Question 1

According to Porter, strategy is fundamentally about being _____.
A) different
B) efficient
C) superior
D) scalable
E) profitable

Accepted Answer

According to Porter, strategy is about creating a unique and different position in the market that allows a firm to create sustainable competitive advantage. Being different is a key aspect of successful strategy.

Question 2

Startup firms can struggle to gain lower prices from rivals, but FreshDirect seems to have found several ways to gain lower supplier prices. FreshDirect buys direct from suppliers, eliminating any markup from a middleman. In addition to this, the firm employs other methods to get lower prices from suppliers. Which of the following is not a way FreshDirect helps suppliers in exchange for supplier agreement to offer it better pricing terms?
A) FreshDirect carries a greater selection of supplier products
B) FreshDirect will cobrand products from suppliers
C) FreshDirect pays suppliers faster than rivals
D) FreshDirect shares warehouse space with farmers and livestock producers
E) FreshDirect shares data on customer insights with suppliers

Accepted Answer

The option "FreshDirect shares warehouse space with farmers and livestock producers" seems to be incorrect as it is not a way FreshDirect helps suppliers in exchange for supplier agreement to offer it better pricing terms. The other options listed - carrying a greater selection of supplier products, cobranding products from suppliers, paying suppliers faster than rivals, and sharing data on customer insights with suppliers - all represent ways FreshDirect helps suppliers and negotiates better pricing terms.

Question 3

When technology can be matched quickly, it is rarely a source of competitive advantage.

Accepted Answer

When technology can be matched quickly, it means that competitors can quickly catch up with and replicate the technology, thereby eliminating any competitive advantage it may have provided.

Question 4

_____ refers to performing different tasks than rivals or the same tasks in a different way.
A) Straddling
B) Operational effectiveness
C) Strategic positioning
D) Vertical integration
E) Scale advantage

Accepted Answer

Strategic positioning involves performing different tasks than rivals or performing similar tasks in a different way, which helps a company achieve a sustainable competitive advantage by creating a unique position in the market.

Question 5

Cisco's acquisition of Pur Digital, makers of the Flip video camera line, was largely considered a flop because comparable technology soon became a feature in other popular consumer electronics products.

Accepted Answer

Cisco's acquisition of Pur Digital and the Flip video camera line was seen as a flop as other consumer electronics products soon incorporated comparable technology.

Question 6

The resource-based view of competitive advantage states that for a firm to maintain sustainable competitive advantage it must control a set of exploitable resources that have four critical characteristics. What are these characteristics?
A) inventory turns, high margins, long account payable periods, brand building relationships
B) operational effectiveness, strategic positioning, scale, distribution channels
C) rareness, value, imperfect imitability, non substitutability
D) a web site, an app, cloud-based systems, a savvy technology staff

Accepted Answer

The four critical characteristics of resources that a firm must control to maintain sustainable competitive advantage are rareness, value, imperfect imitability, and non-substitutability. Option A includes inventory turns, high margins, long account payable periods, and brand building relationships, which are not the critical characteristics. Option B includes operational effectiveness, strategic positioning, scale, and distribution channels, which are important but not the critical characteristics. Option D includes technology-related resources that may be valuable but not the critical characteristics for maintaining sustainable competitive advantage.

Question 7

Many telecom firms began digging up the ground and laying webs of fiberglass to meet the growing demand for Internet connectivity. However, rivals and startups began to imitate these firms and soon these new assets were not so rare and each day they seemed to be less valuable. It can be inferred from this example that:
A) resource-based thinking can help avoid the trap of carelessly entering markets simply because growth is spotted.
B) the telecommunications market is only big enough to support one or two major players.
C) the immense scale advantages enjoyed by major firms can help them fight off competition from newer entrants.
D) technology assets that require high investment and maintenance are liable to becoming obsolete much quicker than others.
E) the scale of technology investment required to run a business is not a huge enough factor to act as a barrier to entry for new, smaller competitors.

Accepted Answer

The example highlights the importance of resource-based thinking and avoiding blindly entering markets without considering the uniqueness and sustainability of the resources being utilized. It does not suggest that the telecommunications market can only support limited players, or that scale advantages automatically ensure success over competitors. The example also does not necessarily suggest that technology assets become obsolete quickly, but rather that their value can decrease as they become more commonplace. Finally, the example does not support the idea that the scale of technology investment is not a barrier to entry for smaller competitors, as it only highlights one specific instance where new entrants were able to compete.

Question 8

Operational effectiveness refers to:
A) the implementation of technology in a business context.
B) performing the same tasks better than rivals perform them.
C) the number of times inventory is sold or used during the course of a year.
D) performing different tasks or the same tasks in different ways.
E) matching the benefits of a successful position while maintaining an existing position.

Accepted Answer

Operational effectiveness refers to performing the same tasks better than rivals perform them. It is a company's ability to excel in the efficiency and productivity of its operations compared to its competitors.

Question 9

A firm's financial performance that consistently outperforms its industry's peers is known as _____.
A) comparative advantage
B) absolute advantage
C) sustainable competitive advantage
D) first mover advantage
E) operational efficiency advantage

Accepted Answer

A sustainable competitive advantage is when a firm consistently outperforms its competitors in financial performance, which cannot be easily replicated or imitated by its competitors. This advantage can come from various factors such as superior technology, cost leadership, brand image, or unique resources and capabilities.

Question 10

Sometimes technology can sound geeky and so technical that executives might think that it doesn't require managerial or investor attention. However many investing in the telecom sector suffered from a lack of insight on how a key technology was impacting their industry. Telecom firms failed to anticipate the impact of a technology known as ____________, which enabled existing fiber to carry more transmissions than ever before.
A) radio frequency identification (RFID)
B) dense wave division multiplexing (DWDM)
C) cloud computing
D) open source software

Accepted Answer

The answer of Sometimes technology can sound geeky and so...

Question 11

Fast growing Groupon was able to dissuade rivals from entering its market because the firm's technology was so difficult to replicate.

Accepted Answer

This statement is not entirely accurate. While Groupon did have a strong technology platform, it was not the sole reason for dissuading rivals from entering the market. Groupon's dominance was also attributed to its first-mover advantage, strong brand recognition, and vast network of participating merchants. Additionally, many competitors did enter the market, but were not able to achieve the same level of success as Groupon.

Question 12

According to Michael Porter, the reason many firms suffer margin-eroding competition is because they have defined themselves according to strategic positioning rather than operational effectiveness.

Accepted Answer

Michael Porter argues that firms suffer margin-eroding competition because they focus too much on operational effectiveness rather than adopting a unique strategic position. Operational effectiveness means performing similar activities better than rivals, which can lead to competitive convergence, making it hard for firms to maintain long-term advantages. Strategic positioning involves choosing activities that are different from rivals’ or performing similar activities in different ways, which can help firms achieve sustainable competitive advantages.

Question 13

A firm's financial performance that consistently outperforms its industry's peers is known as operational effectiveness.

Accepted Answer

A firm's financial performance that consistently outperforms its industry's peers is known as competitive advantage. Operational effectiveness refers to performing the same tasks better than competitors.

Question 14

In _____, the light inside fiber is split into different signal-carrying wavelengths in a way similar to how a prism splits light into different colors.
A) polarization
B) time-division multiplexing
C) space-division multiplexing
D) frequency hopping spread spectrum
E) dense wave division multiplexing

Accepted Answer

The description matches the technology of dense wave division multiplexing (DWDM), where multiple signals with different wavelengths are combined and transmitted over a single fiber optic cable. The process involves splitting the light into different wavelengths, just like a prism splits light into colors, and then combining those different wavelengths into a single fiber.

Question 15

The _____ problem exists when rivals watch a pioneer's efforts, learn from their successes and missteps, and then enter the market quickly with a comparable or superior product at a lower cost.
A) late entrant
B) early starter
C) first mover
D) intellectual property
E) fast follower

Accepted Answer

The described problem is commonly known as the "fast follower" problem, as other companies quickly follow a pioneer's lead and enter the market with a similar or better product, often at a lower cost.

Question 16

A firm is said to be _____ when it attempts to match the benefits of a successful position while maintaining its existing position.
A) switching
B) straddling
C) dovetailing
D) streamlining
E) vertically integrating

Accepted Answer

Straddling is when a firm attempts to match the benefits of a successful position while maintaining its existing position. It involves trying to serve two or more segments by making compromises in between.

Question 17

What are Porter's views in relation to operational effectiveness and strategic positioning? Contrast the two concepts.

Accepted Answer

The answer of What are Porter's views in relation to...

Question 18

Which of the following statements about technology is true?
A) Technology alone is enough to provide sustainable competitive advantage to a firm.
B) Technology plays a marginal role in creating strategic differences.
C) Technological improvements are not important in strengthening a firm's strategic advantages.
D) Technological improvements can often be copied by rivals, leading to a profit-eroding arms race.
E) Technology cannot be used by late entrants to gain a share of the industry.

Accepted Answer

Technological improvements can often be copied by rivals, leading to a profit-eroding arms race. While technology can provide a temporary advantage, competitors can quickly catch up and replicate the technology. This can lead to an arms race where companies compete to constantly improve technology, eroding profits for all involved. As such, technology alone is not enough to create a sustainable competitive advantage.

Question 19

One of the key questions posed by 21st century managers is "How can we possibly compete when everyone can copy our technology and the competition is a click away?" One path to take involves creating a resource or set of resources for sustainable competitive advantage. List the four characteristics that such resources must have for the possibility of sustainable competitive advantage to exist. Why is it important to have all four simultaneously?

Accepted Answer

The answer of One of the key questions posed by...

Question 20

According to the resource-based view of competitive advantage, if a firm is to maintain sustainable competitive advantage, it must control a set of exploitable resources that are valuable and can be substituted easily.

Accepted Answer

According to the resource-based view, for a firm to maintain sustainable competitive advantage, its resources must be valuable, rare, inimitable, and non-substitutable, not easily substituted.

Quiz 2: Strategy and Technology: Concepts and Frameworks for Understanding What Separates Winners From Losers

According to Porter, strategy is fundamentally about being _____.

When technology can be matched quickly, it is rarely a source of competitive advantage.

_____ refers to performing different tasks than rivals or the same tasks in a different way.

Cisco's acquisition of Pur Digital, makers of the Flip video camera line, was largely considered a flop because comparable technology soon became a feature in other popular consumer electronics products.

The resource-based view of competitive advantage states that for a firm to maintain sustainable competitive advantage it must control a set of exploitable resources that have four critical characteristics. What are these characteristics?

Operational effectiveness refers to:

A firm's financial performance that consistently outperforms its industry's peers is known as _____.

Fast growing Groupon was able to dissuade rivals from entering its market because the firm's technology was so difficult to replicate.

According to Michael Porter, the reason many firms suffer margin-eroding competition is because they have defined themselves according to strategic positioning rather than operational effectiveness.

A firm's financial performance that consistently outperforms its industry's peers is known as operational effectiveness.

In _____, the light inside fiber is split into different signal-carrying wavelengths in a way similar to how a prism splits light into different colors.

The _____ problem exists when rivals watch a pioneer's efforts, learn from their successes and missteps, and then enter the market quickly with a comparable or superior product at a lower cost.

A firm is said to be _____ when it attempts to match the benefits of a successful position while maintaining its existing position.

What are Porter's views in relation to operational effectiveness and strategic positioning? Contrast the two concepts.

Which of the following statements about technology is true?

According to the resource-based view of competitive advantage, if a firm is to maintain sustainable competitive advantage, it must control a set of exploitable resources that are valuable and can be substituted easily.