Corporate Strategy
Pre-Test Questions
Course Introduction
Corporate Strategy explores the frameworks, analytical tools, and processes essential for guiding organizations in achieving long-term goals and maintaining competitive advantage. This course examines how firms make decisions about diversification, vertical integration, mergers and acquisitions, international expansion, and resource allocation to create value across business units. Through real-world case studies and strategic models, students will gain an understanding of the roles of top management, the complexities of corporate governance, and the challenges in balancing stakeholder interests. Participants will develop practical skills to evaluate and implement corporate-level strategies in dynamic and global business environments.
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) Industry effects clearly are more significant than firm-level effects on firm performance.
A)True
B)False
Answer: False
Q2) According to the text,which part of the organization seeks superior performance by asking the question "how to compete"?
A) Corporate strategy
B) Functional strategy
C) Business level strategy
D) Project strategy
Answer: C
Q3) A business model is the translation of strategy into action,which details the firm's competitive tactics and initiatives.Another way to say this is ___________.
A) It's reliant on co-opetition to be successful
B) It's a crowdsourcing process for the firm
C) It's how the firm intends to make money
D) It's how network effects are taken into account
Answer: C
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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) When Disney says its mission is "to make people happy," they translate that mission into which of the following actions as discussed in the text?
A) Employees are screened for their acting ability at all levels of the organization.
B) They bought Pixar to make more movies that audiences would enjoy.
C) They adjust their ticket prices seasonally to meet customer demand.
D) Employees are cast members to help the customers enjoy the "show" throughout the park.
Answer: D
Q2) Mission statements can also be used to help refocus a firm on its main line of business.One example of this given in the text is:
A) Ben & Jerry's expanding beyond ice cream into other food categories.
B) Disney selling off its theme parks to focus on movies.
C) Shell Canada selling off its chemicals and forestry businesses.
D) Ford Motors moving into hybrid cars and SUVs.
Answer: C
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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) Which of the main industry groups in the SCP model is described as having many firms,some pricing power,and differentiated products?
A) Monopolistic competition
B) Oligopoly
C) Monopoly
D) Perfect competition
Answer: A
Q2) The U.S.airline industry has intense rivalry,primarily undifferentiated products,low entry barriers,and low switching costs.Furthermore,suppliers of aircraft engines to the industry have strong bargaining power.It is no surprise that this industry has been one of the least profitable for years.Michael Porter calls this industry what?
A) A zero-sum industry
B) A "zero star" industry
C) A declining star industry
D) A competitively dynamic industry
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) Explain the difference between resource stocks and resource flows.
Q2) One assumption made under the resource-based model is that resources do not move easily from firm to firm.
A)True
B)False
Q3) When a firm is conceptualized as a network of socially complex,interconnected activities it is referred to as being:
A) A value oriented system
B) A strategic activity system
C) An adaptive organization
D) A firm with high resource utilization
Q4) It is difficult to pinpoint the underlying cause of Apple's phenomenal success.Gaining a deep understanding of exactly why Apple has done so well is difficult because of which situation?
A) Competitive dependence
B) Casual ambiguity
C) Strategic luck
D) Substitutability of Apple's competencies
Q5) What is the purpose of using the VRIO framework?
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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) The balanced scorecard helps a firm formulate strategy.
A)True
B)False
Q2) As noted in Chapter 5,BMW anticipated the need to recycle its automobile parts due to potential industry regulation.It redesigned its manufacturing processes to include quick disassembly and reuse of car components.In addition,BMW sells the used parts in the after-sales market.This is an example of how the triple-bottom-line framework:
A) Adds more layers of bureaucracy to a firm.
B) Streamlines processes of the firm.
C) Shortens product life cycles.
D) Improves a firm's social and ecological responsibility.
Q3) A firm's _________ captures the historical costs of a firm's assets.
A) Market value
B) Value created
C) Book value
D) Economic value
Q4) When using the shareholder value to compare Microsoft and Google since 2005,which firm seems to have the advantage? Please explain.
Q5) What is meant by the term "competitive advantage is transitory"? Please explain.
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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) There are several cost drivers that can be managed in order to establish a low-cost leadership advantage.One of the basic cost drivers is:
A) Access to unique features that turn commodities into differentiated products.
B) Access to lower-cost input factors including raw materials and labor.
C) Creating personalized customer service in order to minimize price-sensitivity.
D) Shifting to small-scale production processes in order to create customized products.
Q2) When pursing a differentiation strategy,the focus of competition is to add unique features in order to create a level of value creation that competitors cannot easily imitate.
A)True
B)False
Q3) When the CEO of Whole Foods,John Mackey,had to make decisions about the company's cost structure and value position he was:
A) Making strategic trade-offs.
B) Conducting a strategic group map evaluation.
C) Trying to improve the firm's economies of scope.
D) Leveraging the low-cost position of the company.
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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) Disruptive innovations such as the $200 netbook computer do all of the following EXCEPT:
A) Target existing markets.
B) Incorporate new technology.
C) Introduce a radical idea and create a new industry.
D) Attack the market from the "bottom up."
Q2) When a new product,process,or idea is introduced into the market,it has been:
A) Extracted.
B) Commercialized.
C) Invented.
D) Executed.
Q3) The word processor brought more perceived value to the market and replaced the typewriter as the industry standard.Later,the word processor industry was undone by the computer industry which created even more value.This is an example of:
A) The "ups and downs" of an economic cycle.
B) A shortened industry life cycle.
C) The positive and negative aspects of creative destruction.
D) The effects of diversification.
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) 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.
Q2) If a firm wants to have more ownership of the activities closer to product inputs or design,then it should:
A) Backward vertically integrate.
B) Forward vertically integrate.
C) Forward horizontally integrate.
D) Use a single-business diversification strategy.
Q3) Which of the following is NOT a strategic advantage of forward integration?
A) Better access to end users
B) Ability to secure critical supplies
C) More control of after-sales service
D) Better planning and response to changes in demand
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) Strategic alliance partners often exchange personnel to make the acquisition of tacit knowledge possible,because tacit knowledge can ONLY be acquired through actively participating in the process.
A)True
B)False
Q2) Describe pharmaceutical company Eli Lilly's well-known three-person alliance management team.
Q3) In a non-equity alliance,firms tend to share _____________ that can be codified.
A) Explicit knowledge
B) Implicit knowledge
C) Tacit knowledge
D) Corporate venture capital
Q4) A(n)______________ is the purchase or takeover of one company by another.
A) Joint venture
B) Equity alliance
C) Consortium
D) Acquisition
Q5) Please specify four sources of value creation in horizontal integration and choose one of the benefits of horizontal integration to provide an example.
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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) GM has been producing a small,boxy type of sedan in China,because of:
A) Cultural differences
B) The lower purchasing power of the Chinese market.
C) Different customer demands.
D) All of these.
Q2) A low-cost labor pool is considered an important factor in international expansion for many MNEs.
A)True
B)False
Q3) Globalization 2.0 requires significant ________ when initiating business operations overseas.
A) Strategic alliances
B) Joint ventures
C) Foreign direct investment
D) Core competencies
Q4) Economic development has two consequences for MNEs.They are ______________.
A) Rising wages and trustworthy relationships with suppliers
B) High living standards and low crime rates
C) Higher production rates and the development of green technology
D) Rising wages and high living standards
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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) Organizational culture is difficult to imitate because of ________.
A) Causal ambiguity and social complexity
B) Core competence and competitive advantage
C) Socialization and internalization
D) None of these
Q2) The key elements of organizational structure are specialization,centralization,formalization,and hierarchy.
A)True
B)False
Q3) A high degree of formalization streamlines the decision-making process.
A)True
B)False
Q4) W.L.Gore uses a simple structure because it is small in size with less formalization. A)True B)False
Q5) Please briefly explain why "structure follows strategy"?
Q6) The degree of formalization for McDonald's is low. A)True B)False
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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 the process of the board acting in its legal responsibility to oversee executives' behaviors and performance.
A) Advising
B) Evaluating
C) Approving
D) Monitoring
Q2) Former CEO of HP,Mark Hurd,resigned his job due to his unethical behavior.
A)True
B)False
Q3) 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
Q4) Which of the following statements is true concerning U.S.boards of directors?
A) They are typically made up of a majority of insiders.
B) They are often chaired by CEOs.
C) They are appointed by the CEOs.
D) All of these are true.
Q5) Discuss the three informational roles of a leader.
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