Business Strategy
Pre-Test Questions
Course Introduction
Business Strategy is a comprehensive course that explores the frameworks, tools, and analytical approaches used by organizations to achieve and sustain competitive advantage in dynamic markets. Through the study of industry analysis, strategic positioning, resource allocation, and competitive dynamics, students develop an understanding of how firms make key decisions concerning growth, diversification, innovation, and global expansion. The course integrates real-world case studies and current events to enhance critical thinking and decision-making skills, preparing students to formulate and implement effective strategies in diverse business environments.
Recommended Textbook
Strategic Management of Technological Innovation 5th Edition by Schilling
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520 Verified Questions
520 Flashcards
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Page 2
Chapter 1: Introduction
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Sample Questions
Q1) Explain how an understanding of the innovation funnel might influence a company's view of research and development.
Answer: If a company truly understands the innovation funnel concept,it will see the innovation process as a funnel,with many potential new product ideas going in the wide end,but very few making it through the development process.The company can then encourage its R&D staff as well as the rest of the company to come up with and submit new ideas.It will also develop ways of evaluating large numbers of ideas and set up screening criteria that would help the firm decide which ideas to elevate to the next level of attention.Students' answers will vary.
Q2) Most innovative ideas do not become successful new products.
A)True
B)False
Answer: True
Q3) Externalities are costs that are borne by individuals other than those responsible for creating them.
A)True
B)False
Answer: True
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3
Chapter 2: Sources of Innovation
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Q1) 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
Q2) The degree to which innovative activities are geographically clustered is independent of the national differences in the way technology development is funded or protected.
A)True
B)False
Answer: False
Q3) The science-push approach to research and development argued that innovation was driven by the perceived demand of potential users.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Types and Patterns of Innovation
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Sample Questions
Q1) The CEO of a pharmaceutical company asked his consultant if it was a good idea to implement the s-curve model to predict when a technology would reach its limits.The consultant identified a limitation in the use of the model.Which of the following is most likely the limitation identified by the consultant?
A) Firms cannot influence the shape of the s-curve through their developmental activities.
B) Unexpected changes in the market can alter the shape of a technology's s-curve.
C) S-curve models cannot be applied in the pharmaceutical industry.
D) S-curve models are outdated and unrealistic.
Answer: B
Q2) 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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5
Chapter 4: Standards Battles and Design Dominance
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Q1) Which of the following statements is true of dominant design?
A) It is not possible to have legally induced adherence to a dominant design.
B) When a firm's technology is locked in as the dominant design of a market, it earns low rewards.
C) A firm that supports a technology that is chosen as the dominant design is in a poor position to shape the evolution of the industry.
D) A firm may find itself locked out of the market if it is unable to adopt the dominant technology.
Q2) Explain how the more a technology is adopted,the better it becomes.
Q3) In a market characterized by network externalities,the benefit from using a good decreases with an increase in the number of other users of the same good.
A)True
B)False
Q4) As firms develop complementary technologies to improve the productivity or ease of utilization of the core technology,the technology becomes less attractive to other firms.
A)True
B)False
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Chapter 5: Timing of Entry
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Sample Questions
Q1) All pioneers face customer uncertainty.
A)True
B)False
Q2) A firm intending to refine an earlier entrant's technology should avoid fast-cycle development processes.
A)True
B)False
Q3) Why were other keyboards that claimed to be more efficient not able to replace the QWERTY keyboard? Explain how this illustrates the need to consider switching costs when introducing new technologies.
Q4) A disadvantage of using parallel development processes is that it greatly lengthens the new product development time.
A)True
B)False
Q5) Other things being equal,an entrant with a strong reputation can attract adoptions earlier than entrants without strong reputations.
A)True
B)False
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Chapter 6: Defining the Organizations Strategic Direction
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Q1) A strategic stakeholder analysis emphasizes the stakeholder management issues a firm ought to attend to due to their ethical or moral implications.
A)True
B)False
Q2) According to Porter's five-force model,if a buyer can threaten to backward vertically integrate,it will:
A) decrease the buyer's bargaining power.
B) increase the buyer's bargaining power.
C) increase the supplier's bargaining power.
D) lower the threat of entry into the industry.
Q3) A firm's emphasis on a scientific discipline that is central to its core competency can make the firm less attractive to individuals from other disciplines.
A)True
B)False
Q4) Dynamic capabilities enable firms to quickly adapt to emerging markets or major technological discontinuities.
A)True
B)False
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Chapter 7: Choosing Innovation Projects
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Sample Questions
Q1) The allocation of a finite quantity of resources over different possible uses is known as research rationing.
A)True
B)False
Q2) Which of the following is true of quantitative methods of analyzing new projects,particularly in rapidly changing environments?
A) They enable managers to use rigorous statistical comparisons of projects.
B) Their accuracy is unquestionable.
C) Discounted cash flow methods are the least commonly used quantitative methods. D) They are particularly accurate in highly uncertain or rapidly changing environments.
Q3) Dayton Regional Medical Center has decided to build a new wing for its outpatient services.Dayton wants to know which services are important to its patients in this new wing.Do they prefer large waiting rooms for family members or small rooms adjacent to recovery rooms? Do they prefer patient advocates to keep them informed,or would nurses be better? What technique would be appropriate to come up with the weights and trade-offs for these types of services? Explain why you consider the technique to be most appropriate.
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Chapter 8: Collaboration Strategies
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Sample Questions
Q1) _____ refers to the degree to which partners have compatible objectives and styles.
A) Resource fit
B) Strategic fit
C) Capability complementation
D) Contractual fit
Q2) When technology is progressing rapidly,firms are more likely to:
A) commit themselves to fixed assets that will rapidly become obsolete.
B) avoid forming alliances for projects that are risky and complex.
C) use linkages with other specialized firms to access resources they do not possess.
D) avoid becoming more narrowly specialized.
Q3) Which of the following statements is true of contract manufacturing?
A) It requires companies to increase its labor force to meet the scale of market demand.
B) It requires firms to meet the scale of market demand by committing to long-term capital investments.
C) It enables a firm to tap the greater economies of scale.
D) It decreases organizational responsiveness to the environment.
Q4) What are the characteristics of collective research organizations?
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Chapter 9: Protecting Innovation
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Q1) A service mark distinguishes the provider of a service rather than a product.
A)True
B)False
Q2) External development efforts typically lack the coordination of internal development.
A)True
B)False
Q3) What is a copyright? Discuss the provisions of the section 106 of the 1976 Copyright Act.
Q4) Which of the following can be protected by a copyright?
A) Familiar symbols
B) Names of people
C) An improvisational speech that has not been recorded
D) A novel
Q5) In the United States,utility patent owners are granted a term of _____ years of protection.
A) 35
B) 20
C) 90
D) 50
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Chapter 10: Organizing for Innovation
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Q1) Pioneer Systems Inc.has a high degree of formalization.Employees in Pioneer Systems are more likely to:
A) exhibit high levels creativity and experimentation.
B) feel empowered to implement new solutions.
C) face morale and motivation problems.
D) face ambiguity as a result of a lack of formal rules and procedures.
Q2) Biotrue Inc.produces tissues and diagnostics substances for three market segments: hospitals,universities,and pharmaceutical companies.The firm is trying to decide whether to decentralize its R&D activities by division or not.You have been called in as a consultant to explain the advantages and disadvantages of such a move.What will your opinion be?
Q3) In a locally leveraged strategy to innovation,the R&D divisions _____.
A) are completely centralized
B) play different roles in the company's overall R&D strategy
C) work on the full scope of development activities relevant to their business unit
D) do not share creative resources and innovative developments
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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Q1) In the product development process,expenditures increase as uncertainty increases.
A)True
B)False
Q2) Trekker Inc.has developed a product with a very short product development cycle.Which of the following can it typically expect?
A) The product's sales will be slow as consumers would already be committed to other products.
B) It will be able to provide complementary goods to enhance the attractiveness of its product.
C) It will be unable to fully amortize the fixed costs of development before the product becomes obsolete.
D) It will not be able to upgrade its product.
Q3) Which of the following measures assesses the ratio of a firm's total profits from new products to its total expenditures?
A) Return on innovation
B) Average cycle time of the innovation
C) Percentage of development projects meeting deadlines
D) Percentage of development projects within the estimated budget
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Chapter 12: Managing New Product Development Teams
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Q1) Karen's supervisor,while discussing about her participation in a new product development team,tells her that she has been engaging in social loafing.This means that Karen:
A) has been involved in whistle-blowing activities.
B) has been discriminating against colleagues belonging to minority groups.
C) has not been putting much effort into the team's work.
D) has stolen office property.
Q2) Which of the following statements is true of heavyweight teams?
A) Project managers of heavyweight teams lack the authority to command resources.
B) Heavyweight teams are always temporary.
C) In heavyweight teams, members are collocated with the project manager.
D) Heavyweight teams are considered inappropriate for platform projects.
Q3) In the forming of virtual teams,what criteria must be used to select team members?
Q4) The CEO of Bright Electronics Inc.has put together an autonomous new product development team.He is now trying to decide the type of leader who should be appointed to head the team.What should he look for in the leader of this team to improve its chances of success?
Q5) Write a short note on functional teams.
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Chapter 13: Crafting a Deployment Strategy
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Sample Questions
Q1) If a firm wishes to avoid giving away its own installed base or complementary goods advantages to others,it may protect them by ensuring its products are incompatible with those of future entrants.
A)True
B)False
Q2) Maverick Systems Inc.is a leading company in the mobile phone market,and profits from its mobile phones are very high.Maverick Systems has developed a new generation of smartphones,which is better than its existing line of smartphones,and has decided to embrace cannibalization of its existing line of smartphones.This means that the company is going to:
A) introduce the new technology right away and increase its market lead while taking away profits from its existing line of smartphones.
B) delay introduction of the next generation product until profits have begun to significantly decrease for the existing line of smartphones.
C) use up most of its financial resources in promoting the new phone.
D) wait for the existing line of smartphones to become obsolete and then introduce the new generation of smartphones into the market.
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Page 15