Question 1

A firm has a competitive advantage when it implements a strategy that competitors are able to duplicate or find costly to imitate.

Accepted Answer

True

Question 2

Employees, managers and non-managers are examples of organisational stakeholders.

Accepted Answer

True, employees, managers and non-managers are all examples of individuals or groups who have a vested interest or concern in the activities, decisions and outcomes of an organization, and are therefore considered stakeholders.

Question 3

A profit pool includes the total profits earned in an industry at all points along the value chain.

Accepted Answer

A profit pool includes the total profits earned by all participants in an industry at all points along the value chain, including suppliers, manufacturers, distributors, and retailers.

Question 4

The resource-based model assumes that differences in resources and capabilities are the basis of a competitive advantage.

Accepted Answer

The resource-based model posits that organizations achieve a competitive advantage by accumulating and deploying resources and capabilities that are valuable, rare, inimitable, and non-substitutable (VRIN). This approach asserts that organizations can improve their performance by developing unique and valuable resources that are difficult for competitors to replicate or substitute.

Question 5

Above-average returns are returns in excess of what an investor expects to earn from other investments with a similar amount of risk.

Accepted Answer

Above-average returns are higher than the expected returns from other investments with a similar level of risk. Therefore, they are considered as superior or better performing investments.

Question 6

The risks of participating outside of a firm's domestic country in the global economy are labelled a 'liability of newness'.

Accepted Answer

The term 'liability of newness' refers to the challenges a new firm faces when establishing itself in a domestic market, not when participating in the global economy. The risks of participating outside of a firm's domestic country in the global economy are related to political, economic, and cultural differences and are referred to as 'liability of foreignness'.

Question 7

The I/O model argues that core competencies are the basis of a firm's competitive advantage.

Accepted Answer

The I/O (Industrial Organization) model focuses on the firm's external environment to explain competitive advantage, suggesting that the structure of the industry determines firm strategy and profitability, rather than internal factors like core competencies. Core competencies are central to the Resource-Based View (RBV) of the firm.

Question 8

Perpetual innovation is a term used to describe how rapidly and consistently new, information-intensive technologies replace older ones.

Accepted Answer

Perpetual innovation refers to the continuous cycle of new and advanced technologies replacing older ones at a fast pace.

Question 9

Firms that are capable of successfully competing in global markets may not need to worry about their home markets.

Accepted Answer

While firms with global success may have less dependence on their home market, it is still important for them to maintain a strong presence and competitive advantage in their domestic market. Additionally, changes in the domestic market can have ripple effects on global operations, so it is important for firms to stay attuned to their home market.

Question 10

When products become somewhat indistinguishable because of the widespread and rapid diffusion of technologies, speed to market may be the primary source of competitive advantage.

Accepted Answer

When technologies become widely available, it becomes easier for competitors to produce similar products. In such a scenario, speed to market can become the primary source of competitive advantage.

Question 11

Knowledge is a critical organisational resource and an increasingly valuable source of competitive advantage.

Accepted Answer

Knowledge is a critical resource for any organization as it contributes to the development of innovative products, better services, and strategic decision-making. With the emergence of the knowledge economy, the importance of knowledge as a source of competitive advantage has significantly increased. Organizations that possess valuable knowledge and can utilize it effectively are more likely to succeed in the market.

Question 12

Strategic competitiveness is achieved when a firm successfully formulates and implements a value-creating strategy.

Accepted Answer

Strategic competitiveness is the ability of a firm to successfully create and implement a value-creating strategy that allows it to achieve an advantage in the marketplace.

Question 13

Strategic flexibility is a set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment.

Accepted Answer

Strategic flexibility helps organizations adjust to changes in the market and respond to new opportunities and challenges. It involves the ability to quickly adapt to new information and adjust strategies accordingly, as well as the ability to innovate and experiment with new approaches to business.

Question 14

A core competency is the capacity for a set of resources to perform a task or an activity in an integrative manner.

Accepted Answer

The answer of A core competency is the capacity for...

Question 15

Organisational culture refers to the core values shared by a firm's managers but not necessarily by its lower-level employees.

Accepted Answer

Organisational culture refers to the shared values, beliefs, attitudes, and practices that characterise an organisation and guide its behaviour. While managers play a crucial role in shaping and promoting the culture, it is not limited to them. The culture permeates throughout the organisation and is shared by all its members, including lower-level employees. Therefore, organisational culture is not just about managers but an all-encompassing aspect of the company.

Question 16

The industrial organisation (I/O) model suggests that above-average returns are earned when firms implement a strategy dictated by the characteristics of the general, industry and competitor environments.

Accepted Answer

The I/O model focuses on external factors that impact a firm, such as the industry and competitive environment, and suggests that above-average returns can be achieved by aligning strategy with these factors.

Question 17

Organisational stakeholders are a firm's internal resources, capabilities and core competencies that are used to accomplish what may at first appear to be unattainable goals in the competitive environment.

Accepted Answer

This statement defines organisational resources, capabilities, and core competencies, but not stakeholders. Organisational stakeholders refer to individuals or groups such as employees, shareholders, customers, and suppliers who have a vested interest in the success of the organisation.

Question 18

A firm's mission tends to be enduring while its vision can change in view of changing environmental conditions.

Accepted Answer

A firm's mission is its core purpose and remains relatively stable, while its vision is aspirational and can evolve as the company grows or as external conditions change.

Question 19

Customers, suppliers, unions and local governments are examples of capital market stakeholders.

Accepted Answer

Capital market stakeholders are typically investors and financial institutions, not customers, suppliers, unions, and local governments. These types of stakeholders may be considered part of the broader stakeholder community, but are not specifically associated with the capital market.

Question 20

A strategy is a coordinated set of actions designed to exploit core competencies and gain a competitive advantage.

Accepted Answer

This is a widely accepted definition of strategy in the business world.

Quiz 1: Strategic Management and Strategic Competitiveness