Corporate Strategy
Exam Materials
Course Introduction
Corporate Strategy explores the frameworks and tools that organizations use to achieve long-term growth, competitive advantage, and sustained profitability across multiple businesses or markets. The course covers topics such as strategic analysis, diversification, mergers and acquisitions, international expansion, and the role of corporate headquarters in shaping business portfolio strategies. Students will analyze real-world corporate decisions and develop the skills to formulate and implement effective strategies that align with organizational goals, industry dynamics, and global trends.
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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Page 2
Chapter 1: What Is Business Strategy?
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Sample Questions
Q1) Which of the following statements best describes the term internal analysis?
A) It studies the infrastructure of a company to gauge the number of employees it can recruit.
B) It examines a company's resources and capabilities to configure a firm's ability to deliver unique value.
C) It examines the emotions of a firm's employees in order to identify their weaknesses.
D) It examines the efficiency of employees through the help of standardized tests and group discussions.
Answer: B
Q2) The Board of Directors of Miranay Corp.assesses and evaluates the firm's industry structure.In order to track the factors that could affect Miranay's performance, it tries to scan the industry's positive and negative trends.The Board of Directors of Miranay Corp.is involved in a(n) _____.
A) financial analysis
B) internal analysis
C) external analysis
D) profit analysis
Answer: C
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3
Chapter 2: Analysis of the External Environment: Opportunities and Threats
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Sample Questions
Q1) How is buying power related to switching costs?
Answer: If customers, or buyers, can easily switch firms, then buyers have increased power.
Q2) A product that is fundamentally different yet serves the same function or purpose as another product best defines the term _____.
A) threat
B) substitute
C) opportunity
D) rivalry
Answer: B
Q3) The companies LaceThings Inc.and BellePrints Corp.sell the same product.They constantly try to outdo each other in terms of resources, price, and customer satisfaction.The companies try to outperform each other in order to gain customer loyalty and generate more sales.This scenario is an example of _____.
A) integration
B) partnership
C) rivalry
D) switching
Answer: C
Page 4
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Chapter 3: Internal Analysis: Strengths, Weaknesses, and Competitive Advantage
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Sample Questions
Q1) The exclusive sofa company, Seaterz Inc., has the best resources in terms of equipment, employees, infrastructure, and technology.Yet, it is not able to keep pace with its competitor SoftSofa Corp.After extensive analyses, the CEO of Seaterz stated the reason for their limitation.He stated that their company did not have a definite administrative system to audit and retain the profits created by the employees.Which of the following statements can be inferred about Seaterz Inc.from this scenario?
A) It was not organized to exploit.
B) It was not organized to perform.
C) It does not have competitive parity.
D) It has a successful virtuous circle.
Answer: A
Q2) Which of the following is a disadvantage of the value chain process?
A) It does not help analyze a company's strength compared to its competitors.
B) It does not take into account firm infrastructure or human resource management.
C) It does not help managers to identify areas in which a firm has an absolute strength.
D) It does not span all of a firm's economic activities.
Answer: A
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Page 5
Chapter 4: Cost Advantage
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Sample Questions
Q1) 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
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) Explain why a learning curve is more complex than a scale curve.
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6
Chapter 5: Differentiation Advantage
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Q1) Tracie, the CEO of Boney's Inc., wanted to analyze what customers think of their products.She began her survey by finding out how her customers become aware of their needs, how they find the products, how they purchase products, and how the products are serviced or repaired.These steps are part of:
A) mapping the consumption chain.
B) studying the value chain.
C) studying the production cycle.
D) mapping the supply chain.
Q2) 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
Q3) In terms of product differentiation, convenience refers to:
A) how long a product functions optimally.
B) how unique a product is when compared to others.
C) how efficient a product is in meeting consumers' primary needs.
D) how easy it is for customers to purchase a product.
Q4) What are the three ways in which product features can be offered for the purpose of differentiation?
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Chapter 6: Corporate Strategy
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Q1) Amber Corp., a jute manufacturing company, wants to diversify into the food industry.In order to do so, the board of directors decides to move some of its existing resources, expertise, and technology to set the base of the food unit.The market analysts at Amber predict that this unit has a high growth potential.Thus, rather than leaving the new food unit to grow on its own, the board decides to invest in it as it this will help increase the corporate value of the company.In this scenario, Amber Corp.is trying to create value by acting as a(n) _____.
A) adjacent market
B) internal capital market
C) external capital market
D) related-constrained market
Q2) Virgo Inc.earns less than 70 percent of its revenue from manufacturing computers.It recently started manufacturing tablets.The company made use of existing technology and materials and decided to distribute the tablets through the same distributors used for its computers.In this scenario, Virgo Inc.chose _____.
A) related-constrained diversification
B) related-linked diversification
C) unrelated-constrained diversification
D) unrelated-linked diversification
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Page 8
Chapter 7: Vertical Integration and Outsourcing
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Sample Questions
Q1) When one firm tries to take advantage of another firm that has made a transaction-specific investment, by causing a brief delay in business because a product has no other use is known as a(n) _____.
Q2) Sport Soles Inc., a sports footwear manufacturing company, makes athletic shoes with rubber soles.In order to maximize its value and profit, Sport Soles sets up its operations right next to rubber tree fields.This way, the company gets easy access to its main raw material.In the context of vertical integration, this scenario illustrates that Sport Soles Inc.is exercising _____.
A) control
B) coordination
C) extensive focus
D) modular interdependence
Q3) Yellow Express LLC is a company in the computer hardware industry that solely manufactures microchips.Yellow Express LLC is _____.
A) diagonally integrated
B) vertically integrated
C) horizontally diversified
D) vertically specialized
Q4) What are the dangers of vertical integration?
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Chapter 8: Strategic Alliances
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Sample Questions
Q1) Two organizations, Purple Inc.and Spring Corp., are positioned at a common stage of the value chain.However, they do not have a supplier-buyer relationship.They form an alliance to benefit from complementary activities.Which of the following is exemplified in this scenario?
A) A horizontal alliance
B) A vertical alliance
C) A joint venture
D) A supply agreement
Q2) Green Dye Inc., a manufacturing firm that produces organic products, is approached by Zoe, a leading clothes designer owning her own label.Together, they create a line of clothes using organic dye and fabric made from pure cotton.Which of the following is likely to be the primary value created by this alliance?
A) Combining unique resources along different stages of the value chain
B) Lowering distribution costs at all stages of the value chain
C) Lowering the transaction costs at all stages of the value chain
D) Offering customized retail benefits to increase the sale of the products
Q3) What are the ways in which strategic partners can build trust in alliance relationships?
Q4) What are the different types of nonequity alliances?
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Chapter 9: International Strategy
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Q1) Which of the following statements is true of alliances as a means of entering international markets?
A) It is a favored way to enter markets that are close to the home market.
B) It allows the alliance to be perceived by both government and consumers as local.
C) It avoids sharing resources, risks, and rewards.
D) It offers the least amount of control of all the various modes of entry.
Q2) Which of the following is a disadvantage of exporting as a mode for entering a foreign market?
A) It increases the cost of selling in the foreign market.
B) It does not work when the product adaptation required is minimal.
C) It cannot work with distribution networks in the foreign market.
D) It involves heavy investment in the foreign country.
Q3) In the context of modes of international market entry, which of the following statements is true of licensing and franchising?
A) It offers the highest amount of control of all the various modes of entry.
B) It is easy to extract knowledge for use in other locations through this mode.
C) It can increase the cost of selling in a foreign market.
D) It involves the risk of a local firm in alliance to become a competitor.
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11
Chapter 10: Innovative Strategies That Change the Nature of Competition
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Q1) Which of the following statements is true of an incremental innovation?
A) It focuses on a different knowledge base to deliver value in a truly unique way.
B) It creates new values through a different set of resources and capabilities than that of rivals.
C) It sustains a company's current product offering and revenues.
D) It typically creates improvements based on the knowledge perceived from competitors.
Q2) _____ coined the term hypercompetition.
Q3) Lica Inc., a software company, initially offers a small percentage of its services for free.Once customers get familiar with the services, they decide to purchase them at a premium.The company makes money on the add-on services like application downloads, messenger updates, and other online services.Other companies pay Lica for advertising through these portals.Which of the following innovative strategies has been adopted by the company?
A) A combination of freemium and third-party strategies
B) A cross-sell strategy
C) A combination of high-end and low-end disruptive strategies
D) A bundling strategy
Q4) What are low-end disruptive innovations? Explain with an example.
Page 12
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Chapter 11: Competitive Strategy
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Sample Questions
Q1) What are the principles that strengthen a company's ability to compete?
Q2) 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
Q3) Zara, a research analyst, is studying the business decisions of some restaurant owners.During the data analysis stage, she employs a strategic canvas.Which of the following is likely to be her primary reason to employ this tool?
A) To understand the pricing strategy used for different dishes within each restaurant
B) To study the differences in the ways the restaurants compete with each other
C) To identify the combined target audience of strategic groups as a whole
D) To observe the similarities in the employees' views of their respective organizations
Q4) Briefly describe the game theory.
Q5) Briefly describe competition under monopoly.
Q6) Write a note on strategic groups and mobility barriers.
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Page 13
Chapter 12: Implementing Strategy
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Sample Questions
Q1) Green Cruz Inc., a multinational retailer, is hiring employees who possess creative talents and prefer working in a challenging environment.In the context of the 7 S model of organizational alignment, which of the following is exemplified in this case?
A) Structure
B) Strategy
C) Skills
D) Systems
Q2) Janice is the sales head at a dairy exporting firm.She spends much of her time interacting with people from various cultural backgrounds.The competitive and risk-taking attitude of Janice is different from those in more conservative work areas.In the context of the 7 S model of organizational alignment, which of the following is being exemplified in this case?
A) Structure
B) Strategy
C) Skills
D) Style
Q3) In the context of the 7 S model of organizational alignment, the _____ category describes key processes that span a firm's organizational structure.
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14
Chapter 13: Corporate Governance and Ethics
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Q1) Raj, a student of business management, claims that the shareholder primacy model is not a good model of business management.Which of the following statements should he use in order to best support his claim?
A) The shareholders are not the legal owners of the corporation's assets.
B) Financial capital is the most important input into making a business successful.
C) The shareholders cannot not trade or own any stock of the corporation.
D) Managing for shareholder value creates negative consequences for firms.
Q2) Which of the following statements is true of the intrinsic stakeholder model of business management?
A) It is the belief that stakeholder groups have the right to be considered in decisions that will impact them.
B) It is the belief that giving importance to stakeholders makes it difficult for managers to effectively run their firms.
C) It is the belief that stakeholder interactions have longer-term consequences on a firm's performance and competitive advantage.
D) It is the belief that financial capital is the most important input into making a business successful.
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Chapter 14: Strategy and Society
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Q1) Elvis works as a dentist at Prince Inc., a premier dentist clinic.The clinic conducts free checkups every month in remote places of the country to create more awareness on good dental hygiene.Which of the following social responsibilities is best reflected in this scenario?
A) Economic responsibilities
B) Philanthropic responsibilities
C) Institutional responsibilities
D) Legal responsibilities
Q2) 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
Q3) Discuss the four fundamental social responsibilities of a business.
Q4) _____ refers to a social entrepreneur who creates something new through the combination of diverse and different elements.
Q5) Discuss the four roles played by stakeholders in the value net.
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