Strategic Management Exam 1 (Chapters 1-
3) Exam Questions With Verified Answers.
42) A sequential set of analyses and choices that can increase the likelihood that a firm will
choose a strategy that generates competitive advantages is the
A) organizational change process.
B) strategic managem...
42) A sequential set of analyses and choices that can increase the likelihood that a firm will
choose a strategy that generates competitive advantages is the
A) organizational change process.
B) strategic management process.
C) mission statement process.
D) goal setting process. - answer✔✔Answer: B
43) A firm's ________ is its long-term purpose that defines both what it aspires to be in the long
run and what it wants to avoid in the meantime.
A) mission
B) strategy
C) objective
D) goal - answer✔✔Answer: A
44) The strategic management process begins when a firm
A) determines its objectives.
B) defines its mission.
C) makes a strategic choice.
D) implements its strategy. - answer✔✔Answer: B
45) Firms whose mission is central to all they do are known as ________ firms.
A) missionary
B) emergent
C) parity
D) equivalent - answer✔✔Answer: B
47) The mission statements of visionary firms
A) suggest that profit maximizing, while an important corporate objective, is not their primary
reason for existence.
B) suggest that profit maximizing is neither an important corporate objective nor their primary
reason for existence.
C) suggest that profit maximizing is their primary reason for existence.
D) suggest that value maximizing is their primary reason of existence. - answer✔✔Answer: A
48) Which of the following statements regarding firm mission is accurate?
A) While some firms have used their missions to develop strategies that create significant
competitive advantages, firm missions can hurt a firm's performance as well.
B) Virtually all firms have used missions to develop strategies that create significant competitive
advantages, while very few firms have used missions that can hurt their performance.
C) It is very rare for firms to be able to use their missions to develop strategies that create
significant competitive advantages, and most firm missions actually hurt their performance.
D) Missions tend to have very little impact on a firm's ability to create significant competitive
advantages. - answer✔✔Answer: A
49) ________ are specific measurable targets a firm can use to evaluate the extent to which it is
realizing its mission.
A) Strategies
B) Missions
C) Competitive advantages
D) Objectives - answer✔✔Answer: D
50) High quality objectives are those that are
D) not quantitative. - answer✔✔Answer: A
51) By conducting a(n) ________, a firm identifies the critical threats and opportunities in its
competitive environment.
A) internal analysis
B) competitive analysis
C) external analysis
D) strategic choice - answer✔✔Answer: C
52) ________ helps a firm understand which of its resources and capabilities are likely to be
sources of competitive advantage.
A) Competitive analysis
B) Internal analysis
C) Strategic choice
D) External analysis - answer✔✔Answer: B
53) Actions firms take to gain competitive advantages in a single market or industry are known
as
A) business level strategies.
B) corporate level strategies.
C) diversification strategies.
D) strategy implementation. - answer✔✔Answer: A
54) Actions firms take to gain competitive advantages by operating in multiple markets or
industries simultaneously are known as
A) corporate level strategies.
B) diversification strategies.
C) business level strategies.
D) strategic alliance strategies. - answer✔✔Answer: A
D) Strategic control - answer✔✔Answer: C
56) When a firm is able to create more economic value than rival firms it is said to have a(n)
A) comparative advantage.
B) competitive advantage.
C) residual advantage.
D) economic advantage. - answer✔✔Answer: B
57) The difference between the perceived benefits gained by a customer who purchases a firm's
products or services and the full economic cost of these products or services is the (Note: Porter
was deleted from this edition)
A) value proposition.
B) cost advantage.
C) economic value.
D) competitive advantage. - answer✔✔Answer: C
58) If TechnoGeek and VarsityBlue compete in the same market for the same customer and
TechnoGeek generates $900 of economic value each time it sells a product or service while
VarsityBlue generates $400 of economic value each time it sells a product or service,
TechnoGeek has a(n) ________ of $500.
A) perceived benefit
B) economic value
C) cost advantage
D) competitive advantage - answer✔✔Answer: D
59) A competitive advantage that lasts a very short period of time is known as a ________
competitive advantage.
A) temporary
B) sustained
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