Question 1

Which of the following are reasons why a firm may want to go global?

Accepted Answer

A)  Market size 
B)  Spreading risk 
C)  Increased profitability 
D)  Keeping up with rivals 
E)  All of the above 
A)  Market size 
B)  Spreading risk 
C)  Increased profitability 
D)  Keeping up with rivals 
E)  All of the above E

Question 2

Porter identifies the threat of substitutes as one of his five forces. What are the main causes of this threats?

Accepted Answer

This threat can come from three areas:
• the availability and cost to customers of alternative products.
• the threat of competitors bringing out a more advanced and up- to- date product
• the impact that substitutes are likely to have on pricing strategy.

Question 3

What are the potential problems with global expansion?

Accepted Answer

There is likely to be a high degree of both economic and political risk. This is likely to be especially true if a firm expands into emerging markets or countries with different legal structures. It is very tempting as returns tend to be much higher in these countries. It is a question of balancing the risk of investment with the potential returns. Sometimes a firm may try to expand too quickly and may not have the necessary finance, personnel, expertise and operational issues to cope with it. Furthermore, expansion into new markets may detract from the domestic markets. Also, when a firm moves into another market, it is important that research has been undertaken, as customers in the new market will be different from those in the domestic markets. Tastes, fashions, preferences will vary, so market research is necessary and can be very expensive.

Question 4

What are the five steps of Porter's value chain?

Accepted Answer

1) Inbound logistics - handling of input

Question 5

Which of the following would be considered a secondary activity?

Accepted Answer

A)  Operations 
B)  Service 
C)  Marketing and sales 
D)  Firm infrastructure 
E)  Outbound logistics 
A)  Operations 
B)  Service 
C)  Marketing and sales 
D)  Firm infrastructure 
E)  Outbound logistics

Question 6

Strategic management comprises three main components:
  • strategic analysis
• strategic choice
• strategic implementation.
Checking the costs and benefits of different strategies is part of

Accepted Answer

A)  strategic implementation. 
B)  routine management. 
C)  strategic analysis. 
D)  strategic choice. 
A)  strategic implementation. 
B)  routine management. 
C)  strategic analysis. 
D)  strategic choice.

Question 7

Which of the following is a frequent criticism of Porter's five forces model?

Accepted Answer

A)  It neglects supply- side issues. 
B)  It is not very good at coping with monopoly. 
C)  It presents a largely static view of the business environment. 
D)  It neglects demand- side issues. 
A)  It neglects supply- side issues. 
B)  It is not very good at coping with monopoly. 
C)  It presents a largely static view of the business environment. 
D)  It neglects demand- side issues.

Question 8

A complementor is a firm that produces similar products

Accepted Answer

A) True 
 B)False

Question 9

An increase in product differentiation increases competitive rivalry.

Accepted Answer

A) True 
 B)False

Question 10

What are the three possible types of strategy according to Porter?

Accepted Answer

Porter has offered a simplific

Question 11

The five forces model presents a static view of the business environment. This is a good thing.

Accepted Answer

A) True 
 B)False

Question 12

In the value chain analysis, support activities relate to firm infrastructure, procurement, technological development and human resource management.

Accepted Answer

A) True 
 B)False

Question 13

Mintzberg suggests that there are five Ps of business strategy. Aggressive pricing would be termed a _____	,whereas strategy which emerged from a consistent response by the firm to the changing business environment would be termed a ______by Mintzberg.

Accepted Answer

A)  ploy; pattern of behaviour 
B)  plan; position with respect to others 
C)  plan; perspective 
D)  ploy; perspective 
A)  ploy; pattern of behaviour 
B)  plan; position with respect to others 
C)  plan; perspective 
D)  ploy; perspective

Question 14

Strategic analysis is concerned with the formulation and evaluation of alternative courses of action, which might be adopted in order to achieve the business's strategic objectives.

Accepted Answer

A) True 
 B)False

Question 15

Techniques such as investment appraisal will have limited value if

Accepted Answer

A)  information is incomplete. 
B)  a strategy is perspective. 
C)  a strategy is deliberate. 
D)  all of the above 
E)  none of the above 
A)  information is incomplete. 
B)  a strategy is perspective. 
C)  a strategy is deliberate. 
D)  all of the above 
E)  none of the above

Question 16

Which of the following could be considered to be a stakeholder of a business?

Accepted Answer

A)  Shareholders 
B)  Customers 
C)  Creditors 
D)  All of the above 
A)  Shareholders 
B)  Customers 
C)  Creditors 
D)  All of the above

Question 17

Henry Mintzberg suggests that there are five Ps of strategy: a plan, a ploy, a pattern of behaviour, a position with respect to others and a perspective.

Accepted Answer

A) True 
 B)False

Question 18

Porter's five forces model deals with the potential for new firms to enter a market. Which of the following would not deter new entrants?

Accepted Answer

A)  High capital requirements 
B)  Existing firms have large economies of scale 
C)  Existing products are highly differentiated 
D)  A highly elastic market demand curve 
A)  High capital requirements 
B)  Existing firms have large economies of scale 
C)  Existing products are highly differentiated 
D)  A highly elastic market demand curve

Question 19

Mintzberg suggests that there are five Ps of business strategy. A strategy which stated clearly where the firm would like to be at some time in the future would be termed a ______by Mintzberg.

Accepted Answer

A)  ploy 
B)  pattern of behaviour 
C)  perspective 
D)  plan 
A)  ploy 
B)  pattern of behaviour 
C)  perspective 
D)  plan

Question 20

If a business had strategy based on its core competencies, this could be termed a____strategy.

Accepted Answer

A)  resource- based 
B)  niche 
C)  market- based 
D)  perspective 
A)  resource- based 
B)  niche 
C)  market- based 
D)  perspective

Exam 13: An Introduction to Business Strategy

Which of the following are reasons why a firm may want to go global?

Porter identifies the threat of substitutes as one of his five forces. What are the main causes of this threats?

What are the potential problems with global expansion?

What are the five steps of Porter's value chain?

Which of the following would be considered a secondary activity?

Strategic management comprises three main components: • strategic analysis • strategic choice • strategic implementation. Checking the costs and benefits of different strategies is part of

Which of the following is a frequent criticism of Porter's five forces model?

A complementor is a firm that produces similar products

An increase in product differentiation increases competitive rivalry.

What are the three possible types of strategy according to Porter?

The five forces model presents a static view of the business environment. This is a good thing.

In the value chain analysis, support activities relate to firm infrastructure, procurement, technological development and human resource management.

Mintzberg suggests that there are five Ps of business strategy. Aggressive pricing would be termed a _____ ,whereas strategy which emerged from a consistent response by the firm to the changing business environment would be termed a ______by Mintzberg.

Strategic analysis is concerned with the formulation and evaluation of alternative courses of action, which might be adopted in order to achieve the business's strategic objectives.

Techniques such as investment appraisal will have limited value if

Which of the following could be considered to be a stakeholder of a business?

Henry Mintzberg suggests that there are five Ps of strategy: a plan, a ploy, a pattern of behaviour, a position with respect to others and a perspective.

Porter's five forces model deals with the potential for new firms to enter a market. Which of the following would not deter new entrants?

Mintzberg suggests that there are five Ps of business strategy. A strategy which stated clearly where the firm would like to be at some time in the future would be termed a ______by Mintzberg.

If a business had strategy based on its core competencies, this could be termed a____strategy.

The Business Environment and Business Economics

Economics and the World of Business

Business Organisations

The Working of Competitive Markets

Business in a Market Environment

Demand and the Consumer

Demand and the Firm

Products, Marketing and Advertising

Costs of Production

Revenue and Profit

Profit Maximisation Under Perfect Competition and Monopoly

Profit Maximisation Under Imperfect Competition

Alternative Theories of the Firm

Growth Strategy

The Small-Firm Sector

Pricing Strategy

Labour Markets, Wages and Industrial Relations

Investment and the Employment of Capital

Reasons for Government Intervention in the Market

Government and the Firm

Government and the Market

Globalisation and Multinational Business

International Trade

Trading Blocs

The Macroeconomic Environment of Business

The Balance of Payments and Exchange Rates

Banking, Money and Interest Rates

Business Activity, Employment and Inflation

Demand-Side Policy

Supply-Side Policy

International Economic Policy

Filters

Mintzberg suggests that there are five Ps of business strategy. Aggressive pricing would be termed a _ ,whereas strategy which emerged from a consistent response by the firm to the changing business environment would be termed a __by Mintzberg.