Corporate Strategy
Test
Preparation
Course Introduction
Corporate Strategy examines the decisions and actions taken by firms to achieve long-term success and competitive advantage at the highest organizational level. This course explores frameworks for analyzing industry environments, managing diversified portfolios, and guiding mergers, acquisitions, alliances, and international expansion. Students learn to evaluate and formulate strategies that align resources, capabilities, and structure with changing markets and stakeholder expectations. Case studies and real-world examples are used to illustrate how effective corporate strategies can drive growth, innovation, and sustainable performance across complex organizations.
Recommended Textbook
Strategic Management 4th Edition by Frank Rothaermel
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12 Chapters
1217 Verified Questions
1217 Flashcards
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Page 2
Chapter 1: What Is Strategy
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Which of the following scenarios illustrates a firm that has a sustainable competitive advantage?
A) Jamison Inc. generated revenue of $300,000 this financial year, which is close to the industrial revenue average of $320,000.
B) CR Inc. almost doubled its sales to 9,000 units this year compared to its previous year's sales of 5,000 units, though the industry average is 10,000 units.
C) Zhang Corp. was able to hold its market share of 68 percent in the social networking industry for more than three years.
D) Peak Inc. was able to outperform its competitors with its new production system, in terms of revenue, for a brief period of four months.
Answer: C
Q2) Explain product-oriented vision statements with the help of an example.
Answer: Student answers may vary.
A product-oriented vision defines a business in terms of a good or service provided. Product-oriented visions tend to force managers to take a myopic view of the landscape. An example of a product-oriented vision statement would be "We want to be the best manufacturer in the industry."
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Page 3
Chapter 2: Strategic Leadership: Managing the Strategy Process
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101 Verified Questions
101 Flashcards
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Sample Questions
Q1) InTex manufactures medical devices. The firm's profitability depends on several variables that are subject to occasional change, including the cost of parts and labor, changes in medical practices, and the price of oil used in both manufacturing and shipping. To account for the potential impact of changes to any of these variables, InTex managers should implement a(n) ________ approach.
A) top-down strategic planning
B) scenario planning
C) upper-echelon
D) strategic business units
Answer: B
Q2) Define strategic leadership.
Answer: Strategic leadership pertains to executives' use of power and influence to direct the activities of others when pursuing an organization's goals.
Q3) In a large company, who is most responsible for devising the corporate strategy?
A) the CEO of the company
B) the lower-level employees in the company
C) the head of the production department in the company
D) the human resource manager in the company
Answer: A
Page 4
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Chapter 3: External Analysis: Industry Structure,
Competitive Forces, and Strategic Groups
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101 Verified Questions
101 Flashcards
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Sample Questions
Q1) Corner Market Inc. is a supermarket chain. Due to strong competition from other stores in the industry, Corner Market has aggressively used branding, pricing, and superior customer service to uniquely position itself in the market. As a result, the supermarket chain has been able to differentiate itself from its competitors and sell its products at higher prices. Which of the following industry competitive structures does this scenario best illustrate?
A) perfect competition
B) monopolistic competition
C) monopoly
D) oligopoly
Answer: B
Q2) Which of the following is the best characterization of sociocultural forces?
A) a firm's culture, norms, and values
B) a society's culture, norms, and values
C) a competitor's culture, norms, and values
D) a focus group's culture, norms, and values
Answer: B
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5
Chapter 4: Internal Analysis: Resources, Capabilities, and Core Competencies
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105 Verified Questions
105 Flashcards
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Sample Questions
Q1) How can a firm fully exploit the competitive potential of its resources, capabilities, and competencies?
Q2) Cartech Inc. is a manufacturer of automobile parts, which it sells to retail auto supply stores. Its core competencies include superior design and engineering capabilities, as well as a highly integrated and efficient supply chain. To sustain its competitive advantage, Cartech should first
A) seek to replicate its nearest competitor's competency in innovative marketing.
B) attempt to cut costs by replacing assembly line workers with robots.
C) upgrade its engineering department and improve its supply chain.
D) diversify its product offerings by developing parts for construction equipment.
Q3) A music distributor that decides to launch a proprietary music streaming service to respond to changes in music consumption trends exhibits dynamic capabilities.
A)True
B)False
Q4) Differentiate resource stocks from resource flows with the help of the bathtub metaphor.
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Chapter 5: Competitive Advantage, Firm Performance, and Business Models
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Unplug Wireless is a cellular service provider that charges its customers $1 for three hours of talk time. So, if a customer's talk time for a month is 60 hours, the company charges him or her $20 at the end of the month. Which of the following business models does this best illustrate?
A) razor-razor-blade
B) subscription-based
C) pay-as-you-go
D) freemium
Q2) Which of the following is a disadvantage of the balanced-scorecard approach?
A) It fails to link the strategic vision to responsible parties within the organization.
B) It fails to translate the vision into measureable operational goals.
C) It provides limited guidance for designing and planning business processes.
D) It provides limited guidance about which metrics to choose.
Q3) A company's total asset base consists of its current assets plus plant, property, and equipment (PPE).
A)True
B)False
Q4) What is risk capital?
Q5) What is the relationship between producer surplus and consumer surplus?
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Chapter 6: Business Strategy: Differentiation, Cost
Leadership, and Blue Oceans
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105 Verified Questions
105 Flashcards
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Sample Questions
Q1) Discuss the threats firms face when they pursue a differentiation strategy.
Q2) Which of the following best explains why a blue ocean strategy is difficult to implement?
A) It combines the benefits of similar strategic positions-differentiation and low cost.
B) It requires the reconciliation of fundamentally different strategic positions-differentiation and low cost.
C) It requires the combination of fundamentally similar strategic positions-differentiation and strategic innovation.
D) It requires the reconciliation of fundamentally different strategic positions-differentiation and strategic innovation.
Q3) Why is keeping its costs the lowest in the industry not the only focus of a firm pursuing cost-leadership strategy?
Q4) Value drivers contribute to a firm's competitive advantage only if
A) the increase in value creation exceeds the increase in costs.
B) they can shrink the firm's value gap.
C) they can restrict the firm from claiming a premium price for its products.
D) the decrease in perceived value leads to an increase in costs.
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Chapter 7: Business Strategy: Innovation, Entrepreneurship, and Platforms
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Which of the following is a feature of the maturity stage of the industry life cycle?
A) The competitive intensity within the industry is at its peak.
B) The market reaches its maximum size.
C) The industry structure is more monopolistically competitive.
D) The focus on product innovation is higher than that on process innovation.
Q2) Which of the following businesses is most likely to disrupt an existing industry?
A) Closer Connex developed an earphone that receives emails and text messages and converts them to voice messages. The first models had poor reception, but they rapidly improved over time.
B) Mega Technologies reconfigured the components used in its touchscreen tablets to create a new type of wearable device for use in restaurants and other service industries.
C) Particle Inc. developed a teleportation technology that can transport physical materials instantaneously across great distances.
D) Altrea added advanced camera technology to its premium line of smartphones so that they would take the highest-quality photos of all phones on the market.
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Page 9
Chapter 8: Corporate Strategy: Vertical Integration and Diversification
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) A firm follows a(n) ________ when less than 70 percent of its revenues come from a single business and there are few, if any, linkages among its businesses.
A) related-constrained strategy
B) unrelated diversification strategy
C) differentiation strategy
D) dominant-business strategy
Q2) ________ are best described as costs that occur due to political maneuvering by managers to control capital and resource allocation and the resulting inefficiencies stemming from suboptimal allocation of scarce resources.
A) Fixed costs
B) Influence costs
C) Coordination costs
D) Opportunity costs
Q3) What must executives decide when formulating a corporate strategy?
Q4) Why are generic industry value chains called vertical value chains?
Q5) Explain the two types of related diversification strategy with the help of examples.
Q6) Discuss the application of the core competence-market matrix.
Q7) List the five reasons why firms need to grow.
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Chapter 9: Corporate Strategy: Strategic Alliances, Mergers, and Acquisitions
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100 Flashcards
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Sample Questions
Q1) Braintree Inc., a manufacturer of smartphones, has entered into a 15-year partnership with a software company to develop sophisticated operating systems and innovative mobile applications for its phones. This would mean that both the companies will have to mutually share their resources, knowledge, and capabilities to develop a superior product. What is the relationship between Braintree and the software company best referred to as in this scenario?
A) an acquisition
B) a strategic alliance
C) a leveraged buyout
D) a proprietorship
Q2) Define horizontal integration and provide a successful or unsuccessful example.
Q3) A candy company called Hearts Aflame Inc. forms an agreement with another candy company called Dreamcatcher Inc. Through this agreement, Hearts Aflame owns 30 percent of Dreamcatcher. However, Dreamcatcher does not own any part of Hearts Aflame. This type of agreement is called a(n)
A) non-equity alliance.
B) equity alliance.
C) joint venture.
D) capital venture.
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Chapter 10: Global Strategy: Competing Around the World
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Fun Foods Inc. is a snack manufacturer that wants to expand globally. Few people abroad are familiar with Fun Foods snacks. The countries into which the company wants to expand require a high degree of local responsiveness when it comes to food, and the citizens of those countries already spend plenty of money on snacks. Which action should the leaders of Fun Foods take?
A) Achieve economies of scale by using the global-standardization approach.
B) Pursue a multidomestic strategy that includes new "local" brands.
C) Keep costs low with undifferentiated product in the international strategy.
D) Appease pressures for cost reductions by following the transnational approach.
Q2) A firm is said to be pursuing a polycentric innovation strategy when
A) its research facility is situated in the headquarters and all other business activities are located around the world.
B) it draws from multiple, equally important research facilities located throughout the world.
C) it restricts its innovation to Western economies and production to developing markets.
D) its knowledge flow takes a one-way path-from its headquarters to the subsidiaries.
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Page 12
Chapter 11: Organizational Design: Structure, Culture, and Control
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Island Home Goods pursues a related diversification strategy, deriving less than 70 percent of revenues from its original business unit, Island Furniture, and maintaining several related units including Island Lighting and Island Hardware. Which of the following structures is most likely to support this strategy?
A) M-Form with centralized decision-making power (cooperative multidivisional)
B) M-Form with decentralized decision-making power (competitive multidivisional)
C) functional with centralized decision-making power
D) functional with decentralized decision-making power
Q2) A primary advantage of the matrix organizational structure is that it simplifies decision making and communication in geographically diverse organizations.
A)True
B)False
Q3) How do results-only-work-environments differ from output controls that depend on extrinsic motivation?
Q4) What are the characteristics of mechanistic organizations? Explain with the help of an example.
Q5) What are the key elements of organizational structure? Define each element.
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Q6) What are multidivisional structures? How are they implemented?
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Chapter 12: Corporate Governance and Business Ethics
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105 Flashcards
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Sample Questions
Q1) How can top management foster ethical behavior in employees? Provide an example that you have read about or that comes from your own experience.
Q2) Which of the following perspectives best supports the shared value creation framework?
A) Markets are more often than not defined by societal needs rather than economic needs.
B) Failing to create value for society almost always reflects on the bottom line.
C) A firm's competitive advantage depends on pitting economic and societal needs in a trade-off.
D) Externalities such as pollution, wasted energy, and costly accidents actually create internal costs.
Q3) Discuss the agency problem of adverse selection.
Q4) Which of the following is the source of the principal-agent problem in publicly traded companies?
A) the law of legal personality
B) the separation of ownership and control
C) limited liability for investors
D) transferability of investor ownership
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