WPC 480 (FINAL) Exam Questions with
Latest Update
Ackbar, Inc. has had high growth in profits for several years, and each year it has had
the highest profits ever. What can you assess about Ackbar's strategic competitive
advantage? - Answer-Can assess nothing about competitive advantage.
Firms that outperform all their competitors must have a high quality strategy. - Answer-
False
It is not rare that a CEO of a large, public organizations will be given a raise and/or
bonus even though the profitability of the firm has been negative for several years. What
is the best explanation for this? - Answer-The firm has been growing rapidly in number
of locations and factories.
Why are theories of how to achieve a competitive advantage not about sufficient
causes, but only necessary causes? - Answer-The causes of firm performance are not
generalizable to all contexts.
Firms are made more capable of achieving a competitive advantage by having strong
competitors so they must adapt and become stronger in the market. - Answer-False
Accounting Value - Answer-Based on historical data
Shareholder Value - Answer-Based on predictions on the future
Economic Value - Answer-Based on predictions of the future
Balanced Scorecard - Answer-Based mostly on perceptions that can change quickly
Research into the causes of high performance in firms ought to include studying firms
that have very low performance. - Answer-True
It is difficult to learn much about how to succeed at strategy when asking people to
explain their successes after they have become successful. - Answer-True
In the long run ,the major ways of evaluating firm performance will tend to be correlated
with each other. So this suggests that for a strategic analyst, it doesn't matter much
what data on firm performance is chosen. - Answer-False
The higher proportion of assets that are tangible, the more useful accounting profit is as
a measure of firm performance for a strategic analyst. - Answer-True
PESTEL - Answer-Political
, Economic
Sociocultural
Technological
Ecological
Legal
Political - Answer-Non-market strategies
Economic - Answer-Macro-economic conditions of a country or region
Sociocultural - Answer-Cultures, norms, and value
Technological - Answer-Application of new knowledge
Ecological - Answer-Natural environment
Legal - Answer-Governing laws, mandates, regulations
What is the primary value to a strategic analyst of doing a PESTEL analysis? - Answer-
Identifies external conditions that can have an effect on competitiveness.
What is the most important information a strategic analyst can obtain by doing an
industry structure analysis? - Answer-Who gets the profits produced by industry
members.
The patent on a new technology has just expired. If all members of an industry adopt
the newly available technology, it will allow them to reduce production costs by 50% by
using more common input materials and fewer workers to run the production line. Which
of the following forces is LEAST likely to be affected if all the industry member's adopt
the new production technology? - Answer-Rivalry among competitors
High exit barriers are likely to lower the profitability of an industry on average. - Answer-
True
Network effects (also known as network externalities) are when a product becomes
more valuable when more people purchase and/or use that product. For example, the
more people that use a particular social media platform, the more valuable the platform
becomes as more people's friends, advertisers, and celebrities want to be on it because
it connects them to more people. If an industry makes a product with network effects, is
it most likely to DECREASE buyer power? - Answer-True
If there is high rivalry/competition among the members of an industry it generally does
not improve industry profitability, EXCEPT it can have a positive effect on profitability by
reducing which of the following? - Answer-Threat of entrants
Latest Update
Ackbar, Inc. has had high growth in profits for several years, and each year it has had
the highest profits ever. What can you assess about Ackbar's strategic competitive
advantage? - Answer-Can assess nothing about competitive advantage.
Firms that outperform all their competitors must have a high quality strategy. - Answer-
False
It is not rare that a CEO of a large, public organizations will be given a raise and/or
bonus even though the profitability of the firm has been negative for several years. What
is the best explanation for this? - Answer-The firm has been growing rapidly in number
of locations and factories.
Why are theories of how to achieve a competitive advantage not about sufficient
causes, but only necessary causes? - Answer-The causes of firm performance are not
generalizable to all contexts.
Firms are made more capable of achieving a competitive advantage by having strong
competitors so they must adapt and become stronger in the market. - Answer-False
Accounting Value - Answer-Based on historical data
Shareholder Value - Answer-Based on predictions on the future
Economic Value - Answer-Based on predictions of the future
Balanced Scorecard - Answer-Based mostly on perceptions that can change quickly
Research into the causes of high performance in firms ought to include studying firms
that have very low performance. - Answer-True
It is difficult to learn much about how to succeed at strategy when asking people to
explain their successes after they have become successful. - Answer-True
In the long run ,the major ways of evaluating firm performance will tend to be correlated
with each other. So this suggests that for a strategic analyst, it doesn't matter much
what data on firm performance is chosen. - Answer-False
The higher proportion of assets that are tangible, the more useful accounting profit is as
a measure of firm performance for a strategic analyst. - Answer-True
PESTEL - Answer-Political
, Economic
Sociocultural
Technological
Ecological
Legal
Political - Answer-Non-market strategies
Economic - Answer-Macro-economic conditions of a country or region
Sociocultural - Answer-Cultures, norms, and value
Technological - Answer-Application of new knowledge
Ecological - Answer-Natural environment
Legal - Answer-Governing laws, mandates, regulations
What is the primary value to a strategic analyst of doing a PESTEL analysis? - Answer-
Identifies external conditions that can have an effect on competitiveness.
What is the most important information a strategic analyst can obtain by doing an
industry structure analysis? - Answer-Who gets the profits produced by industry
members.
The patent on a new technology has just expired. If all members of an industry adopt
the newly available technology, it will allow them to reduce production costs by 50% by
using more common input materials and fewer workers to run the production line. Which
of the following forces is LEAST likely to be affected if all the industry member's adopt
the new production technology? - Answer-Rivalry among competitors
High exit barriers are likely to lower the profitability of an industry on average. - Answer-
True
Network effects (also known as network externalities) are when a product becomes
more valuable when more people purchase and/or use that product. For example, the
more people that use a particular social media platform, the more valuable the platform
becomes as more people's friends, advertisers, and celebrities want to be on it because
it connects them to more people. If an industry makes a product with network effects, is
it most likely to DECREASE buyer power? - Answer-True
If there is high rivalry/competition among the members of an industry it generally does
not improve industry profitability, EXCEPT it can have a positive effect on profitability by
reducing which of the following? - Answer-Threat of entrants
