Business Strategy
Exam Preparation Guide
Course Introduction
Business Strategy explores the foundational concepts, frameworks, and tools used to analyze and formulate organizational strategies in competitive environments. This course covers topics such as industry and competitor analysis, value creation, sustainable competitive advantage, and strategic decision-making. Through the examination of real-world case studies, students develop the skills to critically assess a firms external environment and internal capabilities, craft effective strategies, and understand the implications of strategic choices across a range of industries. The course emphasizes practical application, strategic thinking, and the integration of various business functions to drive long-term 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
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Sample Questions
Q1) Stakeholder impact analysis primarily helps a firm
A) gain a competitive advantage while acting as a good corporate citizen.
B) lower the difference between its value creation and costs.
C) single-mindedly focus on shareholders alone.
D) exploit external stakeholders to benefit internal stakeholders.
Answer: A
Q2) FindFor Inc.is an e-commerce retail firm that sells a variety of merchandise online.Through services like cash on delivery,easy return,and online tracking,the company has created more customer value than its competitors (brick-and-mortar businesses)at the same price.Also,the company's costs are substantially low due to minimal investment in operation and administration.In this scenario,FindFor Inc.has most likely been able to provide superior value and cost control through A) strategic parity.
B) strategic profiling.
C) strategic liquidation.
D) strategic positioning.
Answer: D
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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) Which of the following functions do the general managers in strategic business units primarily perform?
A) design generic business strategies based on guidelines received from corporate headquarters
B) set overarching strategic objectives to unify the entire conglomerate under one mission
C) take responsibility for decisions and actions within a single functional area
D) allocate scarce resources among different business divisions
Answer: A
Q2) A positive relationship between vision statements and firm performance is more likely to exist when
A) visions are product-oriented.
B) internal stakeholders are isolated from defining and revising the visions.
C) organizational structures are aligned with the firm's vision statement.
D) vision statements are equivalent to listening to the customers.
Answer: C
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Chapter 3: External Analysis: Industry Structure,
Competitive Forces, and Strategic Groups
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) Which of the following is an implication of high exit barriers in an industry?
A) The number of underperforming firms in the industry will be low.
B) The industry will face excess capacity.
C) The competitive pressure among existing firms will be low.
D) The industry will be more attractive for new entrants.
Answer: B
Q2) How can a firm change its industry structure from monopolistically competitive or oligopolistic to a near monopoly?
A) by reducing the entry barriers in its industry
B) by developing proprietary technology
C) by implementing frequent price-cuts
D) by decreasing its pricing power
Answer: B
Q3) Which of the following is the best characterization of sociocultural forces?
A) a firm's culture, norms, and values
B) a society's culture, norms, and values
C) a competitor's culture, norms, and values
D) a focus group's culture, norms, and values
Answer: B
Page 5
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Chapter 4: Internal Analysis: Resources, Capabilities, and Core Competencies
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) In the context of the SWOT matrix,which of the following best exemplifies a firm's internal strength?
A) increase in a firm's customer loyalty
B) growth in the size of the market in which a firm operates
C) rise in the income of the demographic segment to which a firm caters
D) loss of a competitor's reputation
Q2) Rice Dazzle Inc.has been making the same breakfast cereal for 50 years.Recently,sales have plummeted.To counteract this,the company created a new package that included an endorsement by a celebrity.As a result,sales increased close to previous highs.However,the cereal itself remained the same.According the VRIO framework,is the new packaging a valuable resource for Rice Dazzle?
A) Yes, because the new packaging has an endorsement by a celebrity.
B) Yes, because the new packaging made the product more attractive in the eyes of consumers.
C) No, because the new packaging did not improve the product itself.
D) No, because the new packaging did help to not increase sales past the previous high for sales.
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Page 6
Chapter 5: Competitive Advantage, Firm Performance, and Business Models
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110 Verified Questions
110 Flashcards
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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) Which of the following approaches to assess competitive advantage is based on the view that noneconomic factors can have a significant impact on a firm's financial performance?
A) the triple-bottom-line approach
B) the economic value creation framework
C) the accounting profitability approach
D) the balanced-scorecard
Q3) 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.
C) strong focus on marketing and sales to promote products and services.
D) negligent investment toward research and development.
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Page 7
Chapter 6: Business Strategy: Differentiation, Cost
Leadership, and Blue Oceans
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110 Flashcards
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Sample Questions
Q1) A _____ primarily details the goal-directed actions managers take in their quest for competitive advantage when competing in a single product market.
A) business-level strategy
B) code of ethics
C) mission statement
D) functional-level strategy
Q2) Tangles Costume Jewelry offers slightly lowerquality merchandise than competitors at a much lower price.What strategy is Tangles using?
A) cost-leadership
B) differentiation
C) niche marketing
D) product diversification
Q3) Firms pursuing a differentiation strategy primarily seek to
A) keep their cost structures lower than that of the cost leader.
B) reduce the value gap to gain a competitive advantage.
C) provide products that are a direct imitation of the competitors' products.
D) create higher customer perceived value than the value that competitors create.
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Page 8
Chapter 7: Business Strategy: Innovation and Entrepreneurship
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) Norce Autos Inc.allows its customers,suppliers,researchers,and the community in general to contribute their ideas toward new product developments.Customers and other interested stakeholders can let the company know what new features they want to see in their next car.If the company faces any technical complexities that its internal R&D team cannot solve,it posts the problem on its website and allows people from the external community to provide solutions.In this scenario,Norce Autos Inc.is primarily leveraging its A) economies of scope.
B) open innovation model.
C) razor-razor-blade business model.
D) experience-curve effects.
Q2) When firms innovate by leveraging existing technologies into new markets,they are said to be involved in A) incremental innovations.
B) radical innovations.
C) architectural innovations.
D) disruptive innovations.
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Chapter 8: Corporate Strategy: Vertical Integration and Diversification
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110 Flashcards
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Sample Questions
Q1) How does a conglomerate benefit from following an unrelated diversification strategy?
A) The conglomerate can solely depend on its primary business activity for a major portion of its revenues.
B) The conglomerate can share most of its competencies in products, services, technology, or distribution between all its businesses.
C) The conglomerate can overcome institutional weaknesses, such as a lack of capital markets, in emerging economies.
D) The conglomerate can limit the learning- and experience-curve effects it faces.
Q2) Which of the following firms is least integrated?
A) a firm that enters a joint venture with another company to develop a new technology
B) a firm that owns production subsidiaries across the globe
C) a firm that makes equity investments in its supplier's company
D) a firm that buys all the required raw materials from multiple external vendors
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Chapter 9: Corporate Strategy: Strategic Alliances, Mergers and Acquisitions
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Sample Questions
Q1) How did the strategic alliance between HP and DreamWorks Animation SKG affect HP?
A) It helped HP pursue a taper integration strategy.
B) It enabled HP to compete head on with Cisco's videoconferencing solution.
C) It resulted in depreciation of HP's shareholder value.
D) It failed because HP lacked the expertise in selecting and integrating technology acquisitions.
Q2) In terms of the build-borrow-or-buy framework,a firm's internal resources are considered to be relevant when they are
A) similar to those that need to be developed and superior to those of competitors in the targeted area.
B) similar to those that need to be developed and inferior to those of competitors in the targeted area.
C) different from those that need to be developed and superior to those of competitors in the targeted area.
D) different from those that need to be developed and inferior to those of competitors in the targeted area.
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Chapter 10: Global Strategy: Competing Around the World
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110 Flashcards
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Sample Questions
Q1) The transnational strategy is similar to a(n)_____ strategy because they both focus on product differentiation and low costs.
A) liquidation
B) product diversification
C) international
D) blue ocean
Q2) A(n)_____ strategy arises out of the combination of high pressure for local responsiveness and high pressure for cost reductions.
A) transnational
B) multidomestic
C) international
D) global-standardization
Q3) Which of the following will most likely harm a MNE's reputation?
A) Principal-agent problems cause a MNE to merge with another MNE.
B) Increased competition causes a MNE to close a factory in a developing country.
C) Wages for workers in a factory owned by a MNE increase, causing profits to decline.
D) A sweatshop owned by a MNE has an explosion that kills hundreds of workers.
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Chapter 11: Organizational Design: Structure, Culture, and Control
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110 Flashcards
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Sample Questions
Q1) Nick just graduated from law school and wants to start his own law firm.It is best for Nick to use a _____ organizational structure.
A) functional
B) simple C) mechanistic
D) matrix
Q2) Why does a firm use an organic organization combined with a functional structure when implementing a differentiation strategy?
A) It allows the firm to create incentives to foster process innovation in order to drive down cost.
B) It allows the firm to reduce its cost below that of competitors while offering acceptable value.
C) It allows the firm to constantly upgrade core competencies in R&D, innovation, and marketing.
D) It allows the firm to nurture and constantly upgrade necessary core competencies in manufacturing and logistics.
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Chapter 12: Corporate Governance and Business Ethics
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Sample Questions
Q1) _____ are the board members who are part of a company's senior management team appointed by shareholders to provide the board with necessary information pertaining to the company's internal workings and performance.
A) Investors
B) Outside directors
C) Inside directors
D) Auditors
Q2) Outside directors are more likely to watch out for the interests of shareholders of their firm because
A) they are more likely to benefit from using inside information to trade stocks.
B) they do not have the safety of serving on the boards of other firms.
C) they are part-time employees of the firm.
D) they have more independence than inside directors.
Q3) Which of the following is an important internal corporate-governance mechanism?
A) shareholder capitalism
B) board of directors
C) market for corporate control
D) activist investors
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