Corporate Strategy
Textbook Exam Questions
Course Introduction
Corporate Strategy explores the formulation and implementation of strategies that determine the overall direction and scope of organizations operating across multiple markets and industries. The course examines concepts such as diversification, vertical integration, corporate parenting, and strategic alliances, alongside tools for analyzing industry structure and internal resources. Through case studies, students learn to assess competitive environments, identify opportunities for growth, and navigate the complexities of managing a portfolio of businesses. Emphasis is placed on aligning corporate initiatives with long-term objectives, ethical considerations, and sustainable value creation.
Recommended Textbook
Economics of Strategy 6th Edition by David Besanko
Available Study Resources on Quizplus
14 Chapters
419 Verified Questions
419 Flashcards
Source URL: https://quizplus.com/study-set/1331
Page 2
Chapter 1: The Power of Principles: an Historical Perspective
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26572
Sample Questions
Q1) What was a key contribution to the dominance of the family-run small business in 1840?
A) Factories
B) Infrastructure
C) Raw Materials
D) Management
E) Laws
Answer: B
Q2) Which of the following facets of modern financial infrastructure came as a result of deregulation in the 1970s and 1980s?
A) Separation of commercial and investment banking
B) Enhanced role of central banks
C) Increased regulation of securities markets
D) Supply of debt and equity funding for firms that could not fund themselves through retained earnings
E) The availability of large investment funds facilitating M&A to flourish
Answer: E
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Economies of Scale and Scope
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26573
Sample Questions
Q1) What force does Manne indicate constrains the actions of managers so that they stay focused on the goals of owners?
A) Market for corporate control
B) SEC
C) Corporate board
D) Corporate governance
E) CEO
Answer: A
Q2) Which of the following is generally a way that LBOs can help a firm realize its potential value?
A) The synergies created allow for cost savings
B) The transaction reduces the disparity between a firm's actual and potential share price
C) The acquisition reduces the likelihood of competition in the industry
D) The transaction requires debt repayment with future free cash flow leaving management no discretion over the investment of these funds
E) The buyout gives an opportunity to adjust the management structure and makeup
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: The Vertical Boundaries of the Firm
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26574
Sample Questions
Q1) Suppose you manufacture 10 million hard drives per year specifically for Dell laptop computers.Suppose your average variable cost C=$20/unit,annualized cost of investment to build a hard drive factory I=$30 million,and the market price (bailout market price in the event Dell does not buy)Pm=$22/unit.If Dell agrees to purchase the 10 million hard drives at a price P*=$25/unit and subsequently renegotiates to only purchase for $22.50/unit,what is your company's new "rent"?
Answer: -$5 million
Q2) What problem preventing complete contracts refers to a lack of transparency/equal access to the details surrounding a contract?
A) Agency costs
B) Bounded rationality
C) Performance measurement difficulties
D) Asymmetric information
E) Contract body of law
Answer: D
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Integration and Its Alternatives
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26575
Sample Questions
Q1) Which of the following is a characteristic of an implicit contract?
A) It is an understanding between parties in a business relationship
B) It is generally enforceable in court
C) The threat of losing future business makes implicit contracts not viable
D) They are typically used in firms that have little relationship with one another
E) It is an alternative agreement method to the Keiretsu understandings between members
Q2) What concept describes the situation where the owner of an asset grants another party the right to use that asset,but the owner retains all controlling rights that are not explicitly stipulated in the contract?
A) Asset specificity
B) Non-contract rights of ownership
C) Control rights agreement
D) Residual rights of control
E) Coordination
To view all questions and flashcards with answers, click on the resource link above.
6
Chapter 5: Competitors and Competition
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26576
Sample Questions
Q1) In a three firm market where the market share split is 50%,30% & 20%,what is the Herfindahl index?
Q2) The Revenue Destruction Effect in oligopolies occurs when:
A) Firms individually reduce prices to gain more customers
B) Firms intentionally reduce output quantity to raise price
C) Firms independently maximize their own profits
D) Firms agree to all sell at the same price
E) Firms all agree to specific output quantities
Q3) What empirical method generally is used to measure the degree to which products substitute for each other?
A) Cross-price elasticity
B) Price comparison
C) Relatedness factor
D) Standard Industrial Classification
E) SSNIP
Q4) Suppose the demand for a product faces by a monopolist firm is given by Q=60-P/2.If the marginal cost of producing the product is $20,what is the profit maximizing price the firm should charge for the product? What are the firm's profits?
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Entry and Exit
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26577
Sample Questions
Q1) Which of the following is not an exit barrier for firms in an industry?
A) Sunk costs
B) Labor agreements or commitments to purchase raw materials
C) Obligations to input suppliers
D) Excess capacity
E) Government restrictions
Q2) What term describes when a firm sells a combination of goods and services at a price below what the individual items would cost?
A) Packaging
B) Combining
C) Bundling
D) Mixing
E) Assembling
Q3) What term describes a market where a monopolist cannot raise price above long run average cost?
A) Blockaded
B) Perfectly contestable
C) Accommodated
D) Deterred
E) Predatory
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: The Dynamics Competing Across Time
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26578
Sample Questions
Q1) Which set of advice below should a manager disregard when seeking pricing stability that is least likely to suffer from antitrust legislation?
A) All pricing decisions should be made unilaterally. Avoid direct contacts with competitors about price
B) Carefully handle public pricing communications
C) Always share analyses of probably competitive reactions
D) Monitor the content. Announce price changes; do not lecture competitors about the need to raise prices or consequences of reducing them
E) Clear your pricing tactics with an attorney well versed in antitrust law
Q2) In a six-firm market,if all firms charge the monopoly price,the profit equals $120,000.In that same six-firm market,if all firms instead charge the prevailing price,the profit is $60,000.If the pricing period is one-month long,what is the maximum monthly discount rate implied for each firm to still have an incentive to independently price at the monopoly level?
Q3) Suppose Firm #1 dominates a market for widgets priced at $100/unit with a marginal cost of $60/unit.If Firm #2 enters the market and offers comparable widgets at a 3% discount,extending a price umbrella optimal as long as Firm #1 loses no more than what portion of its market share?
To view all questions and flashcards with answers, click on the resource link above.
9
Chapter 8: Industry Analysis
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26579
Sample Questions
Q1) Which of the following is not a barrier to entry in professional sports markets?
A) Each league has rules governing the addition of new franchises
B) Potential new owners must pay current owners hundreds of millions of dollars
C) Most potential owners must offer to build new stadiums
D) Incumbent teams have rights to veto franchises in their own geographic markets
E) Because the number of potential billionaire owners has risen dramatically, the purchase prices have dropped
Q2) What entity as a supplier has the most substantial power over manufacturers in the commercial aircraft market?
A) Raw materials suppliers
B) Airlines
C) Aircraft leasing companies
D) Unions
E) Passengers
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Strategic Positioning for Competitive Advantage
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26580
Sample Questions
Q1) Which of the following terms is a concept,developed by Michael Porter,which describes the activities within firms and across firms that add value along the way to the ultimate transacted good or service?
A) Five forces
B) Value creation
C) Value chain
D) Consumer surplus
E) Producer surplus
Q2) Select the letter corresponding to the best answer.For a given consumer,any price-quality combination along the indifference curve yields the _______________.
A) Same consumer surplus
B) Same maximum willingness-to-pay
C) High consumer surplus
D) Low consumer surplus
E) Same competitive advantage
To view all questions and flashcards with answers, click on the resource link above.
11
Chapter 10: Information and Value Creation
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26581
Sample Questions
Q1) What term best describes a firm informing customers about a product's benefits?
A) Advertising
B) Certification
C) Disclosure
D) Notice
E) Broadcasting
Q2) Why do consumers often rely on friend's advice when shopping for experience goods?
A) They know their friend's tastes
B) Friends are less likely to be biased reporters
C) There are no search costs in seeking friend's advice
D) Friends are always more accurate than unknown verifiers
E) All friends share the common goal of highest quality
Q3) Which of the following would not reduce gaming of report cards?
A) Reporting scores using simple graphics
B) Using simple composite scores
C) Making firms pay for report card results
D) Measure quality at the most aggregate level
E) risk adjust report card scores
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Sustaining Competitive Advantage
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26582
Sample Questions
Q1) Which of the following terms best describes a phenomenon whereby a profit-maximizing firm sticks with its current technology or product concept even though the profit-maximizing decision for a firm starting from scratch would be to choose a different technology or product concept?
A) The replacement effect
B) Strategic intent
C) Strategic stretch
D) Hypercompetition
E) The sunk cost effect
Q2) What term describes a framework used in strategy based on resource heterogeneity which posits that for a competitive advantage to be sustainable,it must be underpinned by resource capabilities that are scarce and imperfectly mobile?
A) Persistence of profitability for the firm
B) Capability-based theory of the firm
C) Regression to the mean
D) Resource-based theory of the firm
E) Five-forces framework
To view all questions and flashcards with answers, click on the resource link above.
13
Chapter 12: Performance Measurement and Incentives
Available Study Resources on Quizplus for this Chatper
29 Verified Questions
29 Flashcards
Source URL: https://quizplus.com/quiz/26583
Sample Questions
Q1) What term best describes how a firm performs based on a comparison to another firm in its peer set within an industry?
A) Absolute performance
B) Comparative performance
C) Proportional performance
D) Performance measurement
E) Relative performance
Q2) Given an employee cost of effort function (where e is given in hours worked per week and each unit of e produces an extra $100 in sales):
c(e)= 0 if e<=40 (1/3)*(e-40)² if e>40
If the firm offers a salary-plus-commission job of $500 per week plus 20% of sales,what is the employee's marginal benefit of effort? How much more will the employee work than the standard 40 hour work week? What is the employee's actual salary when they work to maximize their payoff?
To view all questions and flashcards with answers, click on the resource link above.
14
Chapter 13: Strategy and Structure
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26584
Sample Questions
Q1) Which of the following structures best describes a small group of people where the members of the work group are paid based on individual actions?
A) Complex hierarchy
B) Individual
C) Self-managed team
D) Hierarchy of authority
E) Divisional
Q2) Which of the following structures best describes a small group of people where a collection of individuals work together to set and pursue common objectives?
A) Complex hierarchy
B) Individually
C) Self-managed team
D) Hierarchy of authority
E) Divisional
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Environment, power, and Culture
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26585
Sample Questions
Q1) What term best refers to interrelated beliefs,values,material practices,and norms of behavior that exist in an industry at any given time?
A) Institutional elements
B) Institutional standards
C) Institutional influences
D) Institutional logics
E) Institutional ideas
Q2) What does Gary Miller identify as the focus for actors around which a consensus can form within an organization?
A) Contracts
B) Incentives
C) Formal controls
D) Norms and Social conventions (culture)
E) Exclusive deals
To view all questions and flashcards with answers, click on the resource link above. Page 16