MGMT 490 CH 4 EXAM QUESTIONS AND
ACCURATE ANSWERS
Resource and capability analysis is a powerful tool for
1. insulating itself against the impact of the industry's driving forces.
2. assessing the main competitor's core competencies and R&D investments.
3. sizing up the company's competitive assets and determining whether they can
provide the foundation necessary for competitive success in the marketplace. - answer
3. sizing up the company's competitive assets and determining whether they can
provide the foundation necessary for competitive success in the marketplace.
Why is a weighted competitive strength analysis superior to an unweighted analysis?
1. The different measures of competitive strength are unlikely to be equally important.
2. The results are more accurate since they involve a greater amount of data.
3. It eliminates the bias introduced for those firms having large market shares. - answer
1. The different measures of competitive strength are unlikely to be equally important.
Which ratio is expressed by using the equation Operating Income/Interest Expense?
1. debt-to-equity ratio
2. debt-to-asset ratio
3. operating profit margin
4. net profit margin
5. times-interest-earned ratio - answer 5. times-interest-earned ratio
Which of the following statements accurately describes the SWOT analysis?
1. It is a simple tool for sizing up a company's resource capabilities and deficiencies, its
market opportunities, and the external threats to its future well-being.
2. It is a widely used tool for systematically diagnosing the principal competitive
pressures in the market.
3. It is an analytical tool to identify the market segments in which a company is strongly
and weakly positioned. - answer 1. It is a simple tool for sizing up a company's resource
capabilities and deficiencies, its market opportunities, and the external threats to its
future well-being.
, Which of the following is essential for a resource or capability to be competitively
superior?
1. The resource or capability can be something that rivals also have in plenty.
2. The resource or capability should have good substitutes available.
3. The resource or capability is competitively valuable. - answer 3. The resource or
capability is competitively valuable.
Which of the following is NOT part of the task of identifying the strategic issues and
problems that merit front-burner managerial attention?
1. assessing what challenges the company must overcome to be financially and
competitively successful in the years ahead
2. evaluating the company's own resources and competitive position
3. analyzing the company's external environment
4. surveying a company's board members, managers, select employees, and key
investors regarding what strategic issues they think the company faces - answer 4.
surveying a company's board members, managers, select employees, and key investors
regarding what strategic issues they think the company faces
Which of the following shows the cash available for a firm's day-to-day operations?
1. net profit margin
2. internal cash flow
3. free cash flow
4. operating profit
5. working capital - answer 5. working capital
Determining strategy-related issues and problems that company managers need to
address and resolve entails all of the following EXCEPT
1. drawing on what was learned from having analyzed the company's industry and
competitive environment.
2. drawing on evaluations of the company's own resources, internal circumstances, and
competitiveness.
3. assessing what challenges the company has to overcome in order to be financially
and competitively successful in the short-run.
4. assessing the diversification moves of corporations competing in similar industries. -
answer 4. assessing the diversification moves of corporations competing in similar
ACCURATE ANSWERS
Resource and capability analysis is a powerful tool for
1. insulating itself against the impact of the industry's driving forces.
2. assessing the main competitor's core competencies and R&D investments.
3. sizing up the company's competitive assets and determining whether they can
provide the foundation necessary for competitive success in the marketplace. - answer
3. sizing up the company's competitive assets and determining whether they can
provide the foundation necessary for competitive success in the marketplace.
Why is a weighted competitive strength analysis superior to an unweighted analysis?
1. The different measures of competitive strength are unlikely to be equally important.
2. The results are more accurate since they involve a greater amount of data.
3. It eliminates the bias introduced for those firms having large market shares. - answer
1. The different measures of competitive strength are unlikely to be equally important.
Which ratio is expressed by using the equation Operating Income/Interest Expense?
1. debt-to-equity ratio
2. debt-to-asset ratio
3. operating profit margin
4. net profit margin
5. times-interest-earned ratio - answer 5. times-interest-earned ratio
Which of the following statements accurately describes the SWOT analysis?
1. It is a simple tool for sizing up a company's resource capabilities and deficiencies, its
market opportunities, and the external threats to its future well-being.
2. It is a widely used tool for systematically diagnosing the principal competitive
pressures in the market.
3. It is an analytical tool to identify the market segments in which a company is strongly
and weakly positioned. - answer 1. It is a simple tool for sizing up a company's resource
capabilities and deficiencies, its market opportunities, and the external threats to its
future well-being.
, Which of the following is essential for a resource or capability to be competitively
superior?
1. The resource or capability can be something that rivals also have in plenty.
2. The resource or capability should have good substitutes available.
3. The resource or capability is competitively valuable. - answer 3. The resource or
capability is competitively valuable.
Which of the following is NOT part of the task of identifying the strategic issues and
problems that merit front-burner managerial attention?
1. assessing what challenges the company must overcome to be financially and
competitively successful in the years ahead
2. evaluating the company's own resources and competitive position
3. analyzing the company's external environment
4. surveying a company's board members, managers, select employees, and key
investors regarding what strategic issues they think the company faces - answer 4.
surveying a company's board members, managers, select employees, and key investors
regarding what strategic issues they think the company faces
Which of the following shows the cash available for a firm's day-to-day operations?
1. net profit margin
2. internal cash flow
3. free cash flow
4. operating profit
5. working capital - answer 5. working capital
Determining strategy-related issues and problems that company managers need to
address and resolve entails all of the following EXCEPT
1. drawing on what was learned from having analyzed the company's industry and
competitive environment.
2. drawing on evaluations of the company's own resources, internal circumstances, and
competitiveness.
3. assessing what challenges the company has to overcome in order to be financially
and competitively successful in the short-run.
4. assessing the diversification moves of corporations competing in similar industries. -
answer 4. assessing the diversification moves of corporations competing in similar
