Management 405 - Strategic Management » Fall 2022 » Quiz 2

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Question #1
The building blocks of competitive advantage are superior efficiency, quality, innovation and customer responsiveness.
A.   False
B.   True
Question #2
Resources can be considered valuable if they enable a company to create a strong demand for its products or if it lowers the costs of producing those products.
A.   False
B.   True
Question #3
The primary activities of the value chain include the design, creation, and delivery of the product, the product’s marketing, and its support and after-sales service.
A.   False
B.   True
Question #4
The concept of economies of scale suggests that unit costs continue to fall indefinitely as output volume increases.
A.   True
B.   False
Question #5
Flexible production technologies allow a company to produce a wider variety of end products at a unit cost that at one time could be achieved only through the mass production of a standardized output.
A.   False
B.   True
Question #6
No matter how complex the task, learning effects typically diminish in importance after a limited period of time.
A.   False
B.   True
Question #7
There is a negative relationship between the length of time that a customer stays with a company and profit per customer.
A.   True
B.   False
Question #8
Mass customization describes a company’s ability to use flexible manufacturing technology to reconcile the two goals of low cost and differentiation through product customization.
A.   False
B.   True
Question #9
Based on the VRIO framework, a resource can be considered a source of competitive advantage if it:
A.   is rare, valuable, difficult to imitate, and organized or managed by the company.
B.   is kept as a trade secret rather than as a patent.
C.   is the foundation of a company’s strategy.
D.   increases the cost of producing the product and, therefore, the price charged to customers.
E.   is shared by most companies in an industry. 
Question #10
When conducting an internal analysis, a manager must do all of the following EXCEPT:
A.   look at the way in which forces in the macroenvironment affect industry structure and influence opportunities and threats. 
B.   analyze the sources of their company’s competitive advantage to identify what drives the profitability of their enterprise.
C.   appreciate how rare, valuable, and hard-to-imitate resources lead to superior efficiency, innovation, quality, and customer responsiveness.
D.   analyze the sources of their company’s competitive advantage to identify where opportunities for improvement might be.
E.   understand the role of rare, valuable, and hard-to-imitate resources in the establishment of competitive advantage.
Question #11
Intel’s invention of the microprocessor in the early 1970s, Cisco’s development of the router for routing data over the Internet in the mid-1980s, and Apple’s development of the iPod, iPhone, and iPad in the 2000s can be referred to as __________ innovations.
A.   process
B.   resource
C.   value-chain
D.   product
E.   customer
Question #12
The term value chain refers to the idea that a company is:
A.   one of a series of units that comprise an industry segment.
B.   the producer of a series of customer-valued products that are linked together.
C.   one of a series of economic functions.
D.   a collection of various products and their attributes.
E.   a chain of functional activities that transform inputs into products.
Question #13
When Amber first started working at a car manufacturing plant assembling car doors, she was slower at the task than her coworkers. As time passed, her speed at assembling the doors increased and she even taught others how to perform the task more quickly. As a result of increased employee productivity, this particular plant experienced cost savings. These cost savings can be attributed to learning effects.
A.   True
B.   False
Question #14
One of the primary roles of research and development (R&D) in achieving superior efficiency is:
A.   limiting customer defection rates by building brand loyalty.
B.   instituting training programs to build skills.
C.   facilitating cooperation among functions.
D.   designing products for ease of manufacture.
E.   implementing pay for performance.
Question #15
Managers should not become complacent about efficiency-based cost advantages because:
A.   the experience curve steadily rises after a certain threshold is reached, indicating an increase in unit costs.
B.   the experience curve will bottom out at some point.
C.   cost advantages gained from experience effects are not affected by the development of new technologies.
D.   both learning effects and economics of scale go on forever.
E.   unit costs keep reducing as output increases.

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