Entrepreneurship Strategy Practice
Questions
Course Introduction
Entrepreneurship Strategy explores the foundational concepts, frameworks, and tools essential for developing, implementing, and managing strategic initiatives in entrepreneurial ventures. The course examines the unique challenges and opportunities entrepreneurs face in rapidly changing markets, focusing on opportunity recognition, business model innovation, resource acquisition, competitive positioning, and growth strategies. Students will analyze real-world case studies and learn to formulate actionable strategies that support sustainable value creation and competitive advantage in both startups and evolving organizations.
Recommended Textbook
Strategic Management and Competitive Advantage Concepts and Cases 5th Edition by Jay B.
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Page 2
Chapter 1: What Is Strategy and the Strategic Management Process
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) From 1926 to 1995, visionary firms earned ________ returns compared to firms that were not visionary firms.
A) substantially lower
B) substantially higher
C) marginally lower
D) equivalent
Answer: B
Q2) Green Frog is an environmentally friendly firm in the cosmetics industry. If Green Frog undertook an analysis to help it understand which of its resources and capabilities are likely to be sources of competitive advantage and which are less likely to sources of such advantages it would be performing a(n)
A) internal analysis.
B) external analysis.
C) WACC analysis.
D) economic analysis.
Answer: A
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Page 3
Chapter 2: Evaluating a Firms External Environment
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99 Flashcards
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Sample Questions
Q1) Factors such as BidBuy's feedback rating system that are valuable to the company's customers but which are not useful on other online auction sites are examples of A) first-mover advantages.
B) complementors.
C) substitutes.
D) customer-switching costs.
Answer: D
Q2) First movers that invest only in technology usually obtain sustained competitive advantages, even if they do not tie up strategically valuable resources in an industry before their full value is widely understood.
A)True
B)False
Answer: False
Q3) Product innovation is an effort to refine and improve a firm's current processes.
A)True
B)False
Answer: False
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Chapter 3: Evaluating a Firms Internal Capabilities
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Sample Questions
Q1) The inability of rivals to develop or acquire technology similar to that of LaserTech is an illustration of
A) resource immobility.
B) resource heterogeneity.
C) causal ambiguity.
D) path dependence.
Answer: A
Q2) A process is said to be path dependent when imitating firms are not able to understand the relationship between the resources and capabilities controlled by a firm and that firm's competitive advantage.
A)True
B)False
Answer: False
Q3) The value chain model developed by McKinsey and Company divides value-creating activities into two large categories: primary activities and secondary activities.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Cost Leadership
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Sample Questions
Q1) ________ focus(es) on the relationship between the volume of production at a given point in time and average unit costs, the ________ focus(es) on the relationship between the cumulative volume of production and average unit costs.
A) Economies of scale; learning curve
B) Competitive advantage; economies of scale
C) Learning curve; economies of scale
D) Economies of scale; competitive advantage
Q2) Cost advantages based on diseconomies of scale are likely to be rare.
A)True
B)False
Q3) A firm that chooses a ________ focuses on gaining advantages by reducing its cost below all of its competitors.
A) diversification strategy
B) product-differentiation business strategy
C) corporate strategy
D) cost-leadership business strategy
Q4) Identify the types of control systems that are appropriate for firms pursuing a cost-leadership strategy.
Q5) Discuss the difference between the learning curve and economies of scale.
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Chapter 5: Product Differentiation
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Sample Questions
Q1) While product features, by themselves, are usually not a source of sustained competitive advantage, they can be a source of a temporary competitive advantage.
A)True
B)False
Q2) While firms often alter the ________ of their products or services in order to implement a product-differentiation strategy, the existence of product differentiation, in the end, is always a matter of ________.
A) customer perceptions; objective properties
B) objective properties; price
C) customer perceptions; price
D) objective properties; customer perception
Q3) Attempts to create differences in the relative perceived value of a firm's products or services are rarely made by altering the objective properties of those products or services.
A)True
B)False
Q4) Product differentiation can lead to high market share and low costs.
A)True
B)False
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Chapter 6: Vertical Integration
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Sample Questions
Q1) If one of a firm's exchange partners behaves opportunistically, this reduces the economic value of the firm.
A)True
B)False
Q2) Firms should only bring market exchanges within their boundaries when the cost of vertical integration is more than the cost of opportunism.
A)True
B)False
Q3) If Dell computers were to open its own factory to manufacture the LCD televisions it sells at its online store, this would be an example of
A) forward vertical integration.
B) product differentiation.
C) forward horizontal integration.
D) backward vertical integration.
Q4) More vertically integrated firms accomplish fewer stages of the value chain within their boundaries than less vertically integrated firms.
A)True
B)False
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Page 8
Chapter 7: Corporate Diversification
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Sample Questions
Q1) When diversified firms use the revenues from profitable businesses to subsidize the operations of another business and then set the prices of the subsidized firm's products at a level that is below the subsidized business's cost to produce these items, this is known as ________ pricing.
A) dynamic
B) monopoly
C) predatory
D) beneficial
Q2) In 2001, Peach Computers' diversification strategy was best characterized as
A) related-linked diversification.
B) dominant-business diversification.
C) single-business diversification.
D) related-constrained diversification.
Q3) Employee compensation is an example of costly-to-duplicate economies of scope.
A)True
B)False
Q4) Shared activities can increase the expenses for a diversified firm's business.
A)True
B)False
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Chapter 8: Organizing to Implement Corporate Diversification
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Sample Questions
Q1) Describe the multidivisional, or M-form structure, and how it is used to implement a corporate diversification strategy.
Q2) Two common agency problems include
A) managers investing some of a firm's capital in managerial perquisites that do not add economic value to a firm and managerial risk aversion.
B) managers not investing enough of a firm's capital in managerial perquisites and managerial risk aversion.
C) managers investing some of a firm's capital in managerial perquisites that do not add economic value to a firm and managerial risk seeking.
D) managers not investing enough of a firm's capital in managerial perquisites and managerial risk seeking.
Q3) The M-form structure is designed to create checks and balances for managers that increase the probability that a diversified firm will be managed in ways consistent with A) the interests of all of its stakeholders.
B) an exclusively short-term perspective.
C) an exclusively long-term perspective.
D) the interests of its equity holders.
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Page 10
Chapter 9: Strategic Alliances
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Sample Questions
Q1) The existence of moral hazard in a strategic alliance proves that at least one of the parties is either malicious or dishonest.
A)True
B)False
Q2) Discuss when firms go it alone and identify three conditions under which alliances will be preferred to going it alone and when going it alone is not an attractive substitute for an alliance.
Q3) Strategic alliances are particularly valuable in facilitating market entry and exit when the value of market entry or exit is
A) high.
B) low.
C) moderate.
D) uncertain.
Q4) In network industries with increasing returns to scale where standards are unimportant, strategic alliances can be used to create a more favorable competitive environment.
A)True
B)False
Q5) What is the connection between strategic alliances and real options?
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Chapter 10: Mergers and Acquisitions
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Sample Questions
Q1) If there are five bidders (each of which has a current market value of $50,000 ) interested in a target firm that has no strategic relatedness with any of the bidding firms and has a current market value of $25,000, identify the economic profits that will be earned by both the bidding firm's equity holders and the target firm's equity holders and discuss this case.
Q2) Which of the following actions should bidding firm managers take to help earn superior performance in an acquisition strategy?
A) Share information with other bidders.
B) Delay the closing of the deal.
C) Avoid winning bidding wars.
D) Operate in competitive acquisition markets.
Q3) One study that reviewed 40 empirical merger and acquisition studies in the finance literature concluded that acquisitions, on average, increased the market value of bidding firms by about 25 percent and left the market value of the target firms unchanged.
A)True
B)False
Q4) Describe three major challenges that firms integrating acquisitions are likely to face.
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Page 12
Chapter 11: International Strategies
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Sample Questions
Q1) Hedging strategies reduce the political risks that firms assume when they enter into nondomestic markets.
A)True
B)False
Q2) In a coordinated federation structure, shared activities and other cross-divisional/cross-country economies of scope are managed by the
A) country unit.
B) corporate center.
C) local unit.
D) country manager.
Q3) In a ________, strategic and operational decisions are delegated to divisions/country companies.
A) transnational structure
B) decentralized federation
C) coordinated federation
D) centralized hub
Q4) International strategies are actually a special case of business strategies.
A)True
B)False
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