achieve a competitive advantage.
References
Multiple Choice Difficulty: 3 Hard Learning Objective: 01-01 Explain the role
of strategy in a firm's quest for
competitive advantage.
58.
Award: 1.00 point
59.
Award: 1.00 point
Which of the following is an example of competitive parity?
A firm manufactures higher-quality wall clocks than its competitors.
A firm provides wall clocks that its consumers value more than other wall clocks.
A firm sells wall clocks at a lower price than its competitors.
A firm produces a similar number of wall clocks at a similar cost as its competitors.
Two or more firms performing at the same level have competitive parity. Therefore, a firm has
competitive parity if it produces wall clocks at the same rate as its competitors.
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 01-02 Define
competitive advantage, sustainable
competitive advantage, competitive
disadvantage, and competitive parity.
A firm that achieves superior performance relative to other firms in the same industry or the industry
average has a(n)
competitive advantage.
balanced scorecard.
power position.
equity leverage.
A firm that achieves superior performance relative to other competitors in the same industry or the
industry average has a competitive advantage.
References
Multiple Choice Difficulty: 1 Easy Learning Objective: 01-02 Define
competitive advantage, sustainable
competitive advantage, competitive
disadvantage, and competitive parity.
60.
Award: 1.00 point
Bright Lighting was the first company to start selling LED light bulbs in its country—a product that
gained popularity among diverse groups. Soon, other companies started to sell their own brands of
LED bulbs, thereby giving Bright Lighting ample competition. In response, Bright Lighting decided to
limit its LED light bulbs to outdoor models. However, it ensured that these models were the longest-
lasting and lowest-priced on the market. With this innovation, Bright Lighting consistently
outperformed its competitors for ten years. In this scenario, Bright Lighting maintained a ________
through its innovative strategy.
balanced scorecard
fiduciary responsibility
consistent power position
sustainable competitive advantage
In this scenario, Bright Lighting maintained a sustainable competitive advantage through its
innovative strategy. A firm that is able to outperform its competitors or the industry average over a
prolonged period of time has a sustainable competitive advantage.
References
Multiple Choice Difficulty: 3 Hard Learning Objective: 01-02 Define
competitive advantage, sustainable
competitive advantage, competitive
disadvantage, and competitive parity.
61.
Award: 1.00 point
Which of the following scenarios illustrates a firm that has a sustainable competitive advantage?
Samson LLC generated revenue of $300,000 this financial year, which is close to the
industrial revenue average of $320,000.
GoNow Inc. almost doubled its sales to 9,000 units this year compared to its previous
year’s sales of 5,000 units, though the industry average is 10,000 units.
Bill and Ted Corp. was able to hold its market share of 68 percent in the social networking
industry for more than three years.
Johnson Inc. was able to outperform its competitors with its new production system, in
terms of revenue, for a brief period of four months.
A firm that is able to outperform its competitors or the industry average over a prolonged period of
time has a sustainable competitive advantage. Thus, Bill and Ted Corp. has a sustainable
competitive advantage because it has been able to hold its market share of 68 percent in the social
networking industry for more than three years.
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 01-02 Define
competitive advantage, sustainable
competitive advantage, competitive
disadvantage, and competitive parity.
62.
Award: 1.00 point
If Modern Furniture LLC obtains an 18 percent return on invested capital, which of the following will
help determine if it has a competitive advantage over other pharmaceutical companies?
comparing the return to the return on invested capital obtained by other firms in the
industry
assessing the value based on the shareholders’ expectations of return on their capital
evaluating the liquidity ratios for other pharmaceutical companies