MBA Capstone Chapter Exam Questions
Course Introduction
The MBA Capstone course serves as the culminating academic experience for students in the Master of Business Administration program. This course integrates knowledge and skills acquired across core business disciplines such as finance, marketing, strategy, and operations by engaging students in comprehensive projects, simulations, or case analyses that reflect real-world business challenges. Through collaborative teamwork, critical problem-solving, and decision-making exercises, students develop strategic solutions for complex organizational issues, demonstrating mastery of analytical and leadership competencies. The Capstone also emphasizes effective communication, ethical considerations, and aligns academic learning with professional practice, preparing students for advanced leadership roles in diverse business environments.
Recommended Textbook
Strategic Management 4th Edition by Frank Rothaermel
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Chapter 1: What Is Strategy
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Q1) Strategic commitments are actions that are
A) inexpensive.
B) long-term oriented.
C) easy to reverse.
D) easy to imitate.
Answer: B
Q2) According to AFI strategy framework, in which of the following tasks of strategic management is a firm's vision, mission, and values identified?
A) strategy control
B) strategy analysis
C) strategy formulation
D) strategy implementation
Answer: B
Q3) In ________, a firm frames a guiding policy to address the competitive challenge.
A) strategy control
B) strategy implementation
C) strategy formulation
D) strategy analysis
Answer: C
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Chapter 2: Strategic Leadership: Managing the Strategy Process
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Q1) Strategic leadership pertains to the use of power and influence by ________ to direct the activities of others when pursuing an organization's goals.
A) production workers
B) lower-level managers
C) external stakeholders
D) corporate executives
Answer: D
Q2) Differentiate between a firm's intended, realized, and emergent strategies. Answer: Top-level executives design an intended strategy-the outcome of a rational and structured, top-down strategic plan. An emergent strategy describes any unplanned strategic initiative undertaken by mid-level employees of their own volition. If successful, emergent strategies have the potential to influence and shape a firm's strategy. A firm's realized strategy is generally a combination of its top-down strategic intentions and bottom-up emergent strategy.
Q3) A firm's resource-allocation process (RAP) has very little effect on its realized strategy.
A)True
B)False
Answer: False
Page 4
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Chapter 3: External Analysis: Industry Structure,
Competitive Forces, and Strategic Groups
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Q1) Curry Rush is a premium Asian restaurant chain that differentiates itself from a large number of competitors by providing exclusively organic Vietnamese cuisine. It has some pricing power because it provides differentiated products and therefore, has some entry barriers in place. In this scenario, Curry Rush is most likely operating in a(n) A) oligopoly.
B) monopoly.
C) perfectly competitive industry.
D) monopolistically competitive industry.
Answer: D
Q2) A video-streaming service provider such as Netflix is a complement to a manufacturer of streaming video devices such as Roku.
A)True
B)False
Answer: True
Q3) Firms within the same industry automatically belong to the same strategic group. A)True
B)False
Answer: False
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Chapter 4: Internal Analysis: Resources, Capabilities, and Core Competencies
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Sample Questions
Q1) Provide examples of the secondary activities in a firm's value chain.
Q2) ________ are barriers to imitation that prevent rivals from competing away the advantage a firm may enjoy.
A) Embargoes
B) Cartel arrangements
C) Isolating mechanisms
D) Market niches
Q3) Amazon's tendency to reinvest a large share of its profits into new services and capabilities exemplifies a low level of resource flows.
A)True
B)False
Q4) Provide examples of the primary activities in a firm's value chain.
Q5) In the context of the SWOT matrix, which of the following best exemplifies a firm's internal strength?
A) increase in a firm's customer loyalty
B) growth in the size of the market in which a firm operates
C) rise in the income of the demographic segment to which a firm caters
D) loss of a competitor's reputation
Q6) Define the value chain.
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Chapter 5: Competitive Advantage, Firm Performance, and Business Models
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Q1) A firm incurs $100 to manufacture an office table. It fixes the market price of the table as $250, and discounts the price to $200. However, the maximum a person is willing to pay for it is $180. What is the amount of total perceived consumer benefits in this scenario?
A) $250
B) $200
C) $180
D) $100
Q2) Discuss the limitations associated with using accounting data to measure competitive performance.
Q3) The cost of capital to create a product is a fixed cost because it is
A) directly proportional to the output level.
B) uniform throughout all firms and industries.
C) not a part of the profit calculations.
D) unaffected by consumer demand.
Q4) A company's total asset base consists of its current assets plus plant, property, and equipment (PPE).
A)True
B)False
Q5) What does "total return to shareholders" mean?
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Chapter 6: Business Strategy: Differentiation, Cost
Leadership, and Blue Oceans
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Q1) 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.
Q2) Which of the following provides an example of a firm in a red ocean?
A) Chique Apparel offered clothing at a low price but failed to differentiate its product as being exclusive.
B) Cheap Apparel offered clothing at a price matching that of its competitors and, as a result, it had lower profit margins.
C) Goode Apparel offered clothing at a mid-range price but failed to differentiate its product as being of decent quality.
D) Top Drawer Apparel offered clothing at a higher price than competitors and, as a result, failed to make a profit.
Q3) A cost leader is the firm most likely to survive a price war.
A)True
B)False
Q4) Discuss product features as value drivers.
Q5) What is higher value associated with?
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Chapter 7: Business Strategy: Innovation, Entrepreneurship, and Platforms
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Q1) Explain some of the features of the introduction stage of the industry life cycle.
Q2) How is process innovation different from product innovation?
Q3) Potomac Industries is a manufacturer of high-definition televisions. The industry has gone through a period of rapid growth and expansion, and has started to experience a decline in the rate of growth. Several smaller firms have been bought out by larger competitors, and competition for market share is intensifying. Which of the following strategies is most likely to give Potomac a competitive advantage?
A) Implement process innovations that lower per-unit costs.
B) Introduce product innovations that differentiate Potomac televisions from the competition.
C) Imitate the features of the highest-selling television on the market.
D) Increase spending on marketing and attempt to acquire a high-profile celebrity spokesperson.
Q4) In the introductory stage, the level of product innovation is at a maximum. Elaborate.
Q5) Why do firms have more strategic variety in the growth stage of the industry life cycle?
Q6) Define entrepreneurship. Who are entrepreneurs?
Page 9
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Chapter 8: Corporate Strategy: Vertical Integration and Diversification
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Q1) Coca-Cola was primarily known for its core competencies in marketing, bottling, and distributing aerated drinks. However, with the success of Gatorade, Coca-Cola developed competencies in the development and marketing of its own sports drink, Powerade. Which of the following is true of Coca-Cola?
A) It is leveraging existing core competencies to improve current market position.
B) It is building new core competencies to protect and extend its current market position.
C) It is redeploying and recombining existing core competencies to compete in markets of the future.
D) It is targeting the chasm between the early adopter and early majority market segment.
Q2) What options do managers have to formulate corporate strategy once they have a clear understanding of their firm's core competencies?
Q3) Describe the two types of vertical integration along the industry value chain.
Q4) Discuss the application of the core competence-market matrix.
Q5) Why are generic industry value chains called vertical value chains?
Q6) List the five reasons why firms need to grow.
Q7) What must executives decide when formulating a corporate strategy?
Page 10
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Chapter 9: Corporate Strategy: Strategic Alliances, Mergers, and Acquisitions
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Q1) How did the strategic alliance between HP and DreamWorks Animation SKG affect HP?
A) It helped HP pursue a taper integration strategy.
B) It enabled HP to compete head on with Cisco's videoconferencing solution.
C) It resulted in depreciation of HP's shareholder value.
D) It failed because HP lacked the expertise in selecting and integrating technology acquisitions.
Q2) Adidas acquired Reebok primarily to
A) overcome its competitive disadvantage against Nike.
B) get access to the superior technology of Reebok.
C) overcome its principal-agent problems.
D) pursue an unrelated diversification strategy.
Q3) A company that wants to enter a new geographic market within China or Saudi Arabia should avoid joint ventures with companies that are based in that country. Partnering with a foreign entity props up that entity's business rather than weakening it through competition.
A)True
B)False
Q4) Explain how firms use strategic alliances to change the industry structure in their favor.
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Chapter 10: Global Strategy: Competing Around the World
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Q1) Which of the following is an observable feature in the Globalization 3.0 stage?
A) Knowledge flow between the local replicas of the multinational enterprises and their U.S. headquarters is limited.
B) Only sales and distribution functions of a multinational enterprise are located in a few key countries.
C) Based on an optimal mix of costs, skills, and PESTEL factors, companies now freely locate business functions anywhere in the world.
D) The typical firm has reorganized from a global enterprise with different centers of expertise to a multinational company with self-contained operations in a few selected countries.
Q2) Which of the following is a drawback of pursuing a transnational strategy?
A) It creates bottlenecks for global learning.
B) It exposes a firm to diseconomies of scale and location.
C) It requires a global matrix structure, which is difficult to implement.
D) It involves locating all key business activities in the home country headquarters.
Q3) How can expanding globally become a threat to a multinational enterprises (MNEs) reputation? Explain with the help of a real-world example.
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Chapter 11: Organizational Design: Structure, Culture, and Control
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Q1) To effectively implement a differentiation strategy, managers rely on a functional structure that resembles an organization that is highly
A) formalized.
B) specialized.
C) organic.
D) mechanistic.
Q2) ________ define appropriate employee attitudes and behaviors.
A) Values
B) Artifacts
C) Appraisals
D) Norms
Q3) What is most likely to happen if a firm relies too long on a competency without honing, refining, and upgrading as the firm and the environment change?
A) The firm's original core competency can turn from a liability into an asset.
B) The firm's organizational inertia can turn into its core rigidity.
C) The firm's competitive parity can turn into its competitive advantage.
D) The firm's culture can turn from a core competency into a core rigidity.
Q4) Discuss how a cost-leadership strategy is used with a functional structure.
Q5) What are the characteristics of organic organizations?
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Chapter 12: Corporate Governance and Business Ethics
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Q1) What are poison pills?
A) Shareholders use them to prevent the founder of a company from taking the company private through a leveraged buyout.
B) They are unspecified conditions in the contract between stakeholders in an organization.
C) Companies use them in a bid to perform a hostile takeover of competing firms.
D) They are defensive provisions that kick in should a buyer reach a certain level of share ownership.
Q2) Describe moral hazard in the context of the principal-agent relationship. Use an example.
Q3) Because of poor management, the stock price of Orange Dolphin Inc. falls and many investors sell their shares. Soon Orange Dolphin becomes the target of a hostile takeover, during which Hans buys enough shares to exert control over the firm. In this scenario, Hans performs the role of a(n)
A) inside director.
B) outside director.
C) corporate raider.
D) corporate consultant.
Q4) How does GE exemplify the creation of a shared value creation framework?
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