Business Strategy and Policy
Exam Solutions
Course Introduction
Business Strategy and Policy explores the frameworks and tools necessary for analyzing a firm's internal and external environments, formulating effective strategies, and implementing policies that sustain competitive advantage. The course emphasizes the integration of knowledge from various business disciplines, including marketing, finance, management, and operations, to address complex organizational challenges. Students examine real-world case studies, learn to assess industry trends, evaluate strategic options, and understand the ethical, social, and global implications of strategic decision-making. By the end of the course, students are equipped with the analytical and decision-making skills required to develop and execute strategies that drive organizational success.
Recommended Textbook
Strategic Management Concepts 3rd Edition by Frank Rothaermel
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12 Chapters
1319 Verified Questions
1319 Flashcards
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Chapter 1: What Is Strategy
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110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/57133
Sample Questions
Q1) Which of the following is an accurate statement about the relationship between firm effects and industry effects?
A) Firm effects deal with the action of competitors; industry effects deal with internal circumstances.
B) Firm effects deal with a manager's actions; industry effects deal with external circumstances.
C) Firm effects deal with a manager's actions; industry effects deal with internal circumstances.
D) Firm effects deal with the action of competitors; industry effects deal with external circumstances.
Answer: B
Q2) Which of the following factors most effectively contributed to the success of Threadless in comparison to other companies with T-shirt designs,including American Eagle,Old Navy,and Urban Outfitters?
A) its reliance on crowdsourcing
B) its point-to-point business model
C) its hub-and-spoke system
D) its shorter distances
Answer: A
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Chapter 2: Strategic Leadership: Managing the Strategy Process
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) The management team at Clear Solutions,Inc.decided to build a branch office in Memphis,Tennessee.Which of the following terms correctly describes this action?
A) strategy formulation
B) strategy implementation
C) execution of strategy
D) business strategy
Answer: A
Q2) Strategic commitments are actions that are
A) inexpensive.
B) long-term oriented.
C) easy to reverse.
D) easy to imitate.
Answer: B
Q3) Organizational values help individuals make choices that are
A) legal but unethical.
B) both illegal and effective.
C) both ethical and effective in advancing a company's goals.
D) ethical but ineffective in achieving long-term success.
Answer: C
Page 4
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Chapter 3: External Analysis: Industry Structure,
Competitive Forces, and Strategic Groups
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110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/57131
Sample Questions
Q1) When is the rivalry among existing competitors in an industry likely to be more intense?
A) when the industry growth rate is high
B) when firms make strategic commitments to compete in an industry
C) when firms engage in non-price competition as opposed to price-cutting
D) when the industry has low exit barriers
Answer: B
Q2) An industry has many firms that compete in it.While products between competitors tend to be similar,they are by no means identical.As a consequence,managers selling a product with unique features tend to have some ability to raise prices.This type of industry is an example of
A) oligopoly.
B) monopoly.
C) perfect competition.
D) monopolistic competition.
Answer: D
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Page 5
Chapter 4: Internal Analysis: Resources, Capabilities, and Core Competencies
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110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/57130
Sample Questions
Q1) Amazon.com's ability to provide the largest selection of items online,combined with superior IT systems and customer service,can be referred to as its
A) equity reserve.
B) economic equity.
C) core competency.
D) capital gain.
Q2) The "Gold Crisps" potato wafers manufactured by True Foods Inc.have been the highest selling wafers in the market.Though the market for wafers is flooded with competitors,True Foods Inc.has been able to maintain its market position for a long time.This is mainly attributed to the unique taste of the wafers that comes from the unique natural flavoring used by the company.This competency of True Foods Inc.will be considered as a(n)_____ resource in the VRIO framework.
A) inexhaustible
B) rare
C) intangible
D) virtual
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Chapter 5: Competitive Advantage, Firm Performance, and Business Models
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110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/57129
Sample Questions
Q1) Genevieve is a recent fashion graduate.She started her own apparel store with an investment of $300,000.In the first year she made a profit of $60,000.If she had taken up a job as a fashion editor for a magazine,she would have earned $50,000 as salary per year.Also,she could have invested her capital,$300,000,in treasury bonds and earned an interest of $12,000.Thus,the amount $62,000 ($50,000 + $12,000)would be Genevieve's
A) social cost.
B) break-even price.
C) reservation price.
D) opportunity cost.
Q2) The management team for SafeCare Chemicals Inc.came up with the following vision statement: "SafeCare Chemicals will conscientiously track its financial performance to ensure profits for its investors,enhance its community through employment and supporting charities,and dispose of waste in a manner that will not harm the environment." This vision statement is most likely based on the A) accounting profitability approach.
B) economic value creation approach.
C) triple-bottom-line approach.
D) balanced-scorecard approach.
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Chapter 6: Business Strategy: Differentiation, Cost
Leadership, and Blue Oceans
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) Which of the following describes an airline that is most likely stuck in the middle?
A) Red Carpet Airline that offers complimentary drinks and meals, coast-to-coast coverage via connecting hubs, plush airport lounges, and high prices.
B) Plush Airline that offers international routes and global coverage, high customer service, high reliability, and high prices.
C) Just Right Airline offers high-quality beverages and meals, plush airport lounges, only a few connections via hubs domestically, poor customer service, and low prices.
D) Bottom Line Airline that offers no assigned seating, no in-flight amenities, no drinks or meals, no airport lounges, and low prices.
Q2) Which of the following is a firm effect that has an impact on the competitive advantage of a firm?
A) the exit barriers within the industry in which the firm operates
B) the number of companies operating in the industry in which the firm operates
C) the intensity of rivalry among existing companies in the firm's chosen industry
D) the value and the cost position of the firm relative to its competitors
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Page 8
Chapter 7: Business Strategy: Innovation and Entrepreneurship
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109 Verified Questions
109 Flashcards
Source URL: https://quizplus.com/quiz/57127
Sample Questions
Q1) Which of the following statements is true of a disruptive innovation?
A) It begins as a low-cost solution to a new problem.
B) It initially performs better than the existing technology.
C) It involves leveraging existing technologies in new markets.
D) It invades the market from the bottom up, by first capturing the low end.
Q2) The customers entering the market in the growth stage are primarily
A) technology enthusiasts.
B) laggards.
C) early adopters.
D) late majority.
Q3) On which of the following tenets is the crossing-the-chasm framework,suggested by Geoffrey Moore,based?
A) The number and size of competitors remain constant throughout the industry life cycle.
B) Each stage of the industry life cycle is dominated by a different customer group.
C) Industries tend to follow an unpredictable industry life cycle.
D) The supply and demand sides of the market remain constant irrespective of the phase of the industry life cycle.
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Chapter 8: Corporate Strategy: Vertical Integration and Diversification
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110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/57126
Sample Questions
Q1) A firm follows a(n)_____ when less than 70 percent of its revenues come from a single business and there are few,if any,linkages among its businesses.
A) related-constrained strategy
B) unrelated diversification strategy
C) differentiation strategy
D) dominant-business strategy
Q2) About 20 years ago,Sturdy Light,Inc.,produced a sturdy,lightweight backpack in a market that was rapidly growing.Sturdy Light became a leader in this market.Eventually,the backpack market reached the maturity stage and slowed down.However,by this time,Sturdy Light had developed a strong brand name and continued to steadily lead the market.Which of the following describes this scenario?
A) Sturdy Light was a star that developed into a cash cow.
B) Sturdy Light was a question mark that developed into a star.
C) Sturdy Light was a dog that developed into a question mark.
D) Sturdy Light was a cash cow that developed into a star.
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Page 10
Chapter 9: Corporate Strategy: Strategic Alliances, Mergers and Acquisitions
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) Which of the following scenarios best illustrates horizontal integration?
A) Regal Autos Inc. enters into a licensing contract with a distributor in a new international market.
B) Regal Autos Inc. acquires a component parts manufacturer who previously supplied to Regal Autos' competitor.
C) Regal Autos Inc. sets up its own distribution channel and retail stores.
D) Regal Autos Inc. joins with Marcus Motors Inc., one of its direct competitors.
Q2) Amiware Inc.,a manufacturer of ceramic cookware,has entered into a contractual agreement with Micoware Inc.The agreement involves vertical strategic alliances connecting different parts of the industry value chain.This arrangement between the two companies best illustrates a(n)
A) joint venture.
B) acquisition.
C) non-equity alliance.
D) greenfield venture.
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Chapter 10: Global Strategy: Competing Around the World
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110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/57124
Sample Questions
Q1) For a firm pursuing a global-standardization strategy,which of the following bases of competition becomes its primary weapon?
A) product differentiation
B) superior customer service
C) local responsiveness
D) price
Q2) Which of the following is a drawback of pursuing a transnational strategy?
A) It creates bottlenecks for global learning.
B) It exposes a firm to diseconomies of scale and location.
C) It requires a global matrix structure, which is difficult to implement.
D) It involves locating all key business activities in the home country headquarters.
Q3) Which of the following types of organizations comparatively requires the lowest levels of investment and control?
A) joint ventures
B) franchising
C) acquisition
D) greenfield operations
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Chapter 11: Organizational Design: Structure, Culture, and Control
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110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/57123
Sample Questions
Q1) The key components of organizational design are
A) structure, culture, and control.
B) structure, efficiency, and control.
C) innovation, efficiency, and culture.
D) innovation, culture, and control.
Q2) Strong organizational cultures that are strategically relevant align employees' behaviors more fully with the organization's
A) hierarchical rigidity.
B) strategic goals.
C) hierarchical structure.
D) strategic flexibility.
Q3) _____ refers to a firm's resistance to change the status quo that can set the stage for the firm's subsequent failure.
A) PESTEL factors
B) Formalization
C) Organizational inertia
D) Centralization
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Page 13
Chapter 12: Corporate Governance and Business Ethics
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110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/57122
Sample Questions
Q1) Why does Michael Porter recommend expanding the customer base of an organization in terms of the shared value creation framework?
A) Doing so could yield significant business opportunities that could improve the standard of living of the poor.
B) Doing so is the best way to ensure that shareholders have the most legitimate claim on profits made by the organization.
C) Doing so could be the only way to meet stockholder expectations in a highly competitive market.
D) Doing so will help to prevent the inclusion of more nontraditional partners into internal firm value chains.
Q2) Ethics is
A) not synonymous with law.
B) impossible to codify into law.
C) always universal and cannot differ between cultures.
D) the minimum acceptable standard in business practice.
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