Strategic Management
Exam Questions
Course Introduction
Strategic Management explores the formulation, implementation, and evaluation of cross-functional decisions that enable organizations to achieve long-term objectives. The course examines key concepts such as competitive analysis, industry dynamics, resource allocation, and the alignment of organizational vision, mission, and strategy. Students engage with frameworks and tools for analyzing a companys internal and external environments, crafting strategic plans, and responding to business challenges in dynamic markets. Through case studies and applied projects, learners develop skills in strategic thinking, decision-making, and leadership, preparing them to contribute to an organizations success at the highest levels.
Recommended Textbook
Strategic Management Concepts BRV 1st Edition by Jeffrey H. Dyer
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14 Chapters
700 Verified Questions
700 Flashcards
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Chapter 1: What Is Business Strategy?
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Q1) The management of Neptune Inc.creates a definite plan of action that will surely create profits for the company.It allocates and sectionalizes its machinery and personnel.The main office is moved to a prime location that helps attract customers and facilitates competitive development.This plan of action helps Neptune Inc.retain its competitive advantage and has also grow as a company.Which of the following terms does this scenario best illustrate?
A) Strategic tools
B) Strategic management process
C) Functional strategy
D) Business unit strategy
Answer: B
Q2) Which of the following is an example of a resource?
A) An overdue
B) A mission
C) A patent
D) A goal
Answer: C
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Page 3
Chapter 2: Analysis of the External Environment: Opportunities and Threats
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Q1) How is buying power related to switching costs?
Answer: If customers, or buyers, can easily switch firms, then buyers have increased power.
Q2) The household appliance industry has few major manufacturers like Nebula Corp., Cook Well Inc., and Mercury Corp.and a few smaller manufacturers.There is not much competition in this industry because the smaller companies cannot afford to compete aggressively with the large firms which do not engage in price wars.This scenario best illustrates a _____.
A) quinary industry
B) fragmented industry
C) quaternary industry
D) concentrated industry
Answer: D
Q3) How do switching costs affect industry rivalry?
Answer: The lower the switching costs, the easier it is for competitors to poach customers, thereby increasing industry rivalry.
Q4) A firm that provides products that are inputs to another firm's production process is known as a(n) _____.
Answer: supplier
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Chapter 3: Internal Analysis: Strengths, Weaknesses, and Competitive Advantage
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Q1) Kevin, the General Manager at KlockWorks Inc., wants to assess the true worth of his company.Kevin wants to know the amount of profits accrued by the company, its strengths and weaknesses, and how far ahead is the company compared to its rivals.In order to conduct the research, he does an online search, studies the annual reports, the audits, and pays a visit to a local library.Which of the following types of data gathering techniques for company diamond analysis is being illustrated in the scenario?
A) Observation
B) Interviews
C) Archival data
D) Focus groups
Answer: C
Q2) 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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Page 5
Chapter 4: Cost Advantage
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Q1) Define economies of scale and list out its four principle sources.
Q2) BizTechno Inc.has always retained competitive advantage over its competitors.The company has offered customer satisfaction for many years by providing the best services and benefits for them.The resources, capabilities, and the organizational structure of the organization have also created an increased edge over its competitors.Which of the following does this scenario best illustrate?
A) Business model
B) Employee specialization
C) Value chain
D) Task specialization
Q3) Mention the four ways that companies achieve cost advantage through lower-cost inputs and explain bargaining power over suppliers.
Q4) The relatively fixed costs such as the costs of plant and equipment, which do not increase with an increase in the number of units manufactured, are known as _____.
A) fixed cost of production
B) fixed cost of supply
C) fixed cost of demand
D) fixed cost of scale
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6
Chapter 5: Differentiation Advantage
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Q1) Network effect occurs when some products or services are more convenient to use because there is a _____ of other users.
Q2) What are the three ways in which product features can be offered for the purpose of differentiation?
Q3) Which of the following products best exemplifies reliability?
A) A computer that has greater processing speed than others in the market
B) A phone that offers the unique function of face recognition
C) A washing machine that works optimally for many years
D) An air conditioner that detects movement automatically
Q4) Time-Threads Inc.sells storage devices, such as memory cards, thumb drives, and external hard disks.Which of the following is most likely true if it achieves product differentiation by designing its products to perform more jobs than its competitors?
A) Its thumb drives come with a tracker to help users locate them.
B) Its memory cards offer more space than most others in the market.
C) Its hard disks are designed for quicker copying of files from various mediums.
D) Its instructions manuals are printed in more languages than its competitors.
Q5) _____ is grouping customers based on similar needs.
Q6) What is customer segmentation? Mention the three types of customer segmentation.
Page 7
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Chapter 6: Corporate Strategy
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Q1) Mention the factors that lead to destroying value through diversification.Explain any three of them.
Q2) The search for competitive advantage within a single industry, market, or line of business best defines the term _____.
A) complementary service strategy
B) corporate strategy
C) business unit strategy
D) cost advantage strategy
Q3) Explain the ways in which diversification adds value.
Q4) Stacy works as a manager at Daffodils Corp., a manufacturing firm that has not been performing well.Despite the availability of research materials and databases, she uses her own experience to make acquisitions because she is usually very confident about the success of her plans.This attitude of Stacy can be termed _____.
A) hubris
B) selfishness
C) solipsism
D) megalomania
Q5) What does the term adjacent market mean?
Q6) What is a greenfield entry? When should a company use it?
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Chapter 7: Vertical Integration and Outsourcing
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Q1) White Flower Corp.and DLG Inc.are competitors in the crockery industry.Claude, the head of operations at White Flower, says that the company is able to undertake its in-house business processes and activities much better than DLG.This, Claude says, helps White Flower produce better quality products that DLG.In the context of vertical integration, Claude's statements refer to the concept of _____.
A) coordination
B) networking
C) priorities
D) control
Q2) Lupus LLC is a company that sells personalized gift items.It reduces the cost of employing professional artists, designers, photographers, salespeople, and retailers by letting its members and other people submit their ideas for designs, quotes, and phrases on its e-commerce website.Which of the following types of crowdsourcing does Lupus LLC use?
A) Crowdvoting
B) Crowdinnovation
C) Crowdtasking
D) Crowdcreating
Q3) What are the dangers of vertical integration?
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Page 9
Chapter 8: Strategic Alliances
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Q1) Drew's Cafe Inc.and Cuppa Corp., two local coffee chains, combine resources to enter the global market.They retain their individual ownership; however, they agree to share production facilities and manpower, and they also decide to market their products through combined promotional tools.The arrangement made by the two retail chains to combine resources and collaborate for a common objective refers to a _____.
A) strategic alliance
B) mass-customization strategy
C) standardization venture
D) product-differentiation strategy
Q2) Stylink Inc.and Plateus Inc.formed an alliance to create and own a legally independent company.However, Stylink tried to exploit the alliance-specific investments made by Plateus.Which of the following is being exemplified in this case?
A) Hold-up
B) Misrepresentation
C) Bondage
D) Battery
Q3) What are the ways in which strategic partners can build trust in alliance relationships?
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Chapter 9: International Strategy
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Q1) An automobile manufacturing company has its production units and sales units in two different locations.The production units are situated in geographical areas that offer cheap labor and easy resource availability.On the other hand, the sales units are located in places where there is a high demand for the products.Which of the following strategies is best exemplified in this scenario?
A) A multidomestic strategy
B) A global strategy
C) An arbitrage strategy
D) A standardization strategy
Q2) Shondura Inc.focuses on both local responsiveness and standardization in global business.The company typically begins with a strong emphasis in a single strategy and then works to minimize the downsides associated with that strategy as much as possible as they begin to implement the second strategy.Which of the following is best exemplified in this case?
A) A multidomestic strategy
B) A global strategy
C) An arbitrage strategy
D) A transnational strategy
Q3) Explain the four different modes of international market entry.
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Page 11
Chapter 10: Innovative Strategies That Change the Nature of Competition
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Q1) _____ refers to Professor Rich's argument that competitive intensity has increased, and that periods of competitive advantage have decreased.
A) Hypercompetition
B) Mass customization
C) Third-party competition
D) Standardization
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) Explain the four stages of the product life cycle.
Q4) Which of the following statements is true of the blue ocean strategy?
A) It disrupts an existing market by displacing an earlier technology.
B) It relies on its existing knowledge of products to improvise on new features.
C) It uses low-end disruptive innovations to compete in the market.
D) It creates new demand in an uncontested market space.
Page 12
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Chapter 11: Competitive Strategy
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Q1) Most companies are in competition with their rivals each and every day, month, or year with no certain end date.This is an example of _____.
A) a parallel game
B) an infinitely repeated game
C) a simultaneous game
D) the Nash equilibrium
Q2) Which of the following statements is true about an infinitely repeated game?
A) In this game, players always believe there is a future.
B) In this game, each player's best choice is to implicate the rivals.
C) It is the solution concept used to predict the outcome of competitive interactions.
D) It removes incentive to defect in the sense that no firm can improve its payoffs.
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
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13
Chapter 12: Implementing Strategy
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Q1) Clinton Corp., a global fashion brand, has shifted its focus primarily to the elements of style, skills, staffing, and shared values.Owing to the nature of these elements, the organization realizes that it will take a long time to influence and change the work environment.In the context of the 7 S model of organizational alignment, which of the following best exemplifies Clinton's approach?
A) Scorecard
B) Hard triangle
C) Guiding coalition
D) Soft square
Q2) Noel, the CEO of a firm operating in the electronics industry, wants to change the environmental trends, store keeping facilities, and distribution strategy by creating a new plan for the production plant immediately.This need for change can be achieved by
A) generating urgency
B) building a guiding coalition
C) creating a response profile
D) refreezing
Q3) What are the eight steps to successful change?
Q4) Write a note on the structure of the 7 S model of organizational alignment.
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Chapter 13: Corporate Governance and Ethics
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Q1) Ria and Maria start an investment firm together that is not a separate legal entity.They have an equal share of the profits and the liabilities of the business.This type of business ownership can be best categorized as a(n) _____.
A) cooperative
B) partnership
C) corporation
D) individual proprietorship
Q2) Define ethical behavior.
Q3) Describe how style can help a company create a climate where ethical behavior becomes the expected norm.
Q4) 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
Q5) _____ are those values that define for an individual, group, or society things that are morally right or wrong.
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Chapter 14: Strategy and Society
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Q1) Linz Inc., a global automobile manufacturing company, exports its automobiles to distributors in seven countries.The manufacturer incurs expenses of $1,000 per car as export duties and diligently pays its duties within the stipulated time frame.In this scenario, Linz is seen fulfilling its _____.
A) philanthropic responsibility
B) legal responsibility
C) shared responsibility
D) ethical responsibility
Q2) Inde Air Inc., a major airline, launches promotional schemes at regular intervals to increase its market share and counter the schemes launched by another airline, FlySky Inc.In the context of the value net model, which of the following best represents the relationship between Inde Air and FlySky?
A) Suppliers
B) Competitors
C) Complementors
D) Principal investors
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) Discuss the four roles played by stakeholders in the value net.
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