Competitive Strategy
Solved Exam Questions
Course Introduction
Competitive Strategy explores the frameworks and analytical tools that businesses use to achieve and sustain a competitive advantage in dynamic markets. The course examines the root causes of industry profitability, the role of resources and capabilities, and the strategic decisions firms make to outperform rivals. Through case studies and real-world examples, students will learn how to analyze competitors, anticipate market shifts, and formulate strategies that leverage core competencies, innovation, and strategic positioning. By the end of the course, students will be well-equipped to craft strategies that drive long-term success in diverse business environments.
Recommended Textbook
Strategic Management Theory An Integrated Approach 12th Edition by Charles W. L. Hill
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12 Chapters
896 Verified Questions
896 Flashcards
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Chapter 1: Strategic Leadership: Managing the Strategy
Making Process for Competitive Advantage
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81 Verified Questions
81 Flashcards
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Sample Questions
Q1) The great virtue of scenario planning is that managers must think outside of the box to anticipate what they might do in different situations.
A)True
B)False
Answer: True
Q2) The final component of the strategic management process is crafting the organization's mission statement,which provides the framework or context within which strategies are formulated.
A)True
B)False
Answer: False
Q3) The profit growth of a company can be measured by the increase in net profit over time.
A)True
B)False
Answer: True
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Page 3
Chapter 2: External Analysis: The Identification of Opportunities and Threats
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81 Verified Questions
81 Flashcards
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Sample Questions
Q1) A consolidated industry structure:
A)consists of a large number of small companies.
B)can be seen in agriculture, dry cleaning, health clubs, and real estate brokerage.
C)consists of few companies that are in a position to determine industry price.
D)provides no scope for oligopoly to exist.
E)is characterized by low-entry barriers and commodity-type products.
Answer: C
Q2) One of the defining characteristics of the mature stage of the industry life-cycle is that growth is low or zero.
A)True
B)False
Answer: True
Q3) Entry barriers in embryonic industries tend to be based on:
A)brand loyalty.
B)economies of scale.
C)absolute cost advantages.
D)regulatory advantage.
E)technological knowhow.
Answer: E
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Chapter 3: Internal Analysis: Resources and Competitive Advantage
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79 Verified Questions
79 Flashcards
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Sample Questions
Q1) Employee productivity is a common measure of efficiency.
A)True
B)False Answer: True
Q2) The importance of reliability in building competitive advantage has increased dramatically over the past several decades.
A)True
B)False Answer: True
Q3) The ability of established competitors to imitate the competitive advantage of a rival is limited by factors such as existing strategic commitments and low absorptive capacity.
A)True
B)False Answer: True
Q4) Quality-as-excellence and quality-as-reliability are concepts that apply to goods but not services.
A)True
B)False Answer: False
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Chapter 4: Building Competitive Advantage Through Functional Level Strategies
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75 Verified Questions
75 Flashcards
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Sample Questions
Q1) Identify the two dimensions of quality and describe how companies can achieve them.
Q2) Which of the following is the first step in the five-step chain reaction,as articulated by Deming,with regard to the philosophy underlying TQM ?
A)Improvement in productivity
B)Increase in a company's profitability
C)Higher market share due to superior quality of products
D)Reduction of costs due to improved quality
E)Creation of more jobs
Q3) Flexible production technologies allow a company to produce a wider variety of end products at a unit cost that at one time could be achieved only through the mass production of a standardized output
A)True
B)False
Q4) A benefit of long-time customer loyalty is the free advertising that customers provide for a company through referrals.
A)True
B)False
Page 6
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Chapter 5: Business Level Strategy
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74 Flashcards
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Sample Questions
Q1) Jordan's Ice Creams is strategically located near a university.After realizing that most of its customers,who are mostly students,prefer a wide range of flavors,it started offering different combinations of premium flavors,cones,and toppings to create hundreds of extravagant,customized products.Which generic strategy is Jordan pursuing?
A)Broad low-cost strategy
B)Broad differentiation strategy
C)Focused low-cost strategy
D)Focused differentiation strategy
E)Product substitution strategy
Q2) When a company recognizes that the needs of one market segment is not the same as another and accordingly customizes its product offerings,it is said to be pursuing:
A)stuck-in-the-middle strategy.
B)rapid-growth strategy.
C)differentiation strategy.
D)focus strategy.
E)low-cost strategy.
Q3) List the features that need to be included in functional strategies to improve differentiation.
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Chapter 6: Business Level Strategy and the Industry Environment
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Sample Questions
Q1) Which of the following is an advantage of franchising?
A)It gives the franchisor the same level of tight control over franchisees as does chaining.
B)It allows the franchisor to earn all of the profits made by franchisees.
C)It is beneficial for franchisees because they do not have to face higher capital costs.
D)It helps the franchisees by relieving them of the responsibility of running operations.
E)It can help the franchisor expand his or her business rapidly.
Q2) Which of the following shakeout strategies requires a company to limit or decrease its investment in a business and to extract,or milk,the proceeds of its investment as much as it can?
A)Market concentration strategy
B)Share-increasing strategy
C)Cost-leadership strategy
D)Hold-and-maintain strategy
E)Harvest strategy
Q3) Fragmented industries typically have high barriers to entry.
A)True
B)False
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Chapter 7: Strategy and Technology
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73 Flashcards
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Sample Questions
Q1) With reference to high-technology industries,which of the following statements is true about technical standards?
A)They emerge because there are economic benefits associated with them.
B)They cause compatibility problems between products and their complements.
C)They can create a lot of confusion in the minds of consumers.
D)They often result in higher production costs.
E)They increase the risks associated with supplying complementary products.
Q2) A set of related technical standards that specify the common set of features or design characteristics of a product is called a dominant design.
A)True
B)False
Q3) Microsoft's near monopoly substantially reduces the risks facing the makers of complementary products and the costs of those products.
A)True
B)False
Q4) Give an example of an industry that has recently undergone a technological paradigm shift.What impact did the shift have on established companies and on new entrants to the industry?
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Chapter 8: Strategy in the Global Environment
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67 Flashcards
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Sample Questions
Q1) Global standardization strategy emphasizes customization and product differentiation.
A)True
B)False
Q2) Despite the globalization of production and markets,many of the most successful companies in certain industries are still clustered in a small number of countries.
A)True
B)False
Q3) An international strategy may not be viable in the long term,but companies that can pursue it need to shift toward a global standardization strategy to survive.
A)True
B)False
Q4) A localization strategy is most appropriate when there are substantial differences across nations with regard to consumer tastes and preferences and when cost pressures are not too intense.
A)True
B)False
Q5) List and briefly describe each of the four basic global strategies.
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Chapter 9: Corporate-Level Strategy: Horizontal Integration,
Vertical Integration, and Strategic Outsourcing
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Sample Questions
Q1) Strategic alliances and outsourcing are two alternatives to vertical integration.What are the advantages and disadvantages of each compared to vertical integration? What can managers do to eliminate or reduce the risks?
Q2) Horizontal integration allows companies to obtain bargaining power over suppliers or buyers and increase their profitability at the expense of suppliers or buyers.
A)True
B)False
Q3) What is the relationship between a company's corporate-level strategy and its business model?
Q4) The price that one division of a company charges another division for its products,which are the inputs the other division requires to manufacture its own products is known as:
A)vertical disintegration.
B)related pricing.
C)transfer pricing.
D)related diversification.
E)tapered pricing.
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Chapter 10: Corporate Level Strategy: Related and Unrelated Diversification
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Sample Questions
Q1) A company considering entering an industry that is in the mature stage of its life cycle would generally prefer which of the following entry strategies?
A)Joint ventures
B)New ventures
C)Acquisitions
D)Long-term contracting
E)Taper integration
Q2) Which of the following statements is not generally true of a diversification strategy based on the realization of economies of scope?
A)The strategy requires the head office to evaluate each business unit as a stand-alone operation.
B)The strategy allows a company to realize cost economies among business units.
C)The strategy may allow a company to use shared resources more intensively, thereby realizing economies of scale.
D)The strategy requires managers to be aware of the costs of coordination.
E)The strategy requires close coordination among different business units.
Q3) What are the two general types of diversification and when would one be preferred over the other?
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Chapter 11: Corporate Performance, Governance, and Business Ethics
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Sample Questions
Q1) Gamma Corp.recently bought stocks in an under-performing company that has failed to maximize stockholder wealth.Gamma Corp.made changes to the top management structure of the company and persuaded the management to pursue strategies that maximize the wealth of stockholders.Gamma Corp.has been able to earn millions by doing so.Which of the following concepts is illustrated in this scenario?
A)Greenmail
B)Agency theory
C)Information asymmetry
D)Self-dealing
E)On-the-job consumption
Q2) Stock-based compensation schemes for senior executives are designed to align the interests of managers with those of stockholders.
A)True
B)False
Q3) An effective governance arrangement exists when the CEO is also the chairman of the Board of Directors.
A)True
B)False
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Chapter 12: Implementing Strategy Through Organization
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Sample Questions
Q1) Natalie and Shay are both employees at RightTool,Inc.,the marketing manager,often meets with Shay,the production manager,in order to solve specific mutual problems.This is an example of:?
A)Organizational culture.
B)Liaison roles.
C)Direct contact.
D)Diverging mechanisms.
E)Strategic control.
Q2) In any organization,for-profit or not-for-profit,span of control refers to the:?
A)number of managers at the highest levels in the organization.
B)CEO and his or her management team.
C)number of subordinates who report directly to one manager.
D)number of supervisors in a specific segment of a manufacturing activity.
E)number of members elected or appointed to be the board of directors.
Q3) Effective organizational design can allow a company to obtain a competitive advantage,but it has no impact on profitability.
A)True
B)False
Q4) Identify and discuss the three building blocks of organizational structure.
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