Corporate Strategy
Exam Answer Key
Course Introduction
Corporate Strategy examines how organizations achieve competitive advantage and long-term success by making high-level decisions about their overall direction, resource allocation, and relationships with stakeholders. This course explores frameworks and analytical tools for understanding industry structures, organizational capabilities, diversification, mergers and acquisitions, international expansion, and strategies for growth. Through case studies and applied projects, students learn to critically evaluate strategic choices, consider ethical and societal implications, and develop skills for strategic thinking and leadership in complex corporate environments.
Recommended Textbook
Strategic Management Concepts and Cases Competitiveness 10th Edition by
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13 Chapters
2022 Verified Questions
2022 Flashcards
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Page 2
Michael A. Hitt
Chapter 1: Strategic Management and Strategic Competitiveness
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135 Verified Questions
135 Flashcards
Source URL: https://quizplus.com/quiz/13749
Sample Questions
Q1) The development of a firm's mission typically involves which of the following?
A) Only the CEO.
B) Only top managers.
C) The CEO and top managers.
D) None of the these.
Answer: C
Q2) The five forces model suggests that firms should target the industry with the highest potential for above-average returns and then implement either a cost-leadership strategy or a differentiation strategy.
A)True
B)False
Answer: True
Q3) In a diversified firm, corporate-level strategy is concerned with
A) operating each individual business under the corporate umbrella.
B) determining how each functional department of the firm will operate.
C) determining in which businesses to compete and how resources will be allocated between businesses.
D) coordinating the vision and mission of each subsidiary firm.
Answer: C
Page 3
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Chapter 2: The External Environment: Opportunities,
Threats, Industry Competition, and Competitor Analysis
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164 Verified Questions
164 Flashcards
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Sample Questions
Q1) A firm experiencing intense rivalry with powerful competitors should energetically engage in competitor analysis.
A)True
B)False
Answer: True
Q2) When rival firms compete aggressively by trying to attract competitors' customers, this might be an indication of
A) an industry with low exit barriers.
B) increasing economies of scale.
C) slow industry growth.
D) high bargaining power among buyers.
Answer: C
Q3) The Chapter 2 Strategic Focus indicates that producing and selling "green" (i.e., environmentally friendly) products is one way that companies have responded to pressures from the physical environment.
A)True
B)False
Answer: True
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Chapter 3: The Internal Organization: Resources, Capabilities, Core Competencies, and Competitive
Advantages
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153 Verified Questions
153 Flashcards
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Sample Questions
Q1) Resources are the source of capabilities, some of which lead to the development of core competencies; in turn, some core competencies may lead to competitive advantage.
A)True
B)False
Answer: True
Q2) A decision that results in failure
A) is a career-ending event because it is so unusual.
B) often results from lack of accountability.
C) fosters organizational inertia.
D) allows for learning.
Answer: D
Q3) Which of the following is not a component of internal analysis leading to competitive advantage?
A) Tangible and intangible resources.
B) Analysis of supplier power.
C) Capabilities.
D) Core competencies.
Answer: B
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Chapter 4: Business-Level Strategy
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Sample Questions
Q1) Strategic fit among many activities (in an activity map) is fundamental to
A) the development of core competencies for a firm.
B) the breadth of competitive scope for a firm.
C) sustainability of a firm's competitive advantage.
D) the integrity of the firm's value chain.
Q2) When selecting a business level strategy, the firm determines who will be served, what customer needs will be satisfied, and how those needs will be satisfied.
A)True
B)False
Q3) According to the Chapter 4 Opening Case, part of Starbuck's success in 2011 was the decision to
A) cease introducing new products.
B) emphasize innovation by introducing new products.
C) cut back on the number of stores it operates.
D) discontinue unternational expansion.
Q4) How do focused differentiation and focused cost-leadership strategies differ from their non-focused counterparts?
Q5) (Refer to the above Case Scenario ) Is ICP's focused low-cost strategy appropriate for its industry? Why?
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Chapter 5: Competitive Rivalry and Competitive Dynamics
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Sample Questions
Q1) (Refer to the above Case Scenario) As one of RI's direct competitors, how would you try to predict what it will do with regard to the new technology?
Q2) On the whole there are more competitive responses to
A) strategic actions than to tactical actions.
B) tactical actions than to strategic actions.
C) buyer pressures than to supplier pressures.
D) the demands of the top management team than to industry structural pressures.
Q3) Competition in the global automobile producer industry is characterized by________________ (Chapter 5 Strategic Focus)
A) lack of awareness and motivation.
B) high market commonality and low resource similarity.
C) high market commonality and high resource siimilarity.
D) reduced rivalry, especially in the production of fuel efficient cars.
Q4) A competitive action is a strategic or tactical action taken by a firm to gain or defend a competitive advantage or improve its market position.
A)True
B)False
Q5) Define awareness, motivation and ability in reference to competitive behavior.
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Chapter 6: Corporate-Level Strategy
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162 Verified Questions
162 Flashcards
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Sample Questions
Q1) Isidore Crocker, CEO of Gotham Engines, is strongly in favor of acquiring Carolina Textiles, a firm in an unrelated industry. Some members of the board of directors are questioning Crocker's motives for the acquisition. They argue that it is not uncommon for CEOs to push for acquisitions because
A) a successful acquisition will increase the CEO's power over the board of directors.
B) making an acquisition is an easier route to increased firm value than is improving the firm's core competencies.
C) higher CEO pay is related to larger organization size.
D) CEOs nearing retirement seek to create empires to continue their legacy.
Q2) Google's diversification could lead the firm towards a related linked strategy and give the firm advantages in multipoint competition with competitors such as Facebook and Microsoft (Chapter 6 Strategic Focus).
A)True
B)False
Q3) Many manufacturing firms are de-integrating and moving to independent supplier networks.
A)True
B)False
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Chapter 7: Merger and Acquisition Strategies
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Sample Questions
Q1) P&G's acquisition of Gillette reshaped its competitive scope by giving P&G a stronger presence in some products for whom men are the target market.
A)True
B)False
Q2) It is relatively common for a firm to develop new products internally to diversify its product lines.
A)True B)False
Q3) Horizontal, vertical, and related acquisitions to build market power
A) are likely to undergo regulatory review and analysis by financial markets.
B) are rarely permitted to occur across international borders.
C) typically involve a firm purchasing one of its suppliers or distributors.
D) concentrate on capturing value at more than one stage in the value chain.
Q4) United Technologies Corp. (UTC) uses acquisitions of firms such as Otis Elevator Company (elevators, escalators, and moving walkways) and Carrier Corporation (heating and air conditioning systems) as the foundation for implementing its related diversification strategy.
A)True B)False
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Chapter 8: International Strategy
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167 Flashcards
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Sample Questions
Q1) The increased pressures for global integration of operations have been driven mostly by
A) new low cost entrants.
B) increasing demand for similar products.
C) increased levels of joint ventures.
D) the rise of governmental regulation.
Q2) When a firm INITIALLY becomes internationally diversified, its returns
A) remain stable.
B) decrease.
C) become more variable.
D) increase.
Q3) Which of the following is NOT a disadvantage of international acquisitions?
A) They are very expensive and often require debt financing.
B) The acquiring firm has to deal with the regulatory requirements of a host country.
C) Merging the acquired and acquiring firm is difficult.
D) It is the slowest way to enter a new market.
Q4) A transnational strategy is difficult to use because of its conflicting goals.
A)True
B)False
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Chapter 9: Cooperative Strategy
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Sample
Questions
Q1) Japanese telecom NTT DoCoMo Inc. and Chinese Internet search operator Baidu Inc. established an alliance to distribute games and other mobile-phone content. Baidu will own 80% of this collaboration with DoCoMo holding the remaining 20%. This collaborative arrangement is an example of a(n)
A) joint venture.
B) network strategy.
C) equity strategic alliance.
D) nonequity strategic alliance.
Q2) Horizontal business-level strategic alliances have greater probability of creating sustainable competitive advantage than do vertical business-level strategic alliances.
A)True
B)False
Q3) Because of U.S. legal restrictions concerning large foreign acquisitions, American firms can only enter into diversifying alliances with other U.S. firms.
A)True
B)False
Q4) Describe the two strategic management approaches to managing alliances.
Q5) Identify the three types of corporate-level cooperative strategies.
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Chapter 10: Corporate Governance
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Sample Questions
Q1) In contrast to managers' desires, shareholders usually prefer that free cash flows be
A) used to diversify the firm.
B) returned to them as dividends.
C) used to reduce corporate debt.
D) re-invested in additional corporate assets.
Q2) A virtually exclusive reliance on financial controls may occur when outsider-dominated boards exist. This may lead to all of the following EXCEPT
A) high executive turnover.
B) increased diversification of the firm.
C) excessive management compensation.
D) reduction in R&D expenditure.
Q3) Boards of directors are now becoming more involved in A) the strategic decision making process.
B) selecting new CEOs.
C) the firm's tax issues.
D) governmental relations.
Q4) Define the three internal corporate governance mechanisms and how they may be used to control and monitor managerial decisions.
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Page 12
Chapter 11: Organizational Structure and Controls
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Sample Questions
Q1) (Refer to the above Case Scenario) What type of organizational structure will likely be needed for its transnational strategy? What impact will this have on the location of particular value chain activities?
Q2) It is easiest to identify the company that functions as the strategic center firm in
A) horizontal complementary strategic alliances.
B) vertical complementary strategic alliances.
C) corporate-level cooperative partnerships.
D) international cooperative partnerships.
Q3) Firms such as Textron Inc. that frequently acquire and divest other firms are most likely to use the ____ structure.
A) matrix
B) competitive multidivisional
C) hybrid combination
D) horizontal complementary strategic alliance
Q4) Centralized and formalized procedures allow for greater flexibility, an important factor for firms using a cost leadership strategy.
A)True
B)False
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Chapter 12: Strategic Leadership
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Sample Questions
Q1) Which of the statements about CEO duality is FALSE?
A) CEO duality is associated with high CEO power.
B) CEO duality has been blamed for slow response to change by the organization.
C) CEO duality is relatively rare in the U.S. except in large Fortune 500 firms.
D) If the CEO acts a steward, CEO duality facilitates effective decisions and actions.
Q2) In the past, companies had a preference for insiders to fill top-level management positions because of the desire for continuity and a continuing commitment to the firm's current vision, mission, and chosen strategies.
A)True
B)False
Q3) Which of the following will increase the probability that a lower-level manager will become a successful strategic leader?
A) appointing many outside board members.
B) increasing the firm's sales.
C) increasing the homogeneity of the top management team.
D) training and development programs.
Q4) As a strategic leader, what actions could you take to establish and emphasize ethical practices in your firm?
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Page 14
Chapter 13: Strategic Entrepreneurship
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Sample Questions
Q1) According to the Chapter 13 Strategic Focus, research labs play an important role in 3M's innovation process; each of its six businesses has its own research lab which is product-focused.
A)True
B)False
Q2) While both incremental and radical innovations can create value, incremental innovations have the potential to contribute more significantly to a firm's efforts to earn above-average returns.
A)True
B)False
Q3) A major barrier to the use of cross-functional teams is A) excessive individualism of creative people.
B) lack of communication skills of technical people.
C) independent frames of reference of team members.
D) lack of social capital by team members.
Q4) (Refer to the above Case Scenario) The likelihood of success of FearNot is increased because both Wim Vijkland and Cathy Liu to have international backgrounds.
A)True
B)False
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