Question 1

The statement that defines a company's core intent and the business(es) in which it intends to operate is known as

Accepted Answer

A company's core intent and the business(es) in which it intends to operate are defined in its mission statement. The mission statement guides the company's overall strategy and decision-making.

Question 2

Firms need stakeholders but stakeholders do not need firms.

Accepted Answer

Stakeholders, which can include employees, customers, suppliers, and investors, often rely on firms for employment, products, services, and investment opportunities, indicating a mutual need between firms and stakeholders.

Question 3

A company's strengths, weaknesses and resources are conditions that affect its choice of strategies. All of these conditions are aspects of

Accepted Answer

The company's strengths, weaknesses, and resources are all part of the internal environment of the company, which refers to factors and conditions within the company that can influence its performance and strategic choices. The external environment, on the other hand, refers to factors outside the company such as market trends, competition, legal and regulatory issues, and economic conditions. The global economy and the company's vision may also be relevant but are not the main factors affecting the choice of strategies.

Question 4

Resources and capabilities that allow a firm to complete important tasks are known as

Accepted Answer

Resources and capabilities that allow a firm to complete important tasks are known as strengths. Strategy and vision refer to the overall direction and goals of the firm, while intangible assets are non-physical assets such as intellectual property and brand reputation.

Question 5

Managing relationships between the firm and its stakeholders is difficult because satisfying one stakeholder's needs may come at the expense of another stakeholder.

Accepted Answer

This is because different stakeholders often have different, and sometimes conflicting, interests and priorities. For example, maximizing profits may be important to shareholders, but may come at the expense of employee satisfaction or environmental concerns. Effective stakeholder management involves balancing the needs and interests of all stakeholders to create long-term value for the firm.

Question 6

PetsMed.com uses the Internet and telemarketing to sell its products to customers. This set of actions taken by PetMed.com after it selected its strategy is known as

Accepted Answer

Strategy implementation refers to the set of actions taken to put a chosen strategy into action. In this case, PetMed.com has chosen its strategy of using the Internet and telemarketing to sell its products, and it is now carrying out those actions to implement that strategy.

Question 7

Which of the following IS NOT part of the strategic management process?

Accepted Answer

Hiring and training employees is not part of the strategic management process. It is a part of the operational management process. The strategic management process involves creating a vision, analyzing the internal and external environments, and selecting strategies that create value for stakeholders.

Question 8

The MISSION of any company should focus on

Accepted Answer

The mission statement of a company should focus on identifying the markets the company serves and the goods and services it will provide. The mission statement outlines the company's reason for existence and sets the direction for the organization. Options A, B, and D may be important considerations for a company, but they do not represent the primary focus of a mission statement.

Question 9

Which of the following strategic management concepts consists of a company's mission and a picture of what the firm hopes to become in the future?

Accepted Answer

A company's mission and its envisioned future are encapsulated in its vision statement. Core competencies refer to a company's unique strengths, while strengths are the skills and resources that a company possesses. A strategy is a long-term plan to achieve a company's goals.

Question 10

When a company creates value for customers by performing key activities BETTER than its competitors, the firm is said to possess a

Accepted Answer

A competitive advantage is when a company is able to perform better than its competitors, giving it an edge in the market. This can be achieved through various means such as offering better quality products or services, having more efficient production processes, or providing superior customer service. A competitive advantage allows a company to differentiate itself from its rivals and capture more market share, ultimately leading to higher profits and a better return for shareholders.

Question 11

When a company has core competencies that are different than the capabilities of competitors, these core competencies are also known as

Accepted Answer

When a company has core competencies that differentiate it from its competitors, these competencies are referred to as distinctive competencies. Intangible assets refer to things like patents or trademarks, while tangible assets include physical items like equipment or inventory. Visionary capabilities are more focused on a company's ability to see future opportunities and trends.

Question 12

When a firm creates value for customers by performing activities that its competitors can't perform, the firm is said to possess

Accepted Answer

A firm that can perform activities that its competitors can't perform has a competitive advantage. This means that it can create value for customers in a way that its competitors can't, which can lead to increased customer loyalty, higher profits, and ultimately, a positive return for shareholders. While having a good reputation and intangible values can be important for a company, they do not necessarily guarantee a competitive advantage.

Question 13

Firms that manage their relationships with internal and external stakeholders better than competitors might gain a competitive advantage.

Accepted Answer

Managing relationships with stakeholders can lead to improved collaboration, increased trust, and enhanced reputation, which can ultimately translate into a competitive advantage for the firm.

Question 14

What do we call the action plan that is designed to help a company achieve its vision?

Accepted Answer

A strategy is a long-term plan that is designed to help a company achieve its vision. It outlines the steps that the company needs to take to reach its goals and objectives. A contingency plan is a backup plan that is put into place in case the original plan fails. A forecast is an estimate of future events or conditions. A mission statement is a brief summary of the company's purpose and objectives.

Question 15

Distribution and inventory management are two capabilities that Walmart emphasizes and performs especially well in pursuit of its vision. For Walmart, distribution and inventory management are considered to be

Accepted Answer

Walmart emphasizes and performs well in distribution and inventory management, which makes them core competencies of the company.

Question 16

Conditions in the external environment that can help a company reach its vision are known as

Accepted Answer

Conditions in the external environment that can help a company reach its vision are referred to as opportunities. Opportunities are external factors that an organization can leverage to achieve its goals and objectives. These can include emerging markets, advancements in technology, changes in social trends, shifts in consumer behavior, and other market-based conditions that create openings for growth and success.

Question 17

A company's strengths, weaknesses, opportunities and threats are all aspects of the internal environment that can affect the firm's choice and use of strategies.

Accepted Answer

Strengths and weaknesses are aspects of a company's internal environment, while opportunities and threats are aspects of the external environment.

Question 18

When a firm is able to integrate its resources and complete important tasks, the firm is said to possess

Accepted Answer

When a firm is able to integrate its resources and complete important tasks, it is said to possess capabilities. These are the abilities of a firm to coordinate, integrate, and leverage its resources to achieve a competitive advantage. Therefore, option B is the best choice. Option A is incorrect because competitive advantage refers to the distinctive edge a firm has over its competitors. Option C is incorrect because economic incentives refer to the rewards given to induce individuals or firms to engage in a particular activity. Option D is incorrect because effective performance appraisal practices refer to the process of evaluating an individual's work performance.

Question 19

Population trends, income levels, and competition are conditions that can affect a firm's performance. All of these conditions are aspects of

Accepted Answer

Population trends, income levels, and competition are all external factors that can impact a firm's performance, which are elements of the external environment. The economy and governmental policy may also affect a firm's performance, but they are broader categories that encompass both internal and external factors.

Question 20

Tangible assets, such as a strong balance sheet, and intangible assets like a company's reputation or knowledge are known as

Accepted Answer

Tangible assets refer to physical assets that a company owns, like property or equipment, while intangible assets refer to non-physical assets like intellectual property, reputation, or knowledge. Both of these types of assets are considered resources that a company can use to create value and generate revenue. Cultural values and stakeholders are related concepts but do not encompass the idea of tangible and intangible assets. 'Expertise' is not an accurate choice as intangible assets are a broader category that extend beyond expertise.

Quiz 1: The Foundations of Strategic Management