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 higher the 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 the external 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 or answers 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.

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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.