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Strategy Course Practice Midterm

True/False Indicate whether the sentence or statement is true or false.

1. Age structure, geographic distribution, income distribution, interest rates, and process innovations are some of the elements of concern when studying the demographic segment of the general environment. 2. Generally, the stronger the competitive forces in an industry, the higherthe profitability of an industry. 3. Firms can earn above-average returns even if they do not develop or sustain a competitive advantage. 4. Individually, resources typically result in a sustainable competitive advantage. 5. The resource-based model assumes that firms may form a competitive advantage by having resources that are not easy to attain or duplicate. 6. The objective of assessing theexternal environment is to determine the effects of environmental changes and trends on the strategic management of the firm. 7. Typically, fast industry growth increases an industry's rivalry. 8. A low-cost leader may create entry barriers to potential entrants by continually improving its levels of efficiency.

Multiple Choice Identify the letter of the choice that best completes the statement oranswers the question. 9. a. b. c. d. Which of the following results from the integration and coordination of a set of resources? A capability A core competence Sustainable competitive advantage Organizational assets

10. An analysis of the economic environment would include all of the following EXCEPT: a. interest rates. b. trade deficits and surpluses. c. the health of other countries'economies. d. the ethnicity of the workforce.


11. The technological segment of environmental analysis includes: a. institutions and activities involved with creating new knowledge and translating that knowledge into new outputs. b. the determination of when machinery will need to be replaced in a given firm. c. the need for new technology in order for a firm to gain a competitive advantage. d.places where a firm's technology will allow that firm to dominate a given market. 12. The threat of new entrants is increased if: a. access to distribution channels is hard to gain. b. economies of scale in the industry are high. c. product differentiation in the industry is low. d. capital requirements in the industry are high. 13. The threat from substitutes is high when: a. switching costs arehigh. b. the substitute product's price is lower than the industry product's price. c. the quality of the substitute product is lower than the quality of the industry's product. d. the substitute product stimulates new process innovations within the industry. 14. Which of the following is NOT an intangible asset? a. Trademarks b. Organizational culture c. Production equipment d. Brand name 15.Which of the following is a true statement about capabilities? a. Capabilities derive from the firm's capacity to deploy resources that have been integrated to achieve a desired end state. b. Capabilities emerge quickly when resources interact. c. Human capital cannot be a firm's capability. d. Capabilities become weaker and less valuable through repetition and practice. 16. Which of the followingis NOT a criterion that managers can use to decide which of their firm's capabilities have the potential to create a sustained competitive advantage? a. Valuable b. Nonsubstitutable c. Rare d. Easy to imitate


17. Value chain support activities include: a. converting inputs into product. b. developing advertising and promotional campaigns. c. distributing the product to customers. d.recruiting, hiring, and training personnel. 18. The four generic business-level strategies a firm can implement include all of the following EXCEPT: a. focused cost leadership. b. cost leadership. c. differentiation. d. leadership. 19. The five forces model does NOT include which of the following? a. Buyers b. Competitive rivalry c. Suppliers d. Replacements 20. The resource-based view of the firm:...