1. Specialized Bicycle Components, Inc. introduced the first major production mountain bike in 1980. Two-thirds of its profits come from the sale of mountain bikes. It is recognized worldwide for its ability to design and produce superior mountain bikes. This ability is its
customer sustainability.
• organizational advantage.
• brelative competence.
• distinctive competence.
• superlative advantage.
2. A sustainable competitive advantage exists for an organization when other companies have tried unsuccessfully to duplicate the advantage and
• those companies have been prohibited from duplicating the advantage by federal law.
• those companies have, for the moment, stopped trying to duplicate the advantage.
• the organization is able to implement exclusive distribution.
• the organization operates in the international marketplace.
• the organization has a follower strategic stance.
3. When companies are performing above or better than their strategic reference points, top management is more likely to choose a daring, risk-taking strategy.
• True
• False
4. A competitive advantage becomes a sustainable competitive advantage when other companies find it very expensive to duplicate what the company is providing to customers.
• True
• False
5. Companies should use their resources to improve organizational efficiency and effectiveness.
• True
• False
6. The ____ is a portfolio strategy that managers use to categorize their corporation's businesses by growth rate and relative market share. This strategy helps them to decide how to invest corporate funds.
• investment matrix
• SWOT matrix
• BCG matrix
• portfolio management matrix
• Maslow grid
7. Starbucks, the operator of Starbucks coffeehouses, also markets a line of compilation CDs and other noncoffee items. The making and marketing of the CDs and other noncoffee products would be an example of
• related differentiation.
• related diversification.
• an integrated acquisition.
• competency acquisition.
• unrelated diversification.
8. Four conditions must be met if a company's resources are to be used to achieve a sustainable competitive advantage. The resources must be valuable, rare, imperfectly imitable, and nonsubstitutable.
• True
• False
9. Companies face very little uncertainty in their strategic business environments.
• True
• False
10. Suppose Dow Chemical is conducting a situational analysis. According to its sales, Dow is the second largest chemical company in the world. BASF is the largest. Both companies use a similar strategy. Within Dow's situational analysis, BASF would be classified as a
• cash cow.
• primary firms.
• unrelated firm.
• core firm.
• secondary firm.