Deck 4: Evaluating a Companys Resources, Capabilities, and Competitiveness

Question 1

Which two tests of a resource's competitive power determine whether a company's competitive advantage can be sustained in the face of active competition?

A) Whether the resource or capability is competitively valuable and/or is something that rivals lack.
B) Whether the resource or capability is rare and/or is hard to copy.
C) Whether the resource or capability is easy to copy.
D) Whether the resource or capability is competitively valuable and/or are there good substitutes available for the resource.
E) Whether the resource or capability is hard to copy and/or can be trumped by different types of resources and capabilities.

Answer 1

E

Question 2

Which of the following does not represents a company resource?

A) a company's brand.
B) a productive input that is owned by the firm.
C) marketing and brand management.
D) R&D teams.
E) a productive input that is controlled by the firm.

Answer 2

C

Question 3

Whether a resource or capability can support a competitive advantage is determined by which two tests?

A) Whether the resource or capability is competitively valuable and/or is something that rivals lack.
B) Whether the resource or capability is rare and/or is hard to copy.
C) Whether the resource or capability can be trumped and/or is hard to copy.
D) Whether the resource or capability is competitively valuable and/or are there good substitutes available for the resource.
E) Whether the resource or capability is hard to copy and/or can be trumped by different types of resources and capabilities.

Answer 3

A

Question 4

One important indicator of how well a company's present strategy is working is whether

A) it has more core competencies than close rivals.
B) its strategy is built around at least two of the industry's key success factors.
C) the company is achieving its financial and strategic objectives and whether it is an above-average industry performer.
D) it is customarily a first-mover in introducing new or improved products (a good sign) or a late-mover (a bad sign).
E) it is subject to weaker competitive forces and pressures than close rivals (a good sign) or stronger competitive forces and pressures (a bad sign).

Question 5

Which one of the following is not a reliable measure of how well a company's current strategy is working?

A) Whether the company's sales are growing faster, slower, or about the same pace as the industry as a whole, thus resulting in a rising, falling, or stable market share
B) Whether it has a larger number of competitive assets than competitive liabilities and whether it has a superior quality product
C) The firm's image and reputation with its customers
D) Whether its profit margins are rising or falling and how large its margins are relative to those of its rivals
E) How well the firm stacks up against rivals on technology, product innovation, customer service, product quality, price, speed in getting newly developed products to market, and other relevant factors on which buyers base their choice of which brand to purchase

Question 6

Resource and capability analysis is achieved by

A) probing the caliber of a firm's competitive assets relative to those of rival firms.
B) achieving price stability.
C) analyzing only internal strengths and weaknesses through a matrix comparison model.
D) cost-benefit analysis of the company's core product sales.
E) Performing resource specific activities within the organization to allocate available capital.

Question 7

Which of the following is not a good example of a company's strength?

A) More intellectual capital and better e-commerce capabilities than rivals
B) Fruitful partnerships or alliances with suppliers that reduce costs and/or enhance product quality and performance
C) Having higher earnings per share and a higher stock price than key rivals
D) A well-known brand name and enjoying the confidence of customers
E) A lower-cost value chain than rivals

Question 8

If a company doesn't possess stand alone resource strengths capable of contributing to competitive advantage,

A) all potential for competitive advantage is lost.
B) it is unlikely to survive in the marketplace and should exit the industry.
C) it may have a bundle of resources that can be leveraged to develop a distinctive competence.
D) it is virtually blocked from using offensive strategies and must rely on defensive strategies.
E) its best strategic option is to revamp its value chain in hopes of creating stronger competitive capabilities.

Question 9

Which of the following is not pertinent in identifying a company's present strategy?

A) The key functional strategies (R&D, supply chain management, production, sales and marketing, HR, and finance) a company is employing
B) Management's planned, proactive moves to outcompete rivals (via better product design, improved quality or service, wider product lines, and so on)
C) The company's mission, strategic objectives, and financial objectives
D) Moves to respond and react to changing conditions in the macro-environment and in industry and competitive conditions
E) The strategic role of its collaborative partnerships and strategic alliances with others

Question 10

Which of the following is not a component of evaluating a company's resources and competitive position?

A) Evaluating how well the present strategy is working
B) Scanning the environment to determine a company's best and most profitable customers
C) Assessing whether the company's costs and prices are competitive
D) Evaluating whether the company is competitively stronger or weaker than key rivals
E) Pinpointing what strategic issues and problems merit front-burner managerial attention

Question 11

A company's resource and capability analysis

A) represent its core competencies.
B) are the most important parts of the company's value chain.
C) signal whether it has the wherewithal to be a strong competitor in the marketplace.
D) give it excellent ability to insulate itself against the impact of the industry's driving forces.
E) combine to give it a distinctive competence.

Question 12

Which of the following is a clear representation of a company's capability?

A) a company's brand.
B) a productive input that is owned or controlled by the firm.
C) capacity of a firm to perform some activity.
D) an alliance or collaboration with another firm.
E) All of these.

Question 13

Resource and capability analysis is designed to

A) ascertain the internal market place of non-distinct divisions of the company.
B) ascertain which of a company's resources and capabilities are competitively valuable.
C) stimulate demand for a product.
D) ascertain to what extent a competitor can sustain a competitive advantage.
E) stimulate economic growth for companies within the industry.

Question 14

Which of the following most accurately reflect a company's resource strengths?

A) Its human, physical and/or organization assets; its skills and competitive capabilities; and achievements or attributes that enhance the company's ability to compete effectively
B) The sizes of its unit sales, revenues, and market share vis-à-vis those of key rivals
C) The sizes of its profit margins and return on investment vis-à-vis those of key rivals
D) Whether it has more primary activities in its value chain than close rivals and a better overall value chain than these rivals
E) Whether it has more core competencies than close rivals

Question 15

A company that has competitive assets which are central to company strategy and superior to rival firms creates a

A) long-term derivative strategy.
B) cash flow feasibility analysis.
C) competitive advantage over other companies.
D) resource deployment strategic plan.
E) cost underestimation and benefit overestimation.

Question 16

The spotlight in analyzing a company's resources,internal circumstances,and competitiveness includes such questions/concerns as

A) whether the company's present strategy is better than the strategies of its closest rivals based on such performance measures as earnings per share, ROE, dividend payout ratio, and average annual increase in the common stock price.
B) whether the company's key success factors are more dominant than the key success factors of close rivals.
C) whether the company has the industry's most efficient and effective value chain.
D) what are the company's resource strengths and weaknesses and its external opportunities and threats.
E) what new acquisitions the company would be well advised to make in order to strengthen its financial performance and overall balance sheet position.

Question 17

The best example of a company resource is

A) having higher earnings per share and a higher return on shareholders' equity investment than key rivals.
B) being totally self-sufficient such that the company does not have to rely in any way on key suppliers, partnerships with outsiders, or strategic alliances.
C) having proven technological expertise and ability to churn out new and improved products on a regular basis.
D) having a larger number of competitive assets than competitive liabilities.
E) having more built-in key success factors than rivals.

Question 18

Which of the following is not one of the six questions that comprise the task of evaluating a company's resources and competitive position?

A) What are the company's most profitable geographic market segments?
B) How well is the company's present strategy working?
C) Are the company's prices and costs competitive?
D) Is the company competitively stronger or weaker than key rivals?
E) What strategic issues and problems merit front-burner managerial attention?

Question 19

The best quantitative evidence of whether a company's present strategy is working well is

A) whether the company has more competitive assets than it does competitive liabilities.
B) whether the company is in the industry's best strategic group.
C) the caliber of results the strategy is producing, specifically whether the company is achieving its financial and strategic objectives and whether it is an above-average industry performer.
D) whether the company has a shorter value chain than close rivals.
E) whether the company is in the Fortune 500.

Question 20

A company's strength can concern

A) a skill, specialized expertise, or competitively important capability.
B) valuable human assets and intellectual capital.
C) an achievement or attribute that puts the company in a position of market advantage.
D) competitively valuable alliances or cooperative ventures.
E) All of these.

Question 21

When a company is good at performing a particular internal activity,it is said to have

A) a competitive advantage over rivals.
B) a competitive capability.
C) a distinctive competence.
D) a core competence.
E) a company competence.

Question 22

SWOT analysis is a powerful tool for

A) gauging whether a company has a cost competitive value chain.
B) sizing up a company's resource capabilities and deficiencies, its market opportunities, and the external threats to its future well-being.
C) evaluating whether a company is in the most appropriate strategic group.
D) determining a company's competitive strength vis-à-vis close rivals.
E) identifying the market segments in which a company is strongly positioned and weakly positioned.

Question 23

Which of the following does not represent a potential core competence?

A) Skills in manufacturing a high-quality product at a low cost
B) Know-how in creating and operating systems for cost-efficient supply chain management
C) The capability to fill customer orders accurately and swiftly
D) Having a wider product line than rivals
E) The capability to speed new or next-generation products to the marketplace

Question 24

Identifying and assessing a company's resource strengths and weaknesses and its external opportunities and threats is called

A) SWOT analysis.
B) competitive asset/liability analysis.
C) competitive positioning analysis.
D) strategic resource assessment.
E) company resource mapping.

Question 25

A core competence

A) gives a company competitive capability and is a genuine company strength and resource.
B) typically has competitive value, the amount of which is reflected in the physical and tangible assets on a company's balance sheet.
C) usually is grounded in the technological expertise of a particular department or work group.
D) is more difficult for rivals to copy than a distinctive competence.
E) refers to a company's lowest-cost and most efficiently executed value-chain activity.

Question 26

The competitive power of a company resource strength or competitive capability hinges on

A) how hard it is for competitors to copy.
B) whether it is rare and something rivals lack.
C) whether it is really competitively valuable and having the potential to contribute to a competitive advantage.
D) how easily it can be trumped by the substitute resources/capabilities of rivals.
E) All of these.

Question 27

A core competence

A) retracts from a company's arsenal of competitive capabilities and competitive assets and is not a genuine resource strength.
B) is typically results-based, residing in a company's tangible physical assets on the balance sheet.
C) is often grounded in a single departments set of knowledge and expertise.
D) is a competitively relevant activity which a firm performs especially well in comparison to the other activities it performs.
E) All of these.

Question 28

A competitively superior resource or capability is a company's

A) True strategic asset providing a competitive advantage.
B) Equally valuable substitute resource providing a competitive advantage.
C) Assessment of the availability of superior substitutes.
D) Unsurpassed worker productivity and product quality.
E) Unique piecework incentive system providing a competitive advantage.

Question 29

Which of the following is not an example of a company's dynamic capability?

A) capacity to improve existing resources and capabilities.
B) upgrades to R&D resources to drive product innovation.
C) capacity to add new resources and capabilities to the competitive asset portfolio.
D) ability to replace degraded resources with acquired capabilities.
E) All of these.

Question 30

When a company has real proficiency in performing a competitively important value chain activity,it is said to have

A) a distinctive competence.
B) a core competence.
C) a key value chain proficiency.
D) a competitive advantage over rivals.
E) a company competence.

Question 31

The difference between a company competence and a core competence is that

A) a company competence refers to a company's best-executed functional strategy and a core competence refers to a company's best-executed business strategy.
B) a company competence refers to a company's strongest resource whereas a core competence refers to a company's lowest-cost and most efficiently performed value chain activity.
C) a company competence is a competitively relevant activity which a firm performs especially well relative to other internal activities, whereas a core competence is an activity that a company has learned to perform proficiently.
D) a company competence represents real proficiency in performing an internal activity whereas a core competence is a competitively relevant activity which a firm performs better than other internal activities.
E) a core competence usually resides in a company's technology and physical assets whereas a company competence usually resides in a company's human assets and intellectual capital.

Question 32

A distinctive competence

A) is a competitively important activity that a company performs better than its competitors.
B) gives a company competitively valuable capability that is unmatched by rivals.
C) is a basis for sustainable competitive advantage.
D) can underpin and add real punch to a company's strategy.
E) All of these.

Question 33

A company's resource strengths are important because

A) they pave the way for establishing a low-cost advantage over rivals.
B) they represent its competitive assets and are big determinants of its competitiveness and ability to succeed in the marketplace.
C) they provide extra muscle in helping lengthen the company's value chain.
D) they give it competitive protection against the industry's driving forces.
E) they provide extra organizational muscle in turning a core competence into a key success factor.

Question 34

What two factors inhibit the ability of rivals to imitate a firm's most valuable resources and capabilities?

A) Social ambiguity and causal uncertainty.
B) Social simplicity and causal complexity.
C) Collective complexity and causal ambiguity.
D) Social complexity and causal ambiguity.
E) Social simplicity and causal uncertainty.

Question 35

The difference between a core competence and a distinctive competence is that

A) a distinctive competence refers to a company's strongest resource or competitive capability and a core competence refers to a company's lowest-cost and most efficiently executed value-chain activity.
B) a core competence usually resides in a company's base of intellectual capital whereas a distinctive competence stems from the superiority of a company's physical and tangible assets.
C) a core competence is a competitively relevant activity which a firm performs especially well in comparison to the other activities it performs, whereas a distinctive competence is a competitively relevant activity which a firm performs especially well in comparison to other firms with which it competes.
D) a core competence represents a resource strength whereas a distinctive competence is achieved by having more resource strengths than rival companies.
E) a core competence usually resides in a company's technology and physical assets whereas a distinctive competence usually resides in a company's know-how, expertise, and intellectual capital.

Question 36

The competitive power of a company resource strength is not measured by which one of the following tests?

A) Is the resource rare and something rivals lack?
B) Is the resource strength something that a company does internally rather than in collaborative arrangements with outsiders?
C) Is the resource strength easily trumped by the substitute resources/capabilities of rivals?
D) Is the resource strength hard to copy?
E) Is the resource strength competitively valuable, having the potential to contribute to a competitive advantage?

Question 37

For a particular company resource/capability to have real competitive power and perhaps qualify as a basis for competitive advantage,it should

A) be hard for competitors to copy, be rare and something rivals lack, be competitively valuable, and not be easily trumped by substitute resource strengths possessed by rivals.
B) be something that a company does internally rather than in collaborative arrangements with outsiders.
C) be patentable.
D) be an industry key success factor and occupy a prime position in the company's value chain.
E) have the potential for lowering the firm's unit costs.

Question 38

When a company performs a particular competitively important activity truly well in comparison to its competitors,it is said to have

A) a company competence.
B) a strategic resource.
C) a distinctive competence.
D) a core competence.
E) a key success factor.

Question 39

For a company to have competitively potent resources and capabilities,they must

A) be in sync with changes in the company's own strategy.
B) be in sync with its efforts to achieve a resource-based competitive advantage.
C) fully support company efforts to attract customers.
D) combat competitors' newly launched offensives to win bigger sales and market shares.
E) All of these.

Question 40

A company requires a dynamically evolving portfolio of resources and capabilities to

A) assist the strategic planning team in overall direction.
B) sustain complex manufacturing systems as a strategic recoil.
C) sustain its competitiveness and help drive improvements in its performance.
D) sustain benefits of high market share as an interest in growth strategies.
E) transform knowledge into a management style supporting competition in a globally diverse world.

Question 41

Which of the following is not an example of an external threat to a company's future profitability?

A) The lack of a distinctive competence
B) New legislation that entails burdensome and costly government regulations
C) Slowdowns in market growth
D) More intense competitive pressures
E) The introduction of restrictive trade policies in countries where the company does business

Question 42

SWOT analysis

A) is a way to measure whether a company's value chain is longer or shorter than the chains of key rivals.
B) is a tool for benchmarking whether a firm's strategy is closely matched to industry key success factors.
C) reveals whether a company is competitively stronger than its closest rivals.
D) provides a good overview of whether a company's situation is fundamentally healthy or unhealthy.
E) identifies the reasons why a company's strategy is or is not working very well.

Question 43

The competitive power of a company's core competence or distinctive competence depends on

A) whether it helps differentiate a company's product offering from the product offerings of rival firms.
B) how hard it is to copy and how easily it can be trumped by substitute resource strengths and competitive capabilities of rivals.
C) whether customers are aware of the competence and view the competence positively enough to boost the company's brand name reputation.
D) whether the competence is one of the industry's key success factors.
E) whether the competence is technology-based or based on superior marketing know-how.

Question 44

One of the lessons of SWOT analysis is that a company's strategy should

A) be grounded in its resource strengths and capabilities.
B) be aimed at those market opportunities that offer the best potential for both profitable growth and competitive advantage.
C) seek to defend against threats to the company's future profitability.
D) generally not place heavy demands on areas where company resources are weak or unproven.
E) All of these.

Question 45

Sizing up a company's overall resource strengths and weaknesses

A) essentially involves constructing a "strategic balance sheet" where the company's resource strengths represent competitive assets and its resource weaknesses represent competitive liabilities.
B) is called benchmarking.
C) is called competitive strength assessment.
D) is focused squarely on ascertaining whether the company has more/less resource strengths than weaknesses.
E) is called company resource mapping.

Question 46

A company's resource weaknesses can relate to

A) inferior or unproven skills, expertise, or intellectual capital in competitively important parts of the business.
B) something that it lacks or does poorly (in comparison to rivals).
C) deficiencies in competitively important physical, organizational, or intangible assets.
D) missing or competitively inferior capabilities in key areas.
E) All of these.

Question 47

Which one of the following is not part of conducting a SWOT analysis?

A) Identifying a company's resource strengths and competitive capabilities
B) Benchmarking the company's resource strengths and competitive capabilities against industry key success factors
C) Identifying a company's market opportunities
D) Drawing conclusions about the company's overall business situation-what is attractive and what is unattractive about the company's circumstances?
E) Translating the results of the analysis into actions for improving the company's strategy and market position

Question 48

Which of the following best describes the market opportunities that tend to be most relevant to a particular company?

A) Those market opportunities that provide avenues for taking market share away from close rivals and enhance a company's image as a leader in product innovation and product quality.
B) Those market opportunities that offer the company a chance to raise entry barriers.
C) Those market opportunities that help promote greater diversification of revenues and profits.
D) Those market opportunities that match up well with the firm's financial resources and competitive capabilities, offer the best growth and profitability, and present the most potential for competitive advantage.
E) Those market opportunities that help correct a company's biggest weaknesses and competitive deficiencies.

Question 49

The payoff of doing a thorough SWOT analysis is

A) identifying whether the company's value chain is cost effective vis-à-vis the value chains of rivals.
B) helping strategy-makers benchmark the company's resource strengths against industry key success factors.
C) enabling a company to assess its overall competitive position relative to its key rivals.
D) revealing whether a company's market share, measures of profitability, and sales compare favorably or unfavorably vis-à-vis key competitors.
E) assisting strategy-makers in crafting a strategy that is well-matched to the company's resources and capabilities, its market opportunities, and the external threats to its future well-being.

Question 50

The two most important parts of SWOT analysis are

A) pinpointing the company's competitive assets and pinpointing its competitive liabilities.
B) identifying the company's resource strengths and identifying the company's best market opportunities.
C) identifying the external threats to a company's future profitability and pinpointing how many market opportunities it has.
D) drawing conclusions from the SWOT listings about the company's overall situation and translating these into strategic actions to better match the company's strategy to its resource strengths and market opportunities, to correct the important weaknesses, and to defend against external threats.
E) making accurate lists of the company's strengths, weaknesses, opportunities, and threats and then using these lists as a basis for ascertaining how well the company's strategy is working.

Question 51

The three steps of SWOT analysis are

A) identifying the company's resource strengths and weaknesses and its opportunities and threats, drawing conclusions about the company's overall situation, and translating the conclusions into strategic actions to improve the company's strategy.
B) pinpointing the company's competitive assets, pinpointing its competitive deficiencies, and determining whether it enjoys a competitive advantage.
C) determining whether the company has more competitive assets than competitive liabilities, determining whether the company has good market opportunities, and evaluating the seriousness of the threats to the company's future profitability.
D) matching the company's strategy to its resource strengths, correcting the company's important resource weaknesses, and identifying the company's best market opportunities.
E) benchmarking the company's strengths and weaknesses against those of key rivals, identifying its market opportunities and the external threats it faces, and determining the company's potential for establishing a competitive advantage over rivals.

Question 52

Which of the following is not an example of a threat to a company's future profitability?

A) Likely entry of potent new competitors
B) The lack of a well-known brand name with which to attract new customers and help retain existing customers
C) Shifts in buyer needs and tastes away from the industry's product
D) Costly new regulatory requirements
E) Growing bargaining power on the part of the company's major customers and major suppliers

Question 53

The external market opportunities which are most relevant to a company are the ones that

A) increase market share.
B) reinforce its overall business strategy.
C) match up well with the firm's financial resources and competitive capabilities, offer the best growth and profitability, and present the most potential for competitive advantage.
D) correct its internal weaknesses and resource deficiencies.
E) help defend against the external threats to its well-being.

Question 54

Which one of the following is inaccurate as concerns a distinctive competence?

A) A distinctive competence is a competitively important activity that a company performs better than its competitors.
B) A distinctive competence is typically less difficult for rivals to copy than a core competence.
C) A distinctive competence can be a basis for sustainable competitive advantage.
D) A distinctive competence can underpin and add real punch to a company's strategy.
E) A distinctive competence gives a company competitively valuable capability that is unmatched by rivals.

Question 55

The market opportunities most relevant to a particular company are those that

A) offer the best growth and profitability.
B) provide a strong defense against threats to the company's profitability.
C) hold the most potential for product innovation.
D) provide avenues for taking market share away from close rivals.
E) hold the most potential to reduce costs.

Question 56

In doing SWOT analysis and trying to identify a company's market opportunities,which of the following is not an example of a potential market opportunity that a company may have?

A) Serving additional customer groups or market segments
B) Growing buyer preferences for substitutes for the industry's product
C) Acquiring rival firms or companies with attractive technological expertise or capabilities
D) Expanding into new geographic markets
E) Openings to win market share away from rivals

Question 57

Which one of the following is not something that can be gleaned from identifying a company's resource strengths,resource weaknesses,market opportunities,and external threats?

A) How to improve a company's strategy by using company strengths and capabilities as cornerstones for its strategy
B) Which market opportunities are best suited to a company's strengths and capabilities
C) Which resource weaknesses and deficiencies need to be corrected so as to better enable the pursuit of important market opportunities and to better defend against certain external threats
D) How to turn a core competence into a distinctive competence
E) Whether any of the company's resource strengths can be used to help lessen the impact of external threats

Question 58

A company resource weakness or competitive deficiency

A) represents a problem that needs to be turned into a strength because weaknesses prevent a firm from being a winner in the marketplace.
B) causes the company to fall into a lower strategic group than it otherwise could compete in.
C) prevents a company from having a distinctive competence.
D) usually stems from having a missing link or links in the industry value chain.
E) is something a company lacks or does poorly (in comparison to rivals) or a condition that puts it at a disadvantage in the marketplace.

Question 59

One of the most telling signs of whether a company's market position is strong or precarious is

A) whether its product is strongly or weakly differentiated from rivals.
B) whether its prices and costs are competitive with those of key rivals.
C) whether it has a lower stock price than key rivals.
D) the opinions of buyers regarding which seller has the best product quality and customer service.
E) whether it is in a bigger or smaller strategic group than its closest rivals.

Question 60

In doing SWOT analysis,which one of the following is not an example of a potential resource weakness or competitive deficiency that a company may have?

A) Less productive R & D efforts than rivals
B) Having a single, unified functional strategy instead of several distinct functional strategies
C) Lack of a strong brand image and reputation (as compared to rivals)
D) Higher overall unit costs relative to rivals
E) Too narrow a product line relative to rivals

Question 61

Benchmarking involves

A) comparing how different companies perform various value chain activities and then making cross-company comparisons of the costs of these activities.
B) checking whether a company has achieved more of its financial and strategic objectives over the past five years relative to the other firms it is in direct competition with.
C) studying whether a company's resource strengths are more/less powerful than the resource strengths of rival companies.
D) studying how a company's competitive capabilities stack up against the competitive capabilities of selected companies known to have world class competitive capabilities.
E) comparing the best practices in one industry against the best practices in another industry.

Question 62

A company's value chain identifies

A) the steps it goes through to convert its net income into value for shareholders.
B) the primary activities it performs in creating value for its customers and the related support activities.
C) the series of steps it takes to get a product from the raw materials stage into the hands of end-users.
D) the activities it performs in transforming its competencies into distinctive competencies.
E) the competencies and competitive capabilities that underpin its efforts to create value for customers and shareholders.

Question 63

A much-used and potent managerial tool for determining whether a company performs particular functions or activities in a manner that represents "the best practice" when both cost and effectiveness are taken into account is

A) competitive strength analysis.
B) activity-based costing.
C) resource cost mapping.
D) SWOT analysis.
E) benchmarking.

Question 64

The options for remedying an internal cost disadvantage include

A) investing in productivity-enhancing, cost-saving technological improvements.
B) redesigning the product or some of its components to facilitate speedier and more economical manufacture or assembly.
C) implementing the use of best practices, particularly for high-cost activities.
D) eliminating some cost-producing activities from the value chain, especially low value-added activities.
E) All of these.

Question 65

Identifying the primary and secondary activities that comprise a company's value chain

A) indicates whether a company's resource strengths will ultimately translate into greater value for shareholders.
B) reveals whether a company's resource strengths are well-matched to the industry's key success factors.
C) is the first step in understanding a company's cost structure (since each activity in the value chain gives rise to costs).
D) is called benchmarking.
E) is called resource value analysis.

Question 66

Which one of the following provides the most accurate picture of whether a company is cost competitive with its rivals?

A) How the costs of the company's internally performed activities (its own value chain) compare against the costs of the internally-performed activities of rival companies
B) Costs in the value chains of the company's suppliers
C) Costs in the value chains of a company's distributors and retail dealers and forward channel allies
D) The costs of a company's internally performed activities, costs in the value chains of both the company's suppliers and forward channel allies, and how all these costs compare against the costs that make up the value chain systems employed by rival firms
E) Whether the company has a longer or shorter value chain than its close rivals

Question 67

Two analytical tools useful in determining whether a company's prices and costs are competitive are

A) SWOT analysis and key success factor analysis.
B) SWOT analysis and benchmarking.
C) value chain analysis and benchmarking.
D) competitive position assessment and competitive strength assessment.
E) driving forces analysis and SWOT analysis.

Question 68

Activity-based cost accounting aims at

A) making cross-company comparisons of the costs of each value chain activity.
B) dividing all company expenses into two categories: activities whose costs are variable and activities whose costs are fixed.
C) determining the costs of each activity comprising a company's value chain by establishing expense categories for specific value chain activities and assigning costs to the activity responsible for creating the cost.
D) determining the costs of each strategic action a company initiates.
E) None of these accurately describes what activity-based costing is about.

Question 69

A company's strategic options for remedying cost disadvantages in internally performed value chain activities do not include

A) revamping its value chain to eliminate or bypass some cost-producing activities (particularly low value-added activities).
B) implementing the use of best practices, particularly for high-cost activities.
C) investing in productivity-enhancing, cost-saving technological improvements.
D) switching to activity-based costing.
E) outsourcing the performance of high-cost activities to vendors that can perform them more cheaply.

Question 70

Activity-based costing is used to

A) determine whether the value chains of rival companies are similar or different.
B) benchmark the costs of primary value chain activities against the costs of the support value chain activities.
C) determine the costs of each primary and support activity comprising a company's value chain and thereby reveal the nature and make-up of a company's internal cost structure.
D) determine the costs of each strategic action a company initiates.
E) None of these accurately describes what activity-based costing is about.

Question 71

The value chains of rival companies

A) tend to be essentially the same-any differences are typically minor.
B) can differ substantially, reflecting differences in the evolution of each company's own particular business, differences in strategy, and differences in the approaches being used to execute strategy.
C) are fairly similar or fairly different, depending on how many activities are performed internally and how many are outsourced.
D) can be either fairly similar or fairly different, depending on the extent to which each company's primary and support activities are comprised of fixed cost activities and variable cost activities.
E) are fairly similar except when rival companies have quite different product designs.

Question 72

Benchmarking provides a company with which of the following?

A) Hard evidence of cost competitiveness.
B) Proof of resource availability.
C) A company strategy.
D) Verification of total cost ownership.
E) Improvements to internal processes.

Question 73

Which of the following areas within a company's total value chain system,can managers improve efficiency and effectiveness?

A) A company's own activity segments.
B) Suppliers' part of the overall value chain.
C) The distribution channel portion of the value chain.
D) None of these.
E) All of these.

Question 74

Which of the following is not one of the objectives of benchmarking?

A) To identify the best practices in performing various value chain activities
B) To learn how best practice companies achieve lower costs or better results in performing benchmarked activities
C) To help construct a company value chain and identify which activities are primary and which are support activities
D) To develop cross-company comparisons of the costs of performing specific value chain activities
E) To take actions to improve a company's cost competitiveness when benchmarking reveals that its costs and results of performing an activity are not as good as what other companies have achieved

Question 75

The three main areas in the value chain where significant differences in the costs of competing firms can occur include

A) age of plants and equipment, number of employees, and advertising costs.
B) operating-level activities, functional area activities, and line of business activities.
C) the nature and make-up of their own internal operations, the activities performed by suppliers, and the activities performed by wholesale distribution and retailing allies.
D) human resource activities (particularly labor costs), vertical integration activities, and strategic partnership activities.
E) variable cost activities, fixed cost activities, and administrative activities.

Question 76

The most difficult part of benchmarking is

A) the decision of whether to do it at all.
B) how to gain access to information regarding rivals practices and costs.
C) when to initiate the process.
D) what information to utilize in the analysis process.
E) when to stop the process and move forward with strategy.

Question 77

Activity-based costing

A) is an accounting system that assigns a company's expenses to whichever activity in a company's value chain is responsible for creating the cost.
B) involves using benchmarking techniques to develop cost estimates for the value chain activities of each major rival.
C) is a powerful tool for identifying the different pieces of a company's value chain and classifying them as primary activities and support activities.
D) involves determining which value chain activities represent variable costs and which represent fixed costs.
E) is a tool for identifying the activities that cause a company's product to be strongly differentiated from the products of rivals.

Question 78

A company's value chain

A) consists of the primary activities that it performs in seeking to deliver value to shareholders in the form of higher dividends and a higher stock price.
B) depicts the internally performed activities associated with creating and enhancing the company's competitive assets.
C) consists of two broad categories of activities: the primary activities that create customer value and the requisite support activities that facilitate and enhance the performance of the primary activities.
D) concerns the basic process the company goes through in performing R&D and developing new products.
E) consists of the series of steps a company goes through to develop a new product, get it produced and distributed into the marketplace, and then start collecting revenues and earning a profit.

Question 79

Which of the following is not a good option for trying to remedy high internal costs vis-à-vis rivals firms?

A) Investing in productivity-enhancing, cost-saving technological improvements
B) Redesigning the product or some of its components to permit more economical manufacture or assembly
C) Implementing aggressive strategic resource mapping to permit across-the-board cost reduction
D) Outsourcing high-cost activities to vendors or contractors who can perform them more economically
E) Relocating high-cost activities (like manufacturing) to geographic areas (like China or Latin America or Eastern Europe) where they can be performed more cheaply

Question 80

Determining whether a company's prices and costs are competitive

A) requires looking at the costs of a company's competitively relevant suppliers and forward channel allies (distributors/dealers).
B) requires considering the costs of a company's internally performed activities.
C) involves the use of benchmarking the costs in a company's value chain system (the costs of its suppliers, its internally performed activities, the costs of its distributors/dealers) against the costs of the value chain systems employed by rival firms.
D) typically involves the use of activity-based cost accounting.
E) All of these.