Chapter 1: What is Strategy?

What is strategy?

• A set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors

• A list of company goals

• A marketing plan

• A financial statement

Strategic management is an integrative management field that combines _______, formulation, and implementation in the quest for competitive advantage.

• analysis

• marketing

• production

• sales

What is competitive advantage?

• Achieving superior performance relative to other competitors in the same industry or the industry average

• Having the largest company size

• Offering the lowest prices

• None of the above

Sustainable competitive advantage means:

• Outperforming competitors or the industry average over a prolonged period of time

• Matching the industry average

• Underperforming competitors

• None of the above

Competitive disadvantage refers to underperformance relative to other competitors in the same industry for industry average.

• True

• False

What is competitive parity?

• Performance of two or more firms at the same level

• Performance of one firm above all others

• Underperformance relative to competitors

• None of the above

Which of the following is NOT a strategy?

• Grandiose statements

• A failure to face a competitive challenge

• Operational effectiveness, competitive benchmarking, or other tactical tools

• All of the above

About what percentage of a firm's profitability depends on the industry it's in?

• 10%

• 20%

• 50%

• 80%

Industry effects describe the underlying economic structure of the _______.

• industry

• company

• market

• government

What is considered a more important factor in determining firm performance: managerial actions or external environment forces?

• Managerial actions

• External environment forces

• Both equally

• Neither