Business Policy Review
Questions
Course Introduction
Business Policy is a capstone course that integrates knowledge from various functional areas of business, such as marketing, finance, management, and operations, to develop strategic decision-making skills. The course examines the formulation and implementation of organizational strategies in response to changing internal and external environments. Students explore concepts such as competitive advantage, corporate governance, ethical leadership, and global business challenges through the analysis of real-world case studies. By focusing on both theoretical frameworks and practical applications, Business Policy equips students with the analytical tools and critical thinking abilities necessary for effective strategic management in complex business settings.
Recommended Textbook
Crafting and Executing Strategy Concepts and Cases 22nd Edition by Thompson Jr
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Chapter 1: What Is Strategy and Why Is It Important?
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Sample Questions
Q1) Winning a sustainable competitive edge over competitors does not hinge on which of the following?
A)having a distinctive competitive product offering
B)building competitively valuable expertise and capabilities not readily matched, and offering distinctive products
C)building experience, know-how, and specialized capabilities that have been perfected over a long period of time
D)having hard-to-beat capabilities and impressive product innovation
E)building products and distributing them at low prices to a broad customer base irrespective of manufacturing cost
Answer: E
Q2) The consumer goods companies listed below all pursue the same business model with the exception of
A)Acer laptops.
B)Gillette razors.
C)Epson printers.
D)Keurig espresso coffee machines.
E)Nintendo Wii.
Answer: A
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Chapter 2: Charting a Companys Direction
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Sample Questions
Q1) Management's strategic vision for an organization
A)charts a strategic course for the organization ("where we are going")and provides a rationale for why this directional path makes good sense.
B)describes in fairly specific terms the organization's strategic objectives, and strategy.
C)spells out how the company will become a big moneymaker and boost shareholder value.
D)addresses the critical issue of "why our business model needs to change and how we plan to change it."
E)spells out the organization's strategic intent and the actions and moves that will be undertaken to achieve it.
Answer: A
Q2) A superior example of a well-stated strategic objective is to
A)increase revenues by more than the industry average.
B)be among the top five companies in the industry in customer service.
C)overtake key competitors on product performance or quality within three years.
D)improve manufacturing performance by 5 percent within 12 months.
E)obtain 150 new customers during the current fiscal year.
Answer: C
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Chapter 3: Evaluating a Companys External Environment
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Sample Questions
Q1) In evaluating whether the industry and competitive environment presents sufficiently attractive prospects for both competitive success and attractive profits usually does not involve a consideration of which of the following factors?
A)the industry's growth potential and whether competitive pressures will likely grow stronger or weaker, and whether strong competitive forces are squeezing industry profitability to subpar levels
B)whether the company occupies a stronger market position than rivals
C)whether the industry's future profitability will be favorably or unfavorably affected by the prevailing driving forces
D)the severity of the macro-environment problems confronting the industry
E)whether the industry's product is strongly or weakly differentiated
Answer: E
Q2) Where the real payoff from strategic analysis of industry dynamics comes is for managers to draw some conclusions about what strategy adjustments will be needed to deal with the impacts of the driving forces. True or false? Explain.
A)True
B)False
Answer: True
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Chapter 4: Evaluating a Companys Resources,
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Sample Questions
Q1) A company resource weakness or competitive deficiency
A)represents a problem that needs to be turned into a strength because weaknesses prevent a firm from being a winner in the marketplace.
B)causes the company to fall into a lower strategic group than it otherwise could compete in.
C)prevents a company from having a distinctive competence.
D)is something a company lacks or does poorly (in comparison to rivals)or a condition that puts it at a disadvantage in the marketplace.
E)usually stems from having a missing link or links in the industry value chain.
Q2) The most difficult part of benchmarking is
A)the decision of whether to do it at all.
B)how to obtain access to information regarding rivals' practices and costs.
C)when to initiate the process.
D)what information to utilize in the analysis process.
E)when to stop the process and move forward with strategy.
Q3) Identify one competitive resource strength that a SWOT analysis of Blue Apron and Domino's Pizza would reveal.
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Chapter 5: The Five Generic Competitive Strategies
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Q1) What are the distinctive features of a broad differentiation strategy? Under what circumstances is a broad differentiation strategy appealing?
Q2) A low-cost provider strategy can defeat a differentiation strategy when
A)sellers are not charging a price premium.
B)many rivals are pursuing a similar differentiation approach.
C)a company can offset thinner profit margins per unit by selling enough additional units to increase total profits.
D)there are few ways to differentiate a product or a service and many buyers perceive these differences valuable.
E)customers are basically satisfied and don't think extra attributes are worth a higher price.
Q3) Explain how the keys to sustaining a broad differentiation strategy differ from the keys to sustaining a best-cost producer strategy.
Q4) Describe the strategy of striving to be the industry's overall low-cost provider. What does a company have to do to achieve low-cost provider status?
Q5) Identify cost drivers in a company's value chain. Explain how these drivers impact a firm's generic strategy.
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Chapter 6: Strengthening a Companys Competitive Position
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Sample Questions
Q1) ________ is the extent to which a firm's internal activities encompass one, some, many, or all of the activities that make up an industry's entire value chain system.
A)Horizontal scale
B)Vertical scope
C)Outsourcing scope
D)Cooperative scaled scope
E)Focal scope
Q2) The purposes of a defensive strategy do not include
A)increasing the risk of having to defend an attack.
B)weakening the impact of any attack that occurs.
C)pressuring challengers to aim their efforts at other rivals.
D)helping protect a competitive advantage.
E)decreasing the risk of being attacked.
Q3) Identify and briefly discuss three factors a company must consider in order to capture the benefits of engaging in strategic alliances.
Q4) Why does a company racing to stake out a strong position in an industry of the future need strategic alliances?
Q5) Discuss why timing of strategic moves is important.
Page 8
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Chapter 7: Strategies for Competing in International Markets
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Sample Questions
Q1) Why does a U.S. company exporting wooden furniture manufactured in Malaysia to the European Union benefit from the decline in the value of the ringgit against the euro?
A)Because decline in the value of the ringgit against the euro raises the cost of furniture manufactured in Malaysia, making it less competitive in European markets.
B)Because decline in the value of the ringgit against the euro reduces the cost of furniture manufactured in Malaysia, making it more competitive in European markets.
C)Because decline in the value of the ringgit against the euro has no impact on the cost of furniture manufactured in Malaysia, both in Malaysian or European markets.
D)Because decline in the value of the ringgit against the euro makes European goods more competitive as compared to Malaysian goods.
E)Because decline in the value of the ringgit against the euro makes Malaysian goods less competitive in the U.S. market.
Q2) Explain how exchange rate fluctuations pose a risk to manufacturing companies that rely upon an export strategy to compete in foreign markets.
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Chapter 8: Corporate Strategy
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Sample Questions
Q1) When Disney acquired Marvel Comics on August 31, 2009, for $4.24 billion, management needed to determine whether or not there were opportunities to strengthen the business, which includes all of the following considerations, except A)the transferring of valuable resources and capabilities from one business to another.
B)combining related value chain activities of different businesses to achieve lower costs.
C)forcing cultural independence, operating diversity, and sophisticated analytical responsibility on the businesses to ensure compatibility with the corporate overhead identity.
D)sharing the use of powerful and well-respected brand names across multiple businesses.
E)encouraging knowledge-sharing and collaborative activity among the businesses.
Q2) Why is it pertinent in evaluating a diversified company's business lineup to rank a diversified company's businesses on the basis of their future performance prospects?
Q3) Which is the better approach to diversification-a strategy of related diversification or a strategy of unrelated diversification? Explain and support your answer.
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Chapter 9: Ethics, Corporate Social Responsibility,
Environmental Sustainability, and Strategy
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Q1) Notions of right and wrong, fair and unfair, moral and immoral, ethical and unethical
A)are governed mainly by religious views held in different geographic regions of the world.
B)are present in all societies, organizations, and individuals.
C)vary enormously from country to country across the world.
D)ultimately depend on the circumstances-nothing is really black or white when it comes to ethical standards.
E)ultimately depend on a person's own values and beliefs.
Q2) Codes of conduct based on ethical relativism ARE NOT ethically problematic for multinational companies if they
A)create a maze of conflicting ethical standards.
B)justify conflicting ethical standards for operating in different countries.
C)establish little moral basis for establishing ethical standards for a company worldwide.
D)restrict enforcement of ethical standards worldwide.
E)create standards that mostly relate to ethical codes in a company's home market, which might trigger compliance issues in the local market.
Q3) What is the case for why business strategies should be ethical?
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Chapter 10: Building an Organization Capable of Good Strategy Execution
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Sample Questions
Q1) A company must do all of the following to match structure to strategy EXCEPT A)choose a basic organizational design and modify it to fit the company's particular business.
B)supplement the design structure with coordinating mechanisms.
C)institute networking and communication arrangements to support strategy execution.
D)set up "ideal" organizational arrangements despite having to disturb existing relationships.
E)knit the efforts of outsourced groups together.
Q2) Imagine that you have been retained as a consultant to REI, a diversified U.S. retailer of outdoor adventure outerwear, gear, and travel expeditions. What might be some common approaches that you would recommend to REI for improving its core competencies and competitive capabilities?
Q3) Identify and briefly discuss/explain three components of structuring a company's work effort to promote successful strategy execution.
Q4) In choosing between a centralized and a decentralized organizational structure, which of the two is more likely to further the cause of good strategy execution? Why?
Q5) What business case could you make to Costco to empower its employees?
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Chapter 11: Managing Internal Operations
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Sample Questions
Q1) Illustrate how companies have used strategic priorities to drive how capital allocations are made in the pursuit of good strategy execution.
Q2) NOT among the reasons that Wegmans Food Markets delivers above-average profit margins and has below-average employee turnover rates in comparison to its supermarket industry rivals is
A)its recruitment and staffing policy of filling at least half of its open opportunities internally.
B)a regular series of programs designed to "hear," capture, and implement employees' ideas.
C)company events such as "open-door" days, team huddles, focus groups, and two-way Q&As with senior management.
D)rewards and benefits substantially lower than supermarket industry averages in order to boost profit margins.
E)multimillion dollar investments in the training and education of its employees.
Q3) Discuss control mechanisms that managers can use to monitor the performance of empowered employees.
Q4) How has Wegmans created a strategy-supportive reward structure?
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Chapter 12: Corporate Culture and Leadership
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Sample Questions
Q1) The emergence and sustainability of a strong culture like Epic Systems has been fostered by
A)senior executives that walk the walk of high ethical standards.
B)a strong emphasis on developing innovative core competencies and competitive capabilities.
C)a sincere, long-standing company commitment to operating the business according to established traditions, thereby creating an internal environment that supports decision-making and strategies based on cultural norms.
D)centralized decision-making and strict enforcement of company policies.
E)a long-standing commitment to strict enforcement of established policies and procedures and steadfast unwillingness to change these policies and procedures.
Q2) What is the role of managerial leadership in changing a problem corporate culture?
Q3) Suppose you are managing a company that provides digital archival record-keeping services to midsized companies and institutions. How might the two basic types of healthy corporate cultures become valuable to good strategy execution? How would you know if your company has one or the other type of healthy corporate culture?
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