Corporate Strategy
Midterm Exam
Course Introduction
This course delves into the key concepts, frameworks, and tools necessary for understanding and formulating corporate strategy in complex business environments. Students will explore how organizations create value across multiple businesses, manage diversification, and build competitive advantage at the corporate level. Topics include portfolio management, vertical integration, mergers and acquisitions, strategic alliances, and corporate governance. Through case studies and real-world applications, participants will analyze the challenges and opportunities faced by multi-business firms and develop the skills needed to craft effective corporate strategies that align with dynamic market conditions and organizational goals.
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) The AFI Strategy Framework is used by managers to implement a human resource strategy for all employees within a firm.
A)True
B)False
Answer: False
Q2) Why is Google characterized as having sustainable competitive advantage? Will they always maintain sustainable advantage?
Answer: Google is characterized as having sustainable competitive advantage because it outperforms its rivals such as Yahoo consistently over time.However,their past performance will not guarantee Google to maintain their status amongst other search engines.
Explanation: Google has been tremendously successful in its first decade, but the future could yield different results.
Q3) Business strategy concerns the choice of strategy in terms of where to compete. A)True
B)False
Answer: False
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Chapter 2: The Strategic Management Process
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95 Verified Questions
95 Flashcards
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Sample Questions
Q1) Questions such as "What resources do we need if this happens?" and "How can we shape our anticipated future environment?" are performed under what stage of the AFI framework?
A) The formulation stage
B) The forecasting stage
C) The installation stage
D) The iteration stage
Answer: A
Q2) What is the main intention of firms when they use scenario planning?
Answer: Firms will refer to scenario planning to help them map out the "what if" questions.Managers anticipate possible futures,especially in a fast-changing environment.
Explanation: Scenario planning is useful when the risk of uncertainty is high.
Q3) Customer-oriented missions are defined as __________________.
A) providing solutions to employee needs
B) providing solutions to customer needs
C) providing solutions to executive needs
D) providing solutions to stockholder needs
Answer: B
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Page 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) The type of industry most likely to engage in non-price competition is
A) a perfectly competitive industry
B) an oligopolistic industry
C) all industries engage in non-price competition
D) only strategic groups engage in non-price competition
Answer: B
Q2) A large textile manufacturer located in South Carolina had to exit the industry because it could no longer compete with firms from overseas.The company laid off hundreds of employees,its suppliers started to struggle,and several local establishments closed their doors.It can be said that the local economy in South Carolina was experiencing what?
A) The retaliation effects of abandonment
B) The ripple effects through the supply chain
C) The destructive role of complements
D) Dynamic industry consequences
Answer: B
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Chapter 4: Internal Analysis: Resources, Capabilities, and Activities
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102 Verified Questions
102 Flashcards
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Sample Questions
Q1) Crocs Shoes lost its competitive advantage because patents did not protect the firm from direct imitation.
A)True
B)False
Q2) Currently,lean manufacturing is a _________ but _____________ resource which leads to competitive parity.
A) Valuable; rare
B) Common; tangible
C) Valuable; common
D) Rare; tangible
Q3) Toyota lost its competitive advantage when lean manufacturing became an industry standard as other firms learned about,and utilized this manufacturing process.These firms learned about lean manufacturing due to:
A) Resource heterogeneity
B) Knowledge diffusion
C) Resource immobility
D) Dynamic mobility
Q4) Explain the difference between resource stocks and resource flows.
Q5) Define core competency.
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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) When measuring competitive advantage under the economic value creation approach,it can be easy to determine what the consumer's maximum willingness to pay will be.
A)True
B)False
Q2) When the value that a customer attaches to a good or service exceeds the price paid for the good or service,this is a(n):
A) Economic surplus.
B) Consumer surplus.
C) Value surplus.
D) Consumer value.
Q3) An important feature of the triple-bottom-line approach to creating a firm's competitive advantage is that it increases the chances that the strategy chosen will be sustainable.
A)True
B)False
Q4) The balanced scorecard helps a firm formulate strategy.
A)True
B)False
Q5) What is meant by the term "competitive advantage is transitory"? Please explain.
Page 7
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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) Learning curves were first used by aircraft manufacturers in the 1930s.Companies found a predictable relationship between increasing production output and cost per unit.What does it mean for a firm to have an 80% learning curve?
A) Every time the cumulative output increases by 80%, the cost per unit will decrease by 20%.
B) Every time the cumulative output is doubled, the cost per unit will decline by 80%.
C) Every time the cumulative output goes up 20%, the cost per unit will decline by 80%.
D) Every time the cumulative output is doubled, the cost per unit will decline by 20%.
Q2) Contrast the idea of economy of scope with economy of scale.
Q3) In the value gap analysis (V-C),which item do cost leaders focus on with their strategies?
Q4) 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
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Page 8
Chapter 7: Business Strategy: Innovation and Strategic Entrepreneurship
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) According to Michael Porter,firms face hypercompetition because they rely too much on _______________,which leads to a failure of distinct strategic positioning for the individual firm.
A) Imitating one another
B) Reaching technological limitations
C) Joint destruction
D) Creative competition
Q2) When a disruptive innovation is first introduced to the market,it is generally inferior in performance relative to what currently exists.
A)True
B)False
Q3) Six Sigma,lean manufacturing,and genetic engineering are examples of ___________ that deliver new ways to produce or deliver existing products or services.
A) Procedural changes
B) Process innovations
C) Entrenched standards
D) Trial innovations
Q4) What are the strategic implications of "the long-tail phenomenon"?
Page 9
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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) If a firm wants to have more ownership of activities closer to the end product or customer,it should:
A) Backward vertically integrate.
B) Forward vertically integrate.
C) Forward horizontally integrate.
D) Use a single-business diversification strategy.
Q2) Human-asset specificity is the form of an asset that a firm invests in to create the human capital with knowledge about the specific routines and procedures needed to support a firm's vertical integration strategy.These routines and procedures bring competitive value to the firm because:
A) They organize the firm's work processes.
B) They are not transferable to a different employer.
C) They are not easily imitated.
D) All of these.
Q3) Do information asymmetries favor a "make" or "buy" alternative as more likely to be successful? Briefly explain your answer.
Q4) "Where to compete" is the key question senior management must answer for corporate strategy.Provide an example of a corporate strategy and briefly explain how it answers this question.
Page 10
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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) To accomplish effective alliance management,it is suggested that firms create a(n)_____,endowed with its own resources and support staff.
A) Partner compatibility
B) Dedicated alliance function
C) Structure-conduct-performance (SCP) model
D) Alliance network
Q2) Acquisitions,alliances,and networks help firms pursue common interests,enhance competitiveness,and increase revenues.
A)True
B)False
Q3) Learning races describe situations in which both partners are motivated to form an alliance for learning,but the firm that learns faster and thus accomplishes its goal more quickly has an incentive to exit the alliance or reduce its knowledge sharing.
A)True
B)False
Q4) Weak ties usually allow for the transfer of tacit knowledge ONLY.
A)True
B)False
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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) Firms within emerging economies may want to form strategic alliances with firms from developed countries because __________.
A) Assets from the investing foreign company can be nationalized later
B) Disruption to the host-country's economy will be minimal
C) There will be less cultural conflict than in licensing arrangements
D) It gains access to the foreign firm's sophisticated technology
Q2) One of the dimensions of corporate strategy is how to compete effectively in the global marketplace.
A)True
B)False
Q3) Regional clusters promote regional economic growth because it is easier to promote tighter interfirm collaboration with reduced proximity.
A)True
B)False
Q4) _______ refers to the political and legal factors of a foreign market.
A) National culture
B) Core competence
C) Competitiveness
D) National institutions
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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) Which of the following does NOT cause a firm to move from a functional structure to a multidivisional structure?
A) Increasing diversification
B) International expansion
C) The need for knowledge-sharing among specialists
D) The need for greater amounts of data and information to operate
Q2) Typically,successful firms pursuing a differentiation strategy will __________.
A) Have a very hierarchical structure
B) Require a structure which is very formal
C) Use cross-functional development teams
D) Develop free-standing business units
Q3) What are the characteristics of organic organizations? What are the examples?
Q4) Managers using M-form structures to support a(n)__________ strategy should decentralize decision making.
A) Single business
B) Domain business
C) Related diversification
D) Unrelated diversification
Q5) What is organizational design?
Q6) What types of control mechanisms can a firm use? Page 13
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Page 14
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) What is corporate governance?
Q2) Stakeholders impact analysis is a tool used to quantify which specific stakeholders have the largest financial impact on the firm.
A)True
B)False
Q3) Which of the following is a disadvantage associated with stock options?
A) They may encourage the CEO to falsely cook the company's financials.
B) They align incentives with shareholder interests.
C) They encourage executives to create stock value.
D) They motivate CEOs to act like owners.
Q4) The pyramid of corporate social responsibility (CSR),shown in Exhibit 12.4,symbolizes that the firm needs to fulfill its responsibilities in a step-by-step sequential fashion.
A)True
B)False
Q5) Explain the major components of corporate social responsibility.
Q6) In what ways is corporate governance related to strategy formulation and implementation?
Q7) What are the major characteristics of public stock companies?
Q8) What is the role of the board of directors in corporate governance? Page 15
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Page 16