Question 1

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, not operational effectiveness. Operational effectiveness refers to performing similar activities better than rivals do.

Question 2

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 refers to a firm's attempt to achieve the benefits of a successful position while maintaining its existing position, often by entering into multiple markets with different positioning strategies. Switching refers to a firm's complete change of direction, while dovetailing and streamlining are not directly related to maintaining a successful position. Vertical integration refers to a firm's ownership of multiple stages of the production and distribution process.

Question 3

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 process described is known as dense wave division multiplexing (DWDM), which splits the light into different wavelengths to increase the amount of data that can be transmitted over a single fiber optic cable. Polarization, time-division multiplexing, space-division multiplexing, and frequency hopping spread spectrum do not involve this specific process of wavelength splitting.

Question 4

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 about achieving excellence in an activity while using resources better than competitors.

Question 5

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.

Question 6

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

This example highlights the importance of resource-based thinking, which involves analyzing a firm's unique resources and capabilities to determine its competitive advantage. Simply entering a market because of growth opportunities without considering the long-term sustainability of the business model can lead to a situation where the assets become less valuable and firms struggle to differentiate themselves from competitors.

Question 7

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 8

12. 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 12. Sometimes technology can sound geeky and...

Question 9

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

Accepted Answer

Groupon's technology was not particularly difficult to replicate, which led to many competitors entering the market. The challenge for Groupon was more about building a large network of businesses and consumers rather than protecting complex technology.

Question 10

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 known as the fast follower problem, where competitors observe and beat the pioneer by entering the market quickly with comparable or superior products at a lower cost.

Question 11

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

Accepted Answer

Porter argues that strategy is about being different and creating a unique position in the marketplace that sets a company apart from its competitors. Efficiency, superiority, scalability, and profitability are all important considerations in strategy, but they are ultimately secondary to the goal of differentiation.

Question 12

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

Accepted Answer

When technology is easily matched by competitors, it becomes a commodity and does not provide a competitive advantage. Companies need to continuously innovate and improve their technology in unique ways to gain a competitive edge.

Question 13

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

Sustainable competitive advantage refers to a firm's ability to consistently outperform its industry peers in terms of financial performance, while comparative advantage refers to a firm's ability to produce goods or services at a lower cost than its competitors, absolute advantage refers to a firm's ability to produce more goods or services with the same amount of resources, first mover advantage refers to the advantage gained by a firm that is the first in a new market, and operational efficiency advantage refers to a firm's ability to reduce costs through efficient operations.

Question 14

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 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: rareness, value, imperfect imitability, and non-substitutability.

Question 15

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, it can quickly be copied by rivals, leading to a situation where resources are diverted towards constant innovation and improvement, leading to a profit-eroding arms race. Therefore, technology alone is not enough to sustain a competitive advantage.

Question 16

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 statement about sharing warehouse space with farmers and livestock producers is not a way FreshDirect helps suppliers in exchange for better pricing terms. The other options are all ways in which FreshDirect provides benefits to suppliers in exchange for better pricing.

Question 17

Technology that that super-imposes content, such as images and animation on top of real world images is called:

Accepted Answer

The answer of Technology that that super-imposes content, such as...

Question 18

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

This statement is true. Cisco bought Pure Digital for $590 million in 2009 but closed the Flip camera division just two years later, citing the competition from smartphones with high-quality cameras as one of the reasons for the product's decline in popularity.

Question 19

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 20

_____ 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 refers to performing different tasks than rivals or the same tasks in a different way. Straddling refers to attempting to do both low cost and differentiation at the same time. Operational effectiveness refers to achieving higher efficiency, productivity, and profitability than rivals. Vertical integration refers to owning and controlling different stages of the production process. Scale advantage refers to the advantages gained by a company due to its size and volume of operations.

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

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

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

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.

Operational effectiveness refers to:

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.

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.

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

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.

According to Porter, strategy is fundamentally about being _____.

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

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

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?

Which of the following statements about technology is true?

Technology that that super-imposes content, such as images and animation on top of real world images is called:

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.

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

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