Strategic Management
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Course Introduction
Strategic Management explores the formulation, implementation, and evaluation of organizational strategies to achieve long-term goals and sustain competitive advantage. This course examines the external environment, internal resources, and the dynamics of strategy in various business settings. Students analyze real-world cases, assess strategic choices, and learn tools for decision-making, while developing skills in critical thinking, leadership, and teamwork. Topics include industry analysis, corporate and business-level strategy, global strategy, innovation, and ethical decision-making, providing a comprehensive understanding of how organizations create and sustain value.
Recommended Textbook
Strategic Management Concepts and Cases 1st Edition by Jeffrey H. Dyer
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14 Chapters
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Page 2
Chapter 1: What Is Business Strategy
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Sample Questions
Q1) The Mykari Publishing House invested in buying high-end machinery that allowed its newspapers to be printed at twice the speed of average printing machines.The executives of the company stated that this would increase the company's profit margin by 12% as opposed to the usual 7 to 8% that it makes annually.When the finances of the company were tallied this year,it was found that the profits increased to about 19%.This scenario best illustrates _____.
A) return of equity
B) above-average profits
C) complimentary value
D) unique value
Answer: B
Q2) What does the term cost advantage mean?
Answer: It is 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.
Q3) 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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Page 3
Chapter 2: Analysis of the External Environment: Opportunities and Threats
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Sample Questions
Q1) Which of the following statements is true of a fragmented industry?
A) It is characterized by rivalry that is typically less intense.
B) It usually has very few competitors and tends to be dominated by a few large firms.
C) It is difficult to keep track of the pricing and competitive moves of multiple players.
D) It involves companies selling the same brand of products that are scattered in different locations.
Answer: B
Q2) 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
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Chapter 3: Internal Analysis: Strengths, Weaknesses, and Competitive Advantage
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Sample Questions
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) Value is usually created when:
A) the end user enjoys direct pleasure and satisfaction from a company's product.
B) a company survives but has no real competitive advantage over rivals.
C) a company eliminates quality control processes as much as possible.
D) the steps in the production chain of a company are reduced.
Answer: A
Q3) The characteristics that make a resource or capability difficult to imitate is known as _____.
Answer: inimitability
Q4) Which of the following is true of a tangible resource?
A) It is an economically valuable asset such as brands and patents.
B) It has a physical presence such as land, machinery, and cash.
C) It includes employee and management skills and talents.
D) It includes organizational assets like knowledge and reputation.
Answer: B
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Chapter 4: Cost Advantage
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Q1) Which of the following statements is true of research and development (R&D)?
A) Small volumes of production enable firms to spread the cost of research and development (R&D), advertising, and general and administrative expenses.
B) The higher a firm's R&D costs, the more the scope for the company to expand globally allowing costs to be spread across more customers.
C) Adding R&D allows a firm to have a cost advantage over competitors.
D) Eliminating R&D helps firms to lead in launching new product designs.
Q2) The Finance Department of Neptune Industries has to audit expenses and profits made each year.It creates separate databases for costs accrued in the form of equipment used in the company and for other costs such as costs of accounting,rent,and managerial salaries.Which of the following is the subject of economies of scale in the described scenario?
A) Research and development expenses
B) General and administrative costs
C) Incentives and promotional costs
D) Advertising expenses
Q3) Explain proprietary knowledge and its important sources.
Q4) Define the cost advantage strategy and its characteristics.
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) Rita lives in a dorm with other students of her college.She hesitates to buy furniture owing to lack of space.She wants to buy a new study desk,one that can easily fold away and be dismantled so that it doesn't occupy much space when not in use.What is Rita's main concern?
A) How to use the product
B) How to store the product
C) How to assemble the product
D) How to locate the product
Q2) Which of the following is necessary for a product to be considered reliable?
A) It needs to do a better job as far as performance on existing features is concerned.
B) It needs to do more jobs than products offered by other firms in the market.
C) It needs to last longer than products offered by other firms in the market.
D) It needs to offer unique functions and features that no other firm offers.
Q3) What is brand image and when does a company make use of this product differentiation method?
Q4) _____ is grouping customers based on similar needs.
Q5) Briefly discuss the questions that a company must ask in order to figure how to deliver the unique value of a product.
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Chapter 6: Corporate Strategy
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Q1) 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
Q2) In order to successfully carry out an acquisition,the managers at Pink Inc.prepared a list of potential target companies that it could purchase.In the next step,the managers evaluated each prospective company in depth to understand their methods of operations,processes,procedures,strengths,and limitations in order to choose the best target company.This process of evaluating the companies is best known as _____.
A) due diligence
B) market intelligence
C) consultation
D) market evaluation
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Chapter 7: Vertical Integration and Outsourcing
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Q1) Which of the following scenarios illustrates the concept of outsourcing?
A) TechOn Inc., a company that buys raw materials from a supplier company
B) BNX Corp., a company that procures raw materials and supplies them to a different company
C) Virgo Corp., a company that contracts out a business activity to another company
D) Red Inc., a company that sells all its assets to another company
Q2) Cygnus Bank is a banking and financial services company.It offered a large sum of money and a chance to receive employment to the programmers who could create a software that would help enhance employee productivity.Which of the following types of crowdsourcing did Cygnus Bank use?
A) Crowdvoting
B) Crowdinnovation
C) Crowdtasking
D) Crowdcreating
Q3) What are some of the advantages of outsourcing?
Q4) What are the dangers of vertical integration?
Q5) What is the main difference between a company that is vertically integrated and a company that is vertically specialized?
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Chapter 8: Strategic Alliances
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Q1) Sands Inc.,a financial firm,partners with another organization that is at a similar stage along the value chain.The parent organizations create a legally independent firm.However,Sands brings more resources to the new firm than the other partner.Which of the following is being exemplified in this case?
A) A contractual alliance
B) An equity alliance
C) A distribution agreement
D) A joint venture
Q2) Borpon Inc.and Biocolog Corp.are well-established biotechnology companies.They enter into a strategic alliance in which they create and own a legally independent company.The new company is created from resources and assets contributed by the parent firms.Revenues,expenses,and profits are equally shared by both firms.Which of the following strategic alliances is adopted by Borpon and Biocolog?
A) A contractual alliance
B) An equity alliance
C) A distribution agreement
D) A joint venture
Q3) What are the different types of nonequity alliances?
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Chapter 9: International Strategy
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Questions
Q1) Score Ink Corp.,a publishing firm,decides to enter a new market.It changes its strategy from standardization to local responsiveness in order to meet the needs of the new market.However,in order to execute this strategy,it had to increase production and distribution expenses.Which of the following is adopted by Score Ink?
A) A multidomestic strategy
B) A global strategy
C) An arbitrage strategy
D) A standardization strategy
Q2) _____ is the need to tailor an organization's products,marketing,and distribution strategies to the local customers in a foreign country.
Q3) In the context of modes of international market entry,which of the following statements is true of a joint venture?
A) It is a favored way to enter markets that are close to the home market.
B) It involves cultural barriers that increase the difficulty of operations.
C) It avoids sharing resources, risks, and rewards.
D) It offers the least amount of control of all the various modes of entry.
Q4) _____ distance is usually measured as per capita gross domestic product.
Q5) Write a note on cultural distance.
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Chapter 10: Innovative Strategies That Change the Nature of Competition
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Q1) Pearl Corp.,a manufacturer of dental equipment,creates a new instrument.With the experience it has in creating small equipment required for dental surgeries,it customizes the new tool to be more accurate and effective.It also comes with an improvised handle.Which of the following innovations has Pearl adopted in this scenario?
A) An altered innovation
B) An incremental innovation
C) A radical innovation
D) A progressive innovation
Q2) Peach Corp.continues to refine its chocolate products even as they look for innovative ways to reach customers through marketing and new distribution channels.In this case,the organization is in the _____ stage of the product life cycle.
A) introduction
B) growth
C) maturity
D) decline
Q3) Explain the four stages of the product life cycle.
Q4) _____ coined the term hypercompetition.
Q5) Creating new demand in an uncontested market space is called the _____.
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Chapter 11: Competitive Strategy
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Q1) An airline service provider watches its rivals closely.It studies the potential for reliable,timely,and service-oriented international travel offered by its competitors.In this case,the firm is focusing on the competitors' _____.
A) resources and capabilities
B) objectives
C) organizational structure
D) market risks
Q2) A _____ profile identifies characteristics of a competitor in order to assess how it might respond in the face of rival actions.
Q3) An organization watches it rivals closely and chooses actions that mimic what its rivals are doing.This is an example of a _____.
A) structural analysis
B) tit-for-tat strategy
C) parallel game
D) simultaneous game
Q4) Write a note on strategic groups and mobility barriers.
Q5) In game theory,a set of actions that are always played no matter what a rival chooses to do is referred to as the _____.
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Chapter 12: Implementing Strategy
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Q1) Which of the following statements is true about the principle of line of sight?
A) It helps to overcome the limited perspectives of individual organizational members.
B) It means moving from one set of behaviors and activities to another.
C) It is often successful by trial and error.
D) It provides the fundamental motivation for change.
Q2) MorrisWhitaker Inc.,a metallurgical firm,wants to create a new production plan.This step involves formalizing and institutionalizing new behaviors,methods,processes,or routines.This is an example of the _____ phase of organizational change.
A) unfreezing
B) monitoring
C) changing
D) refreezing
Q3) Which of the following statements is true of the unfreezing phase of organizational change?
A) It allows organizations to maintain the progress they made through change.
B) It means moving from one set of behaviors and activities to another.
C) It is the phase where an organization engages in a trial and error process.
D) It provides the fundamental motivation for change.
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Chapter 13: Corporate Governance and Ethics
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Q1) Chemica Corp.is a company that manufactures household chemicals and fertilizers used in farming.The government of the state in which it operates will be affected by the business through the:
A) effect its products have on environmental pollution.
B) reputation of the company.
C) earnings generated by the company.
D) employment opportunities that the company generates.
Q2) 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.
Q3) Describe how style can help a company create a climate where ethical behavior becomes the expected norm.
Q4) Explain with examples how the engagement of a company with its key stakeholders can affect its overall performance and competitive advantage.
Q5) In a company,who are called agents?
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Chapter 14: Strategy and Society
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Q1) Gama Inc.,a cell phone manufacturer,procures lithium batteries from Zipcharge Inc.These batteries are used in the smart phones manufactured by Gama.In the context of the value net model,Gama is most likely to be considered a _____.
A) supplier
B) competitor
C) principal
D) customer
Q2) John purchases a laptop from an electronics store for his own use without any intention to resell it.In the context of the value net model,John's purchase intention reflects that of a _____.
A) complementor
B) customer
C) strategic supplier
D) competitior
Q3) Discuss the role of a social entrepreneur in the creation of shared value.
Q4) Differentiate between a social bricoleur and a social engineer.
Q5) 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 _____.
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