Internal Analysis and Competitive Advantage: Quiz :Business Strategy (Strategic Leadership and Management Specialization) Answers 2025

Question 1

Why do some businesses perform exceptionally well even in poorly performing industries?

❌ They managed to create a cartel with other high performers.
❌ They lobbied the government to pass favorable laws.
❌ They face very little competition from rivals.
✅ They have developed and sustain a competitive advantage.

Explanation:
Strong firms outperform others by building and maintaining a competitive advantage, not by industry conditions alone.

Question 2

What do we mean when we say that a firm has a competitive advantage?

❌ The firm is able to outperform its competition.
❌ The firm performs better than the industry average competitor.
❌ The firm is better at taking competitive actions than other firms.
❌ A and B
✅ A, B, and C

Explanation:
Competitive advantage includes outperforming rivals, beating industry averages, and executing superior competitive actions.

Question 3

Which of the following is an example of an intangible resource?

❌ Machinery
❌ Real estate
✅ Customer relationships
❌ Borrowing capacity

Explanation:
Intangible resources are non-physical assets like brand value, reputation, and customer relationships.

Question 4

If a firm has a resource or a capability that is valuable and rare, but potentially imitable, then it may have a _____________.

✅ Temporary competitive advantage
❌ Competitive parity
❌ Sustained competitive advantage
❌ Competitive disadvantage

Explanation:
If competitors can eventually copy the resource, the advantage will be temporary, not sustained.

Question 5

Starbucks’s real-estate approach was to avoid having multiple Starbucks outlets in close proximity or on the same block to prevent cannibalizing each other’s sales.

❌ True
✅ False

Explanation:
Starbucks intentionally places stores close together to dominate locations and increase convenience, even if some cannibalization occurs.

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