Archives: Quiz

Diffused cost leadership is one of Michael Porter’s four positions in the field of strategic management. Bootstrapping refers to exploiting a new business opportunity with limited funds. Answer: True A franchisee assumes all management responsibility for individual business locations. Answer: […]

Subsequent deals for a company are faster, but are generally not as profitable. The main determinant of CEO pay is the firm’s industry. Answer: False An alliance may eventually become an acquisition. Answer: True Firms generate more profits out of […]

An acquisition ensures that a firm enters a new business with viable competitive strength. How managers define an industry is critical to the formulation of a strategy for competing in it. Answer: True When bonuses are tied to accounting indicators […]

The Bermuda Triangle of Management describes the region where firms are faced with the need to cross over from new ventures to IPOs. Strategy must be internally consistent and externally oriented. Answer: True Economies of scale exist if average costs […]

Employers may receive up to a one-year variance regarding compliance with new OSHA standards. A diversity audit is similar to a utilization analysis conducted by the EEOC. Answer: FALSE Employers can force an employee to retire if the employee is […]

If career development is over-emphasized, the organization may suffer when employees become more concerned about their image than their actual performance. Most managers consider career development counseling with their employees a top priority. Answer: FALSE Performance diaries typically improve the […]

When an industry is characterized by perfect competition, rivals in the industry will achieve above-average levels of profitability. Strategies provide solutions to problems. Answer: True The burden placed on firms by their nation’s codes of best practice varies across the […]

Entrepreneurs who depend on significant investor capital often find their flexibility considerably increased. Blockholders are considered powerful because they control 10 percent or more of a firm’s shares. Answer: False Intel is successful because it doesn’t license its technology to […]

If a firm is pursuing a growth strategy, the coevolution perspective would suggest that it divest slow-growth businesses and products. The entrepreneurial model emphasizes a need to choose between opportunity or resources and capabilities. Answer: False The five competitive strategies […]

Causal ambiguity is a condition where a resource is considered valuable and rare because it is difficult to identify and understand. Orthodoxies represent the status quo of an industry. Answer: True Making assumptions about sociocultural norms in your home market […]

Firms with very different international-strategy configurations can coexist in the same industry. Synergy is the condition in which the combined benefits of multiple activities are greater than the simple sum of those benefits. Answer: True MES varies by industry and […]

Many popular U.S. brands have benefited from increasing levels of consumerism in other countries. Staging decisions are typically driven by a single factor, such as resources, urgency, credibility, or the need for early wins. Answer: False Firms that have integrated […]

Competitive advantage occurs when a firm has more resources than its competitors. The more dissimilar the contexts across which its businesses compete, the harder it is to manage a firm’s portfolio and to create value through economies of scope. Answer: […]

A turbulent environment is characterized by bold dynamic moves on the part of competitors. A challenger can gain a competitive market position to the extent that they can catch the leader unaware. Answer: True Financial budgets impose a form of […]

An effective executive team relies partly on the division of labor. Clearly articulated vision and mission statements may be used as substitutes for strategy. Answer: False Good economic times often contribute to organizational problems. Answer: False Greenfield investments do not […]

Identifying and exploiting differentiators demonstrates that a firm is successful at making tough choices and deciding on tradeoffs. Primary and support activities are both potential sources of competitive advantage. Answer: True People and rewards are the implementation levers that usually […]

Successful strategic positions are based on the effective implementation of the drivers of cost or differentiation. Liability of newness is a disadvantage that tends to increase as international diversification increases. Answer: False Competitors may easily imitate acquiring tangible resources. Answer: […]

The five elements of a strategy are critical to any new or established firm that is engaged in entrepreneurial activity. A firm that controls a valuable and scare resource always has a competitive advantage. Answer: False Successful strategies increasingly require […]

As a firm increases in size, shareholder wealth automatically increases as well. In a truly global industry, the core product is diversified. Answer: False The degree to which horizontal expansion is desirable depends on the degree to which the new […]

Minimum efficient scale is an explanation for the use of alliances as a foreign-entry tactic. Companies can reduce human capital loss by developing industry-specific, transferable knowledge. Answer: False Executive compensation tends to be linked to firm size. Answer: True Growth […]

Outsourcing is what a firm does when it contracts with outside suppliers to perform parts of a company’s value chain of activities. Resources may be both tangible and intangible at the same time. Answer: True Mergers and acquisitions in converging […]

Differences in long-term performance between firms in the same industry primarily come from different internal sources of competitive advantage. New-market disruption strategies involve identifying a business that will let a firm shift customers from a high-cost-to-serve to a low-cost-to-serve business […]

A strategy is only as good as its execution. To address the strategic element of differentiators, a firm must decide whether it will use alliances or acquisitions as international entry strategies. Answer: False The Level 5 Hierarchy is a model […]

Strategic-positioning decisions should be supported by only a select few tactical decisions made to implement and reinforce the firm’s strategy. Early stages of the industry life cycle encourage significant global expansion. Answer: False Industrial organization (I/O) economics is a discipline […]

In the functional structure, authority is based on the control of resources and knowledge and not on hierarchical rank. New-market-creation strategies are designed to eliminate, reduce, create, or raise some previously assumed dimension of product/market supply and demand. Answer: True […]

Rebuilding morale after turnaround is as important as restoring return on investment. Almost any organization is a potential alliance partner. Answer: True The absolute amount of knowledge in the world remains absolute. Answer: False Business strategy refers to the choices […]

A firm’s decision to grow rapidly through acquisitions is consistent with a corporate strategy aimed at differentiating its product line. Firms that compete in some aspects of business may actually cooperate in other business areas. Answer: True Business history is […]

A private firm is one in which the owner(s) has not listed shares of the firm on a public exchange. When managers are owners of the firm, the risk that they will deviate from the organization’s stated purpose increases. Answer: […]

Alliances are strategies in and of themselves. A potential problem in any alliance is that one partner may take advantage of another. Answer: True Typically, the hardest part of drawing up a good alliance contract is negotiating termination rights. Answer: […]

The industry-wide effect of the five forces will determine industry attractiveness. When complementary assets are tightly held and the first mover has weak protection from imitation, the value-creating opportunities favor the holders of the complementary assets. Answer: True The VRINE […]

The generic strategy typology is helpful in selecting a starting strategic position. The market will frequently place higher valuations on risky firms with poor governance characteristics. Answer: False Rebundling resources and capabilities can be accomplished through alliances and acquisitions. Answer: […]

New ventures face common problems whose solutions involve identifying new opportunities and developing organizational resources and capabilities. Industry concentration affects the intensity of competition in an industry. Answer: True Firms do not typically incur significant additional costs when diversifying their […]

Strategic coherence is best demonstrated by firms that move in and out of new businesses. The external perspective indicates that differences in competitive advantage are more often a function of industry attractiveness than a function of the firm’s position in […]

Mergers may be designed to improve market access for both companies in geographic markets where individually they are weak. The VRINE model cannot be used to assess every resource or capability for potential competitive advantage. Answer: False Learning and economies […]

The competitive advantage held by one firm over its competitors tends to change more slowly in stable markets. A strategy that depends on rapid change requires that a firm’s resources and capabilities support stability and continuity. Answer: False Focused differentiation […]

A strategic group is a subset of firms that have similar strategies and capabilities. Key success factors can be likened to table stakes in a poker game. Answer: True Cooption refers to orchestrating a web of shifting linkages among evolving […]

When a company raises capital through an IPO, it generally exchanges only a small portion of the firm’s stock for financial capital. The legal and political environments are often interrelated in that laws and regulations only change when politicians decide […]

Any firm that invests in resources and capabilities that support innovation and not retaliation may be only prolonging its inevitable demise. A major goal of strategy implementation is to translate good ideas into action and translate actions into good ideas. […]

Slotting fees are the fees that suppliers pay for access to retailers’ shelf space. The person who assumes the role of strategic leadership reports directly to the CEO. Answer: False New-venture activities are typically more predictable and are, therefore, less […]

Which of the following statements about sales success is most likely true? A. For success in sales, it is more important to speak well than to listen well. B. Modern salespeople make contributions to the welfare of others through service. […]

The person who operates at the _____ level of moral development would adhere to the Golden Rule of Selling. A. intentional B. principled C. conventional D. discretionary E. preconventional Mark is the salesperson of a large FMCG company. You are […]

The prospect says, “Your price is two percent higher than your competitor’s.” The salesperson responds, “What you’re saying is you want to get the best product for your money’”right?” The salesperson is using which technique for meeting objections? A. Boomerang […]

Which of the following statements about sales jobs is most likely false? A. Sales jobs require salespeople to exhibit more tact than other professions do. B. Many salespeople work with little or no supervision. C. Many sales jobs require considerable […]

As you discuss your proposition with your potential buyer, you notice that she is leaning away from you and staring mostly at the paperweight she is fidgeting with. You are receiving _____ signals. A. rejection B. disagreement C. caution D. […]

Which term refers to the arousal, intensity, direction, and persistence of effort directed toward job tasks over time? A. Enrichment B. Direction C. Motivation D. Influence E. Simulative response Demonstrations, dramatics, and visual aids in sales presentation are most likely […]

A product advantage is defined as: A. any physical characteristic of a product. B. the performance characteristic of a product. C. a favorable result the buyer receives from use of the product. D. the characteristic that no product in the […]

The sales force budget is most likely based on estimates of: A. industry sales. B. sales forecasts. C. long-term staffing needs. D. training costs and functions. E. labor market supply expectations. Morgan-Hunt Agency, a financial investment company, pays $300 to […]

Which of the following is most likely a want rather than a need? A. shelter B. water C. clothing D. spaghetti E. transportation According to the text, which of the following is an example of a technical skill? A. Mastering […]

A salesperson with contact management software has a map file for routing each day’s schedule. Conditions and hopeless objections cannot be handled by negotiation. Answer: False Explanation: Often, conditions stated by the prospect are overcome through negotiation between buyer and […]

According to recent Gallup surveys, most Americans believe that traditional salespeople are overly interested in the needs of customers. During a sales presentation, it is best to begin with the FAB sequence, then present the business proposition, and next the […]