Strategic Management
Mock Exam
Course Introduction
Strategic Management is a comprehensive course that explores the formulation, implementation, and evaluation of cross-functional decisions that enable organizations to achieve long-term objectives. Students will examine key concepts such as competitive analysis, resource allocation, and organizational structure, drawing on real-world case studies to understand how leaders identify opportunities, navigate challenges, and sustain competitive advantage in dynamic markets. Emphasis is placed on practical tools and frameworks for strategic planning, decision-making processes, and the impact of external and internal environments on business strategy. By the end of the course, students will develop the ability to critically analyze complex business situations and propose effective strategic solutions.
Recommended Textbook
Crafting and Executing Strategy Concepts and Cases 22nd Edition by Thompson Jr
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Chapter 1: What Is Strategy and Why Is It Important?
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Sample Questions
Q1) It is incorrect to say that a company's strategy evolves due to
A)a need to promote stability and retain the status quo.
B)the need to abandon some strategy elements that are no longer working well.
C)a need to respond to changing customer requirements and expectations.
D)a need to react to fresh strategic maneuvers on the part of rival firms.
E)the proactive efforts of company managers to improve obsolete aspects of the strategy.
Answer: A
Q2) Strategic approaches to set a company apart from rivals and achieve a sustainable competitive advantage are not likely to include
A)striving to be the industry's low-cost provider.
B)outcompeting rivals on the basis of differentiating features that will appeal to a broad spectrum of buyers.
C)developing a best-cost provider strategy that gives customers more value for the money.
D)focusing on a narrow market niche and serving buyers' special needs and tastes.
E)striving to be the industry's high-price provider.
Answer: E
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Chapter 2: Charting a Companys Direction
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Sample Questions
Q1) A well-conceived and communicated strategic vision ordinarily does not result in
A)solidifying senior executives' view of the firm's long-term direction.
B)minimizing the risk of rudderless decision making.
C)galvanizing organizational members in support of internal changes that will help make the vision a reality.
D)assisting the organization in preparing for the future.
E)protests from stakeholders that the business is rudderless.
Answer: E
Q2) Common shortcomings of company vision statements include
A)too specific and too flexible.
B)unrealistic, unconventional, and unbusinesslike.
C)too broad, vague or incomplete, bland/uninspiring, not distinctive, and too reliant on superlatives.
D)too graphic, too narrow, and too risky.
E)not customer-driven, out of step with emerging technological trends, and too ambitious.
Answer: C
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Chapter 3: Evaluating a Companys External Environment
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Sample Questions
Q1) The payoff of good scouting reports on rivals is an improved ability to
A)anticipate what moves rivals are likely to make next.
B)determine which rivals are in the best strategic group.
C)figure out how many key success factors a rival has.
D)determine whether a rival is gaining or losing market share.
E)determine whether a rival has the best strategy and is the industry leader.
Answer: A
Q2) A strategic group
A)consists of those industry members that are growing at about the same rate and have similar product line breadth.
B)includes all rival firms having comparable profitability.
C)is a cluster of industry members with similar competitive approaches and market positions in the market.
D)consists of those firms whose market shares are about the same size.
E)is made up of those firms having comparable profit margins.
Answer: C
Q3) Competitive markets are economic battlefields. True or false? Explain.
A)True
B)False
Answer: True
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Chapter 4: Evaluating a Companys Resources, Capabilities, and Competitiveness
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Sample Questions
Q1) A good example of a company's resources does not include
A)more intellectual capital and better e-commerce capabilities than rivals
B)fruitful partnerships or alliances with suppliers that reduce costs and/or enhance product quality and performance
C)having higher earnings per share and a higher stock price than key rivals
D)a well-known brand name and enjoying the confidence of customers
E)a lower-cost value chain than rivals
Q2) A company's strengths are important because they
A)pave the way for establishing a low-cost advantage over rivals.
B)represent the quality of its competitive assets that enhance its competitiveness in the marketplace.
C)provide extra muscle in helping lengthen the company's value chain.
D)give it competitive protection against the industry's driving forces.
E)provide extra organizational muscle in turning a core competence into a key success factor.
Q3) What would a deep look at the cost structure of Boll and Branch (Illustration Capsule 4.1), a manufacturer and online marketer of luxury linens, reveal?
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Chapter 5: The Five Generic Competitive Strategies
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Sample Questions
Q1) A low-cost leader's basis for competitive advantage is
A)lowest possible prices for comparable products.
B)a low-cost/moderate price approach to gain the biggest market share.
C)high buyer switching costs.
D)meaningful lower overall costs than rivals on comparable products.
E)higher unit sales than rivals.
Q2) One of the big dangers in crafting a competitive strategy is that managers, torn between the pros and cons of the various generic strategies, will opt for "stuck in the middle" strategies that represent compromises between lower costs and greater differentiation and between broad and narrow market appeal.Explain your answer.
A)True
B)False
Q3) Vanguard, one of the world's largest investment management companies, has attained cost leadership via
A)ferreting out cost-saving opportunities in every part of the value chain.
B)undertaking an operations functionality redesign.
C)establishing sales productivity and operating practices guidelines.
D)re-creating rivals' assembly plant structuration savings.
E)pursuing a differentiation strategy that can be easily copied.
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Chapter 6: Strengthening a Companys Competitive Position
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Sample Questions
Q1) Identify and briefly explain what is meant by each of the following terms:
a. outsourcing strategy
b. vertical integration strategy
c. first-mover advantage
d. first-mover disadvantage
e. horizontal and vertical scope
Q2) In the face of strong competition from Amazon, Walmart's 2016 acquisition of Jet. com was driven by a strategic objective, such as
A)expanding its geographic coverage or extending its business into new product categories.
B)reducing the number of industry key success factors.
C)reducing the number of strategic groups in the industry.
D)facilitating its shift from a low-cost leadership strategy to a focused low-cost strategy.
E)lengthening its value chain and thereby putting it in a better position to deliver superior value to buyers.
Q3) Identify and briefly explain five types of offensive strategies.
Q4) Why does a company racing for global market leadership need strategic alliances?
Q5) Why do strategic alliances often fail to measure up to expectations?
Page 8
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Chapter 7: Strategies for Competing in International Markets
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Sample Questions
Q1) One of the biggest strategic challenges to competing in the international arena includes
A)how to leverage the opportunities arising from shifting exchange rates.
B)how to charge the same price in all country markets.
C)how to identify foreign firms licensed to produce and distribute the company's products.
D)whether to offer a standardized product worldwide or a customized product offering in each different country market.
E)whether to pursue a franchising strategy or a joint venture strategy.
Q2) The big issue an acquisition-minded firm must consider is whether
A)to acquire the firm at a price that cannot recapture the investment.
B)to require the acquired firm's resources and management capability to sustain the ongoing struggling operation.
C)to pay a premium price for a successful local company or to buy a struggling firm at a discount price.
D)to pay a price that builds in all the synergistic advantages to the acquired firm.
E)to pay a very high premium price that sends a signal to the market that the new firm has arrived.
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Chapter 8: Corporate Strategy
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Sample Questions
Q1) Two important negatives of unrelated diversification are
A)underemphasizing the importance of resource fit and the strong likelihood of diversifying into businesses that top management does not know all that much about.
B)insufficient cash flows to finance so many different lines of business and a lack of uniformity among the strategies of the businesses it has diversified into.
C)volatile sales and profits and making the mistake of diversifying into too many cash cow businesses.
D)the difficulties of competently managing a set of fundamentally different businesses and having a very limited competitive advantage potential that cross-business strategic fit provides.
E)overinvesting in the achievement of economies of scope and the difficulties of achieving a good mix of cash cow and cash hog businesses.
Q2) An additional, and often very important motivating factor for adding new businesses is to complement and strengthen the market position and competitive capabilities of one or more of its present businesses. Explain and provide three examples.
Q3) Discuss the pros and cons of a strategy of unrelated diversification.
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Chapter 9: Ethics, Corporate Social Responsibility,
Environmental Sustainability, and Strategy
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Sample Questions
Q1) Among the merits of why acting in a socially responsible manner is "good business," what remains to be proven in practice?
A)Companies with good reputations for contributing time and money to bettering society are better able to attract and retain employees compared to companies with tarnished reputations.
B)That there is a high correlation between socially responsible behavior that addresses social issues and a firm's competitive advantage and financial performance.
C)To the extent that a company's socially responsible behavior wins applause from consumers and fortifies its reputation, a company may win additional patronage.
D)Operating in a socially responsible manner protects the company from consumer, environmental, and human rights activist groups that are quick to criticize businesses whose behavior they consider to be out of line.
E)Well-conceived social responsibility strategies help avoid or preempt legal and regulatory actions that could prove costly to the company.
Q2) Define ethical universalism, ethical relativism, and integrative social contracts theory.
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Chapter 10: Building an Organization Capable of Good Strategy Execution
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Sample Questions
Q1) Organizing a company's work effort to promote successful strategy execution involves
A)deciding how much to spend on training managers and employees.
B)deciding which value chain activities to perform in-house and which to outsource, and making internally performed strategy-critical value chain activities the main building blocks in the organization structure.
C)choosing an organization structure that is a tight fit with the corporate culture.
D)hiring an inexpensive yet capable management team.
E)instituting a compensation structure that reduces employee turnover and thus stabilizes the makeup of work teams.
Q2) Superior strategy execution capabilities are
A)easy for rivals to copy.
B)socially simple.
C)develop quickly.
D)easy to achieve.
E)hard to imitate.
Q3) Identify and briefly discuss/explain three components of structuring a company's work effort to promote successful strategy execution.
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Chapter 11: Managing Internal Operations
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Sample Questions
Q1) To obtain maximum benefits from benchmarking, best practices, reengineering, TQM, and Six Sigma programs aimed at facilitating better strategy execution, managers need to
A)start with a clear idea of what specific outcomes really matter, such as a Six Sigma defect rate or superior customer satisfaction, and then build a total quality culture that is genuinely committed to achieving these outcomes.
B)have annual contests to see which part of the company is making the greatest strides in approaching operating excellence.
C)strive for 100 percent control over the variability in how each and every value chain activity is performed.
D)have at least 50 percent of company personnel earn "green belts" in Six Sigma techniques.
E)build core competencies in TQM, Six Sigma, benchmarking, best practices adoption, and business process reengineering.
Q2) Provide three examples of nonmonetary motivation and rewards practices that have the capability to foster good strategy execution and explain how they act to produce such a result.
Q3) How has Wegmans created a strategy-supportive reward structure?
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Chapter 12: Corporate Culture and Leadership
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Sample Questions
Q1) The characterization of these companies' corporate cultures are all correct EXCEPT
A)W) L. Gore's culture promotes multidiscipline teams to organize around opportunities and in the process leaders emerge.
B)Walmart's culture encourages the zealous pursuit of low costs and frugal operating practices.
C)Nordstrom's corporate culture is centered on delivering exceptional service to customers.
D)Apple's employee-centric culture fosters openness and sharing of company-developed technology.
E)Epic Systems' corporate culture is based on the slogan "Do good. Have fun. Make money."
Q2) Why was Goldman Sachs having trouble recruiting the best and brightest MBAs, finding itself competing for talent with high tech firms like Amazon, Google, and Facebook? What lessons can be learned about how culture impacts the strategy execution effort?
Q3) Why is Apple Inc. widely recognized as an exemplar of a healthy corporate culture? Please explain.
Q4) Briefly identify three types of unhealthy corporate cultures.
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