Corporate Strategy
Final Test Solutions
Course Introduction
Corporate Strategy explores the frameworks and analytical tools that guide firms in making high-level decisions about their overall direction and competitive positioning. The course examines how organizations assess their internal resources and external environment to formulate strategies that drive growth, create value, and achieve long-term objectives. Key topics include diversification, vertical integration, strategic alliances, mergers and acquisitions, and the management of multi-business portfolios. Through case studies and real-world examples, students learn how corporate strategy aligns with operations, corporate governance, and stakeholder interests to ensure sustainable success in dynamic market landscapes.
Recommended Textbook
Strategic Management Concepts and Cases 1st Edition by Frank Rothaermel
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12 Chapters
1235 Verified Questions
1235 Flashcards
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Chapter 1: What Is Strategy and Why Is It Important
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101 Verified Questions
101 Flashcards
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Sample Questions
Q1) A strategy is a manager's theory of how to compete; however,the theory is useless if it is NOT put into action.What is the translation of strategy that details the firm's competitive tactics and initiatives?
A) The business model
B) The business formula
C) The corporate model
D) The corporate formula
Answer: A
Q2) Explain how a corporation might use co-opetition as a strategy.
Answer: Direct competitors will cooperate with one another to achieve strategic objectives.For example,the new Cell microprocessor powers Sony's PlayStation 3.This was accomplished by a collaborative effort between IBM,Toshiba,and Sony.All three companies are competitors with one another in other markets.
Explanation: Any example of competitors agreeing to work together for a substantial project is likely to be correct here.
Q3) A business model is not directly connected to how a firm makes money.
A)True
B)False
Answer: False
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Page 3
Chapter 2: The Strategic Management Process
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95 Verified Questions
95 Flashcards
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Sample Questions
Q1) Top-down strategic planning works best in more uncertain situations because the firm hand of senior leadership is best at seeing the future.
A)True
B)False
Answer: False
Q2) Strategic thinking is different than strategic planning in that:
A) Strategic thinking includes "soft" information and employee experience; strategic planning does not.
B) Strategic thinking relies more on hard numbers than strategic planning.
C) There really isn't that much that differentiates the two.
D) Strategic thinking can create an illusion of control, while strategic planning avoids this.
Answer: A
Q3) A situation when part or all of a firm's strategic plan falls by the wayside due to unexpected events is called an unrealized strategy.
A)True
B)False
Answer: True
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4
Chapter 3: External Analysis: Industry Structure,
Competitive Forces, and Strategic Groups
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102 Verified Questions
102 Flashcards
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Sample Questions
Q1) Agriculture is generally considered a perfect competition industry with largely commodity products.However,there is an aspect of the industry that can be classified as monopolistic competition with differentiated products and price premiums.Which part of the industry is it?
A) Genetically modified wheat
B) Corn for biodiesel
C) Organic milk
D) Fresh water salmon
Answer: C
Q2) BYD is an example of a new firm entering the global auto industry.With more firms vying for a U.S.market that is not growing very fast,what will happen?
A) The rivalry will be about the same.
B) The intensity of the incumbent firms will decrease.
C) Competitive intensity is sure to rise.
D) The incumbents will keep dominant market shares.
Answer: C
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Page 5
Chapter 4: Internal Analysis: Resources, Capabilities, and Activities
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102 Verified Questions
102 Flashcards
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Sample Questions
Q1) When a firm enjoys a competitive advantage it attracts a significant amount of attention and its products or services can be at risk due to:
A) Social Complexity
B) Value erosion
C) Casual ambiguity
D) Direct imitation or substitution
Q2) Which of the following is NOT a criterion for a strategically important resource?
A) Difficult to imitate
B) Not everyone has it
C) Valuable
D) Tangible
Q3) Achieving dynamic capabilities is important to a firm because the rate of change in the external environment is accelerating.
A)True
B)False
Q4) In a SWOT analysis of a company,what tool should be applied to determine strengths and weaknesses? Similarly,what tool should be utilized to determine opportunities and threats?
Page 6
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Chapter 5: Competitive Advantage and Firm Performance
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107 Verified Questions
107 Flashcards
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Sample Questions
Q1) From an economic value creation perspective,competitive advantage is achieved by the firm that does which of the following?
A) Creates and captures more economic value than its rivals.
B) Ensures that the value captured is evenly divided between producer and consumer.
C) Concentrates on tangible assets available as opposed to intangible assets.
D) Formulates strategy based primarily on the balanced-scorecard approach.
Q2) When a firm evaluates its performance utilizing metrics such as the balanced-scorecard approach or accounting measurements,it should interpret the results relative to its competitors,not against its own past performance.
A)True
B)False
Q3) Understanding the shareholder's view of value creation under the balanced scorecard leads a firm to:
A) Focus on value chain activities.
B) Select which product markets to be in.
C) Decide how many shares of stock it should sell.
D) Adopt a more future-oriented perspective.
Q4) What are the three components of the triple bottom line?
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Page 7
Chapter 6: Business Strategy: Differentiation, Cost
Leadership, and Integration
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105 Verified Questions
105 Flashcards
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Sample Questions
Q1) How are the risks different for cost leadership versus differentiation when analyzing the rivalry among existing competitors to the industry?
Q2) ___________ and ____________ are the two focused generic business strategies.
A) Focused differentiation; focused low-cost
B) Integration; focused low-cost
C) Integration; focused differentiation
D) Cost leadership; differentiation
Q3) When costs per unit fall as output increases,_________________ occur.
A) Economies of scope
B) Diseconomies of scale
C) Economies of efficiency
D) Economies of scale
Q4) Achieving differentiation parity can be difficult for a cost leader firm because:
A) Creating value generally means higher costs.
B) Achieving parity in the market is always hard.
C) Cost leaders typically add too much value to their products.
D) Value chain activities should not be altered.
Q6) Name and give an example for TWO of the four value drivers noted in the text. Page 8
Q5) How does an experience curve help a business gain competitive advantage?
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Page 9
Chapter 7: Business Strategy: Innovation and Strategic Entrepreneurship
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) Discontinuities are periods of time when all of the following occur EXCEPT:
A) Many firms experience upheaval.
B) Traditional technology is challenged by updated technology.
C) Incumbent firms are protected.
D) New opportunities exist.
Q2) When the Japanese company Canon was able to redesign the copier and take market share away from Xerox,it was using which type of innovation?
A) Architectural
B) Groundbreaking
C) Radical
D) Intentional
Q3) Each of the following are important reasons to understand the strategic implications of an industry life cycle EXCEPT:
A) Each stage attracts different customer groups with unique needs.
B) The firm should copy the industry leader in each distinct stage.
C) Different competencies are required in each stage that must be created if not existent.
D) The firm needs to know when changes in demand require changes in strategy.
Q4) What are the strategic implications of "the long-tail phenomenon"?
Page 10
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Chapter 8: Corporate Strategy: Vertical Integration and Diversification
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) Corporate diversification strategy leads to superior performance only if the individual businesses are worth more under the company's management than if managed individually.
A)True
B)False
Q2) ExxonMobil's purchase of XTO Energy to move more prominently into natural gas is considered a related-constrained type of diversification.Why is this the appropriate category for this acquisition?
Q3) As noted in Strategy Highlight 8.1,when Toyota wanted to secure a long-term supply of lithium,it had to create a bond of trust with the Argentinean firm Orocobre before the company would invest several hundred million dollars in specialized equipment to supply the lithium to Toyota.What did Toyota do to instill this trust?
A) It offered Orocobre exposure to Toyota's proprietary information.
B) It made a credible commitment by taking an equity stake in Orocobre.
C) It promised to help Orocobre expand its market presence globally.
D) It offered Orocobre franchising opportunities to sell hybrid vehicles.
Q4) What is vertical integration? Provide one example of a firm using vertical integration.
Q5) Explain how reducing flexibility is a risk for vertical integration.
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Chapter 9: Corporate Strategy: Acquisitions, Alliances, and Networks
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103 Verified Questions
103 Flashcards
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Sample Questions
Q1) The main value of Oracle's acquisition of PeopleSoft is _____.
A) Tapping into new distribution channels in international markets
B) Reducing their sales forces and lowering the overall cost of distribution
C) Optimizing their entire vertical and horizontal value chains
D) Lowering competitive intensity in the industry overall
Q2) A ______ describes an acquisition in which the target company does not wish to be acquired.
A) Horizontal integration
B) Merger
C) Joint venture
D) Hostile takeover
Q3) Apple formed strategic alliances to challenge Amazon because it wanted to access critical complementary assets.
A)True
B)False
Q4) Weak ties usually allow for the transfer of tacit knowledge ONLY.
A)True
B)False
Page 12
Q5) Give an example of an equity alliance and describe its typical pros and cons.
Q6) Explain a dedicated alliance function and how it works in an organization.
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Chapter 10: Global Strategy: Competing Around the World
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) AstraZeneca,a Swiss pharmaceutical firm,relocated its research facility to the Boston biotech cluster.This is because they want to ___________.
A) Gain access to low-cost input factors
B) Gain access to foreign markets
C) Develop new competencies
D) Enjoy low tariffs
Q2) According to ChapterCase 10,Hollywood filmmakers have paid little attention to international markets.
A)True
B)False
Q3) Harley Davidson offers similar products in many different global markets by using a(n)____________.
A) International strategy
B) Localization strategy
C) Global-standardization strategy
D) Transnational strategy
Q4) What is McDonald's international entry vehicle? Please explain.
Q5) Please discuss Hofstede's four major cultural dimensions.
Q6) What are the entry vehicles for MNEs to expand internationally?
Page 14
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Chapter 11: Organizational Design: Structure, Culture, and Control
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) One of the drawbacks of a high degree of formalization is ______.
A) The loss of competitive advantage
B) Organizational inertia
C) Multipoint competition
D) A slow decision-marking process
Q2) One disadvantage of the functional structure is that __________.
A) Career paths and professional development are limited
B) Dual reporting relationships blur lines of authority
C) The CEO cannot coordinate and control the efforts of functional-level employees
D) Communication is difficult among organizational functions
Q3) John Garcia just graduated from law school and wants to open his own law office.It is best for John to use a(n)______ structure.
A) Functional
B) Simple
C) M-form
D) Matrix
Q4) When leadership changes,so does the company's culture.
A)True
B)False
15
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Chapter 12: Corporate Governance, Business Ethics, and Strategic Leadership
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101 Verified Questions
101 Flashcards
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Sample Questions
Q1) ________ is a decision tool with which managers can recognize,assess,and address the needs of different stakeholders.
A) Shareholder analysis
B) Stakeholder impact analysis
C) SWOT analysis
D) Financial impact analysis
Q2) The combination of ownership and control is one attractive characteristic of a public company.
A)True
B)False
Q3) An individual who acts on behalf of others is referred to as ______.
A) Principal
B) Shareholder
C) Agent
D) Stakeholder
Q4) Which of the following is NOT an essential component of the Sarbanes-Oxley Act?
A) Accounting oversight by the CEO
B) Auditor independence
C) Shareholders' responsibility to ensure accounting integrity
D) All of these
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