1 Which of the following is not a limitation of SWOT (Strengths, Weaknesses, Opportunity, Threats)

analysis?
A)
Organizational strengths may not lead to competitive advantage
B)
SWOT gives a one-shot view of a moving target
C)
SWOT's focus on the external environment is too broad and integrative
D)
SWOT overemphasizes a single dimension of strategy
2 A marketing department that promises delivery quicker than the production department's ability to
produce is an example of a lack of understanding of the
A)
synergy of the business units.
B)
need to maintain the reputation of the company.
C)
organizational culture and leadership.
D)
interrelationships among functional areas and firm strategies.
3 XYZ Corp. is centering on the objective of low-cost, high quality, on-time production by curtailing
idle productive facilities and workers. The XYZ Corp. is taking advantage of a ____________ system.
A)
Just-In-Time (JIT)
B)
Last In, First Out (LIFO)
C)
First In, First Out (FIFO)
D)
Highly mechanized
4 Which of the following lists is comprised of support activities:
A)
human resource management, information systems, procurement, and firm
infrastructure
B)
customer service, information systems, technology development, and
procurement
C)
human resource management, technology development, customer service, and
procurement
D)
human resource management, customer service, marketing and sales, and operations
5 Although firm infrastructure is quite frequently viewed only as overhead expense, it can become a
source of competitive advantage. Examples include all of the following except:
A)
negotiating and maintaining ongoing relations with regulatory bodies.
B)
marketing expertise increasing a firm's revenues and enabling it to enter new
markets.
C)
effective information systems contributing significantly to a firm's overall cost
leadership strategy.
D)
top management providing a key role in collaborating with important customers.
6 The competencies or skills that a firm employs to transform inputs into outputs are:
A)
tangible resources.
B)
intangible resources.
C)
organizational capabilities.
D)
reputational resources.
7 An array of firm resources include interpersonal relations among managers in the firm, its culture,
and its reputation with its customers and suppliers. Such competitive advantages are based upon
A)
physical uniqueness.
B)
path dependency.
C)
social complexity.
D)
tangible resources.

8 A company's ability to meet its short-term financial obligations is measured by which of the
following categories?
A)
Liquidity ratios
B)
Profitability ratios
C)
activity ratios
D)
leverage ratios
9 The "balanced scorecard" supplies top managers with a _____________ view of the business.
A)
long-term financial
B)
detailed and complex
C)
simple and routine
D)
fast but comprehensive

Strategy and the Organization

Question 1
To find out what an organization's strategy is, you should:
a) Read the mission statement
b) Look at what the organization actually does
c) Read the strategic plan
d) Ask the CEO
Question 2
Which of the following statements is not true when describing a successful strategy?
a) It provides some property that is unique or distinctive
b) It provides the means for renewing competitive advantage
c) It addresses changes in the external environment
d) It guarantees long term survival
Question 3
In the context of strategic management resources can be defined as:
a) The knowledge and skills within the organization
b) Something that an organization owns or controls that cannot be copied
c) Something that an organization owns, controls or has access to on a semi-permanent
basis
d) The physical assets of the organization
Question 4
In the context of strategic management, stakeholders can be defined as:
a) An individual or group with a financial stake in the organization
b) An external individual or group that is able to impose constraints on the organization
c) Internal groups or individuals that are able to influence strategic direction of the organization
d) An individual or group with an interest in the organization's activities and who seeks
to influence them
Question 5
In the case where an organization acquires its supplier, this is an example of:
a) Horizontal integration
b) Forwards vertical integration
c) Backwards vertical integration
d) Downstream vertical integration
Question 6

When a firm seeks the benefits of global integration and local adaptation, it is best described as
which type of strategy?
a) Transnational
b) Global
c) Multi-national
d) Global-local
Question 7
Knowledge which is difficult to define and codify is known as:
a) Explicit
b) Tangible
c) Tacit
d) Random
Question 8
Competitive advantage based on the creation of opportunities using internal resources is
characterized by which approach/view?
a) The positioning approach
b) The outside-in approach
c) The resource-based view
d) The knowledge-management approach
Question 9
'Reputation' in the context of an organization's resources can provide competitive advantage
because:
a) It is difficult to copy
b) It is based on word-of-mouth
c) It is a threshold resource
d) It is explicit
Question 10
A strategic manager that seeks to reach acceptable profit targets as opposed to making as much
profit as possible is making decisions of which type?
a) Satisfactory
b) Satisficing
c) Irrational
d) Optimal

What is Strategic Management?

Question 1
A strategic decision can be distinguished from other types of decisions by three factors, these are
magnitude, time-scale and:
a) Commitment
b) Riskiness
c) Impact
d) Longevity
Question 2
'Logical incrementalism' can be described as:
a) Careful design and planning
b) Emergent
c) Cautious resource allocation
d) Top management rational analysis
Question 3

An organization in which strategy development is characterized by internal political negotiation and

self-interest is operating in which strategy-making mode?
a) The transactive mode
b) The muddling through mode
c) The command mode
d) The emotional mode
Question 4
'Influence' is defined as the ability to ____________ someone to something they would not otherwise
have done.
a) Intimidate
b) Force
c) Order
d) Persuade
Question 5
McDonalds is deciding whether to expand into manufacturing kitchen equipment in China. At what
level is this decision likely to be made?
a) Business
b) Corporate
c) Functional
d) International
Question 6
The authors believe there are three tests that can be applied to judge whether a strategy is 'good'.
These are:
a) Fit, distinctiveness, sustainability
b) Fit, internal resources, external environment
c) Distinctiveness, internal resources, fit
d) Sustainability, distinctiveness, external environment
Question 7
Diversification into many unrelated areas is an example of:
a) Risk management
b) Good management
c) Uncertainty reduction
d) Sustainability
Question 8
According to Porter, dealing with the paradox of premature commitment versus not enough
commitment involves some kind of:
a) Trade-of
b) Lock-in
c) Lock-out
d) Diversification
Question 9
Corporate governance is concerned with:
a) Executive remuneration, disclosure of information,
procedures, and organizations' management structures
b) Elections to the board of directors
c) Relationships with national governments
d) Corporate-level strategy
Question 10
The principal-agent problem is concerned with:

auditing

and

accounting

a) Procurement
b) Appropriation of shareholders' investment by a firm's managers
c) How to control a firm's distributors and dealers
d) Corporate social responsibility

The Value Chain

Question 1
The value chain is subdivided into two main headings. These are primary activities and:
a) Peripheral activities
b) Support activities
c) Secondary activities
d) Outsourced activities
Question 2
In the value chain, primary activities are:
a) Directly involved in the production, marketing and delivery of the product or service
b) Those activities that are all undertaken in-house
c) Those activities that support the production, marketing and delivery of the product or service
d) Directly involved in the production and delivery of the product or service
Question 3
The 'operations' in a passenger airline service would be:
a) The manufacture of the aircraft
b) Getting passengers and baggage from A to B by means of flying in an aircraft
c) The design of the price structure and yield plan
d) Selling the tickets to passengers
Question 4
One of the strategic decisions relating to the value chain concerns vertical integration. This would
involve:
a) Deciding whether to locate operations in the home country or in a foreign location
b) Deciding whether the activity should be performed within the organization or by a
diferent firm
c) Deciding to link all activities using Enterprise Resource Planning
d) Deciding whether to share certain activities across different products and markets
Question 5
Firm A has decided to use an outside travel firm for making travel arrangements but it is based on
the premises of Firm A. This is an example of:
a) Nearshoring
b) Offshoring
c) Insourcing
d) Outsourcing
Question 6
A network of firms providing different parts of a value-chain in the production of a product or service
is known as:
a) Franchising
b) Nearshoring
c) Orchestrating
d) Co-specialization
Question 7
A firm outsources many of its value chain activities. Compared to a firm that does everything inhouse this is likely to incur:

a) Higher transaction costs, lower control

b) Higher transaction costs, higher control
c) Lower transaction costs, higher control
d) Lower transaction costs, lower control
Question 8
When a firm promises more than it can actually deliver to win a contract, this is known as:
a) Adverse selection
b) Inverse selection
c) Moral hazard
d) Trust hazard
Question 9
Which of the following outcomes is a potential benefit of outsourcing?
a) Higher flexibility
b) Higher control
c) Lower transaction costs
d) Better linkages between activities
Question 10
A joint venture can be defined as:
a) Two firms collaborate together on a specific project
b) One firm licenses its intellectual property to another firm
c) Two firms merge together
d) Two firms come together to form a third, legally separate firm

Competitive Advantages
Question 1
A 'market driven' firm will typically:
a) Develop new products and then find someone to sell them to
b) Define the target market and produce products that will satisfy those customers'
needs
c) Operate in a product-oriented fashion
d) Suffer from market-myopia
Question 2
Segmentation is a way of:
a) Subdividing markets
b) Subdividing industries
c) Differentiating products
d) Subdividing organizations into departments
Question 3
A B2C market is:
a) Business to commercial
b) Business to consumer
c) Business to contract
d) Business to corporate
Question 4
Segmentation is a compromise between two ideals: mass marketing and:
a) Customization
b) Uniformity
c) Innovation
d) Convergence of tastes

Question 5
Porter's generic strategies are:
a) Low price, differentiation, focus
b) Cost leadership, diferentiation, cost focus, focus diferentiation
c) Price leadership, differentiation, focus
d) Low cost, differentiation, focus differentiation
Question 6
According to Porter, if an organization does not follow either a cost leadership strategy or a
differentiation strategy they are:
a) Hybrid
b) Stuck in the middle
c) Typical
d) No frills
Question 7
According to Bowman's generic strategies model a high price, low-perceived value strategy is only
feasible in:
a) An oligopoly
b) A monopoly
c) A concentrated industry
d) A fragmented industry
Question 8
Treacy and Wiersema identify 3 ways a firm may get competitive advantage. These are:
a) Low cost, customer intimacy, product leadership
b) Operational excellence, customer intimacy, product leadership
c) Operational excellence, reputation, product leadership
d) Low costs, reputation, product leadership
Question 9
In Porter's Generic Strategies model, a focus strategy involves:
a) Selling a limited range of products
b) Selling to a narrow customer segment
c) Selling to one region only
d) Selling simple products that are cheap to produce
Question 10
H&M, the clothes retailer is for most of its products following which generic strategy?
a) Focused differentiation
b) Hybrid
c) Cost Focus
d) No Frills

1. Which of the following is not a recognized element of corporate strategy?

a.Competitive advantage
b.Closure
c.Acquisition
d.Divestment
e.All of the above

Hint: Acquisition, closure, and divestment are recognized activities associated with corporate
strategy. However, the search for competitive advantage is not a key priority as this falls within the
domain of competitive strategy.
2. Which of the following statements is false? Formal strategic planning:
a.implies determined actions for achieving objectives
b.is a time consuming process
c.should develop clear and rigid plans for the organization to implement
d.is most applicable in stable environments
e.None of the above
Hint: Formal strategic planning can develop clear and rigid plans, but these should not be inflexible
as such rigidity can hamper implementation and be dangerous to the organization in dynamic, everchanging environments.
3. Which of the following statements best describes the concept of strategic awareness?
a.Managers understanding of the organizations history, competencies, and current strategy
b.Managers understanding of current strategy and its effectiveness
c.Managers understanding of the strategic options available to the organization
d.Managers understanding the organizations strategy, its efectiveness, and the
potential avenues for change
e.None of the above
Hint: Strategic awareness concerns the understanding of managers of not only current strategy and
its effectiveness, but also the potential need and avenues for strategic change.
4. Which of the following is associated with successful strategies?
a.Creating superior value to customers
b.Exploitation of key success factors
c.Creating and maintaining strategic fit
d.Achieving specified strategic objectives
e.All of the above
Hint: All of the suggested answers are associated with successful strategies.
5. Which type of strategies are of particular importance to global companies?
a.Corporate
b.Functional
c.Competitive
d.Corporate and competitive
e.Corporate, competitive, and functional
Hint: The emphasis in global companies is very much on corporate strategy above all other forms of
strategy. However, issues of competitiveness and competitive advantage are also critical and should
not be ignored. Therefore, both corporate and competitive strategies are key.
6. Which one of the following is of concern for not-for-profit organizations?
a.The markets to service
b.Identifying suppliers to deal with
c.Developing capabilities
d.Which customers to target
e.Building monopolies
Hint: Not-for-profit organizations are generally unconcerned with identifying suppliers and
customers. Further, the development of capabilities is of less concern as the objective is typically not

how to compete but what good causes or areas do these organizations wish to help. What is of
concern for not-for-profit organizations is the entrepreneurial issue of what businesses to be in or
which markets they should serve. That is, what good causes they wishes to raise funds for; which
diseases to research for cures; etc.
7. Select the statement that best applies to emergent strategies. Emergent strategy...
a.implies an ability to react to events
b.implies deliberate evaluation and selection between different strategic options
c.implies strategizing
d.implies no deviation from plans
e.implies constant evaluation of the bigger picture
Hint: Emergent strategy is about tactical moves (changes) in response to external events. Therefore,
it implies flexibility and the ability to react to events in the environment.
8. Select the most accurate statement. Value:
a.means value for money
b.is best described as the benefits the business chooses to give to customers through its
product/service
c.is the benefits of a product/service as perceived by the customer
d.does not offer competitive advantage
e.is not a key element of competitive strategy
Hint: Value is a key element of competitive strategy that allows the business to achieve competitive
advantage. It is more than simply value for money. Value refers to the benefits that accrue from the
purchase and use of a product/service, but critically, it is perceived in the mind of the customer.
Businesses can seek to create value, but critically, it is the individual customer that assesses and
perceives the total value that they derive from the product/service.
9. Which of the following statements best describes strategic management?
a.A process consisting of determining objectives and strategic actions to achieve those objectives
b.A process consisting of determining objectives, strategic actions to achieve those objectives, the
implementation of desired strategy, and the monitoring of that strategy
c.A process consisting of the determination of direction, strategic actions to achieve
objectives, the implementation of desired strategy, and monitoring of that strategy
d.A process for determining direction, strategic actions to achieve objectives, and the
implementation of desired strategy
Hint: Direction refers to organizational purpose and objectives. This is a key part of strategic
management along with determining strategic actions to achieve those objectives, and the
implementation and subsequent monitoring of desired strategy.
10. Which one of the following would not be considered a functional strategy?
a.Financial
b.Marketing
c.Product-market
d.Operations
e.None of the above
Hint: Financial, marketing, and operations strategies are all examples of functional strategies.
Product-market strategy is not a functional strategy, it is a competitive strategy. Competitive
strategy concerns the search for competitive advantage in markets through the products and
services the business offers. This is product-market strategy.