MANECON FINALS

To be ahead of the forces that gain profit, strategies should be developed to gain sustainable advantage.

• TRUE

• FALSE

Answer explanation

To be ahead of the forces that erode profit, strategies should be developed to gain sustainable advantage.

Firms gain competitive advantage when they can deliver the same product or service benefits as their competitors but at a lower cost

• TRUE

• FALSE

Answer explanation

Firms gain competitive advantage when they can deliver superior product or service benefits at a higher cost.

• TRUE

• FALSE

Answer explanation

Firms gain competitive advantage when they can deliver superior product or service benefits at a similar cost.

Firms with competitive advantage can earn positive economic costs.

• TRUE

• FALSE

Answer explanation

Firms with competitive advantage can earn positive economic profits.

Strategy to gain sustainable competitive advantage means about how to increase the size of the profit, as such strategy is all about raising price or reducing cost.

• TRUE

• FALSE

Answer explanation

Any firm which can't manage both over a long period of time shows a sustainable competitive advantage and are successful

• TRUE

• FALSE

Answer explanation

Any firm which can manage both over a long period of time shows a sustainable competitive advantage and are successful

Five schools of thought offer different views to achieve sustainable competitive advantage

• TRUE

• FALSE

Answer explanation

Two schools of thought offer different views to achieve sustainable competitive advantage

The industrial organization (IO) economics perspective – locates the source of problem at the industry level.

• TRUE

• FALSE

Answer explanation

The industrial organization (IO) economics perspective – locates the source of advantage at the industry level.

 The resource-based view (RBV) – locates the source of problem at the industry level.

• TRUE

• FALSE

Answer explanation

The resource-based view (RBV) – locates the source of advantage at the individual firm level.

According to Michael Porter, "firm’s performance in the market place depends critically on the characteristics of the industry environment in which it competes.”

• TRUE

• FALSE

Answer explanation