A

1930

1911

1879

1938

QUESTION
1 The origins of Business Policy & Strategic Management can be retraced to
2 BCG in BCG matrix stands for

Boston Calmette Group

British Consulting Group

Boston Corporate Group

Boston Consulting Group

3 Which of the following is not part of the micro environment?

Technology

Shareholders

Competitors

Public

4 Which of the following is not a part the Macro Environment?

Laws & Policies

Demographics

Suppliers

Social Values

5 Cultural values would be part of which of the following factor in macro environment?

Demographic

Social

Ecological

Natural

6 What does Dog symbolize in BCG matrix?

Introduction

Growth

Maturity

Decline

7 What does Stars symbolize in BCG matrix?

Introduction

Growth

Maturity

Decline

8 What does Question Mark (?) symbolize in BCG matrix?

Remain Diversified

Invest

Stable

Liquidate

9 What do Cash Cows symbolize in BCG matrix?

Remain Diversified

Invest

Stable

Liquidate

10 What does Green symbolize in BCG matrix?

Invest & Expand

Select & Earn

Harvest & Divest

Both a & b

11 What does Yellow symbolize in BCG matrix?

Invest & Expand

Harvest & Divest

Select & Earn

Both a & b

12 What does Red symbolize in BCG matrix?

Invest & Expand

Harvest and Earn

Harvest & Divest

Select & Earn

13 The GE 9 cell model is based on

Industry attractiveness & Business

Strength

Industry Growth rate & Business

strength

Industry Attractiveness & Relative

market share

Industry Growth & Relative market

share

14 The BCG Matrix is based on

Industry attractiveness & Business

Strength

Industry Growth rate & Business

strength

Industry Attractiveness & Relative

market share

Industry Growth rate & Relative

market share

15 In strategic thinking, how long is the long term, approximately?

1 Month to 1 year

2 to 3 years

3 to 5 years

More than 5 years

16 Low cost, Differentiation and Focus are examples of __________________

Corporate strategies

Operational Strategies

Business Strategies

Functional Strategies

17 The word tactic is most likely to be associated with:

Business Strategy

Corporate strategy

Operational Strategy

Functional Strategy

18 In BCG matrix, what is the label of the horizontal axis?

Relative Market share

Business Strength

Industry Growth Rate

Market Growth Rate

19 In BCG Matrix, what is the label of the Vertical axis?

Relative Market share

Business Strength

Industry Growth Rate

Market Growth Rate

20 In GE 9 cell matrix, what is the label of the horizontal axis?

Relative Market share

Industry Attractiveness

Industry Growth Rate

Market Growth Rate

21 Another name for GE 9 cell model is

Three colour matrix

Stop light matrix

Strategic Portfolio Matrix

Colour light matrix

22 To find out what an organization's strategy is, you should:

Read the mission statement

Look at what the organization actually

does

Read the strategic plan

Ask the CEO

23 Which of the following statements is not true when describing a successful strategy?

It provides some property that is It provides the means for renewing It addresses changes in the external
It guarantees long term survival
unique or distinctive
competitive advantage
environment

24 In the context of strategic management, stakeholders can be defined as:

An individual or group with an

An external individual or group that is Internal groups or individuals that is
An individual or group with a financial
interest
in
the
organization's
able to impose constraints on the able to influence strategic direction of
stake in the organization
activities and who seeks to
organization
the organization
influence them

25 Which of the following is NOT part of the micro environment?

Competitors

26 In companys environment, companys customers are part of which of the following?

Internal environment

27 Cultural values would be part of which of the following factor in macro environment?

Economic

28 In the case where an organization acquires its supplier, this is an example of:

Horizontal integration

29

30

31

When a firm seeks the benefits of global integration and local adaptation, it is best described as which type of
Transnational
strategy?

'Reputation' in the context of an organization's resources can provide competitive advantage because:

It is difficult to copy

A strategic manager that seeks to reach acceptable profit targets as opposed to making as much profit as
Satisfactory
possible is making decisions of which type?

Customers

Technology

Publics

Micro environment

Macro environment

external environment

Natural

Social

Ecological

Forwards vertical integration

Backwards vertical integration

a and b

Global

Multi-national

Global-local

It is based on word-of-mouth

It is a threshold resource

It is explicit

Satisfying

Irrational

Optimal

1 to 5 years

More than 5 years

less than 5 year

32 In strategic thinking, how long is the long term, approximately?

1 to 12 months

33 What are stages 2, 3 and 4 of the outline strategy process?

Generate
options;
implement strategy

34 The strategy of TATA Motors would be:

Functional Strategy

Corporate Strategy

Business Strategy

both b and c

35 Growth, retrenchment and stability are examples of __________________?

Corporate strategies

Business Strategies

Functional Strategies

both a and c

36 The word tactic is most likely to be associated with:

Corporate strategy

Business Strategy

Operational Strategy

both a and b

37 Which of these is not a reason why some firms do not have strategic planning?

Laziness

Competitive leadership

Honest difference of opinion

Poor reward structures

strategy-implementation

long-range planning

short-range planning

Objectives; strategies

Mission; vision

38

select

Appraisal
of
strengths
and
strategy; Strategy
selection;
strategy
weaknesses; choice of strategic
implementation; strategic control
Deliberate strategy; emergent strategy; direction; strategy implementation
realized strategy

Developing a vision and mission, identifying an organization's external opportunities and threats, and determining
strategy-formulation
internal strengths and weaknesses are all __________ activities.

39 The _________ answers the question "What do we want to become?" whereas _________answers the question
"What is our business?"

Vision statement; mission statement

Short-term
objectives

40 What is the recommended length of an effective mission statement?

One page

Less than 200 words

One sentence of 10 to 20 words.

There is no recommendation

41 Which one of these is NOT a __________ part of Porter's competitive forces in industry analysis?

Potential entry of new competitors

Bargaining power of suppliers

Development of substitute products

Threat of substitute products and

services

42 __________ is based on the assumption that the future will be just like the past

Delphi forecasts

Econometric models

Linear regression

Scenario forecasts

43

Concentric diversification

Horizontal diversification

Conglomerate diversification

Product development

__________ is adding new, unrelated products or services for present customers

44 Which of the following is not a limitation of SWOT (Strengths, Weaknesses, Opportunity, Threats) analysis?

objectives;

long-term

SWOT's focus on the external

Organizational strengths may not lead to SWOT gives a one-shot view of a
SWOT overemphasizes
environment is too broad and
competitive advantage
moving target
dimension of strategy
integrative

single

45

A marketing department that promises delivery quicker than the production department's ability to produce is an
Synergy of the business units
example of a lack of understanding of the

46 XYZ Corp. is centering on the objective of low-cost, high quality, on-time production by curtailing idle productive
facilities and workers. The XYZ Corp. is taking advantage of a ____________ system

47 Which of the following lists is comprised of support activities:

48

50

Organizational culture and leadership

Interrelationships among functional

areas and firm strategies

Last In, First Out (LIFO)

First In, First Out (FIFO)

Highly mechanized

Just-In-Time (JIT)

human
resource
management, customer service, information systems, human
resource
management, human
resource
management,
information systems, procurement, and technology
development,
and technology development, customer customer service, marketing and
firm infrastructure
procurement
service, and procurement
sales, and operations

Although firm infrastructure is quite frequently viewed only as overhead expense, it can become a source of Negotiating and maintaining ongoing
competitive advantage. Examples include all of the following except:
relations with regulatory bodies

49 The competencies or skills that a firm employs to transform inputs into outputs are:

Need to maintain the reputation of the

company

Tangible resources

An array of firm resources includes interpersonal relations among managers in the firm, its culture, and its
Physical uniqueness
reputation with its customers and suppliers. Such competitive advantages are based upon

Marketing expertise increasing a

firm's revenues and enabling it to
enter new markets

Effective information systems

contributing significantly to a firm's
overall cost leadership strategy

Top management providing a key role

in collaborating with important
customers

Intangible resources

Organizational capabilities

Reputational resources

Path dependency

Social complexity

Tangible resources

51 A company's ability to meet its short-term financial obligations is measured by which of the following categories?

liquidity ratios

profitability ratios

activity ratios

leverage ratios

52

long-term financial

detailed and complex

simple and routine

fast but comprehensive

internal mechanism

operational

external control

The "balanced scorecard" supplies top managers with a _____________ view of the business

The CEO of Lucent Technologies made a lot of mistakes, such as committing errors in assessing the market and
53 competitive conditions, as well as improperly redesigning the organization into 11 business units. Such errors led romantic
to performance declines. According to the text, this example illustrates the _________________ perspective of
leadership
54 The "advance work" in the strategic management process is comprised of

Strategy formulation

Strategy implementation

Strategic posturing

Strategy analysis

55 Members of an organization's board of directors should, while working to prioritize and fulfill their responsibilities,

Direct all actions of the CEO

Emphasize the importance of shortterm goals

Represent their own interests

Represent the interests of the

shareholders

56 The "triple bottom line" approach to corporate accounting, according to the text, includes which three components

Financial, organizational, and

psychological

Financial, environmental, and customer Financial, organizational, and customer Financial, environmental, and social

57

As our world increases in complexity, the global environment is increasingly challenging and competitive. The key
More people speaking more languages
to effective globalization is

58 Which of the following lists is the hierarchy of organizational goals in order from least specific to most specific?

Mission statements, strategic objectives,

vision statements

59 An organization's mission, in contrast to its vision, should

Be less detailed

60

Vision statements are used to create a higher understanding of the organization's overall direction and purpose.
Provide specific objectives
Vision statements

61 Which of the following would be thought of as part of a firm's general environment?

increased trade deficit

62 Interest rate increases have a ________ impact on the residential home construction industry and a ___ effect on positive; negligible
industries that produce consumer necessities, such as prescription drugs or basic grocery items

63

An independent group of suppliers, such as farmers, gather to form a cooperative in order to sell their products to
Forward integration
buyers directly, replacing their previous distributor. This is an example of

64 The bargaining power of the supplier is less than that of the buyer when

65

Volume of purchase is low

As seen in Porter's Five Forces model, conditions under which a supplier group can be powerful include all the Lack of importance of the buyer to the
following except
supplier group

The flow of capital, people, and

information

Governmental regulations

The flow of goods

Mission statements, vision statements, Vision statements, strategic objectives, Vision statements, mission
strategic objectives
mission statements
statements, strategic objectives

Encompass both the purpose of the

Encompass all the major rules and
company as well as the basis of
Be shorter in length
regulations of the corporate work force
competition

Are very specific

Evoke powerful and compelling

mental images

decreased entry barriers

increased bargaining power of the

increased competitive intensity
firm's suppliers

positive; negative

negative; positive

negative; negligible

Backward integration

Threat of substitute products

Threat of entry

The buyer's profit margin is low

Cost savings from the supplier's

product are minimal

Threat of backward integration by

buyers is low

High differentiation by the supplier

Readily available substitute

products

Dominance by a few suppliers

Set organizational structure

66 The most extreme rivalry results from

A high level of differentiation

Numerous equally balanced

Few competitors, slow industry growth,
Numerous equally balanced
competitors, manufacturing capacity
lack of differentiation, high fixed or
competitors, slow industry growth,
increases only in large increments, low
storage costs
high fixed or storage costs
exit barriers

67 Which of the following is an example of the interrelationship between the competitive and general environments?

A decline in a nation's educational

standards results in a decline in the
nation's productivity

Increased awareness of personal

health leads to lower demand, and
greater rivalry in the alcoholic
beverages industry

A country's technological inferiority

Greater awareness of the environment
results in its enactment of strong trade
results in environmental legislation
barriers against importation

68 The value chain is subdivided into two main headings. These are primary activities and:

Peripheral activities

Support activities

Secondary activities

69 In the value chain, primary activities are:

Directly involved in the production,

Those activities that support the
Those activities that are all undertaken
Directly involved in the production and
marketing and delivery of the product
production, marketing and delivery of
in-house
delivery of the product or service
or service
the product or service

70 The 'operations' in a passenger airline service would be:

The manufacture of the aircraft

71 One of the strategic decisions relating to the value chain concerns vertical integration. This would involve:

Deciding whether the activity should

Deciding whether to locate operations in
Deciding to link all activities using
be performed within the organization
the home country or in a foreign location
Enterprise Resource Planning
or by a different firm

72

Firm A has decided to use an outside travel firm for making travel arrangements but it is based on the premises of
Near shoring
Firm A. This is an example of:

73 A network of firms providing different parts of a value-chain in the production of a product or service is known as:

74

Franchising

Outsourced activities

Getting passengers and baggage

The design of the price structure and
from A to B by means of flying in an
Selling the tickets to passengers
yield plan
aircraft

Deciding whether to share certain

activities across different products and
markets

Offshoring

Insourcing

Outsourcing

Near shoring

Orchestrating

Co-specialization

A firm outsources many of its value chain activities. Compared to a firm that does everything in-house this is likely
Higher transaction costs, lower control Higher transaction costs, higher control Lower transaction costs, higher control Lower transaction costs, lower control
to incur:

75 When a firm promises more than it can actually deliver to win a contract, this is known as:

Adverse selection

Inverse selection

Moral hazard

Trust hazard

76 Which of the following outcomes is a potential benefit of outsourcing?

Higher flexibility

Higher control

Lower transaction costs

Better linkages between activities

77 A joint venture can be defined as:

Two firms collaborate together on a One firm licenses its

specific project
property to another firm

78 Substantial changes to the range of offerings or the markets served or both are known as:

Differentiation

79 At corporate level, diversification comes about when a firm is involved in two or more:

Businesses

80 On average, the highest levels of profitability are shown by:

Firms with a moderately diverse

Firms with a very diverse range of Firms with a diverse range of unrelated
Firms focused on just one or two products range of related products and
related products and businesses
products and businesses
businesses

81 Economies of scale are derived from:

Achieving cheaper unit costs through

Using cheaper raw materials
making larger quantities

Increasing the breadth of the portfolio

Increasing the number of markets

served

82 Which of the following outcomes is NOT an advantage of a completely vertically integrated business?

Potentially greater control is achieved

Lowering of risk is achieved

Lower price of supplies is achieved

83 Which of the following might be sources of synergy between two business units?

The profits from one can be used to

They have similar customers and use
finance the other when its gets into They both have a website
the same distribution channels
trouble

84

Similarities in size

Synergies allow businesses to add value to one another whereas the extent to which the corporate centre can add
Relatedness
value to each of its businesses is called:

87 Learning from trying out new and different things is termed:

88

Absorptive capacity

Two firms come together to form a

third, legally separate firm

Diversification

Relocation

Brand extension

Markets

Segments

Industries

Potentially greater quality is achieved

Making
life
competitors

more

They are both located in the same town

difficult

for

Increased access to funding

Operating in industries with similar

Selling to customers with
Similarities in production technologies
success factors
demographic characteristics

similar

Size

Competencies

Vision

Exploitation

Exploration

Economies of scope

what one would receive on U.S.

Treasury securities

profits earned by a corporation on a

diversified portfolio of stocks

differentiation focus

stuck-in-the-middle

profits one would expect to earn on

Businesses without a competitive advantage are not likely to earn more than "normal" profits in the long run.
profits received by corporations in the
investments that have a similar level of
Normal profits are
normal course of business
risk

Primary value chain activities that involve the effective layout of receiving dock operations (inbound logistics) and
89 support value chain activities that include expertise in process engineering (technology development) characterize differentiation
what generic strategy?

90

Two firms merge together

Which of the following might NOT be an advantage of increasing the number of countries in which a clothing firm Exposure to demanding customers with
Increased efficiency
does business?
exotic tastes

85 Which of the following are NOT likely to be sources of relatedness between businesses?

86

intellectual

overall cost leadership

it helps a firm to deal with supplier supplier

power
is
increased firms will enjoy high customer loyalty,
Which of the following is false regarding how a differentiation strategy can help a firm to improve its competitive by increasing a firm's margins, it avoids
power and reduces buyer power since because suppliers will be able to thus experiencing less threat from
position vis vis Porter's five forces?
the need for a low cost position
buyers lack comparable alternatives
charge higher prices for their inputs substitutes than its competitors

91 A narrow market focus is to a differentiation-based strategy as a

Growth market is to a differentiation-based Growth market is to a cost-based

strategy
strategy

Technological innovation is to a costbased strategy

Broadly-defined target market is to

a cost leadership strategy

92

Profit maximizer

Revenue enhancer

Profit outsourcing

Profit pool

93 The emphasis on product design is very high, the intensity of competition is low, and the market growth rate is low maturity
in the ______ stage of the industry life cycle

growth

introduction

decline

94 In the _______ stage of the industry life cycle, there are numerous segments, competition is very intense, and the introduction
emphasis on process design is high

maturity

growth

decline

The total profits in an industry at all points along the industry's value chain is called the

95 As markets mature

There is increasing emphasis on

efficiency

Costs continue to increase

Application for patents increase

Differentiation opportunities increase

96 The most probable time to pursue a harvest strategy is in a situation of

High growth

Decline in the market life cycle

Strong competitive advantage

Mergers and acquisitions

97 An 'industry recipe' can be defined as:

An accepted pattern of operating and A tactic for anticipating a competitor's The hidden competences that are
A strategic group
competing
next move
difficult to imitate

98 Which of the following industries is least likely to follow the conventional life-cycle model?

Software development

Coal mining

Insurance broking

Hairdressing

99 Brandenburger and Nalebuff added a sixth force to Porter's Five Forces. It is known as:

The threat of substitutes

The power of complementors

Seller power

Government regulation

Hyperactive

Atypical

Co-optative

100

An industry characterized by irregular patterns of stability, rapid technological change, high uncertainty and global
Hypercompetitive
competition can be described as: