit costs relative to rivals
E) too narrow a product line relative to rivals
69) If you were asked to conduct a SWOT analysis for Nike, you would not evaluate which of
these market opportunities?
A) serving additional customer groups or market segments.
B) growing buyer preferences for substitutes for the industry’s product.
C) acquiring rival firms or companies with attractive technological expertise or capabilities.
D) expanding into new geographic markets.
E) demographic trends that favor increased repeat purchases and/or higher volume purchases of
the company’s product.
70) If you were asked to conduct a SWOT analysis for Procter & Gamble, you would not be able
to assess
A) how to improve Procter & Gamble’s strategy by building on its strengths and capabilities
B) which market opportunities are best suited to Procter & Gamble’s strengths and capabilities
C) which of Procter & Gamble’s resource weaknesses and deficiencies need to be corrected so as
to better enable the pursuit of important market opportunities and to better defend against certain
external threats
D) how Procter & Gamble could turn a core competence into a distinctive competence
E) whether any of Procter & Gamble’s resource strengths can be used to help lessen the impact of
external threats
71) The two most important parts of SWOT analysis are
A) pinpointing the company’s competitive assets and pinpointing its competitive liabilities.
B) identifying the company’s resource strengths and identifying the company’s best market
opportunities.
C) identifying the external threats to a company’s future profitability and pinpointing how many
market opportunities it has.
D) drawing conclusions from the SWOT listings about the company’s overall situation and
translating these conclusions into strategic actions to better match the company’s strategy to its
resource strengths and market opportunities, correct the important weaknesses, and defend
against external threats.
E) making accurate lists of the company’s strengths, weaknesses, opportunities, and threats and
then using these lists as a basis for ascertaining how well the company’s strategy is working.
72) One of the most telling signs of whether a company’s market position is strong or precarious
is
A) whether its product is strongly or weakly differentiated from rivals.
B) whether its prices and costs are competitive with those of key rivals.
C) whether it has a lower stock price than key rivals.
D) the opinions of buyers regarding which seller has the best product quality and customer
service.
E) whether it is in a bigger or smaller strategic group than its closest rivals.
73) Two analytical tools useful in determining whether a company’s prices and costs are
competitive are
A) SWOT analysis and key success factor analysis.
B) SWOT analysis and benchmarking.
C) value chain analysis and benchmarking.
D) competitive position assessment and competitive strength assessment.
E) driving forces analysis and SWOT analysis.
74) The three main areas in the value chain where significant differences in the costs of
competing firms can occur include
A) age of plants and equipment, number of employees, and advertising costs.
B) operating-level activities, functional area activities, and line of business activities.
C) the nature and makeup of their own internal operations, the activities performed by suppliers,
and the activities performed by wholesale distribution and retailing allies.
D) human resource activities (particularly labor costs), vertical integration activities, and
strategic partnership activities.
E) variable cost activities, fixed cost activities, and administrative activities.
75) Identifying the primary and secondary activities that comprise a company’s value chain
A) indicates whether a company’s resource strengths will ultimately translate into greater value
for shareholders.
B) reveals whether a company’s resource strengths are well-matched to the industry’s key success
factors.
C) is the first step in understanding a company’s cost structure (since each activity in the value
chain gives rise to costs).
D) is called benchmarking.
E) is called resource value analysis.
76) 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) competitive strength analysis.
B) activity-based costing.
C) resource cost mapping.
D) SWOT analysis.
E) benchmarking.
77) Activity-based costing is used to evaluate a company’s cost competitiveness and ________
A) determine whether the value chains of rival companies are similar or different.
B) benchmark the costs of primary value chain activities against the costs of the support value
chain activities.
C) determine the costs of each primary and support activity comprising a company’s value chain
and thereby reveal the nature and makeup of a company’s internal cost structure.
D) determine the costs of each strategic action a company initiates.
E) analyze the costs of each primary activity.