Corporate Strategy
Test Bank
Course Introduction
Corporate Strategy is a comprehensive course that examines the formulation and implementation of high-level strategies designed to enhance the long-term success and competitive advantage of organizations. It explores concepts such as industry analysis, diversification, mergers and acquisitions, international expansion, and the alignment of resources and capabilities with external opportunities. Through case studies, analytical tools, and real-world examples, students learn how top management can make critical decisions that shape the direction of entire organizations, respond to competitive pressures, and create value across multiple business units and markets.
Recommended Textbook
Crafting and Executing Strategy Concepts and Cases 20th Edition by Arthur Thompson
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12 Chapters
1261 Verified Questions
1261 Flashcards
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Page 2
Chapter 1: What Is Strategy and Why Is It Important
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101 Flashcards
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Sample Questions
Q1) A company's strategy stands a better chance of succeeding when:
A) it is developed through a collaborative process involving all managers and staff from all levels of the organization.
B) managers employ conservative strategic moves based on past experience and form an underlying basis of control.
C) it is predicated on competitive moves aimed at appealing to buyers in ways that set the company apart from rivals.
D) managers copy the strategic moves of successful companies in its industry.
E) managers focus on meeting or beating shareholder expectations.
Answer: C
Q2) A winning strategy must pass which three tests?
A) The Dominant Market Test,the Sustainable Advantage Test,and the Profit Test
B) The Fit Test,the Competitive Advantage Test,and the Performance Test
C) The Sustainable Performance Test,the Fit Test,and the Profit Test
D) The Performance Test,the Dominant Market Test,and the Fit Test
E) The Fit Test,the Sustainable Advantage Test,and the Dominant Market Test
Answer: B
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Page 3
Chapter
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Sample Questions
Q1) Which of the following is the best example of a well-stated financial objective?
A) Increase earnings per share by 15 percent annually.
B) Gradually boost market share from 10 percent to 15 percent over the next several years.
C) Achieve lower costs than any other industry competitor.
D) Boost revenues by a percentage margin greater than the industry average.
E) Maximize total company profits and return on investment.
Answer: A
Q2) Which of the following ARE common shortcomings of company vision statements?
A) Too specific and too flexible
B) Unrealistic,unconventional,and un-businesslike
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) Which of the following is NOT a good example of a substitute product that triggers stronger competitive pressures?
A) A salad as a substitute for French fries
B) Wireless phones as a substitute for wired telephones
C) Coca-Cola as a substitute for Pepsi
D) Snowboards as a substitute for snow skis
E) Video-on-demand services from a cable TV company as a substitute for going to the movies
Answer: C
Q2) Determining how strong the threat of substitutes will be entails:
A) identifying the relative price/performance relationship of the substitutes,the switching costs,and the overall buyer demand for the substitute.
B) identifying the attractiveness of other industries.
C) measuring Coke as a substitute for Pepsi and applying dynamic simulation modeling techniques.
D) adopting a substitute product concentration factor to the buyer volume.
E) judging whether industry members are capable of self-manufacturing their products.
Answer: A
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5
Chapter 4: Evaluating a Companys Resources, Capabilities, and Competitiveness
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107 Flashcards
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Sample Questions
Q1) The two approaches that can make the process of uncovering and identifying a firm's capabilities more systematic are:
A) resources assessment and the functional approach.
B) strengths valuations and weaknesses estimations.
C) sustainability resource allocation and resource bundling.
D) cross-functional analysis and collaborative resource methodology.
E) financial statement analysis and management support analysis.
Q2) Key "functional" strategies of a company include all of the following EXCEPT:
A) R&D,technology,and product design strategies.
B) production and information technology and supply chain management strategies.
C) human resource and finance strategies.
D) sales,marketing,and distribution strategies.
E) alliance and partnerships as well as merger and acquisition growth strategies.
Q3) The market opportunities most relevant to a particular company are those that:
A) offer the best prospects for growth and profitability.
B) provide a strong defense against threats to the company's profitability.
C) embrace the most potential for product innovation.
D) provide avenues for taking market share away from close rivals.
E) hold the most potential to reduce costs.
Page 6
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Chapter 5: The Five Generic Competitive Strategies
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Sample Questions
Q1) Which of the following is NOT true of a company that succeeds in differentiating its product offering from those of its rivals?
A) It can avoid having to compete on the basis of simply a low price.
B) It commands a premium price for its product.
C) It usually increases unit sales.
D) It gains buyer loyalty to its brand.
E) It attracts mainly price-conscious buyers.
Q2) Which of the following is NOT one of the ways managers can enhance differentiation based on value drivers?
A) Striving to create superior product features,design,and performance
B) Striving for innovation and technological advances
C) Pursuing continuous quality improvement
D) Increasing the intensity of marketing,brand building,and sales activities
E) Seeking out low-quality inputs
Q3) What are the distinctive features of a focused low-cost strategy? How does it differ from a low-cost leadership strategy?
Q4) What are the distinctive features of a focused differentiation strategy? How is it different from a broad differentiation strategy?
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Page 7
Chapter 6: Strengthening a Companys Competitive Position
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Sample Questions
Q1) A good example of vertical integration is a:
A) global public accounting firm acquiring a small local or regional public accounting firm.
B) large supermarket chain getting into convenience food stores.
C) crude oil refiner purchasing a firm engaged in drilling and exploring for oil.
D) hospital opening up a nursing home for the aged.
E) railroad company acquiring a trucking company specializing in long-haul freight.
Q2) The formation of a new corporation,jointly owned by two or more companies agreeing to share in the revenues,expenses,and control,is known as:
A) a joint venture.
B) a limited liability company.
C) a partnership.
D) sole proprietorship.
E) an S corporation.
Q3) There are a number of offensive strategy options for improving market positions using cost-based and blue-ocean type strategies.Define the terms and suggest ways in which the strategies could be operationalized.
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Page 8
Chapter 7: Strategies for Competing in International Markets
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Sample Questions
Q1) A European-based company that makes all of its goods at a plant in Brazil and then exports the Brazilian-made goods to country markets in many different parts of the world:
A) is competitively disadvantaged when the euro declines in value against the Brazilian real.
B) is competitively disadvantaged when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported.
C) becomes less competitive in foreign markets when the Brazilian real gains in value against the currencies of the countries to which the Brazilian-made goods are being exported.
D) is competitively advantaged when the euro appreciates in value against the Brazilian real.
E) has no interest in whether the euro grows stronger or weaker versus the Brazilian real unless its chief competitors are other companies located in countries whose currency is also the euro.
Q2) When should a company choose to set up operations from the ground up?
Q3) Identify and briefly describe the strategic options for tailoring a company's strategy to compete in emerging country markets.
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Chapter 8: Corporate Strategy
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Sample Questions
Q1) Diversification becomes a relevant strategic option for a company EXCEPT when it: A) spots opportunities to expand into industries whose technologies and products complement its present business.
B) leverages existing resources and capabilities by expanding into industries where these same resource strengths are key success factors and valuable competitive assets.
C) has a powerful and well-known brand name that can be transferred to the products of other businesses and thereby used as a lever for driving up the sales and profits of such businesses.
D) can open up new avenues for reducing costs by diversifying into closely related businesses.
E) expands into additional businesses that unlock possibilities for a comprehensive cost enhancement strategy.
Q2) Identify and briefly describe the six steps involved in evaluating a diversified company's business lineup and diversification strategy.
Q3) Under what circumstances might an already diversified company choose to pursue corporate restructuring?
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Chapter 9: Ethics, Corporate Social Responsibility,
Environmental-Sustainability, and Strategy
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Sample Questions
Q1) Ethical principles as they apply to the conduct of personnel and business decisions:
A) deal chiefly with standards a company has about what is right and wrong insofar as the conduct of its business is concerned and about what behaviors are expected of company personnel.
B) deal chiefly with the behaviors that a company's board of directors expects of all company personnel in both their conduct on the job and off the job.
C) involve the rules a company's top management and board of directors make about "what is right" and "what is wrong."
D) deal primarily with the company's duty to comply with legal requirements and conform to ethical norms of society,in general.
E) are generally less stringent than the ethical principles for society at large because it is well understood that businesses should not be expected to operate any differently than what the law requires of them.
Q2) What are the differences between the school of ethical universalism and the school of ethical relativism?
Q3) What is the difference between ethics and business ethics?
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Chapter 10: Building an Organization Capable of Good Strategy Execution
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Sample Questions
Q1) The two best signs of good strategy execution are whether:
A) the company is challenging its current performance targets and whether value chain activities are fully integrated within the strategic response criteria.
B) managers are personally leading the change process and whether they are meeting deadlines set for budgetary requirements.
C) the company is meeting or beating its performance targets and whether it is performing value chain activities in a manner that is conducive to companywide operating excellence.
D) managers are fully behind the changes and whether the company's value chain managers are executing them diligently.
E) the company identifies what the organization must do and how to make the necessary internal changes.
Q2) Identify and briefly discuss four of the recommended practices companies have used to recruit and retain the best employees to make the rank-and-file employees a genuine competitive asset.
Q3) Identify and discuss the basic tenets,the chief advantages,and the chief disadvantages of decentralized organizational structures.
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Page 12
Chapter 11: Managing Internal Operations
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Sample Questions
Q1) Which of the following is NOT a tool or method that managers can use to promote operating excellence and further the cause of good strategy execution?
A) Benchmarking
B) Business process reengineering
C) Strategic resource training
D) TQM and Six Sigma quality control techniques
E) Best practices
Q2) While Six Sigma programs often improve the efficiency of many operating activities and processes,there is evidence that innovation can be stifled by Six Sigma programs.True or false? Explain.
Q3) The broad areas that internal information business systems need to cover include all of the following EXCEPT:
A) financial performance data.
B) corporate culture data.
C) customer data.
D) operations data.
E) employee data.
Q4) What three principles underlie the statistical thinking of Six Sigma quality control programs?
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Chapter 12: Corporate Culture and Leadership
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Sample Questions
Q1) When trying to change a problem culture,management should undertake such steps as:
A) selecting a team of key employees to lead the culture change effort and design a plan for cultural change.
B) identifying facets of the present culture that are supportive of good strategy execution and which ones are not and then specifying what new actions,behaviors,and work practices are needed in the new culture to improve performance.
C) drawing up an action plan to change the present culture and then persuading company personnel why this plan of action is good and will be successful.
D) conducting an employee survey to determine the organization's cultural norms and what company personnel like and dislike about the current culture.
E) employing a consultant with expertise in culture change and following his or her advice on how to proceed.
Q2) Identify and discuss the three ways that a corporate culture,grounded in actions,behaviors,and work practices and conducive to good strategy implementation can assist corporate strategy execution.
Q3) Briefly identify three types of unhealthy corporate cultures.
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Page 14