Corporate Strategy
Final Exam Questions
Course Introduction
Corporate Strategy explores the foundational principles and advanced concepts involved in guiding organizations toward long-term success across multiple businesses or markets. The course covers topics such as strategic analysis, competitive advantage, diversification, mergers and acquisitions, corporate governance, global strategy, and strategic implementation. Students learn how to assess the external environment, evaluate a firm's internal resources, and formulate coherent strategies that align with overall corporate objectives. Case studies and real-world examples provide practical insight into the formulation and execution of strategies in dynamic, complex business environments.
Recommended Textbook
Strategic Management Theory An Integrated Approach 9th Edition by Charles W. L. Hill
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13 Chapters
1070 Verified Questions
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Page 2
Chapter 1: Strategic Leadership: Managing the
Strategy-Making Process for Competitive Advantage
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80 Verified Questions
80 Flashcards
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Sample Questions
Q1) Functional managers
A)are responsible for the specific business functions or operations that constitute a company or one of its divisions.
B)look at the overall picture of a corporation.
C)have no strategic role.
D)formulate generic strategies.
E)execute business-level decisions.
Answer: A
Q2) A firm obtains competitive advantage when its strategy results in superior performance relative to its competitors.
A)True
B)False
Answer: True
Q3) An important first step in the process of formulating a company's mission is to
A)describe the technological processor.
B)identify the customer segment served by the company.
C)answer the question,"What is our business?"
D)decide what the company will be like ten years from now.
E)evaluate the company's most recent performance.
Answer: C
Page 3
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Chapter 2: External Analysis: The Identification of Opportunities and Threats
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Sample Questions
Q1) When an industry enters the mature stage,
A)the market is totally saturated.
B)demand is limited to replacement demand.
C)growth is low or zero.
D)what growth there is in the industry comes from population expansion.
E)all of these choices
Answer: E
Q2) In determining its opportunities and threats,a firm should focus on internal processes and capabilities.
A)True
B)False
Answer: False
Q3) High exit barriers are most serious as a competitive threat when industry demand is declining.
A)True
B)False
Answer: True
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Page 4
Chapter 3: Internal Analysis: Distinctive Competencies, Competitive
Advantage, and Profitability
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Sample Questions
Q1) Cost accountants are responsible for gathering and monitoring data used for controlling the organization's costs.Cost accountants work in which value chain activity?
A)Research and development
B)Human resources
C)Materials management
D)Marketing and sales
E)Company infrastructure
Answer: E
Q2) Give one example of a firm that has achieved a distinctive competency in efficiency and describe that competency.Then do the same for a firm with a distinctive competency in quality,innovation,and responsiveness to customers.
Answer: Walmart is able to buy its products in high volume and to negotiate low prices from its suppliers,which it can then pass on to customers through low pricing.Ben and Jerry's Ice Cream is able to develop trendy flavors that customers desire,giving that firm an advantage in quality.3M works with customers to develop new products for specific customer needs,which is a distinctive competency in innovation.Dell Computers uses its website to offer convenient and cheap after-sales support to customers,satisfying demands for customer responsiveness.
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Page 5
Chapter 4: Building Competitive Advantage Through Functional-Level Strategy
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84 Flashcards
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Sample Questions
Q1) No matter how complex the task is,learning effects typically die out after a limited period of time.
A)True
B)False
Q2) Diseconomies of scale are the unit cost increases associated with a large scale of output.
A)True
B)False
Q3) Pay for performance tends to
A)increase per-unit costs.
B)decrease employee output.
C)increase employee output.
D)have little effect on employee output.
E)be used only for individual workers,not for teams.
Q4) Pretend that you are a consultant,offering advice to a large manufacturing firm about ways to increase its distinctive competency in innovation.What suggestions would you offer? Be specific and detailed in your answer.
Q5) Discuss why superior efficiency is important and the many ways that different parts of the organization can help achieve it.
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Chapter 5: Building Competitive Advantage Through Business-Level Strategy
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Sample Questions
Q1) A major problem with a differentiation strategy centers on the long-term ability to maintain a product's perceived difference or distinctness in customers' eyes.
A)True
B)False
Q2) Which of the following automobile manufacturers have found it difficult to differentiate their cars?
A)Lincoln
B)Audi
C)Acura
D)All of these choices
E)None of these choices
Q3) In which of the following situations does a differentiation strategy make the most sense?
A)The industry is fragmented into different customer groups,each of which has different needs.
B)Customer needs are primarily satisfied by the price of the product.
C)There is a lot of technological change.
D)There are low barriers to entry and exit.
E)The industry is in the maturity stage of the life cycle.
Page 7
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Chapter 6: Business-Level Strategy and the Industry Environment
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Sample Questions
Q1) In embryonic industries,customer demand is typically A)high.
B)low.
C)growing rapidly.
D)variable.
E)slowly declining.
Q2) By their choices of competitive actions and decisions about product attributes,managers can speed up or slow down the rate of progress of an industry through the stages of the industry life cycle.
A)True
B)False
Q3) Consumer demand for products of an embryonic industry is A)high and ready to explode.
B)frequently limited at first.
C)nonexistent because consumers lack product information.
D)tentative for the first two years.
E)insatiable.
Q4) What advice would you give to a manager of a business in a fragmented industry about how to successfully compete? About how to achieve industry consolidation?
Chapter 7: Strategy and Technology
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Sample Questions
Q1) In the 1870s,Christopher Sholes invented the layout of keys on a typewriter keyboard,sometimes called the QWERTY layout.This invention is a(n)
A)technical standard.
B)first-mover advantage.
C)complementary product.
D)outmoded technology.
E)high-tech industry.
Q2) An example of an important complementary asset is a state-of-the-art manufacturing facility.
A)True
B)False
Q3) If a first mover has complementary assets,barriers to imitation are high,and capable competitors are few,the first mover should
A)license the innovation to others.
B)develop and market the innovation jointly with other companies through a strategic alliance or joint venture.
C)develop and market the innovation itself.
D)sell the technology outright to another firm.
E)wait until competitors develop an alternative product.
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Page 9
Chapter 8: Strategy in the Global Environment
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Sample Questions
Q1) Which of the following is not a necessity for leveraging the skills of global subsidiaries?
A)The firm must have incentives for local managers to share knowledge and ideas.
B)The firm's managers must be aware that competencies can develop anywhere.
C)The firm must be pursuing a strategy of differentiation.
D)The firm's managers must help to transfer competencies around the company.
E)The firm must offer incentives that encourage employees to take necessary risks.
Q2) A company may create value if it can leverage the skills created within subsidiaries and apply them to other operations within the firm's global network.
A)True
B)False
Q3) Which of the following is not a risk of exporting?
A)Tariff barriers
B)Transportation costs
C)Location diseconomies
D)Prime interest rates
E)Delegation of marketing activities to a local agent
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Chapter 9: Corporate-Level Strategy: Horizontal Integration,
Integration, and Strategic Outsourcing
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Sample Questions
Q1) Adam's boss tells him that their company is pursuing a strategy of horizontal integration,which means that the company will
A)acquire one of its suppliers.
B)buy one of its rivals.
C)begin to distribute its own products.
D)reorganize into fewer business units.
E)centralize all of its support functions.
Q2) Which of the following problems is (are)associated with a strategy of vertical integration?
A)An increasing cost structure
B)Manufacturing disadvantages that arise because of rapidly changing technology
C)Marketing disadvantages that arise when demand is unpredictable
D)All of these choices
E)None of these choices
Q3) A wealth of data suggests that most mergers and acquisitions
A)create extensive value for the companies involved.
B)do not create,and may actually reduce,value for the entities involved.
C)create and sustain large and immediate increases in value.
D)have little financial impact on the firms involved.
E)none of these choices.
Page 11
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Chapter 10: Corporate-Level Strategy: Related and Unrelated Diversification
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Sample Questions
Q1) At its simplest level,a joint venture may be thought of as a(n)
A)merger of two companies.
B)acquisition of a smaller company by a larger company.
C)form of strategic outsourcing.
D)sign of weakness on the part of one of the companies.
E)corporate partnership.
Q2) A company should pursue related diversification instead of unrelated diversification when the company's
A)core skills are applicable to a wide variety of industrial and commercial situations.
B)core skills are highly specialized and have few applications outside the core business.
C)top managers are skilled at acquiring and turning around poorly run enterprises.
D)main objective is to maximize growth.
E)free cash flow is high enough that it has funds available for investment.
Q3) Identify and discuss the profitability justifications for pursuing a multibusiness model based on diversification.
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12
Chapter 11: Corporate Performance, Governance, and Business Ethics
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Sample Questions
Q1) Which of the following statements concerning profitability and profit growth is false?
A)Attaining future profit growth may require investments that reduce current profitability.
B)Managers must find the right balance between profitability and profit growth.
C)Too much emphasis on current profitability at the expense of profit growth can make an enterprise less attractive to shareholders.
D)Boosting a company's profitability and profit growth rate is inconsistent with satisfying the claims of other key stakeholder groups.
E)Too much emphasis on profit growth can reduce profitability and make an enterprise less attractive to shareholders.
Q2) A stock option is a right to buy
A)shares of the company's stock at the stock's current price.
B)shares of the company's stock at half the stock's current price.
C)shares of the company's stock at a predetermined price at some point in the future.
D)bonds issued by the company.
E)none of these choices.
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Chapter 12: Implementing Strategy in Companies That
Compete in a Single Industry
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Sample Questions
Q1) Which characteristic is shared by all three of the product,market,and geographic structures?
A)All three utilize permanent organizational groups.
B)All three are based on the use of cross-functional teams.
C)All three require that support functions be decentralized.
D)All three organize workers into permanent groups,are based on the use of cross-functional teams,and require that support functions be centralized.
E)There is no common characteristic for all three structures.
Q2) Give a real or a hypothetical organizational example of how structure,strategic control systems,and culture interact with each other.
Q3) As new,small firms grow and mature,which structure are they likely to choose?
A)Simple
B)Geographic
C)Functional
D)Matrix
E)Product
Q4) Describe the roles that organizational structure,strategic control systems,and organizational culture play in strategy implementation.
Page 14
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Chapter 13: Implementing Strategy in Companies That
Compete Across Industries and Countries
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Sample Questions
Q1) America Online blended its operations with those of Time Warner to create AOL Time Warner.America Online is using which entry mode to enter the broadcast industry?
A)Acquisition
B)Internal new venture
C)Merger
D)Divestiture
E)Joint venture
Q2) Which structure has been adopted by most large,complex U.S.companies?
A)Multidivisional
B)Product
C)Product team
D)Market
E)Functional
Q3) How can information technology (IT)help in the implementation of a multibusiness model?
Q4) Vertical integration is a less expensive strategy to manage than is unrelated diversification.
A)True
B)False
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