MGT 490 EXAM #1 (SU UDAYTON) QUESTIONS AND
VERIFIED ANSWERS
A firm's ________ is defined as its theory about how to gain competitive advantages.
A) objective
B) mission
C) vision
D) strategy - Answers - D
Discuss a firm's competitive advantage. Identify when a firm has a competitive
advantage and distinguish between a temporary competitive advantage and a
sustainable competitive advantage. - Answers - In general, a firm has a competitive
advantage when it is able to generate more economic value than rival firms. A
temporary competitive advantage is a competitive advantage that lasts a very short
period of time while a sustained competitive advantage lasts much longer.
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 - Answers - D
The two types of measures of competitive advantage include
A) accounting measures and strategic measures.
B) strategic measures and economic measures.
C) accounting measures and economic measures.
D) qualitative measures and quantitative measures. - Answers - C
Ratios that focus on the level of a firm's financial flexibility, including its ability to obtain
more debt, are known as
A) leverage ratios.
B) liquidity ratios.
C) activity ratios.
D) profitability ratios. - Answers - A
Green Frog is an environmentally friendly firm in the cosmetics industry. If during the
strategic planning process Green Frog tried to determine the critical threats and
opportunities in its competitive environment, it would be performing a(n)
A) internal analysis.
B) external analysis.
, C) WACC analysis.
D) economic analysis. - Answers - B
Green Frog is an environmentally friendly firm in the cosmetics industry. If Green Frog
undertook an analysis to help it understand which of its resources and capabilities are
likely to be sources of competitive advantage and which are less likely to sources of
such advantages it would be performing a(n)
A) internal analysis.
B) external analysis.
C) WACC analysis.
D) economic analysis. - Answers - A
Green Frog is an environmentally friendly firm in the cosmetics industry. If Green Frog
were considering expanding beyond the cosmetics industry into pharmaceuticals in
order to gain competitive advantages by operating in multiple markets and industries,
this would be an example of which type of strategy?
A) business level strategy
B) cost leadership strategy
C) product differentiation strategy
D) corporate level strategy - Answers - D
Discuss two broad categories of differences that may lead to competitive advantage. -
Answers - · Preference for the firm's outputs
o People choose the firm's output over others'
o People are willing to pay a premium
· Cost advantage vis-à-vis competitor
o Lower costs of production and distribution
What is the definition of economic value - Answers - · Difference between consumer's
perceived benefit and the cost of production
Why is it important to understand a firm's strategy, even if you are not a senior manager
in a firm? - Answers - Answer: First, studying strategy and the strategic management
process can give individuals the tools they need to evaluate the strategies of the firms
that may hire them. Second, once an individual is working for a firm, understanding that
firm's strategy, and their place in it, can be very important to their personal success
since the expectations of how they perform their function will be impacted by the firm's
strategy. Finally, while strategic choices are generally limited to very experienced
managers in large organizations, in smaller and entrepreneurial firms, many employees
end up being involved in the strategic management process.
The ________ consists of broad trends in the context in which a firm operates that can
have an impact on a firm's strategic choices.
A) micro-environment
B) general environment
C) task environment
VERIFIED ANSWERS
A firm's ________ is defined as its theory about how to gain competitive advantages.
A) objective
B) mission
C) vision
D) strategy - Answers - D
Discuss a firm's competitive advantage. Identify when a firm has a competitive
advantage and distinguish between a temporary competitive advantage and a
sustainable competitive advantage. - Answers - In general, a firm has a competitive
advantage when it is able to generate more economic value than rival firms. A
temporary competitive advantage is a competitive advantage that lasts a very short
period of time while a sustained competitive advantage lasts much longer.
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 - Answers - D
The two types of measures of competitive advantage include
A) accounting measures and strategic measures.
B) strategic measures and economic measures.
C) accounting measures and economic measures.
D) qualitative measures and quantitative measures. - Answers - C
Ratios that focus on the level of a firm's financial flexibility, including its ability to obtain
more debt, are known as
A) leverage ratios.
B) liquidity ratios.
C) activity ratios.
D) profitability ratios. - Answers - A
Green Frog is an environmentally friendly firm in the cosmetics industry. If during the
strategic planning process Green Frog tried to determine the critical threats and
opportunities in its competitive environment, it would be performing a(n)
A) internal analysis.
B) external analysis.
, C) WACC analysis.
D) economic analysis. - Answers - B
Green Frog is an environmentally friendly firm in the cosmetics industry. If Green Frog
undertook an analysis to help it understand which of its resources and capabilities are
likely to be sources of competitive advantage and which are less likely to sources of
such advantages it would be performing a(n)
A) internal analysis.
B) external analysis.
C) WACC analysis.
D) economic analysis. - Answers - A
Green Frog is an environmentally friendly firm in the cosmetics industry. If Green Frog
were considering expanding beyond the cosmetics industry into pharmaceuticals in
order to gain competitive advantages by operating in multiple markets and industries,
this would be an example of which type of strategy?
A) business level strategy
B) cost leadership strategy
C) product differentiation strategy
D) corporate level strategy - Answers - D
Discuss two broad categories of differences that may lead to competitive advantage. -
Answers - · Preference for the firm's outputs
o People choose the firm's output over others'
o People are willing to pay a premium
· Cost advantage vis-à-vis competitor
o Lower costs of production and distribution
What is the definition of economic value - Answers - · Difference between consumer's
perceived benefit and the cost of production
Why is it important to understand a firm's strategy, even if you are not a senior manager
in a firm? - Answers - Answer: First, studying strategy and the strategic management
process can give individuals the tools they need to evaluate the strategies of the firms
that may hire them. Second, once an individual is working for a firm, understanding that
firm's strategy, and their place in it, can be very important to their personal success
since the expectations of how they perform their function will be impacted by the firm's
strategy. Finally, while strategic choices are generally limited to very experienced
managers in large organizations, in smaller and entrepreneurial firms, many employees
end up being involved in the strategic management process.
The ________ consists of broad trends in the context in which a firm operates that can
have an impact on a firm's strategic choices.
A) micro-environment
B) general environment
C) task environment
