Business Strategy
Exam Review
Course Introduction
Business Strategy is an advanced course designed to equip students with the analytical tools and frameworks necessary to formulate, evaluate, and implement effective strategies in diverse business environments. The course examines key concepts such as competitive advantage, industry analysis, corporate strategy, and innovation management. Through case studies, simulations, and real-world business scenarios, students learn how organizations position themselves in competitive markets, respond to environmental changes, and achieve long-term objectives. Emphasis is placed on strategic decision-making, resource allocation, and the role of leadership in guiding organizational direction and performance.
Recommended Textbook
Strategic Management of Technological Innovation 5th Edition by Schilling
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13 Chapters
520 Verified Questions
520 Flashcards
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Page 2
Chapter 1: Introduction
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40 Verified Questions
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Sample Questions
Q1) The innovation process is often conceived of as a funnel because most potential new product ideas make it through the development process.
A)True
B)False
Answer: False
Q2) Explain how the globalization of markets affects the importance of innovation.
Answer: The increasing importance of innovation is due in part to the globalization of markets.Foreign competition has put pressure on firms to continuously innovate in order to produce differentiated products and services.Introducing new products helps firms protect their margins,while investing in process innovation helps firms lower their costs.
Q3) If a country's GDP stands at $4,867 billion,it means that the country's _____ is worth $4,867 billion.
A) total annual output
B) investment on technological innovation
C) savings with the World Bank
D) negative variance in budget
Answer: A
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Chapter 2: Sources of Innovation
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Sample Questions
Q1) Innovation often originates with those who create solutions for their own needs.
A)True
B)False
Answer: True
Q2) The president of Mountain Home University has been asked by the board of trustees to set up a separate unit to facilitate the commercialization of technology developed by the research students at the university.Such a unit is typically called a _____.
A) strategic business unit
B) commercialization office
C) technology transfer office
D) science park
Answer: C
Q3) The benefits firms reap by locating in close geographical proximity to each other are known collectively as _____.
A) agglomeration economies
B) incubator economies
C) virtual economies
D) shadow economies
Answer: A
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Page 4
Chapter 3: Types and Patterns of Innovation
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Sample Questions
Q1) For a firm to adopt a component innovation,it requires architectural knowledge about the way components link and integrate to form a whole system.
A)True
B)False
Answer: False
Q2) The path a technology follows through time is termed as _____.
A) technology map
B) technology trajectory
C) technology cluster
D) technology transfer Answer: B
Q3) Technologies always get the opportunity to reach their performance limits before being replaced by a new technology.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Standards Battles and Design Dominance
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Sample Questions
Q1) When are winner-take-all markets good for consumers?
A) When monopoly costs exceed the value of network externality returns
B) When monopoly costs exceed the value of technological utility
C) When the monopoly cost curve is extremely steep
D) When the value of technology utility and network externality returns exceeds monopoly costs
Q2) Which of the following statements is true of a monopoly cost curve?
A) Monopoly costs to market share curve is more s-shaped than network externality returns to market share curve.
B) The steepness of the monopoly cost curve is largely a function of a firm's discretionary behavior.
C) It is not possible for a network externality returns curve to cross a monopoly cost curve.
D) A firm choosing to exploit its monopoly power is flattening its monopoly costs curve.
Q3) Network externalities cannot arise in markets that do not have physical networks.
A)True
B)False
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6
Chapter 5: Timing of Entry
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Sample Questions
Q1) Loren has invented a product that detects water leakages caused by broken pipes and sends out an alarm similar to a smoke alarm.However,Loren has very little personal money to invest in this new product.Therefore,he borrows enough money from his friends to enter the market and begins to experience some success.The product is not patentable because it is too similar to other existing technologies.Major corporations have seen his success and have now entered the market with competing products.What will be the probable destiny of Loren's company?
Q2) Early followers enter the market only after a product begins to penetrate the mass market.
A)True
B)False
Q3) A disadvantage of using parallel development processes is that it greatly lengthens the new product development time.
A)True
B)False
Q4) What assumptions underlie the use of timing of entry strategies into the market for new products?
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Chapter 6: Defining the Organizations Strategic Direction
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Sample Questions
Q1) What are core competencies?
Q2) Sam's Sugar Corp.,a leading cane sugar manufacturer,faces a threat of going out of business when a rival company introduces a zero-calorie sweetener to replace the high-calorie cane sugar.According to Porter's five-force model,the two products are: A) complements.
B) supplements.
C) intermediates.
D) substitutes.
Q3) According to Porter's five-force model,the degree to which a firm relies on one or a few suppliers will influence its ability to negotiate good terms.
A)True
B)False
Q4) According to Porter's five-force model,the threat of potential entrants is influenced by the height of entry barriers.
A)True
B)False
Q5) Explain the advantages and disadvantages of rewarding and promoting the development of core competencies.
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Chapter 7: Choosing Innovation Projects
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Sample Questions
Q1) If the net present value of a project is greater than zero,then the:
A) project cannot be carried out as the cash outflow is too high.
B) present value of cash outflows is higher than present value of cash inflow.
C) project will require 5 years to break even.
D) project generates wealth.
Q2) The most common use of conjoint analysis is to assess the relative importance of different product attributes to customers.
A)True
B)False
Q3) With respect to a research and development (R&D)program,which of the following can be considered the exercise price?
A) The cost of the R&D program
B) The cost of future investment required to capitalize on the R&D program
C) The returns to the R&D investment
D) The returns to the R&D investment minus the cost of the R&D program
Q4) Both net present value and internal rate of return techniques provide concrete financial estimates that facilitate strategic planning and trade-off decisions.
A)True
B)False
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Chapter 8: Collaboration Strategies
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Sample Questions
Q1) Gerden Price Corp.and New Ware Systems Inc.formed an alliance to develop a new line of technologically advanced cooking stoves.Which of the following would be the most likely outcome of this alliance?
A) Faster product delivery to the market
B) Increased market development and penetration times
C) Lesser opportunities to pursue other projects
D) Reduced overall flexibility
Q2) Allured Cosmetics Corp.enters into a contractual agreement with Pure Cosmetics Inc.,a manufacturing firm in the West Coast.According to the contract,Pure Cosmetics can use the manufacturing processes of Allured Cosmetics to produce cosmetics in return for a specific fee.Pure Cosmetics is bound to use the manufacturing process only to make complementary products for the cosmetics manufactured by Allured Cosmetics.This collaborative arrangement is most accurately classified as _____.
A) licensing
B) outsourcing
C) a joint venture
D) capability complementation
Q3) How can firms evaluate potential partners?
Q4) What are the characteristics of collective research organizations?
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Chapter 9: Protecting Innovation
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Sample Questions
Q1) Singing Cards Corp.has decided to make the technology behind its musical cards open.Which of the following is most likely to be one of the advantages associated with this decision?
A) The technology will accrue more rapid adoptions.
B) The price of the technology will rise exponentially.
C) The production of complementary goods will cease.
D) The technology's installed base will accumulate much more slowly.
Q2) In the United States,there are no laws to protect trade secrets.
A)True
B)False
Q3) George has come up with a new computer program to help sellers manage online auctions at sites such as eBay.It is more efficient than just using a spreadsheet to track auctions.He would like his program to become the dominant design,but he also wants to earn a profit from all his hard work.What can George do to most effectively meet both these objectives?
Q4) If multiple firms benefit from a technology's success,the developer of that technology has a much greater incentive to invest in further developing the technology.
A)True
B)False
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Chapter 10: Organizing for Innovation
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Sample Questions
Q1) Since much innovation arises from experimentation and improvisation,the _____ organization structure is typically considered better suited to creativity and innovation.
A) mechanistic
B) formalized
C) standardized
D) organic
Q2) The customization of products and processes to a local market makes them particularly difficult to transfer to divisions serving different markets.
A)True
B)False
Q3) Not-invented-here syndrome occurs when:
A) a division of a firm is reluctant to adopt other divisions' innovations.
B) a firm tends to adopt innovations developed by competitors.
C) an innovation is openly accepted without testing its suitability.
D) developers of a failed innovation refuse to take responsibility for its failure.
Q4) What are some of the advantages and disadvantages of large firms in terms of R&D?
Q5) Explain why a mechanistic organizational structure stifles creativity.
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Chapter 11: Managing the New Product Development Process
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Sample Questions
Q1) A sequential process has an early warning system to indicate that planned features are not manufacturable.
A)True
B)False
Q2) Explain the function of the go/kill gate in the stage-gate process for project development.
Q3) Astech Inc.has been developing a new graphic design software.The firm has released a functional version of the software and has sent it to several lead users for testing.Based on the feedback from the lead users,the firm is going to improve the design of the product and begin commercial production.This initial version of the product is referred to as the _____.
A) spiral model
B) substitute product
C) beta version
D) theta model
Q4) Firms always make decisions about projects on the basis of marketing criteria.
A)True
B)False
Q5) What is a partly parallel development process? Is it universally used?
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Chapter 12: Managing New Product Development Teams
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Sample Questions
Q1) At Tech Edge Inc.,a special team is set up for making a robot capable of assisting blind people in going about their daily activities.The members of the team are taken from various areas of the firm,including R&D,marketing,manufacturing,and distribution.The new team is put under the charge of a senior manager.This team is most accurately an example of a:
A) cross-functional team.
B) laggard team.
C) homogenous team.
D) self-directed work team.
Q2) Albert has put together a new product development team based on the functional team structure.Which of the following statements is most likely to be true about this team?
A) Team members will spend up to 50 percent of their time on team-related activities.
B) The team will typically require dedicated liaison personnel.
C) The team will have a high degree of cross-functional integration.
D) The team structure will be straightforward to implement.
Q3) Describe project charter and contract book.Explain their purposes.How are they related to each other?
Q4) Write a short note on functional teams.
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Chapter 13: Crafting a Deployment Strategy
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Sample Questions
Q1) Cannibalization is the process by which a firm's sales of one product diminish due to a substitute product offering by a competitor.
A)True
B)False
Q2) When Green Water Publication publishes professional books,it donates or sends a number of these new books to university libraries and professors.Which of the following strategies is the firm using to accelerate distribution?
A) Bundling relationship
B) Product modularity
C) Sponsorship
D) Consignment arrangement
Q3) Which of the following statements is true of innovators and early adopters?
A) They are unwilling to take risks and to pay high prices.
B) They may demand considerable customization and technical support.
C) They are more likely to respond to marketing that communicates the product's completeness.
D) For this market segment, detailed technical information is not as important as using market channels with high reach and high credibility.
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