Test Bank For MGMT Principles of Managements Canadian 3rd Edition by Williams

Chapter 5 Organizational Strategy MULTICHOICE

1. What is an organization said to have if it has the assets, capabilities, processes, information, and knowledge used to improve its effectiveness and efficiency, to create and sustain competitive advantage, and to fulfill a need or solve a problem?

(A) grand strategies
(B) distinctive competencies (C) competitive advantages (D) resources
Answer : (D)

2. A sustainable competitive advantage exists for an organization when other companies have tried unsuccessfully to duplicate the advantage and when which of the following happens?

(A) the other companies have been prohibited from duplicating the advantage by federal law (B) the other companies have, for the moment, stopped trying to duplicate the advantage
(C) the organization is able to implement exclusive distribution
(D) the organization operates in the international marketplace

Answer : (B)
3. Which condition must be met if a firm’s resources are to be used to achieve a sustainable

competitive advantage?
(A) differentiation
(B) imperfectly imitable resources (C) related diversification
(D) unrelated diversification Answer : (B)

4. When making travel plans, many tourists select Thomas Cook because they perceive the tour company as being superior to all others. No other tour service can duplicate the customer service and satisfaction that Thomas Cook has provided over its years of

operation. What type of resources has Thomas Cook apparently used to create a sustainable competitive advantage?

(A) synergistic
(B) valuable
(C) tangible
(D) nonsubstitutable Answer : (D)

5. Royal Bank of Canada is the largest bank in Canada. Would this position give it a sustainable competitive advantage, and why?

(A) Yes, because size would make its operations synergistic.
(B) No, because size is not a criterion for sustainable competitive advantage. (C) Yes, because large institutions make more effective use of resources.
(D) No, because large organizations are always targeted for anti-trust activities. Answer : (B)

6. Which type of resource is NOT controlled or possessed by many competing firms? (A) rare resources
(B) imperfectly imitable resources
(C) nonsubstitutable resources

(D) strategically dissonant resources Answer : (A)

7. Wagyu beef sold in Canada is often a crossbreed with the Wagyu breed from Japan. Brant Lake Wagyu raises their Wagyu crossbreed cattle on a mix of pasture feeding and barley. What kind of resource is the Wagyu crossbreed cattle?

(A) rare resource
(B) imperfectly imitable resource (C) nonsubstitutable resource
(D) strategically dissonant resource

Answer : (B)

8. To differentiate its products from other similar brands, Aveda beauty products focuses on educating its customers on general skin and hair care. Its salespeople are trained to answer questions and help customers find solutions. What has Aveda achieved with customer education and employee training?

(A) synergy through relationship marketing (B) prevention of product duplication
(C) efficient use of imitative resources
(D) a competitive advantage

Answer : (D)
9. According to the text, valuable, rare, imperfectly imitable resources can produce a

sustainable competitive advantage. What kind of resources must they also be to do so? (A) nonsubstitutable resources
(B) substitutable resources
(C) reliable resources

(D) expensive resources Answer : (A)

10. What is the first step in the strategy-making process? (A) assess the need for strategic change
(B) conduct a situational analysis
(C) choose strategic alternatives

(D) evaluate the impact of changes on the internal environment Answer : (A)