IBM C5

A firm's strategy can be defined as the actions that managers take to attain the goals of the firm.

• True

• False

The preeminent strategic goal for most firms is to maximize the value of the firm for its owners.

• True

• False

Profit growth is measured by the percentage increase in net profits over time.

• True

• False

The amount of value a firm creates is measured by the difference between its costs of production and the price that it charges for its products.

• True

• False

The customer is able to garner the benefit of the consumer surplus because one firm is competing with other firms for the customer's business, so the firm must charge a lower price than it could if it were a monopoly supplier.

• True

• False

According to Porter, the way to create superior value is to drive down the cost structure of the business and/or differentiate the product in some way so that consumers value it more.

• True

• False

Diminishing returns imply that when a firm already has significant value built into its product offering, increasing value by a relatively small amount requires significant additional costs.

• True

• False

For a firm, all positions on the efficiency frontier are viable.

• True

• False

The strategy, operations, and organization of a firm must all be consistent with each other if the firm is to attain a competitive advantage and achieve superior profitability.

• True

• False

Support activities include the design, creation, and delivery of a product.

• True

• False