Strategic Management

Section (7)
Chapter 6: Business Strategies
First: MCQs
1- The concept that advocates management’s attempt to find a strategic fit between external
opportunities and internal strengths while working around threats and weaknesses is called:
a) environmental analysis
b) position analysis
c) situation analysis
d) objective analysis
2- All of the following reflects criticisms of SWOT analysis EXCEPT:
a) it uses no weights to reflect priorities
b) it only requires a single level of analysis
c) it provides a rational link to strategy implementation
d) it generates lengthy tests
3- A corporation’s specific competitive role which is so well-suited to the firm’s internal and
external environment that other corporations are NOT likely to challenge or dislodge it:
a) strategic fit
b) propitious niche
c) business screen
d) implicit strategy
4- The technique that illustrates how management can match external opportunities and
threats with its strength and weaknesses to yield four sets of strategic alternatives is called:
a) IFAS
b) SFAS
c) SWOT
d) TOWS
5- In TOWS matrix, WT strategies
a) attempts to take advantage of opportunities by overcoming weaknesses
b) are basically defensive and act to minimize weaknesses and avoid threats
c) are ways to get strategies to think “out of the box”
d) consider a company’s strengths as a way to avoid threats
6- Business strategy focuses on:
a) ensuring that the company maintains the existing market share
b) improving the competitive position of a company’s products and services within
the industry or market segment served.
c) providing adequate return on investment
d) preventing competitors from gaining competitive edge
7- According to Porter, the generic competitive strategy that reflects the ability of the
company to design, produce and market a product more efficiently than its competitors is
called:
a) cost leadership
b) differentiation
c) focus
d) diversification
8- Porche, Bentley and Jaguar offer highly innovative unique cars aimed at a very special
group of customers following a ……………. Strategy while BMW, Audi and Mercedes put
innovation as their priority to offer the mass market with highly innovative luxurious cars
following ………. Strategy.

a) Cost Leadership, differentiation focus

b) Cost Focus, differentiation
c) Differentiation, differentiation focus
d) Differentiation focus, differentiation
9- Which of porter’s competitive strategies recommends that a company emphasize a
particular buyer group or geographic market and attempts to seek cost advantage in its targeted
segment?
a) differentiation
b) cost leadership
c) cost focus
d) differentiation focus
10- According to Porter, a business unit in a competitive marketplace with no generic
competitive strategy and has below-average performance is:
a) achieving synergy
b) stuck in the middle
c) not goal oriented
d) last in line
11- Which of the following is NOT one of the eight dimensions of quality:
a) performance
b) durability
c) serviceability
d) value
12- Most entrepreneurial companies follow:
a) differentiation strategy
b) Cost Leadership strategy
c) Focus strategy
d) no strategy
13- The focus strategies will likely predominate when many small and medium sized local
companies compete for relatively small shares of the total market in a(n):
a) fragmented industry
b) consolidated industry
c) integrated industry
d) isolated industry
14- As an industry matures while overcoming fragmentation and become dominated by a small
number of large firms, it tends to become a(n):
a) fragmented industry
b) consolidated industry
c) integrated industry
d) isolated industry
15- A specific operating plan which deals with when a company implements a strategy:
a) tactic
b) timing tactic
c) Market location tactic
d) Strategy
16- when an attacking company encircles the competitor’s position by offering a complete
product line ranging from low to high price and/or servers more markets, this is which
offensive tactic?
a) Flanking Maneuver
b) Encirclement
c) Bypass attack
d) Frontal assault
17- The 3 mobile operators Orange, Vodafone and Etisalat are competing head to head on all
fronts whether Product, Price, Promotion or place. Which tactic are they using?
a) Flanking Maneuver
b) Encirclement
c) Bypass attack
d) Frontal assault
18- The kind of strategic alliance in which there is a partnership of similar companies in similar
industries who pool their resources to gain a benefit that is too expensive to develop alone
is:
a) joint venture
b) licensing agreement
 c) value-chain partnership
d) mutual service consortia
19- The kind of strategic alliance in which a company forms a strong and close long-term
relationship for mutual advantage with key supplier or distributor is the:
a) joint venture
b) licensing agreement
c) value-chain partnership
d) mutual service consortia
20- Coca-Cola was the first cola producer and began selling its products to the public in 1886.
Which timing tactic does it use?
a) Late mover
b) First mover
c) bypass attack
d) frontal assault
21- When Sony and Ericsson temporarily combined their strength to launch the Sony-Ericsson
mobile, which type of alliances did they engage into?
a) Joint venture
b) licensing agreement
c) Value-chain partnership
d) Mutual service consortia
22- A number of health clinics decided to cooperate in building a lab and screening center to
serve all their patients, which is too expensive for any of them to build alone. Which type
of alliance is described in this case?
a) Joint venture
b) licensing agreement
c) Value-chain partnership
d) Mutual service consortia
Second: True or False
1- SO strategies attempt to take advantage of opportunities by overcoming weaknesses.
2- Based on the eight dimensions of quality, serviceability is defined as the product’s ease of
repair.
3- The strategic rollup is an efficient way to quickly consolidate a fragmented industry with
the resulting large firm creating economies of scale.
4- Strategic rollup is another name for mergers and acquisitions.
5- Entrepreneurial firms mainly follow a focus strategy.
6- Hyper competition is characterized by a continuous series of long-term initiatives that
replace current products with new products before competitors can do so.
7- In consolidated industries, cost leadership or differentiation strategies mainly predominate
8- A defensive tactic usually takes place in a competitor’s market location.
9- A strategic sweet spot is a unique market opportunity that is available for a particular time
10- Aesthetics is a dimension of quality that relates to its physical beauty.
11- The risks of a cost leadership strategy include losing proximity in differentiation.
12- The risks of a differentiation strategy include technology changes.
13- The risks of both cost leadership and differentiation strategies include competitors’
imitation.
 Solution
First: MCQs
Q Answer Q Answer
1 c 12 c
2 c 13 a
3 b 14 b
4 d 15 b
5 b 16 b
6 b 17 d
7 a 18 d
8 d 19 c
9 c 20 b
10 b 21 a
11 d 22 d

Second: True or False

Q Answer
1 False, use strengths to take advantage of opportunities
2 True
3 True
4 False, different
5 True
6 False, short-term initiatives
7 True
8 False, offensive tactic
9 False, a strategic window
10 True
11 True
12 False, risks of cost leadership
13 True