Chapter 1

Question 1

Strategy

Answer 1

A firm’s theory about how to gain competitive advantage

Question 2

Mission

Answer 2

A firm’s long term purpose

Question 3

Objectives

Answer 3

Targets used to evaluate reaching a goal

Question 4

SMART

Answer 4

Specific 
Measurable 
Achievable 
Relevant 
Time Bound

Question 5

Temporary vs. Sustainable competitive advantage

Answer 5

Most are temporary until competition imitates. If competition can’t imitate or conceive of something better advantage can be sustainable leading to higher profits.

Question 6

Relationships between competitive advantage and economic returns

Answer 6

If you have competitive advantage you will have above average economic returns.
If you have economic parity you will have normal economic returns
If you have competitive disadvantage you will have below normal economic returns.

Question 7

Corporate Level Strategy

Answer 7

Actions firms take to gain competitive advantage by operating in multiple markets or industries simultaneously

Question 8

Business Level Strategies

Answer 8

Actions firms take to gain competitive advantage in a single market or industry