Deck 13: An Introduction to Business Strategy

Question 1

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.

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

Answer 1

ploy; pattern of behaviour

Question 2

Mintzberg suggests that there are five Ps of business strategy. A strategy that relied on getting employees to share the management's point of view of the business would be termed a____-, whereas a strategy that concentrated on maintaining the brand image of the firm would be termed a______ by Mintzberg.

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

Answer 2

perspective; position with respect to others

Question 3

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.

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

Answer 3

plan

Question 4

If a strategy is a 'perspective', what would you expect it to be based upon?

A) A specific manoeuvre by business
B) A consistent response to global events
C) The position of the business in its market
D) Establishing a common way of perceiving the world, primarily within the organisation itself

Question 5

Strategic management comprises three main components:
• strategic analysis
• strategic choice
• strategic implementation.
Deciding who would be responsible for carrying out a strategy is part of

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

Question 6

Strategic management is best defined as

A) the management of the long- term activities of a business.
B) the management of the short- term activities of a business.
C) the management of the day- to- day activities of a business.
D) all of the above

Question 7

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

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

Question 8

Strategic management comprises three main components:
• strategic analysis
• strategic choice
• strategic implementation.
Checking the effects of technology on the firm is part of

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

Question 9

According to Porter, marketing is

A) one of the factors in the five forces model of competition.
B) part of the primary value chain.
C) part of the support value chain.
D) none of the above

Question 10

According to Porter, the extent of competitive rivalry is

A) one of the factors in the five forces model of competition.
B) part of the primary value chain.
C) part of the support value chain.
D) none of the above

Question 11

According to Porter, human resource management is

A) one of the factors in the five forces model of competition.
B) part of the primary value chain.
C) part of the support value chain.
D) none of the above

Question 12

According to Porter, firm infrastructure is

A) one of the factors in the five forces model of competition.
B) part of the primary value chain.
C) part of the support value chain.
D) none of the above

Question 13

According to Porter, the threat of substitutes is

A) one of the factors in the five forces model of competition.
B) part of the primary value chain.
C) part of the support value chain.
D) none of the above

Question 14

If a business had strategy based on its core competencies, this would be termed a _ _ strategy whereas, if a business had strategy based on cost leadership, this would be termed a strategy.

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

Question 15

A business might become a multinational in order to obtain

A) a spread of risks.
B) lower production costs.
C) all of the above
D) larger sales.

Question 16

Which of the following is an aspect of strategic management?

A) Dealing with routine personnel issues
B) Evaluating investment options
C) Checking production is within budget
D) All of the above are aspects of strategic management.

Question 17

What is corporate governance?

A) The way the government impacts upon a firm's decisions
B) The way a business is run, including monitoring and supervising executive decisions in order to meet the purpose of the business and to represent interest groups
C) The level of taxation on business profits
D) The method by which shareholders influence managers

Question 18

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

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

Question 19

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

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 20

The following diagram shows Porter's five forces model.
Which forces are represented by cells A, B, C and D?

A) Monopoly; oligopoly; monopolistic competition; perfect competition
B) Potential entrants; suppliers; buyers; substitute products
C) Suppliers; demanders; intermediate products; the value chain
D) Advertising; inputs; competition; outputs

Question 21

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?

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 22

What is the order of primary activities within Porter's value chain?

A) Procurement, outbound logistics, technological development, after- sales service
B) Technological development, logistics, marketing and sales, after- sales service
C) Firm infrastructure, inbound logistics, outbound logistics, marketing and sales
D) Inbound logistics, operations, outbound logistics, marketing and sales, after- sales service

Question 23

Which of the following would be considered a secondary activity?

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

Question 24

If a firm has adopted a strategy of driving out inefficiency at every stage of the value chain in order to price below rivals, it is trying to adopt

A) cost leadership.
B) vertical discrimination.
C) a resource- based strategy.
D) increased economies of scale.

Question 25

Which of the following would be classed as a focus strategy?

A) Producing very high quality, up- market products
B) A focus on branding identity with heavy marketing
C) A no- frills airline
D) Product development through innovation, design and research

Question 26

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

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

Question 27

If a business had strategy based on cost leadership, this would be termed a____strategy.

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

Question 28

The management of a seamless integrated supply chain is known as

A) co- operation.
B) conglomeration.
C) a supply curve.
D) logistics.

Question 29

A core competence is best defined as

A) something the company has that is unique.
B) the organisation's main good or service.
C) the key skills that underpin a firm's competitive advantage.
D) something the company has that creates shareholder value.

Question 30

A core competence can give a firm a competitive edge. However, to sustain it into the long run, four conditions must be satisfied. Which of the following is not one of the conditions?

A) Valuable
B) Responsive
C) Transferable
D) Non- substitutable
E) Rare

Question 31

Business ethics

A) can influence profits.
B) may be driven by the wider views of society.
C) includes the values of the business.
D) all of the above

Question 32

What is a multinational corporation?

A) A business that buys and sells in domestic and overseas markets
B) A business that has owners who are located in more than one country
C) A business that either owns or controls foreign subsidiaries in more than one country
D) A business that sells in domestic and overseas markets

Question 33

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

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

Question 34

Which of the following is not a location- related advantage?

A) Availability of raw materials
B) Production is close to customers
C) Relative cost of inputs is low
D) Technology- led economies of scale

Question 35

A business might become a multinational in order to obtain

A) lower production costs.
B) a spread of risks.
C) larger sales.
D) all of the above

Question 36

Accessing global markets can

A) spread risk.
B) allow firms to learn from experience.
C) exploit competitive advantages.
D) all of the above

Question 37

When technological transfer occurs through copying methods, it is called the

A) blue- sky effect.
B) copying effect.
C) demonstration effect.
D) R&D effect.

Question 38

Which of the following descriptions refers to the cost advantage of lower transaction costs?

A) Producing overseas can save on the costs of arranging a contract with an overseas import agent, or with a firm in the host country to make the product under licence.
B) A country abroad might have a highly skilled or highly industrious workforce.
C) The tax rate may be lower abroad.
D) Wage rates may be lower abroad.
E) Where skills and productivity improve with experience, initial small cost advantages of locating overseas may become much more substantial over time.

Question 39

What is the global strategy trade- off?

A) The conflict between a firm's desire to cut costs and enhance profitability and the need to meet the very different demands of consumers
B) The trade- off between the expectations of the shareholders and the expectations of customers
C) The conflict between cutting costs and enhancing profitability
D) The problem of finding a balance between advertising and costs

Question 40

Techniques such as investment appraisal will have limited value if

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 41

Which of the following statements about implementing business strategy is false?

A) The more adventurous the strategy, the greater the impact on resources.
B) Managing change is now a quick response, as more past data is available for analysis.
C) If the choice of strategy is deliberate, CBA will be a useful technique.
D) If the strategic shift is towards the global marketplace, flexibility is even more important

Question 42

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.

Question 43

Strategic analysis is only concerned with evaluating different possible courses of action.

Question 44

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.

Question 45

Strategic management comprises of strategic analysis, strategic choice and strategic implementation which deal with long- term activities of the business.

Question 46

Monitoring the performance of different parts of the firm is called strategic implementation.

Question 47

An increase in product differentiation increases competitive rivalry.

Question 48

Michael Porter suggests that firms should concentrate on two out of the three possible strategies of cost leadership, differentiation and focus.

Question 49

A complementor is a firm that produces similar products

Question 50

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

Question 51

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

Question 52

Outsourcing will increase transaction costs.

Question 53

A core competence refers to the main activity of a business.

Question 54

Firms may become multinational in order to reduce costs and spread risk.

Question 55

To minimise costs, a firm may seek to standardise its product and its operations throughout the world. However, to meet foreign buyers' needs and respond to local market conditions, a firm may be required to differentiate both its product and its operations, such as marketing.

Question 56

Where product differentiation is high, and attributes such as quality or some other non- price factor predominates within the competitive process, local responsiveness will tend to shape business thinking.

Question 57

The introduction of a new strategy may initially lower profits as members of a organisation are often resistant to change.

Question 58

What are Mintzberg's five Ps of strategy?

Question 59

What are the three components of strategic management?

Question 60

What is corporate governance?

Question 61

What is Porter's five forces model of competition?

Question 62

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

Question 63

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

Question 64

According to Porter, what are some of the factors that lead to high competitive rivalry?

Question 65

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

Question 66

Explain the difference between a market- based and a resource- based theory of strategic choice.

Question 67

What are some of the reasons for a firm to enter the global market?

Question 68

How could a firm benefit from increased profits from expanding abroad?

Question 69

What are the potential problems with global expansion?