MGT8803 - Strategy Exam Questions and
Correct Answers Latest Update (Rated
A+)
/.Strategy can best be described as the goal directed actions to gain and sustain
\________\_. (a) high performance in advancing industry capabilities (b) superior
performance in the markets in which the firm operates (c) long term financial profits and
economic viability (d) operational improvements and product advancements (e) the
earth's environment and the well-being of the communities in which the firm operates -
Answer-✅superior performance in the markets in which the firm operates
/.According to Michael Porter the essence of strategy is \________\_. (a) leveraging
operational and marketing effectiveness to create competitive advantage (b) choosing
what not to do (c) maximizing ROI while driving cost of capital down (d) copying what
works from competitors and avoiding what doesn't work (e) aligning the external market
environment with the firm's business model - Answer-✅choosing what not to do
/.A criticism of the Traditional Top-Down approach to strategic planning is that
management assesses the external environment in terms of fit to the firm's current
capabilities rather than thinking more "outside the box" when formulating future
strategies. (a) True (b) False - Answer-✅True
/.Consider both statements. Statement 1: Competitive advantage is always judged
relative to other competitors in the same industry or judged relative to industry average.
Statement 2: Regardless of cost, a differentiation strategy will always result in a
competitive advantage if the firm can charge a premium price for its products. (a) Only
Statement 1 is True (b) Only Statement 2 is True (c) Both Statements are True (d) Both
Statements are False - Answer-✅Only Statement 1 is True
/.All of the following below are drivers that can create a differentiation advantage and a
greater willingness to pay except one. Select the one that does not belong on the list.
(a) brand (b) existence of complements (c) economies of scale (d) customer experience
(e) product features (f) product performance - Answer-✅economies of scale
/.Which statement below is TRUE? (a) Cost leadership is the most common generic
strategy for firms focused on niche markets (b) A firm is said to have a sustainable
competitive advantage if it can consistently earn a profit every year for a prolonged
period of time (c) To obtain a competitive advantage a firm must either create more
value for customers while keeping its costs comparable to competitors, or it must
provide value equivalent to competitors but at a lower cost (d) A firm that is charging the
, lowest price relative to its competitors will always be pursuing a cost leadership strategy
(e) All of the above statements are true statements - Answer-✅To obtain a competitive
advantage a firm must either create more value for customers while keeping its costs
comparable to competitors, or it must provide value equivalent to competitors but at a
lower cost
/.Which statement best describes how Orange, a PC maker, delivers value? (a)
Orange's core competencies are its software development team and connections to
microchip manufacturers in China and India. It is able to use its rich capabilities of
software and data, and partner with low cost manufacturers to compete against its
competitors (b) Orange has great finances and strong backing by its parent company. It
has low expenses due to its outsourcing and hiring of part time contractors. Most costs
are variable, not fixed. Orange generates revenues using the "retail" model (c) Orange
partners with firms like Amazon and Egghead to sell its products rather than using their
own in-house capabilities (d) Orange developers commit substantial resources to
identifying target market customer needs and designs its products to meet those needs
at a relatively low cost. Orange leverages on-line sales rather than physical retail... -
Answer-✅Orange's core competencies are its software development team and
connections to microchip manufacturers in China and India. It is able to use its rich
capabilities of software and data, and partner with low cost manufacturers to compete
against its competitors
/.Which of the following Porter "generic" strategies creates competitive advantage by
creating a larger "wedge" between firm cost (c) and the value (v) created for the
customer than does its direct competitors? (a) differentiation (b) cost leadership (c) both
(a) and (b) are true (d) neither (a) or (b) are true - Answer-✅both (a) and (b) are true
/.Consider both statements. Statement 1: Competitive rivalry is strongest between firms
that are within the same strategic group. Statement 2: Firms in the same strategic group
follow the same generic model: cost leadership, differentiation, or focus-cost leadership,
or focus-differentiation. (a) Only Statement 1 is True (b) Only Statement 2 is True (c)
Both Statements are True (d) Both Statements are False - Answer-✅Only Statement 2
is True
/.A business model is the end result of decisions and tradeoffs made by management in
formulating the prior year's strategy. (a) True (b) False - Answer-✅False
/.Which of the following statements are true about horizontal integration? (Select all that
apply) (a) It involves the acquisition of companies in different industries (b) It can create
a monopoly if all producers of a good or service in a market merge (c) It carries the risk
of significant losses in the event of a decrease in competition (d) It allows a firm to
invest more resources in production and marketing in one area - Answer-✅(b) It can
create a monopoly if all producers of a good or service in a market merge, (d) It allows a
firm to invest more resources in production and marketing in one area
Correct Answers Latest Update (Rated
A+)
/.Strategy can best be described as the goal directed actions to gain and sustain
\________\_. (a) high performance in advancing industry capabilities (b) superior
performance in the markets in which the firm operates (c) long term financial profits and
economic viability (d) operational improvements and product advancements (e) the
earth's environment and the well-being of the communities in which the firm operates -
Answer-✅superior performance in the markets in which the firm operates
/.According to Michael Porter the essence of strategy is \________\_. (a) leveraging
operational and marketing effectiveness to create competitive advantage (b) choosing
what not to do (c) maximizing ROI while driving cost of capital down (d) copying what
works from competitors and avoiding what doesn't work (e) aligning the external market
environment with the firm's business model - Answer-✅choosing what not to do
/.A criticism of the Traditional Top-Down approach to strategic planning is that
management assesses the external environment in terms of fit to the firm's current
capabilities rather than thinking more "outside the box" when formulating future
strategies. (a) True (b) False - Answer-✅True
/.Consider both statements. Statement 1: Competitive advantage is always judged
relative to other competitors in the same industry or judged relative to industry average.
Statement 2: Regardless of cost, a differentiation strategy will always result in a
competitive advantage if the firm can charge a premium price for its products. (a) Only
Statement 1 is True (b) Only Statement 2 is True (c) Both Statements are True (d) Both
Statements are False - Answer-✅Only Statement 1 is True
/.All of the following below are drivers that can create a differentiation advantage and a
greater willingness to pay except one. Select the one that does not belong on the list.
(a) brand (b) existence of complements (c) economies of scale (d) customer experience
(e) product features (f) product performance - Answer-✅economies of scale
/.Which statement below is TRUE? (a) Cost leadership is the most common generic
strategy for firms focused on niche markets (b) A firm is said to have a sustainable
competitive advantage if it can consistently earn a profit every year for a prolonged
period of time (c) To obtain a competitive advantage a firm must either create more
value for customers while keeping its costs comparable to competitors, or it must
provide value equivalent to competitors but at a lower cost (d) A firm that is charging the
, lowest price relative to its competitors will always be pursuing a cost leadership strategy
(e) All of the above statements are true statements - Answer-✅To obtain a competitive
advantage a firm must either create more value for customers while keeping its costs
comparable to competitors, or it must provide value equivalent to competitors but at a
lower cost
/.Which statement best describes how Orange, a PC maker, delivers value? (a)
Orange's core competencies are its software development team and connections to
microchip manufacturers in China and India. It is able to use its rich capabilities of
software and data, and partner with low cost manufacturers to compete against its
competitors (b) Orange has great finances and strong backing by its parent company. It
has low expenses due to its outsourcing and hiring of part time contractors. Most costs
are variable, not fixed. Orange generates revenues using the "retail" model (c) Orange
partners with firms like Amazon and Egghead to sell its products rather than using their
own in-house capabilities (d) Orange developers commit substantial resources to
identifying target market customer needs and designs its products to meet those needs
at a relatively low cost. Orange leverages on-line sales rather than physical retail... -
Answer-✅Orange's core competencies are its software development team and
connections to microchip manufacturers in China and India. It is able to use its rich
capabilities of software and data, and partner with low cost manufacturers to compete
against its competitors
/.Which of the following Porter "generic" strategies creates competitive advantage by
creating a larger "wedge" between firm cost (c) and the value (v) created for the
customer than does its direct competitors? (a) differentiation (b) cost leadership (c) both
(a) and (b) are true (d) neither (a) or (b) are true - Answer-✅both (a) and (b) are true
/.Consider both statements. Statement 1: Competitive rivalry is strongest between firms
that are within the same strategic group. Statement 2: Firms in the same strategic group
follow the same generic model: cost leadership, differentiation, or focus-cost leadership,
or focus-differentiation. (a) Only Statement 1 is True (b) Only Statement 2 is True (c)
Both Statements are True (d) Both Statements are False - Answer-✅Only Statement 2
is True
/.A business model is the end result of decisions and tradeoffs made by management in
formulating the prior year's strategy. (a) True (b) False - Answer-✅False
/.Which of the following statements are true about horizontal integration? (Select all that
apply) (a) It involves the acquisition of companies in different industries (b) It can create
a monopoly if all producers of a good or service in a market merge (c) It carries the risk
of significant losses in the event of a decrease in competition (d) It allows a firm to
invest more resources in production and marketing in one area - Answer-✅(b) It can
create a monopoly if all producers of a good or service in a market merge, (d) It allows a
firm to invest more resources in production and marketing in one area
