Business Policy and Strategy
Exam Questions
Course Introduction
Business Policy and Strategy is a capstone course designed to integrate the knowledge and skills acquired in previous business courses, focusing on the development and implementation of organizational strategies. The course examines how firms formulate policy, analyze internal and external environments, set objectives, and make strategic decisions in a complex and dynamic global marketplace. Emphasis is placed on the roles of vision, mission, competitive advantage, and stakeholder management in guiding corporate actions. Through case studies, simulations, and real-world applications, students learn to assess opportunities and threats, leverage organizational strengths, and formulate viable business strategies for sustained success.
Recommended Textbook
Strategic Management of Technological Innovation 3rd Edition by Melissa A. Schilling
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Chapter 1: Introduction
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Q1) The globalization of markets and the importance of innovation are independent of one another.
A)True
B)False
Answer: False
Q2) If an idea can be shown to be technologically feasible,it is guaranteed to be commercially successful.
A)True
B)False
Answer: False
Q3) If you were the director of R&D at a large pharmaceutical company,how might you apply the concept of "the innovation funnel?"
A) Hire more people because most of them will turn out to be mediocre.
B) Encourage more new ideas because it takes thousands of new ideas to come up with one successful new product.
C) Discourage more new ideas because most of them end up being useless and waste time and energy.
D) The innovation funnel concept can not be used by a person in this position.
Answer: B
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Chapter 2: Sources of Innovation
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Q1) Which of the following is the correct sequence of steps for the science-push approach to research and development?
A) Customers express an unmet need, R&D develops the product to meet that need, the product is produced, and the Marketing team promotes the product.
B) Scientific discovery leads to an invention, the Engineering team designs the product, it is manufactured, and the Marketing team promotes it.
C) Marketing does research to discover a need, R&D comes up with the product concept which is refined by engineering, the Manufacturing team produces it, and the Marketing team sells it.
D) Manufacturing sees a way to improve a product, R&D takes the suggestions and expands on it, the Engineering team redesigns it, the Manufacturing team implements the change, and the Marketing team sells it.
Answer: B
Q2) Collaborative research is especially important in high-technology sectors.
A)True
B)False
Answer: True
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Chapter 3: Types and Patterns of Innovation
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Q1) Until a new technology has established a degree of legitimacy,it may be difficult to attract other researchers to participate in its development.
A)True
B)False
Answer: True
Q2) Product innovation can enable process innovation.
A)True
B)False
Answer: True
Q3) When gutter shields were developed,they replaced gutter cleaning services for homeowners wishing to keep leaves and debris out of their gutters.In other words,the same need was met by an entirely new technology.This is an example of a(n)_____ technology.
A) complementary
B) logical extension
C) discontinuous
D) incremental
Answer: C
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Chapter 4: Standards Battles and Design Dominance
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Q1) The steepness of the monopoly cost curve is largely a function of government regulations.
A)True
B)False
Q2) In some industries,multiple competing technologies can coexist peacefully while in others there will be strong pressures for only one technology to succeed.
A)True
B)False
Q3) Monopoly costs take the form of an s-shape.
A)True
B)False
Q4) Which of the following statement is true about learning curves?
A) There are substantial differences in the rates at which organizations learn.
B) The learning rate is impervious to organizational factors.
C) The learning curve is a function of number of units sold.
D) The learning curve has a specific performance measure, i.e., total cost per unit.
Q5) Explain why it is considered advantageous if a company's technology is adopted by users ahead of other technologies.
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Chapter 5: Timing of Entry Part Two Formulating
Technological Innovation Strategy
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Q1) A firm that has very fast-cycle development processes may be able to capitalize on both first and second-mover advantages.
A)True
B)False
Q2) Lee Peterson has invented a new product that detects water leaks due to broken pipes and sends out an alarm similar to a smoke alarm.However,Lee has very little personal money to invest in this new product.He finally raised enough money to enter the market and began to experience some success.The product was not patentable because it was too similar to other existing technologies.Major corporations saw his success and have now entered the market with competing products.What will be the probable destiny of Lee Peterson's company?
Q3) Since SmoothShoe Inc.is the market leader in the gliding shoe industry,it enjoys an excellent reputation.It was the pioneer of this new market and currently holds 40 percent market share.Now SmoothShoe wants to introduce a new gliding shoe.Discuss how its reputation will affect its acceptance among distributors and consumers.
Q4) The text talks about the timing of entry strategies into the market for new products.What assumptions underlie the use of such strategies?
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Chapter 6: Defining the Organizations Strategic Direction
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Q1) Organizational aptitude refers to those abilities that make a firm more agile and responsive to change.
A)True
B)False
Q2) The Saturday Evening Post bought the paper mills that supplied the paper for printing the magazine.This is an example of horizontal integration.
A)True
B)False
Q3) Even though many aerospace manufacturing firms are very profitable,there are very few upcoming firms.Explain the reason for using at least one force from Porter's Model.
Q4) According to Porter's value chain model,firm infrastructure is a primary activity.
A)True
B)False
Q5) If a firm's product is undifferentiated,buyers will typically experience lesser bargaining power.
A)True
B)False
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Chapter 7: Choosing Innovation Projects
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Q1) Explain why the cash flows (profits minus costs)for a project that are expected to continue for 20 years need to be discounted? Why not simply use the amounts as they are? Would it make a difference if 80 percent of the profits came in during the first 5 years?
Q2) Explain how the real options method could apply to R&D investments in a new project.Are there any drawbacks to this method?
Q3) Venture capitalists are most likely to provide funding
A) if foreign companies are involved with the project.
B) before a new business begins so they can have inputs.
C) when there is only a small return on investment projected.
D) after the new business has already begun operations rather than before it begins.
Q4) The most common use of conjoint analysis is to assess the relative importance of different product attributes to customers.
A)True
B)False
Q5) Many factors in the choice of development projects are quantifiable.
A)True
B)False
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Chapter 8: Collaboration Strategies
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Q1) Even though JetShoes is doing fine on the East Coast in the shoe gliding market,it has decided to collaborate with FastShoes before tackling the West Coast market and trying to compete with SunShoes who is currently the market leader on the West Coast.This is the pooling of
A) supplementary resources.
B) complementary resources.
C) scarce resources.
D) monopolistic resources.
Q2) A firm cannot collaborate with its competitor.
A)True
B)False
Q3) Parker Computer Company is considering entering into collaboration with Sandlot Software Company,but is not sure if the resources of Sandlot are a good fit.How would you address this concern?
A) Do not enter into the agreement until you are 100 percent sure of the fit.
B) It may be difficult to determine the fit. Research it the best you can and then go with it.
C) Resource fit does not matter; all that really matters is cooperativeness.
D) Purchase insurance to cover any uncertainty you feel.
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Chapter 9: Protecting Innovation
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Q1) The demand for Singing Cards has been really high,but now customers are complaining because the supply is so low.Singing Cards cannot keep up with demand,so a good alternative would be to A) protect the technology. B) improve the technology. C) diffuse the technology. D) develop complementary goods.
Q2) An industry can sometimes pressurize a company to provide open (or partially open)access to a new technology.
A)True
B)False
Q3) Fred Stringer has come up with a new computer program to help online sellers manage online auctions at sites such as eBay and others.It is superior to just using a spreadsheet to track auctions.He would like his program to become the dominant design,but also wants to earn a profit from all his hard work.What can Fred do to meet both of these objectives?
Q4) Why would an industry "gang up" on one company that comes out with a new technology? Could this ever cause the company with the new technology to allow the technology to be more open?
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Chapter 10: Organizing for Innovation
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Q1) A loosely coupled structure is better suited for activities that involve the exchange of tacit knowledge.
A)True
B)False
Q2) Tracie Fashions has become very profitable and now employees 80 persons.Tracie needed to have better regulation of employee behavior so she formalized the company with more rules,procedures,and written documentation.This may result in A) less creativity.
B) more creativity.
C) disgruntled employees because they do not know what to expect.
D) more flexibility in responding to fashion trends.
Q3) The Peedle Chocolate Company is headquartered in Belgium.In the United States,it uses manufacturing techniques from France and marketing techniques from Great Britain.It seems to be using the locally leveraged R&D strategy.
A)True
B)False
Q4) What are some of the advantages and disadvantages of large firms in terms of R&D?
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Chapter 11: Managing the New Product Development Process
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Q1) A lead user for a product will often give you an earlier and more accurate idea of whether a new product will be successful in the marketplace compared to other customers.
A)True
B)False
Q2) Pioneer Cleaning Equipment wants to use The House of Quality in designing and developing a new floor buffing machine.This will A) result in a common language and framework for project team members to use. B) blur the relationship between product attributes and customer requirements. C) conceal the competitive shortcomings of the company's existing products.
D) lead to design trade-offs.
Q3) Joe attended a workshop where the Quality Function Deployment (QFD)method of new product development was explained.During the workshop he asked the following question,"This all seems very complex and quantitative to me.I prefer qualitative checks instead.They are less confusing." If you were the workshop leader,how would you address Joe's concern?
Q4) Explain the value of the stage-gate process of new product development.
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Chapter 12: Managing New Product Development Teams
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Q1) Dr.Askew was the Chairman of the Freshman Program Committee at Mountain Home University.This committee was designing a new curriculum for freshman.When he negotiated with the Dean of the University that committee members have no other service assignments so they could concentrate on this project and that the team be given 12 months to complete its goals,he was performing a(n)_____ activity.
A) ambassador
B) task coordination
C) scouting
D) paternalism
Q2) Negotiating delivery deadlines is a task coordination activity.
A)True
B)False
Q3) Which type of international virtual team is likely to be used only for strategic innovations of the utmost importance due to its high expense?
A) Decentralized self-coordination
B) System integrator as coordinator
C) Core team as system architect
D) Centralized venture team
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Chapter 13: Crafting a Deployment Strategy Index
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Q1) If you are seeking to become the dominant design of a new technology,then penetration pricing will not work.
A)True
B)False
Q2) When S.C.Johnson released Agree Shampoo in the late 1970s it was an innovative hair care concept because it repaired split ends.Since it was such an improvement why would S.C.Johnson enter the market with low prices and dealer incentives as it did?
Q3) Emily was looking for a firewall for her home computer.She finally decided on a particular brand because it also included a free anti-spam package to block unwanted email as a bonus.This is an example of A) a premium.
B) vaporware.
C) cash rebate.
D) introductory pricing.
Q4) A firm can signal its commitment to an industry by making substantial investments that would be difficult to reverse.
A)True
B)False
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