6. According to the Industrial Organization (I/O) model, when a firm lacks control over conditions in the
external environment, the company’s strategic options are limited.
10. According to the Industrial Organization (I/O) model, effective management of a company’s
operations results in the creation of unique resources and capabilities.
11. According to the Resource-Based View of the Firm (RBV) model, effective management of a
company’s operations results in the creation of unique resources and capabilities.
ANS: T PTS: 1 REF: Page 13 OBJ: Learning Objective 3
KEY: Comprehension
MSC: AACSB: Analytic | Management: Creation of Value | Dierdorff & Rubin: Managing Strategy &
Innovation
12. Managers can use the Industrial Organization (I/O) model to identify opportunities and threats in their
firm’s external environment.
18. In the fashion industry, Louis Vuitton’s competitive advantages in product design and manufacturing
are critical to the firm’s success.
ANS: T PTS: 1 REF: Page 14 OBJ: Learning Objective 2
KEY: Application
MSC: AACSB: Reflective Thinking | Management: Strategy | Dierdorff & Rubin: Knowledge of
Technology, Design, & Production
19. While inventory management and distribution are competitive advantages for Walmart’s discount
retailing business, they are of little value in their grocery business.
21. 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.
22. Firms need stakeholders but stakeholders do not need firms.
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