EXAM 2019 Flashcards
Which of the following corresponds most closely with Michael Porter’s definition of ‘strategy’ in
a management context?
Deliberately choosing a different set of activities to deliver a unique mix of value
When using the Stakeholder Mapping method to help manage the influence of stakeholders on a strategic initiative, managers should
Keep high power, low attention stakeholders satisfied
Which of the following is true of the ‘logical incrementalism’ explanation of how strategies may emerge?
a) It explains the need for firms’ strategic plans to change incrementally each year.
b) It is about building strategies in logical fashion by incrementally bringing in different aspects of strategic analysis.
c) It is known to be effective in preventing the influence of political behaviour in strategy-making.
d) It is about making strategy in logical fashion, from the top down, avoiding the confusion that results otherwise.
e) It is about experimentation and learning from side-bets and sub-systems.
It is about experimentation and learning from side-bets and sub-systems
What is recommended as a way to mitigate the influence of cognitive biases in strategic analysis?
Explore alternative starting points and ways of structuring the analysis
A pension fund that owns a significant holding in the Canadian industrial company Bombardier made a public call for the existing Executive Chair to be replaced by an independent director. Which of the following statements most accurately characterises the situation?
a) This is an example of an institutional investor actively exercising their power and responsibility
in the governance chain.
b) It runs counter to the normal expectation that an executive chair can exercise stronger
governance oversight.
c) It typifies the shareholder view of corporate governance, which privileges shareholder interests
over other key stakeholders such as executives.
d) It typifies the stakeholder view of corporate governance, in which the interests of external
stakeholders such as a pension fund rank equally with those of internal stakeholders such as
executives.
e) This is an example of an institutional investor exploiting their voting power to reduce the ability
of the firm’s managers to exercise executive authority.
This is an example of an institutional investor actively exercising their power and responsibility
in the governance chain.
When carrying out a resource-based analysis of a firm such as The Warehouse or Dyson, which of the following would be incorrect?
a) The analyst must focus on resources that the organisation has not already exploited
b) The analysis should seek firm resources that are rare within the industry
c) It is important to focus on resources that are distinctive and not easily imitable
d) Non-substitutability is important as a factor when using the VRIO acronym
e) The analyst must evaluate a resource’s value relative to its costs
The analyst must focus on resources that the organisation has not already exploited
Which of the following is true in relation to the supermarket retailing industry in New Zealand?
a) Rivalry is high due to the large number of different brands of supermarket, each with active promotion strategies
b) Buyers have high bargaining power, as they are easily able to choose items on special offer
c) The power of internet-only substitutes is weak in this particular context
d) Suppliers are a powerful force, as they control ownership of the main popular brands
e) There is no room for potential entrants, as almost everyone has access to food products already
The power of internet-only substitutes is weak in this particular context
When an industry’s growth rate slows and it approaches maturity, firms should do all of the following, except:
a) Invest in process innovation
b) Set clear strategic priorities to avoid being stuck in the middle
c) Avoid investing based on past growth patterns
d) Analyse prevailing conditions and decide to harvest, divest, find a good niche, or dominate the industry
e) Maintain competitiveness over short-term financial performance
d) Analyse prevailing conditions and decide to harvest, divest, find a good niche, or dominate theindustry
Potential pitfalls in the design and use of strategic control measures and incentives include
The possibility that managers who are subject to them find ways to meet the targets that fail to
serve the wider strategic interests of the organisation
Which of the following is a known difficulty with the cost leadership strategy?
a) Always charging low prices leads to inherently low margins
b) Cost leaders cannot imitate new product features introduced by differentiators
c) Excessive focus on lowest costs can reduce attention paid to technical and environmental shifts
d) The price-sensitive part of the market is always the most vulnerable to economic downturns
e) It is often unsustainable because consumers associate low price with low quality
Excessive focus on lowest costs can reduce attention paid to technical and environmental shifts
Systems of performance measures used to support strategic decisions should ideally be simultaneously
Accurate, flexible and timely
Which of the following best suits a small firm that comes up with a novel but readily imitated mass-market product?
a) License the design to an established firm that can distribute to the mass market quickly
b) Establish and enforce systematic design and intellectual property protection
c) Use a systematic process to develop and launch the product in the most expedient fashion
d) Use the disruptive innovation method to out-compete industry incumbents
e) Enter into a strategic alliance for mass-market distribution whilst retaining in-house design and
production
License the design to an established firm that can distribute to the mass market quickly
Which of the following is incorrect when carrying out a PESTEL analysis for a business?
a) The analysis should focus on a specified future timeframe
b) The focus should be on factors of likely strategic importance to the business
c) Analysts should give priority to the factors expected to change
d) Trend forecasting, using data where possible, tends to produce better analysis
e) The analysis should prioritise identifying strategic threats
e) The analysis should prioritise identifying strategic threats
An established firm seeking to move into an up-and-coming product area realises it faces
considerable uncertainty in both the technology and market. What stance does the
MacMillan/McGrath model suggest it should take initially?
It should see its initial moves as stepping stones, and make sure it learns from their likely failure.
Which of the following is not a recommendation from the course as to how firms can make use of
the value system (or industry value chain) concept?
a) Identifying profit pools in the system and moving in to exploit them
b) Working out which firms to partner with and how
c) Understanding cost drivers in different parts of the system
d) Making decisions about which activities to outsource and which to undertake themselves
e) Recognising that distinctive firm characteristics can represent disadvantage as well as
advantage
Recognising that distinctive firm characteristics can represent disadvantage as well as advantage
