Business Consulting
Midterm Exam
Course Introduction
Business Consulting explores the methodologies, tools, and strategic approaches used by consultants to help organizations improve performance, solve complex problems, and achieve their goals. Students will gain insights into the consulting process, from defining client needs and analyzing business challenges to developing actionable solutions and delivering impactful recommendations. The course emphasizes effective communication, relationship management, and the ethical responsibilities of consultants, preparing students to work both independently and as part of consulting teams across a variety of industries. Practical case studies and real-world scenarios provide opportunities to apply consulting frameworks and enhance problem-solving skills.
Recommended Textbook
Strategic Management 4th Edition by
Frank Rothaermel
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Page 2
Chapter 1: What Is Strategy
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Sample Questions
Q1) A firm is said to gain a competitive advantage when it can A) exceed its own previous performances.
B) provide products similar to its competitors, but at lower prices.
C) perform at the same level as that of its competitors.
D) minimize the difference between value creation and cost.
Answer: B
Q2) During strategy implementation, managers primarily focus on deciding the A) type of corporate governance that is most effective and ways in which it can put the formulated strategy into practice.
B) industries and markets the firm should compete in to be able to gain and sustain a competitive advantage.
C) relationship between competitive advantage and firm performance.
D) role strategic leaders should play in gaining and sustaining a competitive advantage.
Answer: A
Q3) Core values provide ethical guidelines for how individual employees will behave. A)True B)False
Answer: True
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3
Chapter 2: Strategic Leadership: Managing the Strategy Process
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Sample Questions
Q1) BlueStainless Corp. has been able to gain and sustain a competitive advantage due to its strong relationship with its employees, customers, suppliers, and local communities. The company believes in lifetime employment and ensures that its employees grow along with the company. Investors are more than satisfied with the returns on their investments. Also, 3 percent of the company's profit is spent on community development. With initiatives like these, customers feel privileged to associate themselves with BlueStainless products. This scenario best illustrates the implementation of a
A) strategic analysis.
B) stakeholder strategy.
C) wild card event.
D) black swan event.
Answer: B
Q2) Explain the role of power in the strategic leadership process
Answer: Power is defined as the strategic leader's ability to influence the behavior of other organizational members to do things, including things they would not do otherwise. Strategic leaders can draw on position power as vested in their authority, for example, as chief executive officer (CEO), as well as informal power, such as persuasion to influence others when implementing strategy.
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Chapter 3: External Analysis: Industry Structure,
Competitive Forces, and Strategic Groups
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Q1) Samsung and Google cooperate as complementors to compete against Apple's strong position in the mobile device industry, while at the same time Samsung and Google are increasingly becoming competitive with one another. This scenario best illustrates the process of
A) co-opetition.
B) perfect competition.
C) monopolization.
D) conglomeration.
Answer: A
Q2) How are cumulative learning and experience effects of a company most likely to affect Michael Porter's five forces?
A) Threat of new entrants will be low.
B) Bargaining power of suppliers will be high.
C) Availability of complements will be low.
D) Threat of substitute products and services will be high.
Answer: A
Q3) Firms within the same industry automatically belong to the same strategic group.
A)True
B)False
Answer: False
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Chapter 4: Internal Analysis: Resources, Capabilities, and Core Competencies
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Sample Questions
Q1) How are the critical assumptions of the resource-based model of a firm fundamentally different from the way in which a firm is viewed in the perfectly competitive industry structure?
A) In the resource-based model, resources are freely available and mobile, whereas in the perfectly competitive industry structure, resources are highly immobile.
B) In perfect competition, it is extremely difficult to replicate the resource bundles of a firm, whereas in the resource-based model, it is extremely easy to imitate them.
C) In perfect competition, all firms have access to the same capabilities, whereas in the resource-based model, resource differences exist between firms in the same industry.
D) In the resource-based model, only physical assets of a firm are considered as resources, whereas in perfect competition, a firm's capabilities and competencies are also considered as resources.
Q2) How can a firm fully exploit the competitive potential of its resources, capabilities, and competencies?
Q3) Discuss resource immobility as a critical assumption in the resource-based model of a firm.
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Chapter 5: Competitive Advantage, Firm Performance, and Business Models
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Sample Questions
Q1) ________ denotes the dollar amount a consumer would attach to a good or service.
A) Utility
B) Value
C) Consumer surplus
D) Economic contribution
Q2) How does a firm capture its producer surplus for a good or service?
A) as cost per unit sold
B) as profit per unit sold
C) as earnings per share
D) as market price per share
Q3) The balanced-scorecard can accommodate
A) only short-term performance metrics.
B) only long-term performance metrics.
C) both short- and long-term performance metrics.
D) neither short- or long-term performance metrics.
Q4) A high percentage of R&D/Revenue ratio indicates a(n)
A) strong focus on innovation to improve current products and services.
B) inefficiency in the management to focus on new products.
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C) strong focus on marketing and sales to promote products and services.
D) negligent investment toward research and development.
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Chapter 6: Business Strategy: Differentiation, Cost
Leadership, and Blue Oceans
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Q1) In the multiplex industry, Vibrant Movies Inc. is an upscale multiplex that focuses on superior customer experience. The firm charges premium prices for its movie tickets and services. Global Cine Inc., in contrast, charges the lowest price in the industry with its no-frills approach. In between these two segments is True Movies Inc., which offers a customer experience comparable to that of Vibrant Movies at a price almost as low as that of Global Cine. What strategy is True Movies pursuing in this scenario?
A) liquidation strategy
B) product diversification strategy
C) market penetration strategy
D) blue ocean strategy
Q2) ________ is best described as the output range needed to bring down the cost per unit as much as possible, allowing a firm to stake out the lowest-cost position that is achievable through economies of scale.
A) Minimum efficient scale
B) Break-even output
C) Maximum output capacity
D) Optimum sustainable yield
Q3) Explain blue ocean strategy with the help of an example.
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Chapter 7: Business Strategy: Innovation, Entrepreneurship, and Platforms
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Q1) The typical four-step innovation process begins with
A) the modification and recombination of an existing product or process.
B) the presentation of an idea as findings derived from basic research.
C) the commercialization of an invention by entrepreneurs.
D) a competitor's attempt to imitate an innovation.
Q2) While cell phones with holographic keyboards are currently in the introduction stage of the industry life cycle, tablet computers are in the growth stage. In the context of this scenario, which of the following statements is true?
A) The industry for cell phones with holographic keyboards will face greater competition than the tablet industry.
B) While the industry for cell phones with holographic keyboards will focus more on product innovation, the tablet industry will focus more on process innovation.
C) While the industry for cell phones with holographic keyboards can reap the benefits of economies of scale, the tablet industry will experience no such benefits.
D) The industry for cell phones with holographic keyboards will face price competition, whereas, in the tablet industry, the mode of competition will be non-price.
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Page 9
Chapter 8: Corporate Strategy: Vertical Integration and Diversification
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Q1) Not all firms are motivated by a need to grow.
A)True
B)False
Q2) Why is following an unrelated diversification strategy especially advantageous in an emerging economy?
A) It allows the conglomerate to overcome institutional weaknesses in emerging economies.
B) It allows the conglomerate to form a monopoly in emerging economies.
C) It allows the conglomerate to use well-defined legal systems in emerging economies.
D) It allows the conglomerate to take advantage of strong capital markets in emerging economies.
Q3) Which of the following is an example of an external transaction cost?
A) the cost of setting up a production unit
B) the cost of searching for a contract manufacturer
C) the cost of recruiting and retaining employees
D) the cost of maintaining plant and machinery
Q4) Describe the two types of vertical integration along the industry value chain.
Q5) List the five reasons why firms need to grow.
Q6) Discuss the application of the core competence-market matrix.
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Chapter 9: Corporate Strategy: Strategic Alliances, Mergers, and Acquisitions
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Q1) Which of the following statements is true about managing alliance-related tasks?
A) Forming an alliance with another firm prohibits that firm from forming other alliances.
B) Alliance management capability is based on three alliance-related tasks.
C) A merger is one of the three options for alliance design and governance.
D) In post-formation alliance management, none of the firms in an alliance is permitted to gain a competitive advantage.
Q2) How do strategic alliances help firms gain access to complementary assets?
Q3) When large, incumbent firms buy start-up companies, the transaction is generally described as a(n)
A) joint venture.
B) partnership.
C) acquisition.
D) alliance.
Q4) Which of the following statements is true of explicit knowledge?
A) Explicit knowledge is about knowing how to do a certain task.
B) Explicit knowledge is knowledge that cannot be codified.
C) Explicit knowledge is shared in non-equity alliance firms.
D) Equity knowledge is acquired only through actively participating in a process.
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Chapter 10: Global Strategy: Competing Around the World
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Q1) Midas Touch, a venture capital firm, has the opportunity to invest in one of two firms that are in the process of globalizing. Coolco, an air-conditioner manufacturer, faces intense pressure from its home market. Barker, a dog-toy manufacturer, has encountered little competition in its country of origin. In which company should Midas Touch invest?
A) Coolco, because air conditioners cost more to ship than dog toys do
B) Coolco, because firms that face stiff competition at home tend to do better abroad
C) Barker, because firms that face little or no competition at home tend to do better abroad
D) Barker, because dog toys cost less to ship than air conditioners do
Q2) Which of the following statements accurately explains the primary reason behind Walmart's failure in Germany?
A) inability to implement its trademark focused-differentiation strategy in the German market
B) significant differences between its U.S. personnel policies and Germany's culture
C) Germany's unfamiliarity with retail discount powerhouses
D) Metro's hostile takeover of Walmart in Germany
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Page 12
Chapter 11: Organizational Design: Structure, Culture, and Control
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Q1) Which of the following accurately describes an organic organization?
A) an inflexible organization that fosters slow decision making and high employee motivation
B) an inflexible organization that fosters fast decision making and high employee motivation
C) a flexible organization that fosters slow decision making and high employee motivation
D) a flexible organization that fosters fast decision making and high employee motivation
Q2) What most likely happens when a firm optimizes its organizational structure to its current situation?
A) It plants the seed of subsequent failure: the tightly coupled system can break apart when internal or external pressures occur.
B) It achieves superior performance.
C) It makes it difficult for managers to make the necessary changes due to its effects on resource allocation and power distribution.
D) It transforms strategy into actions and business models.
Q3) What are the characteristics of organic organizations?
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Chapter 12: Corporate Governance and Business Ethics
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Q1) Corporate codes of conduct go beyond what the law requires, imposing higher standards of honesty and fairness.
A)True
B)False
Q2) Discuss the agency problem of adverse selection.
Q3) Which of the following is an implication for the strategist in the context of corporate governance and a company's success?
A) Very few corporate-governance mechanisms can be effective in addressing the principal-agent problem.
B) Effective corporate governance and solid business ethics are critical to gaining and sustaining competitive advantage.
C) Leading by ethical example often has a lesser effect on employee behavior than words do.
D) A firm that restricts its responsiveness to stockholders (and no other stakeholders) and keeps them committed to its vision will be successful.
Q4) Describe moral hazard with an example.
Q5) What usually happens if a hostile takeover attempt is successful?
Q6) What is the connection between Rajat Gupta and insider trading?
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