Question 1

Sheng, the CEO of Mirrorz Inc., comes up with a plan to implement business unit strategies successfully. He decides to do this by making technical advancements in the manufacturing process of the products and developing a solid financial system run by an efficient team. He also plans to establish a marketing team that would sell to people who would not normally buy the product. The ultimate mission of the company would be to provide a customer friendly environment. The plan initiated by Sheng can be best categorized as a(n)________.

Accepted Answer

A) segmentation analysis 
B) emergent strategy 
C) functional strategy 
D) business unit strategy

Question 2

The executives at Purple Inc. hold a meeting where they decide the best way to showcase their products. They have a brainstorming session to identify the best geographical areas to conduct business that will bring them maximum profits. They also identify their competitors and decide whether they would be able to withstand top companies selling similar products. The executives at Purple Inc. are discussing a(n)________.

Accepted Answer

A) emergent strategy 
B) functional strategy 
C) business unit strategy 
D) corporate strategy

Question 3

Summer Inc., a departmental store, wants to provide better service to its customers. This includes providing expertise in each type of product and brand. In order to accomplish this, the general manager of the store suggests that they should begin by identifying the different types of customers. By classifying customers, into various groups, such as mothers, athletes, tech-savvy customers and so on, the store's customer care personnel can specialize on detailed product information. With the help of this classification, the store is able to provide better service to each customer by offering more brands to choose from. This scenario best illustrates ________.

Accepted Answer

A) segmentation analysis 
B) group allocation 
C) group dynamics 
D) division dynamics

Question 4

What is the next step in the strategic management process that a company should take after identifying prospective markets?

Accepted Answer

The answer of What is the next step in the...

Question 5

Which of the following is the main purpose of a strategic management process?

Accepted Answer

A) Ensuring that all employees have managers and supervisors to lead their teams 
B) Creating an organization that functions systematically according to its vision, mission, and goals 
C) Creating a high-level plan that can be implemented without fierce competition and undue risk 
D) Specifying a high-level plan that an organization will employ to achieve competitive advantage

Question 6

Identify a true statement about corporate strategy.

Accepted Answer

A) It refers to decisions made at the level of the strategic business unit about how to gain and sustain advantage. 
B) It refers to decisions about how to effectively implement the business unit strategy within functional areas. 
C) It refers to decisions about activities and strategic choices, such as make versus buy, acquisitions, and strategic alliances. 
D) It refers to decisions that are made by senior executives about where to compete in terms of industries and markets.

Question 7

Identify a true statement about a functional strategy.

Accepted Answer

A) It refers to decisions made at the level of the strategic business unit about how to gain and sustain advantage. 
B) It refers to decisions about how to effectively implement the business unit strategy within functional areas. 
C) It refers to decisions about functional activities and strategic choices such as make versus buy. 
D) It refers to decisions that are made by senior corporate executives about what markets to compete in.

Question 8

MindaX is a beverage manufacturing company. Despite its various promotional efforts, the company finds it difficult to get more customers. Its market analysts later determine that its price is the reason. They are sold at $10 per liter, which makes it difficult for customers to buy this beverage frequently, so, they opt for other lower priced sodas instead. This scenario best illustrates ________.

Accepted Answer

A) price reduction 
B) price increase 
C) price allocation 
D) price sensitivity

Question 9

The management of Neptune Inc. creates a definite plan of action that will surely create profits for the company. It allocates and sectionalizes its machinery and personnel. The main office is moved to a prime location that helps attract customers and facilitates competitive development. This plan of action helps Neptune Inc. retain its competitive advantage and has also grow as a company. Which of the following terms does this scenario best illustrate?

Accepted Answer

A) Strategic tools 
B) Strategic management process 
C) Functional strategy 
D) Business unit strategy

Question 10

Sweetmeats Inc., a deli, produces its own grains, such as corn, wheat, rice, and oats. The employees create different types of breads without having to buy the grains from other sources. This has helped them sell their bread items to customers at much lower prices than other neighboring delis. This scenario best illustrates a(n)________.

Accepted Answer

A) complementary service 
B) emergent strategy 
C) unique value 
D) cost advantage

Question 11

Identify the first decision a company has to make as part of its business strategy.

Accepted Answer

A) Choose a market in which to compete. 
B) Choose a competitor to compete with. 
C) Decide what unique value to offer to customers. 
D) Decide ways to maintain a competitive advantage.

Question 12

Which of the following statements is true of external analysis?

Accepted Answer

A) It is capable of analyzing only the threats that a company might come across. 
B) It studies the factors that influence an organization's appeal and environment. 
C) It focuses on the factors that influence employees of an organization to leave. 
D) It analyzes a firm's resources and capabilities to assess how effectively it is able to deliver unique value.

Question 13

The Mykari Publishing House invested in buying high-end machinery that allowed its newspapers to be printed at twice the speed of average printing machines. The executives of the company stated that this would increase the company's profit margin by 12% as opposed to the usual 7 to 8% that it makes annually. When the finances of the company were tallied this year, it was found that the profits increased to about 19%. This scenario best illustrates ________.

Accepted Answer

A) return of equity 
B) above-average profits 
C) complimentary value 
D) unique value

Question 14

Which of the following statements is true of the strategies of successful companies?

Accepted Answer

A) They are wholly deliberate due to effective strategic planning processes. 
B) They are solely a result of obtaining ideas from within the firm. 
C) They are partly deliberate and partly emergent. 
D) They are partly established by the owners of the company.

Question 15

Which of the following is true of competitive advantage?

Accepted Answer

A) It requires a company to consistently outperform its rivals in generating above-average profits. 
B) It should be avoided by not-for-profit organizations. 
C) It is usually achieved by firms that provide general as well as imitable products. 
D) It can be measured by using only tangible outcomes.

Question 16

What does it mean to provide unique value? Briefly explain the two strategies involved in providing unique value.

Accepted Answer

The answer of What does it mean to provide unique...

Question 17

Which of the following is an example of a resource?

Accepted Answer

A) An overdue 
B) A mission 
C) A patent 
D) A goal

Question 18

Femi, the founder of Pluto Inc., feels that the company has been able to continuously maintain competitive advantage due to the plans of action she initiated years ago. The plan involved establishing and maintaining contacts with influential business personnel, amicably taking over small companies that would help bringing in profits for Pluto Inc., and creating raw materials from scratch rather than buying from other companies. This type of planning is an example of ________.

Accepted Answer

A) resource pools 
B) corporate think tanks 
C) strategic vehicles 
D) functional vehicles

Question 19

The top executives of Willow Inc., a furniture company, have decided what markets to compete in. Willow Inc. now has to adopt a set of organizational processes that enables it to effectively carry out these decisions. In order to translate these decisions into organizational action in a successful manner, the functional activities of the company are being measured for their efficacy to support organizational decisions. Which of the following does this scenario best illustrate?

Accepted Answer

A) Strategy implementation 
B) Strategy vehicles 
C) Emergent strategy 
D) Business unit strategy

Question 20

Katherine is the CEO of a car dealership company called Red Cars. When looking for new investors for the company, she usually says that Red Cars wants to "Be the best automotive retailer in the eyes of its customers, employees, and shareholders." Which of the following does this statement best reflect?

Accepted Answer

A) Red Cars' mission 
B) Red Cars' strategy 
C) Red Cars' capabilities 
D) Red Cars' resources

Exam 1: What Is Business Strategy