Package Title: Chapter 1, Testbank
Course Title: Dyer, SM 3e
Chapter Number: 1
Question type: Multiple Choice
1) ________ can be best defined as when an organization generates higher profits compared
to its rivals.
a) Client advantage
b) Competitive advantage
c) Employer advantage
d) Unique value
Answer: b
Difficulty: Easy
Section Reference 1: What Is Business Strategy?
Learning Objective 1: Define business strategy, including the importance of competitive
advantage, the four choices that are critical to strategy formulation, and the strategic
management process.
Bloomcode: Knowledge
Standard 1:1: AACSB || Analytic
2) Gems Corp. is a leading jewelry brand that finds it hard to make as much profit as its
competitors. In order to overcome this, the employees of Gems Corp. decide to work harder
to provide unique value to customers and increase the sales of the company. After a year, it is
able to make more profits than its competitors. This scenario best illustrates ________.
a) client advantage
b) internal analysis
c) external analysis
d) competitive advantage
Answer: d
Difficulty: Hard
Section Reference 1: What Is Business Strategy?
Learning Objective 1: Define business strategy, including the importance of competitive
advantage, the four choices that are critical to strategy formulation, and the strategic
management process.
Bloomcode: Application
Standard 1: AACSB || Analytic
3) The industry and geographic area that a company competes in, is referred to as its
________.
,a) niche
b) business
c) segment
d) market
Answer: d
Difficulty: Easy
Section Reference 1: What Is Business Strategy?
Learning Objective 1: Define business strategy, including the importance of competitive
advantage, the four choices that are critical to strategy formulation, and the strategic
management process.
Bloomcode: Knowledge
Standard 1:1: AACSB || Analytic
4) Adia and Ali are two business partners who want to set up a company that sells imported
sports gear and equipment. In order to make sure that the company makes and retains profit,
they must choose an area that is close to where their products have the highest demand. This
area should allow them consistently to make profit. In this scenario, Adia and Ali are looking
for a ________.
a) market
b) strategy
c) cost advantage
d) mission
Answer: a
Difficulty: Hard
Section Reference 1: What Is Business Strategy?
Learning Objective 1: Define business strategy, including the importance of competitive
advantage, the four choices that are critical to strategy formulation, and the strategic
management process.
Bloomcode: Application
Standard 1:1: AACSB || Analytic
5) ________ can be best defined as the reason a firm wins with customers or the value
proposition it offers to customers, such as a low cost advantage or differentiation advantage.
a) Switching costs
b) Unique value
c) Complementary products
d) SWOT analysis
Answer: b
Difficulty: Easy
, Section Reference 1: What Is Business Strategy?
Learning Objective 1: Define business strategy, including the importance of competitive
advantage, the four choices that are critical to strategy formulation, and the strategic
management process.
Bloomcode: Knowledge
Standard 1: AACSB || Analytic
6) The employees of Flamingo Inc., a greeting card company, focus on providing unmatched
customer satisfaction. Unlike its competitors, the employees of Flamingo take the time to
listen to the needs of individual customers and design custom-made cards upon request. The
customers of Flamingo state that the company provides a large variety of affordable products
to choose from. The company has won many awards for providing complete customer
satisfaction. In this scenario, which of the following does Flamingo Inc. provide to its
customers?
a) Backward integration
b) Switching costs
c) Complementary products
d) Unique value
Answer: d
Difficulty: Hard
Section Reference 1: What Is Business Strategy?
Learning Objective 1: Define business strategy, including the importance of competitive
advantage, the four choices that are critical to strategy formulation, and the strategic
management process.
Bloomcode: Application
Standard 1:1: AACSB || Analytic
7) Returns in excess of what an investor expects from other investments with a similar
amount of risk are referred to as ________.
a) unique value
b) complimentary value
c) above-average profits
d) above-average losses
Answer: c
Difficulty: Easy
Section Reference 1: What Is Business Strategy?
Learning Objective 1: Define business strategy, including the importance of competitive
advantage, the four choices that are critical to strategy formulation, and the strategic
management process.
Bloomcode: Knowledge
Standard 1: AACSB || Analytic
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