Strategic Management Final Exam Questions With
Complete Solutions
___________ can help an organization overcome inertia.
A) Power struggles
B) Capabilities
C) Prior strategic commitments
D) A crisis
E) The Icarus paradox Correct Answers d. A crisis
A company pursuing a cost-leadership strategy does which of
the following?
A) Includes substandard components in the product to keep
costs low
B) Chooses strategies that keep costs as low as feasible and are
effective
C) Keeps advertising expenses at a maximum
D) Relies on patent protections to keep costs low
E) None of the above Correct Answers b. Chooses strategies
that keep costs as low as feasible and are effective
A company pursuing a focused differentiation business model
A) manufactures products for a generic consumer market.
B) typically has little competition.
C) specializes in making products for one or two market
segments.
D) is likely to enjoy monopolylike status in its industry.
E) bases its strategy on low costs. Correct Answers c.
Specializes in making products for one or two market segments
,A company that enters a foreign market by entering into a
licensing agreement with a local company
A) can realize location economies.
B) can engage in global strategic coordination.
C) can realize experience-curve effects.
D) risks losing control over its technology to the venture partner.
E) can engage in global strategic coordination and realize
experience-curve effects. Correct Answers d. Risks losing
control over its technology to the venture partner
A company with a business-level strategy of cost leadership
should pursue which of the following global expansion
strategies?
A) Localization
B) Simple
C) International
D) Transnational
E) Global standardization Correct Answers e. Global
Standardization
A company's competitive advantage is more durable when
A) barriers to imitation are low and there are few capable
competitors.
B) barriers to imitation are high and there are many capable
competitors.
C) barriers to imitation are high.
D) the industry is stable and there are many capable competitors.
E) the industry is stable and barriers to imitation are low.
Correct Answers c. Barriers to imitation are high
,A company's competitive advantage will not endure for long
when that competitive advantage can be
A) quickly or easily duplicated by other companies.
B) protected by patents.
C) protected by significant barriers to imitation.
D) shared with other companies in the industry.
E) shielded by copyrights. Correct Answers a. Quickly or
easily duplicated by other companies
A company's infrastructure includes the company's
A) organization structure, culture, and style of leadership.
B) organization structure and morale level.
C) culture and productivity levels.
D) overall profitability levels.
E) short-run objectives. Correct Answers a. Organization
structure, culture, and style of leadership
A competitive advantage is considered to be a sustained
competitive advantage when the
A) advantage endures for a long time.
B) firm is able to spread the advantage to all of its business
units.
C) advantage is very large.
D) advantage was gained at a low cost.
E) managers who developed the advantage are still employed at
the firm. Correct Answers a. Advantage endures for a long time
A competitor's ability to ____________ a cost leader's methods
is a threat to a cost-leadership strategy.
A) negate
B) subvert
, C) control
D) repudiate
E) imitate Correct Answers e. Imitate
A differentiation strategy is based on creating a product that
customers perceive as being
A) about the same as other available products.
B) distinct.
C) the least costly product in the industry.
D) the most costly product in the industry.
E) somewhat faddish in nature. Correct Answers b. Distinct
A disadvantage of pursuing a cost leadership strategy is that
A) technological change can make production methods obsolete.
B) price wars make it hard to compete with differentiators.
C) it costs more than a differentiation strategy because of the
necessity of high capital investments.
D) powerful buyers are a major threat.
E) no quality control exists. Correct Answers a. Technological
change can make production methods obsolete
A focused differentiator has the advantage of
A) charging a premium price because of its low costs.
B) pursuing differentiation and low-cost strategies
simultaneously.
C) being close to the customer.
D) superior materials management.
E) protection against price wars. Correct Answers c. Being
close to the customer
Complete Solutions
___________ can help an organization overcome inertia.
A) Power struggles
B) Capabilities
C) Prior strategic commitments
D) A crisis
E) The Icarus paradox Correct Answers d. A crisis
A company pursuing a cost-leadership strategy does which of
the following?
A) Includes substandard components in the product to keep
costs low
B) Chooses strategies that keep costs as low as feasible and are
effective
C) Keeps advertising expenses at a maximum
D) Relies on patent protections to keep costs low
E) None of the above Correct Answers b. Chooses strategies
that keep costs as low as feasible and are effective
A company pursuing a focused differentiation business model
A) manufactures products for a generic consumer market.
B) typically has little competition.
C) specializes in making products for one or two market
segments.
D) is likely to enjoy monopolylike status in its industry.
E) bases its strategy on low costs. Correct Answers c.
Specializes in making products for one or two market segments
,A company that enters a foreign market by entering into a
licensing agreement with a local company
A) can realize location economies.
B) can engage in global strategic coordination.
C) can realize experience-curve effects.
D) risks losing control over its technology to the venture partner.
E) can engage in global strategic coordination and realize
experience-curve effects. Correct Answers d. Risks losing
control over its technology to the venture partner
A company with a business-level strategy of cost leadership
should pursue which of the following global expansion
strategies?
A) Localization
B) Simple
C) International
D) Transnational
E) Global standardization Correct Answers e. Global
Standardization
A company's competitive advantage is more durable when
A) barriers to imitation are low and there are few capable
competitors.
B) barriers to imitation are high and there are many capable
competitors.
C) barriers to imitation are high.
D) the industry is stable and there are many capable competitors.
E) the industry is stable and barriers to imitation are low.
Correct Answers c. Barriers to imitation are high
,A company's competitive advantage will not endure for long
when that competitive advantage can be
A) quickly or easily duplicated by other companies.
B) protected by patents.
C) protected by significant barriers to imitation.
D) shared with other companies in the industry.
E) shielded by copyrights. Correct Answers a. Quickly or
easily duplicated by other companies
A company's infrastructure includes the company's
A) organization structure, culture, and style of leadership.
B) organization structure and morale level.
C) culture and productivity levels.
D) overall profitability levels.
E) short-run objectives. Correct Answers a. Organization
structure, culture, and style of leadership
A competitive advantage is considered to be a sustained
competitive advantage when the
A) advantage endures for a long time.
B) firm is able to spread the advantage to all of its business
units.
C) advantage is very large.
D) advantage was gained at a low cost.
E) managers who developed the advantage are still employed at
the firm. Correct Answers a. Advantage endures for a long time
A competitor's ability to ____________ a cost leader's methods
is a threat to a cost-leadership strategy.
A) negate
B) subvert
, C) control
D) repudiate
E) imitate Correct Answers e. Imitate
A differentiation strategy is based on creating a product that
customers perceive as being
A) about the same as other available products.
B) distinct.
C) the least costly product in the industry.
D) the most costly product in the industry.
E) somewhat faddish in nature. Correct Answers b. Distinct
A disadvantage of pursuing a cost leadership strategy is that
A) technological change can make production methods obsolete.
B) price wars make it hard to compete with differentiators.
C) it costs more than a differentiation strategy because of the
necessity of high capital investments.
D) powerful buyers are a major threat.
E) no quality control exists. Correct Answers a. Technological
change can make production methods obsolete
A focused differentiator has the advantage of
A) charging a premium price because of its low costs.
B) pursuing differentiation and low-cost strategies
simultaneously.
C) being close to the customer.
D) superior materials management.
E) protection against price wars. Correct Answers c. Being
close to the customer
