Corporate Strategy
Chapter Exam Questions
Course Introduction
Corporate Strategy explores the formulation, implementation, and evaluation of strategies that guide organizations toward long-term success and competitive advantage. This course examines how firms analyze their external environment, allocate resources, and make decisions regarding diversification, mergers and acquisitions, global expansion, and strategic alliances. Emphasis is placed on aligning corporate objectives, structure, and governance with the overall vision of the company, using real-world case studies and strategic frameworks to understand challenges faced by leaders in complex, dynamic business environments.
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Strategic Management Concepts and Cases 1st Edition by Jeffrey H. Dyer
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Page 2
Chapter 1: What Is Business Strategy
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Q1) Explain the significance of internal analysis.
Answer: Internal analysis focuses on the company itself.Internal analysis completes the SWOT (Strengths,Weaknesses,Opportunities,and Threats)by focusing on strengths and weaknesses.More formally,internal analysis involves an analysis of the company's set of resources and capabilities that can be deployed-or should be developed-to deliver unique value to customers.
In the 1980s,the resource-based view of the firm,also known as the resource-based model,was developed to explain why some firms outperform other firms within the same industry.
Firms that do not have the resources and capabilities that are necessary to implement the strategies they are contemplating,may need to improve,change,or possibly create them in order to offer unique value to their customers.This is where resource allocation becomes an important dimension of strategy.Once a company decides how it hopes to offer unique value,it must allocate the resources necessary to build those resources or capabilities.
Q2) A company's primary purpose that often specifies the business or businesses in which the firm intends to compete -or the customers it intends to serve-refers to its
Answer: mission
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Chapter 2: Analysis of the External Environment:
Opportunities and Threats
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Q1) Barriers that help keep firms using the same supplier or buyer by imposing extra costs for substituting suppliers or buyers are known as _____.
Answer: switching costs
Q2) OneTick Shop Inc.experienced a loss of finances in the small town of Brightland as a lot of people from the town moved to bigger cities in search of jobs.This resulted in a loss of both returning as well as new customers.This scenario primarily reflects _____.
A) regulatory forces
B) global forces
C) environmental forces
D) demographic forces
Answer: D
Q3) A product that is fundamentally different yet serves the same function or purpose as another product best defines the term _____.
A) threat
B) substitute
C) opportunity
D) rivalry
Answer: B
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Chapter 3: Internal Analysis: Strengths, Weaknesses, and Competitive Advantage
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Q1) Define rarity and explain how it creates competitive advantage.
Answer: Something that is rare,is to be uncommon,or not available to other competitors.Competitive advantages arise when resources or capabilities possess two attributes: value and rarity.Unique is often used as a synonym for rare.Rare or unique resources create competitive advantage through a basic principle of economics-scarcity.When products or services are scarce,users are often willing to pay a higher price for them than they would be if the same products or services were more commonly available,leading to higher company profits.
Q2) ZipTag Inc.is an online company that allows venders of varied products to display their products to prospective buyers.This company has been providing service to both customers and sellers and has established itself in the market as a credible company to conduct business with.This has caused more dealers to display their products in ZipTag as they trust that the company will provide the necessary advertising to pull in prospective customers.This is an example of a _____.
A) time compression diseconomy
B) virtuous circle
C) tacit knowledge
D) path dependence
Answer: B
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Chapter 4: Cost Advantage
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Q1) Rinkon Inc.,an automobile company,purchased its competitor TrackRoads Inc.that had similar production quantities and a sufficient amount of raw materials.This takeover was done to decrease the unit cost production of Rinkon and to increase its production using more equipment in Rinkon.This strategy led to record profits and more customers investing their finances on cars manufactured by Rinkon.The scenario best illustrates the:
A) acquisition strategy.
B) pricing strategy.
C) cost-management strategy.
D) investment strategy.
Q2) Taurus Inc.usually produces 5,000 handcrafted products in a day.Recently,the demand for handcrafted products drastically increased as one of its products became a popular item for home décor.Due to this increase,the company had to up its production level to 10,000 products per day.This,however,decreased the price of individual products.This scenario best illustrates _____.
A) economies of wealth
B) economies of finance
C) economies of scope
D) economies of scale
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Chapter 5: Differentiation Advantage
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Q1) At Red Inc.,a retail store,Mark,the manager,maps the consumption chain to understand the buying patterns of the consumers.He has identified how consumers become aware of their needs for products or services.Which of the following is he likely to do next?
A) He identifies how consumers find the store's offerings.
B) He identifies why dissatisfied consumers return products.
C) He identifies the kind of help that consumers need in order to use their products.
D) He identifies the mode used to pay for the products.
Q2) Suede Inc.,a company that manufactures bags,makes extensive use of advertising to compete in the market.The features of its product are similar to existing products in the market.It uses other promotional tools such as discounts,coupons,and rebates to increase its customer base.In this scenario,which of the following elements does Suede rely on to differentiate its products?
A) Product reliability
B) Convenience
C) Brand image
D) Quality
Q3) Explain the reason why substitute products are taken as a threat by firms.
Q4) Explain product differentiation.
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Chapter 6: Corporate Strategy
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Q1) Movement by a firm along its own value chain in the direction of sales,service,or warranty operations is termed _____.
A) horizontal specialization
B) backward integration
C) forward integration
D) horizontal diversification
Q2) Even though companies offer varied products and provide unique value to their customers,they have similar barriers to face when entering into a host country due to policies set up by the country's government.The similarities shared by the companies in the way they set up business in the country are an example of a(n)_____.
A) plan of action
B) passive judgment
C) dominant logic
D) imitation
Q3) In vertical integration,movement in the direction of raw materials is _____.
Q4) What are the mechanisms that help companies in exploiting and/or expanding their resources and capabilities?
Q5) Explain the ways in which diversification adds value.
Q6) What is a greenfield entry? When should a company use it?
Page 8
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Chapter 7: Vertical Integration and Outsourcing
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Q1) Sport Soles Inc.,a sports footwear manufacturing company,makes athletic shoes with rubber soles.In order to maximize its value and profit,Sport Soles sets up its operations right next to rubber tree fields.This way,the company gets easy access to its main raw material.In the context of vertical integration,this scenario illustrates that Sport Soles Inc.is exercising _____.
A) control
B) coordination
C) extensive focus
D) modular interdependence
Q2) BHG Corp.is a glass manufacturing company that specializes in float glasses.The company manufactures float glass through various stages of melting and refining,coating,and annealing.It is then inspected and cut according to customer requirements.This manufacturing process performed by BHG Corp.is termed as _____.
A) virtuous circle
B) value chain
C) task specialization
D) supply chain
Q3) What are the disadvantages to outsourcing?
Q4) What are the dangers of vertical integration?
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Chapter 8: Strategic Alliances
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Q1) An alliance is likely to rely most on relationships between individuals when it is based on _____.
A) legal contracts
B) collateral bonds
C) goodwill trust
D) shared ownership
Q2) Which of the following statements is true about strategic alliances?
A) Strategic alliances exclude functions that are bought through bidding.
B) In strategic alliances, the power to make decisions is always evenly distributed amidst the firms.
C) In strategic alliances, companies may choose to cooperate at any stage along the value chain.
D) Strategic alliances usually lead to one of the firms losing their relational advantage.
Q3) Explain the different ways through which a firm can create value in an alliance.Support your answer with suitable examples.
Q4) A(n)_____ is a type of strategic alliance in which cooperation between firms is managed directly through contracts,without cross-equity holdings,or an independent firm being created.
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Chapter 9: International Strategy
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Q1) Score Ink Corp.,a publishing firm,decides to enter a new market.It changes its strategy from standardization to local responsiveness in order to meet the needs of the new market.However,in order to execute this strategy,it had to increase production and distribution expenses.Which of the following is adopted by Score Ink?
A) A multidomestic strategy
B) A global strategy
C) An arbitrage strategy
D) A standardization strategy
Q2) Slate-E Corp.,an industrial equipment manufacturer,engages in design adaptability in order to manage the costs of variations.Which of the following is likely to be true in this case?
A) Slate-E's is likely to mass produce machinery that are standard across the globe.
B) Slate-E's cranes are likely to have the exact same external features in every market.
C) Slate-E's factory machines are likely to have standard core components across the globe.
D) Slate-E's is likely to create highly customized equipment from scratch for every individual customer.
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Chapter 10: Innovative Strategies That Change the Nature of Competition
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Q1) Which of the following statements is true of a bundling strategy?
A) It works particularly well when a company offers a broad array of products.
B) It works best in markets where freebies are likely to be very expensive.
C) It typically uses price skimming as a strategy to increase profits.
D) It encourages sales by providing products at a discount.
Q2) Define two general categories of innovations.
Q3) Explain mass customization with an example.
Q4) Copper Inc.,an existing clothing outlet,decides to shift from direct to online retailing.It offers the same products at a reduced price as it does not have to incur the costs to manage a store.In this case,which of the following patterns of innovative strategies has Copper adopted?
A) Recon guring the value chain to eliminate activities
B) Creating low-end disruptive innovations to decrease competition
C) Forming product differentiation strategies to increase value
D) Adding additional product features to increase the product life-cycle
Q5) Groups of people who share similar needs and thus are likely to desire the same features in a product are called _____.
Q6) _____ coined the term hypercompetition.
Q7) Explain the four stages of the product life cycle.
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Chapter 11: Competitive Strategy
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Q1) Plateus Inc.,a food manufacturing company,has brand equity worth a billion dollars that has been accomplished through consistent delivery of quality products and long-term advertising.These strategies make entering the industry a formidable task for any other firm.Which of the following is exemplified in this case?
A) An entry barrier
B) A tit-for-tat strategy
C) A complementary strategy
D) The Nash equilibrium
Q2) Any factor that limits the ability of a company to move between strategic groups is called a(n)_____.
Q3) Lieme Inc.and Pola Inc.are oligopolistic rivals in the automobile industry.Lieme has staked out a price position that is slightly higher than that of Pola.Even so,if Pola raises its price,Lieme would too,in order to maintain the differential.Which of the following is being exemplified in this case?
A) Implementing an entry barrier
B) Limiting competitive access to scarce resources
C) Introducing new products frequently
D) Monitoring and mimicking rival behaviour
Q4) Briefly describe the Nash equilibrium.
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Chapter 12: Implementing Strategy
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Q1) Godwel Inc.,an insurance company,wants to assign accountability for particular tasks.It wants to measure the performance of every unit of the company.Which of the following organizational elements will help Godwel accomplish the given task?
A) Strategy
B) Structure
C) Style
D) Skill
Q2) Robinson Inc.,a manufacturer of smartphones,focuses on moving from its one set of strategic plans to another by increasingly engaging itself with customer services.It feels that it is important to increase the quality of products to increase and retain its customer base.Which of the following phases of organizational change is exemplified in this case?
A) Unfreezing
B) Hard triangle
C) Changing
D) Refreezing
Q3) A group of influential people from all levels in an organization that support and lead the change effort is called a _____.
Q4) What are the three phases of changes?
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Chapter 13: Corporate Governance and Ethics
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Q1) Which of the following individuals has a legal fiduciary duty to act in the best interests of the owners of the corporation where he or she works?
A) Neehara, a nurse at a private hospital
B) Ivana, a senior executive at a financial corporation
C) Steve, a salesperson at an electronic store
D) Jamal, a technical support engineer at an IT firm
Q2) Pick N Shop Inc.operates a chain of supermarkets.The company offers a bonus of $500 to its sales representatives if they can sell products worth $5,000 per month.It also offers bonuses and other benefits to its employees and managers.By offering such bonuses,Pick N Shop Inc.is primarily trying to avoid a(n)_____.
A) hostile takeover
B) proxy fight
C) agency problem
D) accountability problem
Q3) Explain the difference between the shareholder primacy model and the stakeholder model.
Q4) Explain with examples how the engagement of a company with its key stakeholders can affect its overall performance and competitive advantage.
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Chapter 14: Strategy and Society
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Q1) Peter,the founder of MilkWorld Inc.,started his dairy company with the intent of creating a formidable supply-chain link and providing a lucrative source of income for the local dairy farmers in his country.Peter is most likely to be considered a(n):
A) venture capitalist.
B) investment manager.
C) social entrepreneur.
D) angel investor.
Q2) Kevin works for a consulting firm that strictly follows a 40 hours-per-week work schedule as prescribed in the employment terms laid out by the labor tribunal.In this scenario,Kevin's firm is diligently fulfilling its _____.
A) philanthropic responsibilities
B) hybrid responsibilities
C) legal responsibilities
D) superordinate responsibilities
Q3) Differentiate between institutional change and capacity building.
Q4) _____ refers to the simultaneous creation of economic value and social value for the larger community in which a business operates.
Q5) Discuss the four roles played by stakeholders in the value net.
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