Strategic Management Exam Bank
Course Introduction
Strategic Management is a comprehensive course that explores the formulation, implementation, and evaluation of organizational strategies to gain and sustain competitive advantage in dynamic business environments. The course examines concepts such as vision and mission development, environmental analysis, strategy analysis and choice, and executing strategies across functional areas including marketing, finance, operations, and human resources. Emphasis is placed on critical thinking, problem-solving, and decision-making skills through case studies and real-world scenarios, enabling students to integrate and apply knowledge to complex business challenges at both corporate and business unit levels.
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Strategic Management Concepts BRV 1st Edition by
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Page 2
Jeffrey H. Dyer
Chapter 1: What Is Business Strategy?
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Sample Questions
Q1) Appetit Corp.is a famous deli in the metropolitan city of Atika.The company became popular because of its consistency in the quality of bread it provided and its creativity in adding unique elements to create different flavors.One of Appetit's products is an infusion of peanut butter and barbeque sauce filled in a bun.Appetit Corp.also engages its customers in contests that ask them to make their own unique variety of bread, which later features among the company's products with the winner's name.All these factors have helped to create unique value that keeps its customers coming back for more.This scenario best illustrates Appetit Corp.'s _____.
A) capabilities
B) substitutes
C) values
D) resources
Answer: A
Q2) An advantage that a firm has over its competitors in the activities associated with producing a product or service, thereby allowing it to produce the same product at lower cost best defines the term _____.
Answer: cost advantage
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Chapter 2: Analysis of the External Environment: Opportunities and Threats
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Q1) A popular food company, Crunchez Corp., is finding it difficult to retain its buyers as another food company, MidnightSnax Inc., has started to provide the same product with the same taste for a lesser price.Which of the following is a threat to Crunchez Corp.?
A) Cost push inflation
B) Supplier power
C) Switching cost
D) Unused production capacity
Answer: C
Q2) How is buying power related to switching costs?
Answer: If customers, or buyers, can easily switch firms, then buyers have increased power.
Q3) Which of the following statements is true about rivalry?
A) It is an expensive method that treats other companies amicably.
B) It helps increase losses for an organization to a large extent.
C) It is a force that is best avoided in an industry to increase profits.
D) It is an important driving force to increase profitability.
Answer: D
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Chapter 3: Internal Analysis: Strengths, Weaknesses, and Competitive Advantage
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Q1) A firm's advantage becomes stronger if it develops _____, processes that are designed to continuously expand existing resources or to improve or modify operating capabilities.
Answer: dynamic capabilities
Q2) Annabey Inc., a small candy manufacturing company established in 1937, now has several large units that sell unique flavors of candies and assorted chocolates.When the company started out in 1937, it initially experienced slow growth as it was selling brand new products in the market, but later on, their sales picked up at a drastic speed when customers decided to try their products.The CEO of Annabey credits its growth to all the customers who love their candies and chocolates.Which of the following factors of inimitability is best reflected in this scenario?
A) Positive network externality
B) Time compression diseconomy
C) Virtuous circle
D) Complexity
Answer: A
Q3) The characteristics that make a resource or capability difficult to imitate is known as
Answer: inimitability
Page 5
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Chapter 4: Cost Advantage
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Q1) Breaking a large process into smaller elements that require specialized knowledge is known as _____.
A) professional specialization
B) employee specialization
C) task specialization
D) process specialization
Q2) Fuchsia Corp., a retail chain, opens four outlets in different locations of a city.It markets itself for attracting customers to these locations.The company invests in promotional campaigns for one of the outlets and then divides the expenses among the four outlets.Which of the following is the subject of economies of scale in the described scenario?
A) Production costs
B) General costs
C) Research and development expenses
D) Advertising expenses
Q3) Define economies of scale and list out its four principle sources.
Q4) Mention the four ways that companies achieve cost advantage through lower-cost inputs and explain bargaining power over suppliers.
Q5) Explain why a learning curve is more complex than a scale curve.
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Chapter 5: Differentiation Advantage
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Q1) During the process of mapping the consumption chain of a product, Nina looks at the methods followed by companies which send their engineers to check laptops when they detect that a possible bug could be affecting a system.Which of the following questions does this example address?
A) What if customers aren't satisfied and need a return or exchange?
B) What help do customers need to become familiar with the product?
C) How is your product stored?
D) How is your product repaired, serviced, or disposed of?
Q2) The research and development department of Chi Inc.studies the buying patterns of its customers.If it starts with the customers in the first step of the consumption chain, which of the following does it most likely study?
A) How do its customers find its products?
B) How do its customers order its products?
C) How do its customers become aware of their needs?
D) How do its customers pay for the products?
Q3) What are the three ways in which product features can be offered for the purpose of differentiation?
Q4) Define mass customization and explain what companies must do in order for this method to be successful.
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Chapter 6: Corporate Strategy
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Questions
Q1) Pisces Corp.is an apparel manufacturing company.It purchased a few of its raw material suppliers and set up their factories close to the clothing stores so that the company does not have to invest on transportation charges.This is an example of
A) downward diversification
B) forward integration
C) backward integration
D) horizontal diversification
Q2) Venus Inc.is a large firm that sells several healthcare products such as bathing soaps, shampoos, body creams, and baby products.Each of these products has its own customer base.Individually, each of these products has upheld unique approaches to establish and maintain competitive advantage over its own rival companies that sell similar products.Which of the following strategies does Venus Inc.use for its products?
A) Business unit strategy
B) Global marketing strategy
C) Corporate strategy
D) Economic spending strategy
Q3) In vertical integration, movement in the direction of raw materials is _____.
Q4) What does the term adjacent market mean?
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Chapter 7: Vertical Integration and Outsourcing
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Q1) BHG Corp.is a glass manufacturing company that specializes in float glasses.The company manufactures float glass through various stages of melting and refining, coating, and annealing.It is then inspected and cut according to customer requirements.This manufacturing process performed by BHG Corp.is termed as _____.
A) virtuous circle
B) value chain
C) task specialization
D) supply chain
Q2) The sequence of all activities that are performed by a firm to turn raw materials into a finished product that is sold to a buyer best describes the term _____.
A) product line
B) task specialization
C) virtuous circle
D) value chain
Q3) In the context of coordination, what is modular interdependence?
Q4) In the context of vertical integration, when is flexibility most valuable?
Q5) What are some of the advantages of outsourcing?
Q6) What are the dangers of vertical integration?
Q7) Briefly state the difference between outsourcing and insourcing.
Page 9
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Chapter 8: Strategic Alliances
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Q1) An organization wants to form a strategic alliance with another firm.The second firm is at the same level along the value chain.It cannot contribute the same level of financial resources, although it can contribute an extensive level of knowledge.In order to accommodate these factors, they decide to start a legally independent firm.Which of the following alliances will be best suited for the organization?
A) A contractual alliance
B) An equity alliance
C) A distribution agreement
D) A joint venture
Q2) Zeal Inc., a software firm, decides to enter the publishing industry.While it has the financial resources required to enter the new market, it lacks the expertise and technical knowledge required to establish itself in the new industry.So, Zeal Inc.enters into strategic alliance with Chrome Corp., a leading e-publisher.Which of the following is likely to be true in this case?
A) Chrome is likely to lose its relational advantage through this alliance.
B) Zeal and Chrome are likely to cooperate even at the stage of research and development.
C) Zeal's vision is likely to contradict that of Chrome.
D) Chrome is likely to provide its expertise only at the marketing stage.
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Chapter 9: International Strategy
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Q1) _____ distance is usually measured as per capita gross domestic product.
Q2) Although there are a number of alternative treatments available across the globe, herbal products produced in Brazil are sold at a premium.The ancient Brazilian recipes for wellness are considered the main reason for the premium price.This is an example of a(n) _____ arbitrage.
A) economic
B) cultural
C) administrative
D) capital
Q3) Trosome Petroleum Corp.opens new plants in Sopintry.In order to gain economies of scale, it centralizes its products and operations.Decisions regarding operations in Sopintry are made at the central headquarters.Which of the following primary strategies is used by the company to do business internationally?
A) A multidomestic strategy
B) A global strategy
C) An arbitrage strategy
D) A local responsiveness strategy
Q4) What are the three primary strategies that firms can use to do business internationally?
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Chapter 10: Innovative Strategies That Change the Nature of Competition
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Q1) Paws Corp., a manufacturer of pet products, tries to get a few customers to try out their products.The primary goal of the organization is to get some reference customers that will seed future growth to increase market acceptance.In this case, the organization is in the _____ stage of the product life cycle.
A) introduction
B) growth
C) maturity
D) decline
Q2) A clothing manufacturer produces some basic models on a large scale.The customers can then choose print, color, embellishments, and size and place a specific order.Which of the following is being exemplified in this case?
A) Recon?guration of the value chain to eliminate activities
B) Creation of a low-end disruptive innovation
C) Reconfiguration of the value chain to allow for mass customization
D) Creation of a high-end disruptive innovation
Q3) What are low-end disruptive innovations? Explain with an example.
Q4) A(n) _____ describes the creation of a unique or novel concept, method or process that is often turned into a tangible outcome.
Page 12
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Chapter 11: Competitive Strategy
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Q1) A successful chain of restaurants is successful in securing the most advantageous geographic positions.This effectively bars competition.Which of the following is exemplified in this case?
A) A tit-for-tat strategy
B) A limited competitive access to scarce resources
C) A low-end disruptive innovation
D) The Nash equilibrium
Q2) Lieme Inc.and Pola Inc.are oligopolistic rivals in the automobile industry.Lieme has staked out a price position that is slightly higher than that of Pola.Even so, if Pola raises its price, Lieme would too, in order to maintain the differential.Which of the following is being exemplified in this case?
A) Implementing an entry barrier
B) Limiting competitive access to scarce resources
C) Introducing new products frequently
D) Monitoring and mimicking rival behaviour
Q3) Any factor that limits the ability of a company to move between strategic groups is called a(n) _____.
Q4) Write a note on strategic groups and mobility barriers.
Q5) Briefly describe competition under monopoly.
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Chapter 12: Implementing Strategy
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Q1) RandallCollins Inc., a wholesale fuel distributor, develops a new strategy that creates and sustains a competitive advantage in its target markets.However, it aims at making this alteration a part of its operations.Which of the following phases of organizational change is exemplified in this case?
A) Unfreezing
B) Hard triangle
C) Changing
D) Refreezing
Q2) Which of the following statements is true of shared values?
A) It refers to the priorities and virtues that members of an organization see as important.
B) It represents the most important S in the 7 S model.
C) It helps create alignment between goals, skills, and environmental needs.
D) It includes recruitment, hiring, training, promotion, and compensation.
Q3) Write a note on the principle of line of sight.
Q4) A group of influential people from all levels in an organization that support and lead the change effort is called a _____.
Q5) Explain the hard triangle and soft square in the 7 S model.
Q6) Write a note on the structure of the 7 S model of organizational alignment.
Page 14
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Chapter 13: Corporate Governance and Ethics
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Q1) Briefly describe agency problems.How can they destroy value in an organization?
Q2) Describe how style can help a company create a climate where ethical behavior becomes the expected norm.
Q3) Which of the following individuals has a legal fiduciary duty to act in the best interests of the owners of the corporation where he or she works?
A) Neehara, a nurse at a private hospital
B) Ivana, a senior executive at a financial corporation
C) Steve, a salesperson at an electronic store
D) Jamal, a technical support engineer at an IT firm
Q4) Define ethical behavior.
Q5) Newe Chemicals Inc.is a company that manufactures household chemicals.Its customers consist of people who purchase its products.They will be affected by the business through the:
A) wages it pays to its employees.
B) payment it makes to its suppliers.
C) earnings it generates for its investors.
D) advertising campaigns it uses to promote its products.
Q6) Explain the difference between the shareholder primacy model and the stakeholder model.
Page 15
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Chapter 14: Strategy and Society
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Q1) The ability of an organization to consistently gather resources from, or provide services to, key stakeholders such as donors, volunteers, students, or clients is referred to as _____.
Q2) JustHog Inc.and FoodLite Inc.are major fast food chains.They attract a larger share of the fast food market due to their quality, prompt service, and affordability.Due to the recent marketing initiatives of JustHog, FoodLite experienced a drop in its market share.In the context of the value net model, which of the following best represents the relationship between JustHog and FoodLite?
A) Competitors
B) Customers
C) Suppliers
D) Complementors
Q3) Which of the following describes those living in conditions of extreme poverty around the world, usually defined as less than $2 per day?
A) Line of sight
B) Value net
C) Backward integration
D) Base of the pyramid
Q4) Discuss the four roles played by stakeholders in the value net.
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