Business Policy Test
Bank
Course Introduction
Business Policy is a capstone course that integrates knowledge from various functional areas of business, such as marketing, finance, operations, and human resources, to provide students with a comprehensive understanding of strategic decision-making and organizational direction. The course explores the formulation, implementation, and evaluation of business strategies, focusing on how organizations adapt to changing environments and competitive landscapes. Through case studies, simulations, and analytical frameworks, students develop critical thinking and problem-solving skills necessary for effective management and leadership. Emphasis is placed on ethical considerations, corporate governance, and the impact of global trends on policy development and execution.
Recommended Textbook
Strategic Management Concepts BRV 1st Edition by Jeffrey
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14 Chapters
700 Verified Questions
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Page 2
H. Dyer
Chapter 1: What Is Business Strategy?
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Sample Questions
Q1) What does it mean to provide unique value? Briefly explain the two strategies involved in providing unique value.
Answer: Unique value is the reason a firm wins with customers or the value proposition it offers to customers, such as a low cost advantage or differentiation advantage.This is often referred to as a company's value proposition, or the value that it proposes to offer to customers.Companies typically try to achieve a competitive advantage by choosing between one of two generic strategies for offering unique value:low cost or differentiation.A firm that chooses a low-cost strategy focuses on reducing its costs below those of its competitors.Key sources of cost advantage include economies of scale, lower-cost inputs, or proprietary production know-how.A firm that chooses a differentiation strategy focuses on offering features, quality, convenience, or image that customers cannot get from competitors.
Q2) The industry and geographic area that a company competes in, is referred to as its
A) niche
B) business
C) segment
D) market
Answer: D
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Page 3
Chapter 2: Analysis of the External Environment: Opportunities and Threats
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Sample Questions
Q1) Leo Corp., an automobile company, experienced an increase in growth rate this year as the company sold its products at a lesser rate due to the economic conditions that the industry recently went through.This has helped the company to attain more investments than before and consequently to invest in new assets, research and development, and new product development.Which of the following macroeconomic forces does this scenario best illustrate?
A) Currency exchange rate
B) Economic growth
C) Inflation
D) Interest rate
Answer: D
Q2) Royalz Inc.is an automobile company that requires a lot of raw material to manufacture its cars.Royalz Inc.buys these raw materials from other companies that sell car parts as products.From which of the following does Royalz Inc.source its inputs?
A) Producers
B) Customers
C) Suppliers
D) Employees
Answer: C
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Chapter 3: Internal Analysis: Strengths, Weaknesses, and Competitive Advantage
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Sample Questions
Q1) A firm's values and rankings of what is most important most accurately defines the term _____.
A) assets
B) priorities
C) resources
D) capabilities
Answer: B
Q2) Resources that create _____ can be defined as those that create economic value for a firm.
A) opportunities
B) liabilities
C) costs
D) profits
Answer: D
Q3) The characteristics that make a resource or capability difficult to imitate is known as _____.
Answer: inimitability
Q4) What is an intangible resource?
Answer: It is an economically valuable asset that does not have a physical presence.
Page 5
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Chapter 4: Cost Advantage
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Q1) Blaze Corp., a car company, shared its costs of producing cars.It did so by introducing the production of car accessories that are used by customers to upgrade or customize their cars.Blaze Corp.started selling car accessories such as engine oils, wheels, and music player and thus shared its market research costs between cars and car accessories.This led to a definite decrease in the overall cost of production.This scenario best illustrates _____.
A) economies of scale
B) economies of finance
C) economies of wealth
D) economies of scope
Q2) The relatively fixed costs such as the costs of plant and equipment, which do not increase with an increase in the number of units manufactured, are known as _____.
A) fixed cost of production
B) fixed cost of supply
C) fixed cost of demand
D) fixed cost of scale
Q3) Information that is not public and that is viewed as the property of the holder is called _____.
Q4) Explain why a learning curve is more complex than a scale curve.
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Chapter 5: Differentiation Advantage
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Q1) Zeal Inc.launches a new software application.The application doesn't offer any new features but is cheap compared to others in the market.However, because of its low price, customers benefit from network effects.The application often crashes due to bugs in the software.Which of the following is likely to be true in this case?
A) Zeal's new product is an example of customization.
B) The users of the product can contact other users for queries.
C) Zeal's new product is likely to be considered reliable although not convenient.
D) The customers are likely to purchase it for the unique job the product does.
Q2) Explain product differentiation.
Q3) Dave's is a retail chain that offers all utility products ranging from home appliances, stationery, and groceries.Its customers prefer the store as they can buy everything they need under one roof.Dave's has more than a 100 outlets across the state, which makes the store easily accessible for customers easy.These features of Dave's best exemplify the element of _____.
A) Quantity
B) Convenience
C) Preference
D) Quality
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Chapter 6: Corporate Strategy
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Questions
Q1) Rest & Sleep Inc.is a mattress manufacturing firm.By manufacturing related products such as bed covers, comforters and quilts, and pillows, it has gained significant competitive advantage as it has managed to create profits in all these markets as well.Rest & Sleep creates a challenge for the other companies in the market by providing unique value through its customer services and warranties.Which of the following terms best describes what Rest & Sleep Inc.is practicing?
A) Market penetration
B) Business unit strategy
C) Corporate strategy
D) Unrelated diversification
Q2) How does diversification help exploit existing customer-facing resources?
Q3) In vertical integration, movement in the direction of raw materials is _____.
Q4) Sparkle LLC, a beverage industry, earns almost all of its profits only by selling beverages.Sparkle LLC can be best categorized as a _____.
A) single business
B) diversified business
C) dominant vertical business
D) dominant business
Q5) What does the term adjacent market mean?
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Chapter 7: Vertical Integration and Outsourcing
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Q1) In the context of the primary reasons for vertical integration in companies, what do capabilities refer to?
A) Whether a company has the finances to handle and overcome organizational criticism
B) Whether a company knows when it should establish and exercise strict rules and regulations
C) Whether a company can economize on scarce inputs in order to reduce transaction costs
D) Whether a company has the right resources to perform an activity better than other firms
Q2) Cygnus Bank is a banking and financial services company.It offered a large sum of money and a chance to receive employment to the programmers who could create a software that would help enhance employee productivity.Which of the following types of crowdsourcing did Cygnus Bank use?
A) Crowdvoting
B) Crowdinnovation
C) Crowdtasking
D) Crowdcreating
Q3) What are the dangers of vertical integration?
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Page 9
Chapter 8: Strategic Alliances
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Q1) An air conditioner manufacturer, Hues Corp., decides to form a strategic alliance with a firm to source components that make up the highest percentage of total costs.Which of the following suppliers is it most likely to choose as a partner?
A) Jades Inc., which manufactures the packages required for finished products of Hues
B) Black Corp., which prints Hues logo on the air conditioners
C) Fin Inc., which produces the compressors used in Hues air conditioners
D) Den Corp., which produces the designer vents for Hues that come in different colors
Q2) Stylink Inc.and Plateus Inc.formed an alliance to create and own a legally independent company.However, Stylink tried to exploit the alliance-specific investments made by Plateus.Which of the following is being exemplified in this case?
A) Hold-up
B) Misrepresentation
C) Bondage
D) Battery
Q3) What are the different types of nonequity alliances?
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Chapter 9: International Strategy
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Q1) Slate-E Corp., an industrial equipment manufacturer, engages in design adaptability in order to manage the costs of variations.Which of the following is likely to be true in this case?
A) Slate-E's is likely to mass produce machinery that are standard across the globe.
B) Slate-E's cranes are likely to have the exact same external features in every market.
C) Slate-E's factory machines are likely to have standard core components across the globe.
D) Slate-E's is likely to create highly customized equipment from scratch for every individual customer.
Q2) Which of the following is most likely to be categorized as a market risk associated with entering a new market?
A) The local government introducing tariffs on foreign products
B) The local government requiring a certain percentage of managers to be locals
C) The currencies of countries fluctuating significantly when compared to the U.S. dollar
D) The distribution process being different from that in the United States
Q3) The spread of businesses across national borders is called _____.
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11
Chapter 10: Innovative Strategies That Change the Nature of Competition
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Q1) Pearl Corp., a manufacturer of dental equipment, creates a new instrument.With the experience it has in creating small equipment required for dental surgeries, it customizes the new tool to be more accurate and effective.It also comes with an improvised handle.Which of the following innovations has Pearl adopted in this scenario?
A) An altered innovation
B) An incremental innovation
C) A radical innovation
D) A progressive innovation
Q2) Which of the following statements is true of a firm that creates a radical innovation?
A) It focuses on the established knowledge base of a firm to deliver value.
B) It relies on existing technologies and resources to create a new product.
C) It employs a fundamentally different business model than its rivals.
D) It aims to sustain its current product offering and revenues.
Q3) A radical innovative strategy in which companies in the same industry find the innovation so destructive that they can no longer do business as usual is called a(n)
Q4) Groups of people who share similar needs and thus are likely to desire the same features in a product are called _____.
Page 12
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Chapter 11: Competitive Strategy
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Q1) A company wants to form the foundation of a competitive strategy.It decides to assess its strengths and weaknesses.In this case, the company should first assess its
A) resources and capabilities
B) organizational structure
C) structural chart
D) competitors' strategies
Q2) What are the principles that strengthen a company's ability to compete?
Q3) Fuchsia Inc., a cosmetics manufacturer, decides to change how it competes in the market.With this objective in mind, it decides to target a different market segment with its existing set of products.However, Fuchsia takes a long time to reconfigure its activities and systems to meet these changes.Which of the following is being exemplified in this case?
A) Mobility barrier
B) Product differentiation
C) Customer bias
D) Tasks disintermediation
Q4) In game theory, a set of actions that are always played no matter what a rival chooses to do is referred to as the _____.
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Chapter 12: Implementing Strategy
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Q1) Which of the following statements is true of skills?
A) It represents the most important S in the 7 S model.
B) It helps create alignment between goals, skills, and environmental needs.
C) It includes recruitment, hiring, training, promotion, and compensation.
D) It refers to the abilities of individuals, groups, or organizations to perform tasks.
Q2) Mark Dinewell Inc., a well-established restaurant chain has vice presidents for different geographic regions and functional managers for each of those regions.Which of the following organizational elements is exemplified in this case?
A) Strategy
B) Structure
C) Style
D) Skill
Q3) When an organizational element or practice is made so essential that its value is taken for granted, it is referred to as _____.
A) generating a sense of urgency
B) building a guiding coalition
C) creating a vision
D) institutionalizing change
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14
Chapter 13: Corporate Governance and Ethics
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Q1) RedMart Corp.operates a chain of supermarkets.The managers and other employees of the company have been on strike for months due to their differences with its owners.As a result, the share price of the company has fallen drastically.Pro Investments Inc.purchases a majority of the shares of RedMart, confident that it can manage the company better.The problem faced by RedMart Corp.as result of the separation of ownership and control can be termed as a(n) _____.
A) hostile takeover
B) proxy fight
C) agency problem
D) accountability problem
Q2) Antonia owns and runs a bakery in her neighborhood.She is the only person responsible for the liabilities of her bakery.Her bakery is an example of a(n) _____.
A) individual proprietorship
B) corporation
C) partnership
D) joint venture
Q3) _____ are those values that define for an individual, group, or society things that are morally right or wrong.
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Chapter 14: Strategy and Society
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Q1) Discuss the role of a social entrepreneur in the creation of shared value.
Q2) Rended Inc., a publishing house, launches a unique initiative that involves educating children from poor economic backgrounds.For every product that a customer purchases, Rended would contribute $10 toward this cause.Which of the following best exemplifies Rended's initiative?
A) Incremental innovation
B) Corporate social responsibility
C) Competition response strategy
D) Strategic alliance
Q3) Ruth works for an electronics manufacturing company, Zeeway Inc., whose employees volunteer over 1 million hours per year on initiatives that include environmental conservation, economic empowerment, and literacy programs.Which of the following best represents Zeeway's initiative?
A) Incremental innovation
B) Competition response strategy
C) Corporate social responsibility
D) Strategic alliance
Q4) _____ refers to a social entrepreneur who creates something new through the combination of diverse and different elements.
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