1.
Horizontal integration is concerned with
(A) Production,,
(B) Quality
(C) Product planning
(D) All of the above
2. It refers to formal and informal rules, regulations and procedures that complement the company
structure
(A) Strategy,,
(B) Systems
(C) Environment
(D) All of the above
3. Micro environment is the ………. environment of a company.
(A) Working
(B) Human
(C) External
(D) Internal,,
4. Techniques used in environmental appraisal are
(A) single-variable extrapolation/multivariable interaction analysis
(B) Structured/ unstructured expert/inexpert opinion
(C) Dynamic modes and mapping
(D) All of the above,,
5. Match The Following
Question Your Answer
a. Ballast business 1. Give the highest priority
b. Gap analysis 2. Difference between desired and projected performance
c. Corporate parenting 3. Managing SBU’s by a corporate
d. Heartland business 4. Fit well but low opportunities
The correct answer is
(A) a-1, b-3, c-2, d-4
(B) a-2, b-1, c-4, d-3
(C) a-4, b-2, c-3, d-1
(D) a-2, b-3, c-4, d-1
6. It enables the strategists to take corrective action at the right time
(A) Implementation control,,
(B) Special alert control
(C) Strategic Surveillance control
(D) Premise control
7. Like roots of a tree, ________of organization is hidden from direct view.
(A) Performance
(B) Strategy,,
(C) Core competence
(D) All of the above
8. Changes in company ………. also necessitates changes in the systems in various degrees
(A) structure
(B) system,,
(C) strategy
(D) turnover
9. The actual performance deviates positively over the budgeted performance. This is an indication
of ……….. performance.
(A) superior,,
(B) inferior
(C) constant
(D) any of the above
10. Criteria for making an evaluation is (are)
(A) Consistency with goals
(B) Consistency with environment
(C) Money
(D) All of the above,
11. 11. The ………. of any organization is “the aggregate of all conditions, events and influences
that surround and affect it.”
(A) system
(B) environment
(C) structure,,
(D) strategy
12. Strategic management is mainly the responsibility of
(A) Lower management
(B) Middle management
(C) Top management,,
(D) All of the above
13. The major issue(s) of appraisal system is (are)
(A) Factors of appraisal
(B) Relevance of appraisal
(C) Procedure of appraisal
(D) All of the above,,
14. They have time based utility
(A) Goals
(B) Resources
(C) both ‘A’ and ‘B’,,
(D) None of the above
15. Formal systems are adopted to bring ________ & amalgamation of decentralized units into
product groups.
(A) Manpower
(B) Co-ordination
(C) Production,,
(D) All of the above
16. Change in company’s ………. gives rise to problems necessitating a new ……… to be
made
(A) structure, strategy
(B) strategy, structure,,
(C) structure, structure
(D) strategy, strategy
17. Systems are formal and informal rules and regulations that complement the company ………..
(A) strategy
(B) structure,,
(C) system
(D) environment
18. The reasons for acquisition are
(A) Increased market power
(B) Increased diversification
(C) Increased speed to market
(D) All of the above,,
19. Market research is conducted by
(A) By employees
(B) By research agencies
(C) By consultants
(D) all of the above,,
20. Vertical integration is concerned with
(A) supply chain,,
(B) production
(C) Quality
(D) planning
21. ________cost accounting measures the cost of producing and ignores the cost of non-producing
(A) Lean
(B) Traditional
(C) Environmental,,
(D) Throughput
22. Match the following
Question Correct Answer
a. Retrenchment Strategies 1. Retrenchments – either internally or externally
2. Contraction of activities through elimination of the scope of one o
b. Divestment Strategies more of its business
c. Turnaround Strategies 3. Involves the sale or liquidation of a portion of a business
(A) a-1, b-2, c-3
(B) a-3, b-2, c-1
(C) a-2, b-3, c-1
(D) a-3, b-1, c-2
23. ETOP stands for ________.
(A) environmental threat & opportunity project
(B) environmental threat & opportunity profile,,
(C) environmental treaty & opportunity profile
(D) environmental threat & optimum profile
24. The control process requires the following types of information
(A) Planned performance
(B) Variances
(C) Reasons
(D) All of the above,,
25. Financial environment is concerned with
(A) demand & supply of money
(B) capital markets
(C) both ‘A’ and ‘B’,,
(D) None of the above
26. The process of forecasting an organization’s future demands for and supply of right type of
people in right number is
(A) Product planning
(B) Process planning
(C) Man power planning,,
(D) All of the above
27. It is designed to monitor a broad range of events inside and outside the company that are likely to
threaten a firm’s strategy
(A) Strategic surveillance,,
(B) Strategic planning
(C) both ‘A’ and ‘B’
(D) None of the above
28. Harvest strategy is used for
(A) Dogs
(B) Question marks
(C) both ‘A’ and ‘B’,,
(D) none of the above
29. These are critical situations that occur unexpectedly and threaten the course of a firm’s strategy
(A) Crisis,,
(B) Emergency
(C) Shutdown
(D) All of the above
30. Attack strategies are
(A) frontal attack
(B) flank attack
(C) encirclement attack
(D) all of the above,,
31. An approach that strives to follow ethical principles and percepts is
(A) Moral management,,
(B) Immoral management
(C) Amoral management
(D) None of the above
32. Niche marketing means
(A) End user specialist
(B) Specific customer specialist,,
(C) Geographic specialist
(D) all of the above
33. Type(s) important managerial skill(s) required for the effective strategic management
(A) Conceptual skill
(B) Human skill
(C) Intellectual skill
(D) all of the above,,
34. The model(s) of social responsibility is (are)
(A) Austere Model
(B) Vendors Model
(C) Civic Model
(D) all of the above,,
35. Delay in ________ measurement defeats the purpose of evaluation.
(A) Time,,
(B) Quality
(C) Production
(D) All of the above
36. Module of Flotilla strikes an optimum balance of ________ and flexibility
(A) Optimisation
(B) Standardisation,,
(C) Organization
(D) All of the above
37. The ________ are distinct little business set up as units in a larger company.
(A) Small business Units,,
(B) Strategic business Units
(C) Internal business Units
(D) All of the above
38. Knowledge of the relationships between choices, environment & outcomes is
(A) Familiarity
(B) Conversancy
(C) Informality
(D) Normality
39. ________ should have the ability to develop a vision to see patterns into the future.
(A) Leaders,,
(B) Managers
(C) Management
(D) Workers
40. Factors encouraging joint ventures are
(A) Uneconomical separate existence
(B) Risk of business gets shared
(C) Sharing competence of each other
(D) All of the above,,
41. ________ is the drive to achieve beyond one’s expectations.
(A) Motivation,,
(B) Training
(C) Development Programme
(D) All of the above
42. The decisions which are applied to structured or routine problems are
(A) Semi-programmed decisions
(B) Un-programmed
(C) Programmed
(D) Any of the above
43. Strategic management deals with
(A) Production and quality
(B) Profit and loss
(C) Business process
(D) All of the above,,
44. Benchmarking is
(A) Historical analysis
(B) Competitive analysis,,
(C) Re-engineering
(D) All of the above
45. GDP stands for
(A) Gross domestic product,,
(B) Gross domestic production
(C) Gross daily production
(D) Gross domestic process
46. Macro environment
(A) Political- legal
(B) socio-cultural
(C) economic-demographic
(D) All of the above,,
47. Factor(s) determining HRP (Human Resource Planning)
(A) Type & Strategy of organisation
(B) Environmental uncertainties
(C) Type & quality of information
(D) All of the above,,
48. A major part of strategy implementation is
(A) Planning
(B) Communication
(C) Resource allocation,,
(D) Monitoring
49. These people are charged with the responsibility of continuous screening of performance?
(A) Managers
(B) Supervisors
(C) Top management
(D) Audit committee,,
50. ________ and greater accountability replace formal control.
(A) Self-discipline
(B) Self appraisal
(C) both ‘A’ and ‘B’,,
(D) None of the above
51. ………….. function applies to all company levels irrespective of levels of hierarchy.
(A) Planning
(B) Organizing
(C) Staffing,,
(D) Directing
52. Three C’s affecting today’s companies are
(A) Customer, Competition, Change,,
(B) Cost, Competition, Change
(C) Customer, Competition, Cost
(D) Customer, Cost, Change
53. Strategic management is concerned with
(A) Short range planning
(B) Long range planning,
(C) Both ‘A’ and ‘B’
(D) None of the above
54. It provides a way to bring in the people dimension in macro company analysis without using
psychological models of human behaviour.
(A) Environment
(B) Society
(C) Culture
(D) All of the above,,
55. It is used extensively in organisation and is concerned with action or performance.
(A) Operational control
(B) Production control
(C) Quality control
(D) All of the above,,
56. Companies employ trained ________ to develop “competency models” to identify potential
leaders.
(A) Consultants
(B) Psychologists,,
(C) Trainers
(D) All of the above
57. Style of a company are the patterns of actions taken by members of …. management over a
period of time
(A) Top,,
(B) Middle
(C) Lower
(D) Any of the above
58. It concentrates on organisation design and work flow
(A) Systems approach
(B) Flotilla,,
(C) Method study
(D) Work study
59. The benefits of a change in process are defined in terms of _______ cost savings
(A) Labour
(B) Infrastructure
(C) Production,,
(D) Raw material
60. Core ideology
(A) Core values
(B) Core purpose
(C) both ‘A’ and ‘B’,,
(D) None of the above
1. Above-average returns are:
a. higher profits than the firm earned last year.
b. higher profits than the industry average over the last 10 years.
c. profits in excess of what an investor expects to earn from a historical pattern of
performance of the firm.
d. profits in excess of what an investor expects to earn from other investments with a similar
level of risk.
2. The strategic management process is
a. a set of activities that will assure a temporary advantage and average returns for the firm.
b. a decision-making activity concerned with a firm's internal resources, capabilities, and
competencies, independent of the conditions in its external environment.1
c. a process directed by top-management with input from other stakeholders that seeks to
achieve above-average returns for investors through effective use of the organization's
resources.
d. the full set of commitments, decisions, and actions required for the firm to achieve above-
average returns and strategic competitiveness.
3. All of the following are assumptions of the industrial organization (I/O) model EXCEPT
a. Organizational decision makers are rational and committed to acting in the firm's best
interests.
b. Resources to implement strategies are firm-specific and attached to firms over the long-
term.
c. The external environment is assumed to impose pressures and constraints that determine
the strategies that result in above-average returns.
d. Firms in given industries, or given industry segments, are assumed to control similar
strategically relevant resources.
4. All of the following are assumptions of the resource-based model EXCEPT
a. Each firm is a unique collection of resources and capabilities.
b. The industry's structural characteristics have little impact on a firm's performance over
time.
c. Capabilities are highly mobile across firms.
d. Differences in resources and capabilities are the basis of competitive advantage.
5. In the resource-based model, which of the following factors would be considered a key to
organizational success?
a. uniq1ue market niche
b. weak competition
c. economies of scale
d. skilled employees
6. All of the following are resources of an organization EXCEPT
a. an hourly production employee's ability to catch subtle quality defects in products.
b. oil drilling rights in a promising region.
c. weak competitors in the industry.
d. a charity's endowment of $400 million.
7. The resource-based model of the firm argues that
a. all resources have the potential to be the basis of sustained competitive advantage.
b. all capabilities can be a source of sustainable competitive advantage.
c. the key to competitive success is the structure of the industry in which the firm competes.
d. resources and capabilities that are valuable, rare, costly to imitate, and non-substitutable
form the basis of a firm's core competencies.
8. The goal of the organization's ____ is to capture the hearts and minds of employees, challenge
them, and evoke their emotions and dreams.
a. vision
b. mission
c. culture
d. strategy
9. A firm's mission
a. is a statement of a firm's business in which it intends to compete and the customers which
it intends to serve.
b. is an internally-focused affirmation of the organization's financial, social, and ethical
goals.
c. is mainly intended to emotionally inspire employees and other stakeholders.
d. is developed by a firm before the firm develops its vision.
10. The environmental segments that comprise the general environment typically will NOT include
a. demographic factors.
b. sociocultural factors.
c. substitute products or services.
d. technological factors.
11. An analysis of the economic segment of the external environment would include all of the
following EXCEPT
a. interest rates.
b. international trade.
c. the strength of the U.S. dollar.
d. the move toward a contingent workforce.
12. Product differentiation refers to the:
a. ability of the buyers of a product to negotiate a lower price.
b. response of incumbent firms to new entrants.
c. belief by customers that a product is unique.
d. fact that as more of a product is produced the cheaper it becomes per unit.
13. Which of the following is NOT an entry barrier to an industry?
a. expected competitor retaliation
b. economies of scale
c. customer product loyalty
d. bargaining power of suppliers
14. Switching costs refer to the:
a. cost to a producer to exchange equipment in a facility when new technologies emerge.
b. cost of changing the firm's strategic group.
c. one-time costs suppliers incur when selling to a different customer.
d. one-time costs customers incur when buying from a different supplier.
15. New entrants to an industry are more likely when (i.e., entry barriers are low when...)
a. it is difficult to gain access to distribution channels.
b. economies of scale in the industry are high.
c. product differentiation in the industry is low.
d. capital requirements in the industry are high.
16. Suppliers are powerful when:
a. satisfactory substitutes are available.
b. they sell a commodity product.
c. they offer a credible threat of forward integration.
d. they are in a highly fragmented industry.
17. The highest amount a firm can charge for its products is most directly affected by
a. expected retaliation from competitors.
b. the cost of substitute products.
c. variable costs of production.
d. customers' high switching costs.
18. All of the following are forces that create high rivalry within an industry EXCEPT
a. numerous or equally balanced competitors.
b. high fixed costs.
c. fast industry growth.
d. high storage costs.
19. According to the five factors model, an attractive industry would have all of the following
characteristics EXCEPT:
a. low barriers to entry.
b. suppliers with low bargaining power.
c. a moderate degree of rivalry among competitors.
d. few good product substitutes.
20. Internal analysis enables a firm to determine what the firm
a. can do.
b. should do.
c. will do.
d. might do.
21. An external analysis enables a firm to determine what the firm
a. can do.
b. should do.
c. will do.
d. might do.
22. ____ is/are the source of a firm's ____, which is/are the source of the firm's ____.
a. Resources, capabilities, core competencies
b. Capabilities, resources, core competencies
c. Capabilities, resources, above average returns
d. Core competencies, resources, competitive advantage
23. In the airline industry, frequent-flyer programs, ticket kiosks, and e-ticketing are all examples of
capabilities that are
a. rare.
b. causally ambiguous.
c. socially complex.
d. valuable.
24. Compared to tangible resources, intangible resources are
a. of less strategic value to the firm.
b. not the focus of strategic analysis.
c. a more potent source of competitive advantage.
d. more likely to be reflected on the firm's balance sheet.
25. Which of the following is a true statement about capabilities?
a. Capabilities emerge over time through complex interactions of tangible and intangible
resources.
b. Valuable capabilities are based almost entirely on tangible resources.
c. Capabilities based on human capital are more vulnerable to obsolescence than other
intangible capabilities because of the tendency for employee knowledge to become
outdated.
d. The link between firm financial performance and capabilities is dependent on whether the
capabilities are based on tangible or intangible resources.
26. To be a core competency, a capability must satisfy all of the following criteria EXCEPT:
a. be technologically innovative.
b. be hard for competing firms to duplicate.
c. be without good substitutes.
d. be valuable to customers.
27. Capabilities that other firms cannot develop easily are classified as
a. costly to imitate.
b. rare.
c. valuable.
d. non substitutable.
28. Costly-to-imitate capabilities can emerge for all of the following reasons EXCEPT
a. lack of scientific transference.
b. social complexity.
c. unique historical conditions.
d. causal ambiguity.
29. Gamma, Inc., has struggled for industry dominance with Ardent, Inc., its main competitor, for
years. Gamma has gathered and analyzed large amounts of competitive intelligence about Ardent.
It has observed as much of the firm's internal functioning and technology as it can legally, yet
Gamma cannot understand why ABC has a competitive advantage over it. The source of ABC's
success is
a. impregnable.
b. causally ambiguous.
c. rationally obscure.
d. elusive.
30. Firms that achieve competitive parity can expect to:
a. earn below-average returns.
b. earn average returns.
c. earn above-average returns.
d. initially earn above-average returns, declining to average returns.
31. Business-level strategies detail commitments and actions taken to provide value to customers and
gain competitive advantage by exploiting core competencies in
a. the selection of industries in which the firm will compete.
b. specific product markets.
c. primary value chain activities.
d. particular geographic locations.
32. The three dimensions of a firm's relationships with customers include all the following EXCEPT
a. exclusiveness.
b. affiliation.
c. richness.
d. reach.
33. The effectiveness of any of the generic business-level strategies is contingent upon
a. customer needs and competitors' strategies.
b. the match between the opportunities and threats in its external market and the strengths
and weaknesses of its internal environment.
c. the trends in the general consumer base and the robustness of the global and industry
economy.
d. the firm's competitive scope and its competitive advantage.
34. Business-level strategies are concerned specifically with:
a. creating differences between the firm's position and its rivals.
b. selecting the industries in which the firm will compete.
c. how functional areas will be organized within the firm.
d. how a business with multiple physical locations will operate one of those locations.
35. A cost leadership strategy targets the industry's ____ customers.
a. most typical
b. poorest
c. least educated
d. most frugal
36. When the costs of supplies increase in an industry, the low-cost leader
a. may continue competing with rivals on the basis of product features.
b. will lose customers as a result of price increases.
c. will be unable to absorb higher costs because cost-leaders operate on very narrow profit
margins.
d. may be the only firm able to pay the higher prices and continue to earn average or above-
average returns.
37. When a product's unique attributes provide value to customers, the firm is implementing
a. a differentiation strategy.
b. a cost leadership strategy.
c. an integrated cost leadership/differentiation strategy.
d. a single-product strategy.
38. A company pursuing a differentiation or focused differentiation strategy would
a. have highly efficient systems linking suppliers' products with the firm's production
processes.
b. use economies of scale.
c. have strong capabilities in basic research.
d. make investments in easy-to-use manufacturing technologies.
39. T or F? A firm using a differentiation strategy can charge a premium price.
Answer: T
40. A differentiation strategy can be effective in controlling the power of substitutes in an industry
because
a. customers have low switching costs.
b. substitute products are lower quality.
c. a differentiating firm can always lower prices.
d. customers develop brand loyalty.
41. The typical risks of a differentiation strategy do NOT include which of the following?
a. Customers may find the price differential between the low-cost product and the
differentiated product too large.
b. Customers' experience with other products may narrow customers' perception of the
value of a product's differentiated features.
c. Counterfeit goods are widely available and acceptable to customers.
d. Suppliers of raw materials erode the firm's profit margin with price increases.
42. Competitive rivalry has the most effect on the firm's ____ strategies than the firm's other
strategies.
a. business-level
b. corporate-level
c. acquisition
d. international
43. Multimarket competition occurs when firms
a. sell different products to the same customer.
b. have a high level of awareness of their competitors' strategic intent.
c. simultaneously enter into an attack strategy.
d. compete against each other in several geographic or product markets.
44. Competitive dynamics refers to the
a. circumstances where competitors are aware of the degree of their mutual interdependence
resulting from market commonality and resource similarity.
b. set of competitive actions and competitive responses the firm takes to build or defend its
competitive advantages and to improve its market position.
c. total set of actions and responses taken by all firms competing within a market.
d. ongoing set of competitive actions and competitive responses between competitors as
they maneuver for advantageous market position.
45. Firms with few competitive resources are more likely
a. to not respond to competitive actions.
b. respond quickly to competitive actions.
c. delay responding to competitive actions.
d. respond to strategic actions, but not to tactical actions.
46. Which of the following would be an example of a strategic action?
a. a "two movies for the price of one" campaign by Blockbuster Video
b. use of product coupons by a local grocer
c. entry into the European market by Home Depot
d. fare increases by Southwest Airlines
47. The chief disadvantage of being a first mover is the
a. high degree of risk.
b. high level of competition in the new marketplace.
c. inability to earn above-average returns unless the production process is very efficient.
d. difficulty of obtaining new customers.
48. On the whole there are more competitive responses to
a. strategic actions than to tactical actions.
b. tactical actions than to strategic actions.
c. buyer pressures than to supplier pressures.
d. the demands of the top management team than to industry structural pressures.
49. Competitors are more likely to respond to competitive actions that are taken by
a. differentiators.
b. larger companies.
c. first movers.
d. market leaders.
50. Ninety percent of Wm. Wrigley Company's total revenue comes from chewing gum. This is an
example of
a. market commonality.
b. standard-cycle markets.
c. economies of scale.
d. market dependence.
51. All competitive advantages do not accrue to large sized firms. A major advantage of smaller firms
is that they
a. are more likely to have organizational slack.
b. can launch competitive actions more quickly.
c. have more loyal and diverse workforces.
d. can wait for larger firms to make mistakes in introducing innovative products.
State True / False
52. Firms operating in the same market, offering similar products and targeting similar customers are
competitors.
Answer: T
53. Intensified rivalry within an industry results in decreased average profitability for the firms
within it.
Answer: T
54. Competitive dynamics indicates that firms and their strategic actions are independent
Answer: F
55. Extensive market commonality guarantees intense competition in an industry
Answer: F
56. Two firms that have similar resources, but do not share markets would not be direct and mutually
acknowledged competitors.
Answer: T
57. A competitive action is a strategic or tactical action taken by a firm to gain or defend a
competitive advantage.
Answer: T
58. First movers can gain a sustained competitive advantage when they reduce their costs through
reverse engineering.
Answer: F
59. Product quality is a universal theme and is a necessary, but not a sufficient, condition for
competitive success.
Answer: T
60. The probability of a competitive response to a competitive action is based partly on the reputation
of the competitor
Answer: T
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