Business Strategy
Practice Exam
Course Introduction
Business Strategy explores the frameworks, principles, and tools that enable organizations to achieve competitive advantage in dynamic markets. Through the analysis of real-world case studies and contemporary business environments, students learn to formulate, implement, and evaluate strategies at both the corporate and business-unit levels. The course covers topics such as industry analysis, resource-based views of competition, strategic positioning, growth and diversification strategies, and the impact of globalization and digital transformation. By applying strategic thinking and decision-making skills, students develop a holistic understanding of how organizations create and sustain value in complex, uncertain environments.
Recommended Textbook Essentials of Strategic Management 5th Edition by John E Gamble
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708 Verified Questions
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Chapter 1: Strategy,Business Models, and Competitive Advantage
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Sample Questions
Q1) A company's strategy consists of
A) actions to develop a more appealing business model than rivals.
B) plans involving alignment of organizational activities and strategic objectives.
C) offensive and defensive moves to generate revenues and increase profit margins.
D) competitive moves and approaches that managers have developed to grow the business,attract and please customers,conduct operations,and achieve targeted objectives.
E) its strategic vision,its strategic objectives,and its strategic intent.
Answer: D
Q2) A well-conceived strategy builds a company's
A) profitability and financial strength.
B) competitive strength and market standing.
C) distinctive competencies and sustainability.
D) competitive edge.
E) All of these choices are correct.
Answer: E
Q3) List five elements of an enterprise's business strategy.
Answer: Answers may vary.
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Chapter 2: Strategy Formulation, Execution, and Governance
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Sample Questions
Q1) In a single-business company,the strategy-making hierarchy consists of
A) business strategy,divisional strategies,and departmental strategies.
B) business strategy,functional strategies,and operating strategies.
C) business strategy and operating strategy.
D) managerial strategy,business strategy,and divisional strategies.
E) corporate strategy,divisional strategies,and departmental strategies.
Answer: B
Q2) Which of the following are characteristics of an effectively worded strategic vision statement?
A) graphic,directional,and focused
B) challenging,competitive,and "set in concrete"
C) balanced,responsible,and rational
D) realistic,customer-focused,and market-driven
E) achievable,profitable,and ethical
Answer: A
Q3) Identify and briefly discuss at least two examples of faulty oversight by a company's board of directors in corporate governance and/or the strategy formulation,strategy execution process.
Answer: Answers may vary.
Page 4
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Chapter 3: Evaluating a Companys External Environment
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Sample Questions
Q1) What is the analytical value of studying competitors and trying to predict what moves rivals will make next?
Answer: Answers may vary.
Q2) Identify and briefly explain any three factors that intensify competitive pressures stemming from the threat that new firms will enter the industry.
Answer: Answers may vary.
Q3) Not all positions on a strategic group map are equally attractive because
A) entry and exit barriers are different for each strategic group.
B) key success factors are usually quite different for differently positioned industry participants.
C) small strategic groups are always less profitable than large strategic groups.
D) across-group rivalry is strongest at the outer edges of the strategic group map.
E) industry driving forces and competitive pressures favor some companies or groups and hurt others,and the profit potential of different strategic groups varies because of strengths and weaknesses in each strategic group's position.
Answer: E
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Chapter
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Sample Questions
Q1) Which one of the following is not a reliable measure of how well a company's current strategy is working?
A) trends in the company's sales and earnings growth
B) the company's development of human capital,organizational capital,and information capital
C) changes in the firm's image and reputation with its customers
D) the company's overall financial strength
E) evidence of improvement in internal processes such as defect rate,order fulfillment,and employee productivity
Q2) A resource-based strategy
A) focuses on exploiting a company's best-executed operating strategy.
B) is based upon efficient performance of the company's primary value chain activities.
C) concentrates on minimizing the costs associated with the design of a product or service.
D) attempts to exploit resources in a manner that offers value to customers in ways rivals are unable to match.
E) focuses on working with forward channel allies to develop capabilities to outmatch the capabilities of rivals.
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Chapter 5: The Five Generic Competitive Strategies
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Sample Questions
Q1) Successful differentiation allows a firm to
A) command the largest market share in the industry.
B) set the industry ceiling on price.
C) avoid being overly concerned about whether entry barriers into the industry are high or low.
D) command a premium price for its product and/or increase unit sales and/or gain buyer loyalty to its brand.
E) take sales and market share away from rivals by undercutting them on price.
Q2) Which of the following is not one of the ways that a company can achieve a cost advantage by revamping its value chain?
A) Eliminating distributors and dealers by selling direct to customers.
B) Replacing certain value chain activities with faster and cheaper online technology.
C) Increasing production capacity and then striving hard to operate at full capacity.
D) Relocating facilities so as to curb the need for shipping and handling activities.
E) Streamlining operations by eliminating low value-added or unnecessary work steps and activities.
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Chapter 6: Strength-Ending a Company Competitive
Position: Strategic Moves, Timing, and Scope of Operations
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Sample Questions
Q1) Which of the following is not an example of a defensive move to protect a company's market position and restrict a challenger's options for initiating competitive attack?
A) granting volume discounts or better financing terms to dealers/distributors and providing discount coupons to buyers to help discourage them from experimenting with other suppliers or brands
B) signaling challengers that retaliation is likely in the event they launch an attack
C) publicly committing the company to a policy of matching a competitors' terms or prices
D) maintaining a war chest of cash and marketable securities
E) challenging struggling runner-up firms that are on the verge of going under
Q2) What are the merits of outsourcing the performance of certain value chain activities as opposed to performing them in-house? Under what circumstances does outsourcing make good strategic sense?
Q3) Explain the pros and cons of bypassing regular sales channels in favor of direct sales and Internet retailing.
Q4) Explain what is meant by hit-and-run or guerrilla warfare type offensive strategies.
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Chapter 7: Strategies for Competing in International Markets
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Q1) Which of the following is not a potential benefit of strategic alliances or other cooperative arrangements between foreign and domestic companies?
A) Obtaining wider access to attractive country markets
B) Gaining better access to scale economies in production and/or marketing
C) Filling competitively important gaps in technical expertise and/or knowledge of local markets
D) Safeguarding the company's dependence,allowing for positive engagement once the purpose has been served and ensuring products of important technical standardization requirements are not developed
E) Sharing distribution facilities and dealer networks,thus mutually strengthening access to buyers
Q2) Discuss in some detail the difference between a localized multidomestic strategy and a global strategy,and give the pros and cons of each.
Q3) Identify and briefly explain two ways that multinational companies are able to use international operations to improve overall competitiveness.
Q4) Explain the importance of competing in emerging markets.
Q5) When is a global strategy "superior" to a multidomestic strategy?
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Chapter 8: Corporate Strategy: Diversification and the
Multi-Business Company
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Sample Questions
Q1) With an unrelated diversification strategy,the types of companies that make particularly attractive acquisition targets are
A) financially distressed companies with good turnaround potential,undervalued companies that can be acquired at a bargain price,and companies that have bright growth prospects but are short on investment capital.
B) companies offering the biggest potential to reduce labor costs.
C) cash cow businesses with excellent financial fit.
D) companies that are market leaders in their respective industries.
E) companies that are employing the same basic type of competitive strategy as the parent corporation's existing businesses.
Q2) Discuss the pros and cons of a strategy of unrelated diversification.
Q3) Opportunities for cross-business strategic fit exist
A) in R&D and technology activities only.
B) in supply chain activities only.
C) in sales and marketing activities only.
D) in production and distribution activities only.
E) anywhere along the respective value chains of related businesses; no one place is best.
Q4) Explain the difference between a cash cow business and a cash hog business.
Page 10
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Chapter 9: Ethics,Corporate Social
Responsibility,Environmental Sustainability, and Strategy
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Q1) The essence of socially responsible business behavior is
A) encouraging company personnel to run for political offices.
B) balancing strategic actions to benefit shareholders against the duty to be a good corporate citizen.
C) undertaking actions to balance the interests of all company stakeholders rather than just exclusively look out for the interests of shareholders.
D) making sizable contributions to political action committees representing the interests of the industry.
E) pursuing actions to keep prices low enough that the company's profits will not be viewed by the general public as obscenely high or exorbitant.
Q2) Explain the difference between the school of ethical universalism and the school of ethical relativism.
Q3) What is the business case for why a company should pursue ethical strategies?
Q4) Identify and briefly describe the three main drivers of unethical strategies and unethical managerial and business behavior.
Q5) What is the essence of the theory of corporate social responsibility (CSR)? How does the CSR theory differ from the concept of corporate citizenship?
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Chapter 10: Super Strategy Execution-Another Path to Competitive Advantage
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Sample Questions
Q1) Which of the following is not among the types of actions and initiatives undertaken by management in the strategy execution process?
A) building an organization capable of executing the strategy
B) instituting policies and procedures that facilitate rather than impede strategy execution
C) deciding which core competencies and value chain activities to leave as is and which ones to overhaul and improve
D) pushing for continuous improvement in how value chain activities are performed
E) tying rewards directly to the achievement of strategic and financial targets and to good strategy execution
Q2) Symbolic culture-changing actions are best represented by
A) those actions top executives take to lead by example.
B) frugality if a low-cost strategy is being executed.
C) ensuring all management actions are "walking the talk."
D) ceremonial events to celebrate actions that exemplify the performance culture.
E) All of these choices are correct.
Q3) What are the characteristics of unhealthy cultures?
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