Test Bank For
Strategic Management Concepts and Cases, 5th Edition by Jeffrey H. Dyer, Paul C. Godfrey,
Robert J. Jensen, David J. Bryce
Chapter 1-14
Chapter 1 What Is Business Strategy?
1) The origin of strategy comes from the role of a(n) ________. Great individuals in this role
provide ________.
A) architect of the greatest buildings in the world; a good goal
B) architect of the greatest buildings in the world; high level orchestration and vision
C) general in a war; a good goal
D) general in a war; high level orchestration and vision
Answer: D
Diff: 1
Section Reference: 1: What Is Business Strategy?
Learning Objective: 1: Define business strategy, including the importance of competitive
advantage, the four choices that are critical to strategy formulation, and the strategic management
process.
Bloom code: Knowledge
Standard 1: AACSB || Analytic
2) ________ is defined as a company's plan to create and capture value in a marketplace.
A) Business strategy
B) Competitive advantage
C) Infrastructure process
D) Market value
Answer: A
Diff: 1
Section Reference: 1: What Is Business Strategy?
Learning Objective: 1: Define business strategy, including the importance of competitive
advantage, the four choices that are critical to strategy formulation, and the strategic management
process.
Bloom code: Knowledge
Standard 1: AACSB || Analytic
3) ________ is the difference between a customer's willingness to pay for a product and the firm's
total costs to provide the product.
A) Advantage
B) Cost
C) Process
D) Value
Answer: D
Diff: 1
Section Reference: 1: What Is Business Strategy?
Learning Objective: 1: Define business strategy, including the importance of competitive
1
,advantage, the four choices that are critical to strategy formulation, and the strategic management
process.
Bloom code: Knowledge
Standard 1: AACSB || Analytic
4) ________ can be best defined as when an organization generates and captures more value
compared to its rivals.
A) Client advantage
B) Competitive advantage
C) Employer advantage
D) Unique value
Answer: B
Diff: 1
Section Reference: 1: What Is Business Strategy?
Learning Objective: 1: Define business strategy, including the importance of competitive
advantage, the four choices that are critical to strategy formulation, and the strategic management
process.
Bloom code: Knowledge
Standard 1: AACSB || Analytic
5) Firms that capture more value than competitors generate ________.
A) higher costs
B) higher profits
C) lower assets
D) lower market value
Answer: B
Diff: 1
Section Reference: 1: What Is Business Strategy?
Learning Objective: 1: Define business strategy, including the importance of competitive
advantage, the four choices that are critical to strategy formulation, and the strategic management
process.
Bloom code: Knowledge
Standard 1: AACSB || Analytic
6) Gems Corp. is a leading jewelry brand that finds it hard to make as much profit as its
competitors. To overcome this, the employees of Gems Corp. decide to work harder to provide
unique value to customers and increase the sales of the company. After a year, it makes more
profits than its competitors. This scenario best illustrates ________.
A) client advantage
B) internal analysis
C) external analysis
D) competitive advantage
Answer: D
Diff: 3
Section Reference: 1: What Is Business Strategy?
Learning Objective: 1: Define business strategy, including the importance of competitive
advantage, the four choices that are critical to strategy formulation, and the strategic management
2
,process.
Bloom code: Application
Standard 1: AACSB || Analytic
7) The industry and geographic area that a company competes in, is referred to as its ________.
A) niche
B) business
C) segment
D) market
Answer: D
Diff: 1
Section Reference: 1: What Is Business Strategy?
Learning Objective: 1: Define business strategy, including the importance of competitive
advantage, the four choices that are critical to strategy formulation, and the strategic management
process.
Bloom code: Knowledge
Standard 1: AACSB || Analytic
8) Adia and Ali are two business partners who want to set up a company that sells imported sports
gear and equipment. To make sure that the company makes and retains profit, they must choose an
area that is close to where their products have the highest demand. This area should allow them
consistently to make profit. In this scenario, Adia and Ali are looking for a ________.
A) market
B) strategy
C) cost advantage
D) mission
Answer: A
Diff: 3
Section Reference: 1: What Is Business Strategy?
Learning Objective: 1: Define business strategy, including the importance of competitive
advantage, the four choices that are critical to strategy formulation, and the strategic management
process.
Bloom code: Application
Standard 1: AACSB || Analytic
9) ________ can be best defined as the reason a firm wins with customers or the value proposition
it offers to customers, such as a low-cost advantage or differentiation advantage.
A) Switching costs
B) Unique value
C) Complementary products
D) SWOT analysis
Answer: B
Diff: 1
Section Reference: 1: What Is Business Strategy?
Learning Objective: 1: Define business strategy, including the importance of competitive
advantage, the four choices that are critical to strategy formulation, and the strategic management
process.
Bloom code: Knowledge
3
, Standard 1: AACSB || Analytic
10) The employees of Flamingo Inc., a greeting card company, focus on providing unmatched
customer satisfaction. Unlike its competitors, the employees of Flamingo take the time to listen to
the needs of individual customers and design custom-made cards upon request. The customers of
Flamingo state that the company provides a large variety of affordable products to choose from.
The company has won many awards for providing complete customer satisfaction. In this scenario,
which of the following does Flamingo Inc. provide to its customers?
A) Backward integration
B) Switching costs
C) Complementary products
D) Unique value
Answer: D
Diff: 3
Section Reference: 1: What Is Business Strategy?
Learning Objective: 1: Define business strategy, including the importance of competitive
advantage, the four choices that are critical to strategy formulation, and the strategic management
process.
Bloom code: Application
Standard 1: AACSB || Analytic
11) Which of the following is NOT a way strategists can typically increase a customer's
willingness to pay?
A) Improving the features or quality of the product
B) Increasing the investment in equipment or physical assets
C) Providing a complementary product or service
D) Widespread adoption of the product
Answer: B
Diff: 1
Section Reference: 1: What Is Business Strategy?
Learning Objective: 1: Define business strategy, including the importance of competitive
advantage, the four choices that are critical to strategy formulation, and the strategic management
process.
Bloom code: Knowledge
Standard 1: AACSB || Analytic
12) Returns in excess of what an investor expects from other investments with a similar amount of
risk are referred to as ________.
A) unique value
B) complimentary value
C) above-average profits
D) above-average losses
Answer: C
Diff: 1
Section Reference: 1: What Is Business Strategy?
Learning Objective: 1: Define business strategy, including the importance of competitive
advantage, the four choices that are critical to strategy formulation, and the strategic management
process.
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