Question 1

Resources and capabilities provide a continued source of advantage when they:

Group of answer choices

Allow the firm to produce at very low cost

Are valuable, rare, inimitable, and organizationally-supported

Allow the firm to charge a very high price

Question 2

A resource cannot be valuable if it lowers buyers' valuation.

Group of answer choices

True

False

Question 3

Under which of the following conditions is a firm UNLIKELY to have acquired a profit-yielding asset?

Group of answer choices

Firm has superior information about the value of the asset.

Firm has existing capabilities that make the asset more valuable to that firm.

Firm purchased the asset in a competitive markets.

Firm fortuitously (by luck) acquires the asset due to some accident of history.

Question 4

Having a only a single seller for a good (a monopolist):

Group of answer choices

Raises buyer's value for the product

Lowers buyer's value for the product

Raises the price of buyer's outside option

Lowers the price of buyer's outside option

Raises seller's marginal cost

Lowers seller's marginal cost

Question 5

Tradeoffs between activities are

Group of answer choices

To be included as much as possible within a firm's own activity system

Great to have between your activities and the activities of rivals

Something that increases competition

Question 6

When are first movers more likely than followers to succeed in new markets.

Group of answer choices

Always

If the way they make their product is observable

If they have an asset that is valuable, rare, and inimitable

When creating the market requires convincing potential customers that they need the product

Question 7

Which of the following guarantees that the seller can charge a higher price?

Group of answer choices

The seller has the highest outside option for selling her product

The seller has product for which customers have the highest willingness-to-pay

The seller has the lowest production cost

The buyer has the the lowest priced outside option to buying this product

Question 8

When is waiting and moving second a good idea:

Group of answer choices

Your customers face switching costs

When the product can be reverse-engineered.

There is a learning curve in production (costs go down as a firm makes more)

Question 9

All else being equal, which of the following resources and capabilities is least likely to meet the VRIO test, and therefore not generate above average profits?

Group of answer choices

Cash reserves

Organizational culture

Contracts

Brands

Question 10

The central puzzle of strategic management is

Group of answer choices

Why we see persistent performance differences among seemingly similar businesses

What leads to firms making bad strategic decisions

How to predict what is coming and set yourself up for success

Where to play and how to win

How do you motivate a big group of people

What is the best way to represent your product to raise sales

How can you delight your best customers

Question 11

A valuable resource widens the gap between:

Group of answer choices

The buyer's value and the buyer's outside option

The buyer's value and the seller's outside option

The buyer's value and the seller's cost of production

The buyer's outside option and the seller's outside option

The buyer's outside option and the seller's cost of production

Question 12

You are in an industry that produces a commodity, meaning that customers don't value the differences between the products. All the firms in your industry has historically had the same costs of production. A new startup just started selling software that will lower the costs of every company in your industry about the same amount. Which of the following is likely:

Group of answer choices

Your firm's profits go up

Your firm's profits stay the same

Your firm's profits go down

Question 13

Suppose that you and a competitor have brands focusing on different features of your product (for example, you both sell smoothies and they advertise ethical sourcing and you advocate health benefits). Customers have strong allegiances to one brand or another. Are industry profits likely:

Group of answer choices

Closer to profits under Perfect Competition

Closer to monopoly profits

Question 14

A good strategy must provide enough guidance that employees know how to make choices that won't contradict other divisions' choices

Group of answer choices

True

False

Question 15

Your industry makes complicated business software for an industry with 5 major players. You spend the same amount to develop the software regardless of whether 1 company or all 5 companies buy it. Which of the following is true:

Group of answer choices

Minimum efficient scale is low

Minimum efficient scale is high

Capabilities are weak

Capabilities are strong

Question 16

In the situation described in the question above (question 15), will strategies based on interconnected activities lead to persistent profits?

Group of answer choices

No

Yes

Question 17

Your activities are most likely to stay unique in an industry with which of the following average cost curves

A B Market Market size size Margin Margin al cost al cost Market Market price priceIndustry 1 Industry 1 H Industry 1 Industry 1 Industry 2 Industry 2 Industry 2 Industry 2 Customers Customers Customers H Customers A B C D