STRATEGY EXAM QUESTIONS & ANSWERS
What is a company's business model? - Answers- A company's plan to provide a
product or service of value to the customer that will cover costs and provide an
attractive profit to the firm.
What are the two elements of a business model? - Answers- The Customer Value
Proposition & the Profit Formula.
What makes a winning strategy? - Answers- Goodness of Fit, Competitive Advantage,
Performance.
Define strategy - Answers- Competitive moves and business approaches used to gain
a sustainable competitive advantage.
Strategy is nothing without a good business model.
Can a good business strategy make up for a poor business model? - Answers- No;
however, you can have a poor business strategy and implement it well.
As per business model, a company must be profitable, cover costs, and find ways to
provide value to the customer.
Define strategic vision? - Answers- The route an organization takes to develop and
strengthen its business.
How do you make a strategy? - Answers- 1. Develop a vision
2. Set objectives
3. Craft a strategy
4. Implement the strategy
5. Monitor, evaluate, and revise strategy
Which of the step of creating a strategy is the most difficult? - Answers- Implementing
the strategy. It is difficult to change people; it is an art than a science.
How do you make an objective? - Answers- It must be:
1. Specific
2. Measureable
3. Attainable, yet challenging
4. Short-term / long-term
5. Must have a deadline
6. Someone responsible
7. Quantifiable
8. Strategic and Financial
What are the four levels of strategy? - Answers- Corporate (Multi-level)
Business (Individual Businesses)
Functional (Departments)
, Operational (Chain)
What is the purpose of a balanced scorecard? - Answers- To link strategic and financial
objectives
What are the responsibilities of the Board of Directors? - Answers- 1. Approve and
oversee that the strategy is in place
2. Create CEO and top level executive's compensation package
3. Evaluate competency of senior executive for leadership
4. Ensure management is acting in the best interests of shareholders
5. Approve financial reporting
What are Porter's Five Forces? - Answers- 1. Rivalries (STRONGEST - competing for
market share)
2. Threat of New Entrants
3. Threat of Substitutes
4. Bargaining Power of Suppliers
5. Bargaining Power of Buyers
Define driving force - Answers- A cause of change in an industry and competitive
conditions.
Define Key Success Factors (KSF's) - Answers- Factors or attributes that affect EVERY
industry member's ability to be competitively and financially successful.
What is a strategic group? - Answers- A group of firms in a similar industry with similar
competitive approaches and market positions.
What are the 3 strategic questions? - Answers- Who are we?
Where do we go from here?
How do we get there?
What is a vision and define it? - Answers- Asks "where are we going?" and "how do we
get there?" It is future oriented
What is a mission? - Answers- Asks "who are we?", "what do we do?", and "why do we
do it?" It is present oriented.
Define strategic intent? - Answers- It's when a company relentlessly pursues an
ambitious strategic objective.
How do you make a strategic group map? - Answers- 1. Identify two unrelated
competitive characteristics.
2. Plot the firms on the two-variable map using variables that are not correlated.
3. Assign similarly located firms in the same strategic group.
4. Draw circles proportional to the size of the firm's market share.
What is a company's business model? - Answers- A company's plan to provide a
product or service of value to the customer that will cover costs and provide an
attractive profit to the firm.
What are the two elements of a business model? - Answers- The Customer Value
Proposition & the Profit Formula.
What makes a winning strategy? - Answers- Goodness of Fit, Competitive Advantage,
Performance.
Define strategy - Answers- Competitive moves and business approaches used to gain
a sustainable competitive advantage.
Strategy is nothing without a good business model.
Can a good business strategy make up for a poor business model? - Answers- No;
however, you can have a poor business strategy and implement it well.
As per business model, a company must be profitable, cover costs, and find ways to
provide value to the customer.
Define strategic vision? - Answers- The route an organization takes to develop and
strengthen its business.
How do you make a strategy? - Answers- 1. Develop a vision
2. Set objectives
3. Craft a strategy
4. Implement the strategy
5. Monitor, evaluate, and revise strategy
Which of the step of creating a strategy is the most difficult? - Answers- Implementing
the strategy. It is difficult to change people; it is an art than a science.
How do you make an objective? - Answers- It must be:
1. Specific
2. Measureable
3. Attainable, yet challenging
4. Short-term / long-term
5. Must have a deadline
6. Someone responsible
7. Quantifiable
8. Strategic and Financial
What are the four levels of strategy? - Answers- Corporate (Multi-level)
Business (Individual Businesses)
Functional (Departments)
, Operational (Chain)
What is the purpose of a balanced scorecard? - Answers- To link strategic and financial
objectives
What are the responsibilities of the Board of Directors? - Answers- 1. Approve and
oversee that the strategy is in place
2. Create CEO and top level executive's compensation package
3. Evaluate competency of senior executive for leadership
4. Ensure management is acting in the best interests of shareholders
5. Approve financial reporting
What are Porter's Five Forces? - Answers- 1. Rivalries (STRONGEST - competing for
market share)
2. Threat of New Entrants
3. Threat of Substitutes
4. Bargaining Power of Suppliers
5. Bargaining Power of Buyers
Define driving force - Answers- A cause of change in an industry and competitive
conditions.
Define Key Success Factors (KSF's) - Answers- Factors or attributes that affect EVERY
industry member's ability to be competitively and financially successful.
What is a strategic group? - Answers- A group of firms in a similar industry with similar
competitive approaches and market positions.
What are the 3 strategic questions? - Answers- Who are we?
Where do we go from here?
How do we get there?
What is a vision and define it? - Answers- Asks "where are we going?" and "how do we
get there?" It is future oriented
What is a mission? - Answers- Asks "who are we?", "what do we do?", and "why do we
do it?" It is present oriented.
Define strategic intent? - Answers- It's when a company relentlessly pursues an
ambitious strategic objective.
How do you make a strategic group map? - Answers- 1. Identify two unrelated
competitive characteristics.
2. Plot the firms on the two-variable map using variables that are not correlated.
3. Assign similarly located firms in the same strategic group.
4. Draw circles proportional to the size of the firm's market share.
