Internal analysis ch 06 mcqs

Chapter 06Internal Analysis  Multiple Choice Questions 1. (p. 138) The tendency to accept the status quo and disregard signals that change is needed is called: A. Management myopiaB. Environmental awarenessC. Management long-sightednessD. Subjective management Difficulty: MediumLearning Objective: 1 2. (p. 140) SWOT analysis’s value and continued use is found in its: A. ComplexityB. DifficultyC. SimplicityD. Short-sighted nature Difficulty: MediumLearning Objective: 1 3. (p. 140) What have strategists sought in frameworks besides SWOT for conducting internal analysis? A. They have sought to get less detail from other frameworksB. They have sought that the frameworks be more comprehensiveC. They have sought a less generic frameworkD. They have sought to better account for internal factors in light of external factors Difficulty: DifficultLearning Objective: 1  4. (p. 140) _______ views a firm as a sequential process of value-creating activities. A. Resource-based analysisB. Value chain analysisC. SWOT analysisD. Primary internal analysis Difficulty: EasyLearning Objective: 2 5. (p. 140) Common to all the approaches to internal analysis is: A. The use of meaningful standards for comparison in internal analysisB. The use of external factors of analysisC. The process point of viewD. Management market myopia Difficulty: DifficultLearning Objective: 2 6. (p. 140) ________ is a historically popular technique through which managers create a quick overview of a company’s strategic situation—it is based on achieving a sound fit between internal resources and the external situation. A. Internal analysisB. External analysisC. Value chain analysisD. SWOT analysis Difficulty: MediumLearning Objective: 1 7. (p. 140) A(n) ________ is a major favorable situation in a firm’s environment. A. Value chainB. StrengthC. OpportunityD. Capability Difficulty: EasyLearning Objective: 1  8. (p. 140) A(n) ______ is a major unfavorable situation in a firm’s environment. A. WeaknessB. Core strengthC. Competitive disadvantageD. Threat Difficulty: EasyLearning Objective: 1 9. (p. 140) Which of the following is NOT an example of an opportunity for the firm? A. Identification of a previously overlooked market segmentB. Improved buyer or supplier relationshipsC. Positive changes in regulatory circumstancesD. Strong reputation and image with a key demographic Difficulty: MediumLearning Objective: 1 10. (p. 141) A(n) ______ is a resource or capability controlled by or available to a firm that gives it an advantage relative to its competitors in meeting the needs of the customers it serves. A. CompetenceB. StrengthC. OpportunityD. Competitive advantage Difficulty: EasyLearning Objective: 1  11. (p. 141) A(n) _______ is a limitation or deficiency in one or more of a firm’s resources or capabilities relative to its competitors that creates a disadvantage in effectively meeting customer needs. A. WeaknessB. ThreatC. Competitive limitD. Marginal resource Difficulty: EasyLearning Objective: 1 12. (p. 141) Consider e-Pixels, a company that produces miniature digital video cameras that feature easy downloads and uplinks to computers. Which of the following represents a potential strength for the firm? A. Brand nameB. Digitalization of most types of mediaC. Growing global computer companies with similar technologyD. Limited experience with video technology Difficulty: MediumLearning Objective: 1 13. (p. 142) According to a SWOT analysis diagram, what strategy does Cell 1 support? A. AggressiveB. TurnaroundC. DefensiveD. Diversification Difficulty: DifficultLearning Objective: 1  14. (p. 142) The cells on the left side of the SWOT diagram are both characterized by: A. Substantial internal strengthsB. Numerous environmental opportunitiesC. Critical internal weaknessesD. Major environmental threats Difficulty: DifficultLearning Objective: 1 15. (p. 142) Which cell in the SWOT analysis diagram is the most favorable situation? A. Cell 1B. Cell 2C. Cell 3D. Cell 4 Difficulty: MediumLearning Objective: 1 16. (p. 142) ________ represents the least favorable situation, with the firm facing major environmental threats from a weak resource position. A. Cell 1B. Cell 2C. Cell 3D. Cell 4 Difficulty: MediumLearning Objective: 1 17. (p. 142) Which cell supports a turnaround-oriented strategy? A. Cell 2B. Cell 3C. Cell 4D. Cell 1 Difficulty: DifficultLearning Objective: 1  18. (p. 142) Which of the following describes the situation for a firm in Cell 2? A. The firm faces several environmental opportunities and has numerous strengths that encourage pursuit of those opportunitiesB. The firm faces major environmental threats from a weak resource positionC. The firm has identified several key strengths, but faces an unfavorable environmentD. The firm faces impressive market opportunity, but is constrained by weak internal resources Difficulty: DifficultLearning Objective: 1 19. (p. 144) What makes SWOT analysis susceptible to key limitations? A. Its narrow focus on external factorsB. Its broad conceptual approachC. Its vastly limited applicabilityD. Its portrayal of the essence of sound strategy formulation Difficulty: EasyLearning Objective: 1 20. (p. 144) Which of the following statements is false? A. A SWOT analysis can overemphasize external threats and downplay internal strengthsB. A SWOT analysis can be static and can risk ignoring changing circumstancesC. A strength, as identified by SWOT analysis is not necessarily a source of competitive advantageD. A SWOT analysis can overemphasize a single strength or element of strategy Difficulty: MediumLearning Objective: 1  21. (p. 145) Which of the following statements is true? A. Astrength is not always a source of competitive advantageB. Strengths are synonymous with competitive advantageC. Every company resource or capability is a strength and leads to competitive advantageD. Strengths are always inimitable Difficulty: EasyLearning Objective: 1 22. (p. 145) A perspective in which business is seen as a chain of activities that transforms inputs into outputs that customers value is called: A. Value chainB. Value chain analysisC. Resource-baseD. Process division Difficulty: MediumLearning Objective: 2 23. (p. 145) Which of the following is NOT an example of a basic source from which customer value is derived? A. Activities that differentiate the productB. Activities that lower its costC. Activities that add to product complexityD. Activities that meet the customer’s need more quickly Difficulty: EasyLearning Objective: 2 24. (p. 145) Value chain analysis takes a: A. Process point of viewB. Functional point of viewC. Horizontal point of viewD. Corporate point of view Difficulty: MediumLearning Objective: 2  25. (p. 145) Which method of internal analysis disaggregates the business into sets of activities that occur within the business, starting with inputs and finishing with the firm’s products and after-service sales? A. Resource-based viewB. Value chain analysisC. SWOT analysisD. Porter’s generic strategies Difficulty: EasyLearning Objective: 2 26. (p. 146) Which of the following is an example of a primary activity in the typical firm? A. Human resources managementB. Research, technology and systems developmentC. General administrationD. Logistics Difficulty: MediumLearning Objective: 2 27. (p. 146) Which of the following is an example of support activities in the typical firm? A. OperationsB. ProcurementC. Marketing and salesD. Service Difficulty: MediumLearning Objective: 2  28. (p. 146) Those activities in a firm that are involved in the physical creation of the product, marketing and transfer to the buyer and after-sales support are called: A. Operational activitiesB. Support activitiesC. Secondary activitiesD. Primary activities Difficulty: EasyLearning Objective: 2 29. (p. 148) The initial step in value chain analysis is to: A. Allocate costs to different activities within the value chainB. Identify the firm’s strengths and weaknessesC. Divide a company’s operations into specific activities or processesD. Identify the firm’s key resources and capabilities Difficulty: EasyLearning Objective: 2 30. (p. 148) In VCA, which method of cost accounting is preferred? A. Activity-based cost accountingB. Value-based cost accountingC. Traditional cost accountingD. Financial cost accounting Difficulty: MediumLearning Objective: 2  31. (p. 149) Which of the following is usually true about a firm’s value chain? A. Scrutinizing a firm’s value chain may bring attention to several sources of differentiation advantage relative to competitorsB. Scrutinizing a firm’s value chain does not usually reveal cost advantages or disadvantagesC. Scrutinizing the firm’s value chain can minimize the activities that are critical to buyer satisfactionD. Analysis of the firm’s value chain can lead a firm to limit its market success Difficulty: MediumLearning Objective: 2 32. (p. 151) Which of the following considerations is critical at the examination stage of the value chain analysis? A. All primary activities differentiate the firmB. The managers’ choice of activities to be examined influences the mission statement of the firmC. The nature of value chains and the relative importance of the activities within them are standard across industriesD. The relative importance of value activities can vary by a company’s position in a broader value system that includes the value chains of its upstream suppliers and downstream customers or partners Difficulty: MediumLearning Objective: 2 33. (p. 151) It is especially important that managers take into account their level of ________ when comparing their cost structure for activities on their value chain with those of key competitors. A. CompetitionB. Horizontal integrationC. Vertical integrationD. Concentric diversification Difficulty: DifficultLearning Objective: 2  34. (p. 153) The _______ is a new perspective on understanding a firm’s success based on how well the firm uses its internal resources. A. Resource-based viewB. Value chain viewC. Corporate viewD. Functional view Difficulty: EasyLearning Objective: 3 35. (p. 153) What is the underlying premise of the resource-based view? A. Firms generally have very similar capabilities stemming from almost identical resourcesB. Imitation of resources is the best way to achieve competitive advantagesC. Firms differ in fundamental ways because each firm possesses a unique bundle of resourcesD. Firms’ intangible resources can be very difficult to imitate Difficulty: DifficultLearning Objective: 3 36. (p. 154) Which of the following is NOT a basic resource for any firm? A. Tangible assetsB. Core outputsC. Intangible assetsD. Organizational capabilities Difficulty: MediumLearning Objective: 3 37. (p. 154) The most easily identified assets, often found on a firm’s balance sheet, are called: A. Intangible assetsB. Tangible assetsC. CapabilitiesD. Competencies Difficulty: EasyLearning Objective: 3  38. (p. 154) Which of the following is NOT an example of an intangible asset? A. Financial resourcesB. Brand namesC. Company reputationD. Organizational morale Difficulty: MediumLearning Objective: 3 39. (p. 156) Which of the following is NOT one of the RBV guidelines? A. Resources are more valuable when they are critical to being able to meet a customer’s need better than other alternativesB. Resources are more valuable when they are non-durableC. Resources are most valuable when they are scarceD. Resources are most valuable when they drive a key portion of overall profits Difficulty: MediumLearning Objective: 3 40. (p. 156) Consider Company A, a financial services company specializing in small business issues, whose location is in a shopping mall in the suburbs and Company B, a similar business, whose location is downtown between a successful law firm and a courthouse. Company A’s comparative success can be best attributed to which RBV guideline? A. Resource are more valuable when they are scarceB. Resources are more valuable when they are durableC. Resources are more valuable when they are scarceD. Resources are more valuable when they are critical to being able to meet a customer’s need better than other alternatives Difficulty: DifficultLearning Objective: 3  41. (p. 156) The availability of substitutes affects which of the RBV guidelines? A. Resources are more valuable when they are scarceB. Resources are more valuable when they are durableC. Resource are more valuable when they are scarceD. Resources are more valuable when they are critical to being able to meet a customer’s need better than other alternatives Difficulty: DifficultLearning Objective: 3 42. (p. 157) _______ help the firm create resource scarcity by making resources hard to imitate. A. Resource bundlesB. CapabilitiesC. Isolating mechanismsD. Tangible resources Difficulty: MediumLearning Objective: 3 43. (p. 157) Which of the following is NOT an example of an isolating mechanism? A. Physically unique resourcesB. Capital ambiguityC. Path-dependent resourcesD. Economic deterrence Difficulty: MediumLearning Objective: 3 44. (p. 157) ________ are very difficult to imitate because of the difficult, sometimes complicated path another firm must follow to create the resource. A. Path-dependent resourcesB. Physically unique resourcesC. Economic resourcesD. Ambiguous resources Difficulty: EasyLearning Objective: 3  45. (p. 158) Which of the following involves large capital investments in capacity to provide products or services in a given market that are scale sensitive? A. Path-dependenceB. Casual ambiguityC. Physical uniquenessD. Economic deterrence Difficulty: EasyLearning Objective: 3 46. (p. 157) Brand loyalty, employee satisfaction and a reputation for fairness are items that: A. Are easy to imitateB. Can be imitated, but may not beC. Cannot be imitatedD. Are difficult to imitate Difficulty: MediumLearning Objective: 3 47. (p. 159) Which of the following statements is true? A. The faster a resource depreciates, the more valuable it isB. The slower a resource depreciates, the more valuable it isC. The larger a resource or asset, the more slowly it depreciatesD. Intangible assets can have their depletion measures easily Difficulty: MediumLearning Objective: 3 48. (p. 159) In the increasingly hypercompetitive global economy today, distinctive competencies and competitive advantages: A. Are commonplaceB. Are a prerequisite to being in business for the short-termC. Are particularly durableD. Can fade quickly Difficulty: DifficultLearning Objective: 3  49. (p. 159) Which of the following illustrates what it means to utilize a functional perspective? A. Looking at different functional areas of the firm, disaggregating tangible and intangible assets as well as organizational capabilities that are present, can begin to uncover important value-building resources that deserve further analysisB. Dividing categories by function into more specific competencies can allow a more measurable assessmentC. Taking a creative look at what competencies the firm possesses (or has the potential to possess) can help identify sources of competitive advantageD. The value chain approach can uncover organizational capabilities, activities and processes that are potential sources of competitive advantage Difficulty: DifficultLearning Objective: 4 50. (p. 159) Which of the following combinations provides the best sources of competitive advantage? A. Resources/capabilities that are scarce, durable and sustainableB. Resources/capabilities that are central to meeting a customer need better than other alternatives and are inimitableC. Resources/capabilities that are durable, scarce and appropriable to the firmD. Resources/capabilities that are directly appropriable to the firm, inimitable, durable and meet customer needs better than other alternatives Difficulty: MediumLearning Objective: 3 51. (p. 162) When a strategist uses the firm’s historical experience as a basis for evaluating internal factors, he or she is performing a: A. Comparison with key competitorsB. Comparison with success factors in the industryC. Comparison with past performanceD. Comparison with industry benchmarks Difficulty: EasyLearning Objective: 4  52. (p. 162) A manager’s assessment of whether a certain internal factor–like financial capacity–is a strength or weakness will be most strongly influenced by: A. The relative strength of other factorsB. The factor’s flexibility within the organizationC. The manager’s experience in connection with that factorD. The manger’s perception of that factor in other firms Difficulty: MediumLearning Objective: 4 53. (p. 162) Using historical experience as a basis for identifying strengths and weaknesses can be likened to: A. Market myopiaB. Tunnel visionC. Management myopiaD. Benchmarking Difficulty: MediumLearning Objective: 4 54. (p. 162) The differences in internal resources among companies in the same industry: A. Can become relative strengths or weaknesses depending on the strategy a firm choosesB. Almost always result in competitive advantages based on relative strengths or weaknessesC. Arise from benchmarkingD. Are easily observed and relative strengths are easily imitated Difficulty: MediumLearning Objective: 4  55. (p. 162) _______ is a method of comparing the way a company performs a specific activity with a competitor, potential competitor or company doing the same thing. A. BenchmarkingB. ImitatingC. Value chain analysisD. Vertical integration Difficulty: EasyLearning Objective: 4 56. (p. 162) Company X’s principal strength is its inbound and outbound logistics system; its relative weakness, however is after-sales service. Its competitor, Company Y, however is often plagued with lagging shipments and an inflexible distribution setup. Company Y remains successful because it maintains a fully staffed service department and as a result the company is known for its dependable service. _______ allows them to identify ways to build on relative strengths and avoid dependence on capabilities at which the other firm excels. A. Industry comparisonB. BenchmarkingC. Past performance comparisonD. Disaggregating Difficulty: MediumLearning Objective: 4 57. (p. 163) _______ involve(s) identifying the factors associate with successful participation in a given industry. A. The resource-based viewB. Value chain analysisC. Industry analysisD. Porter’s generic strategies Difficulty: EasyLearning Objective: 4  58. (p. 163) Which of the following is a useful framework against which to examine a firm’s potential strengths and weaknesses in a given industry? A. Isolating mechanismsB. The value chainC. Organizational capabilitiesD. Porter’s five forces Difficulty: MediumLearning Objective: 4 59. (p. 163) A company producing toilet paper, tissues and other consumer paper goods can work to establish the right product lines, with reasonable sales volumes, profit margins and growth potential in order to generate: A. Supplier power to face massive buyer power in retail customersB. Buyer power for the end-consumersC. Supplier power for the retail chainsD. Regional advantages over buyers Difficulty: HardLearning Objective: 4 60. (p. 165) ________ is one way to identify success factors against which executives can evaluate their firm’s competencies relative to its key product or products. A. Corporate strategyB. Product life cycleC. DiversificationD. Agglomeration Difficulty: EasyLearning Objective: 4   

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