Exam key (solution approaches) TEK017 January 2023.pdf Flashcards
Strategic goals should be:
a. Clear
b. Consistent
c. Long term
d. All of the above
d
Strategic fit refers to:
a. The need for a firm’s strategy to be consistent with its vision, mission, and culture
b. The consistency of a firm’s strategy with its external and internal environments
c. The need for a firm’s strategy to be unique
d. The need for a firm’s strategy to fit the needs of all its stakeholders, not just shareholders
b
When a firm’s external environment becomes more turbulent and unpredictable:
a. Strategy becomes an increasingly important in providing direction for the business
b. Strategy becomes based upon intuition rather than analysis
c. Cost cutting becomes a dominant priority
d. Strategy becomes an impossible exercise
a
The primary distinction between corporate strategy and business strategy is:
a. Corporate strategy is the responsibility of the CEO, business strategy is formulated by the heads of business units
b. Corporate strategy is concerned with where the firm competes; business strategy with how it competes in particular markets
c. Corporate strategy is concerned with establishing competitive advantage; business strategy with strategy implementation in individual businesses
d. Corporate strategy is concerned with the long term performance of the firm; business strategy with resource deployment.
b
The total value created by a firm is equal to:
a. The total revenue the firm receives for the products it sells
b. The total revenue the firm receives less the cost of bought-in materials and components
c. The sum of producer surplus and consumer surplus the firm creates
d. None of the above
c
For a firm to survive over the long term it must:
a. Pay a satisfactory level of dividends to its shareholders
b. Create customer loyalty, that can then be converted into profit through increasing prices
c. Earn as rate of return that covers its cost of capital
d. Balance the interests of all its stakeholders.
c
To diagnose the sources of a firm’s poor financial performance, it is useful to:
a. Focus on the firm’s cash flow statement rather than its income statement and balance sheet
b. Concentrate on sales growth and market share rather than profit data
c. Adopt a forward-looking approach through analyzing share price performance rather than looking at backward-looking accounting statements
d. Disaggregate overall return on capital into its component items
d
The basic premise of industry analysis is that:
a. Most industries lie on a spectrum between perfect competition at one end and monopoly at the other
b. The level of profitability within an industry is determined by the systematic influence of the industry structure
c. Industry profitability depends upon the interaction among competing firms
d. Technology and consumer demand are the basic forces that shape industry structure
b
The effectiveness of barriers to entry depends upon:
a. How quickly new technologies emerge
b. How fiercely incumbents retaliate against new entrants
c. The resources and capabilities that potential entrants possess
d. How vigorously governments enforce competition law
c
A key limitation of Porter’s five forces framework is that:
a. I looks only at single industries not at relationships between industries
b. Competitive strategies may shape industry structure, rather than structure shaping competition
c. Industries are more complex than can be reduced to five competitive forces
d. It offers qualitative, not quantitative predictions
b
The concept of a “business model” is useful in strategic analysis because:
a. It permits a more rigorous analysis of a firm’s potential to create value
b. It allows us to consider complex business situations that offer a broader range or strategic opportunities
c. It is appealing to venture capitalists
d. It encourages entrepreneurs to identify strategic innovations and deploy these strategic innovations in a novel business setting
b
The difference between a resource and a capability is:
a. A resource is a productive asset; a capability refers to what the firm can do
b. A resources are static; capabilities are dynamic
c. A resource is a weak source of competitive advantage whereas a capability is a strong one
d. There is no clear distinction: a capability is a type of resource
a
Intangible resources tend to be more valuable than tangible resources because:
a. They are easier to acquire
b. They are cheaper to acquire
c. They are more likely to provide sustainable competitive advantage
d. All of the above
c
When a company has weaknesses relative to competitors among strategically important resources and capabilities, the appropriate strategic response is to:
a. Invest heavy in order to upgrade weaknesses
b. Diversify in order to find new areas of business where these resources and capabilities are unimportant to competitive advantage
c. Outsource those activities where third parties can offer superior capabilities while positioning the business to reduce vulnerable to remaining weaknesses
d. Employ management consultants to seek a solution.
c
Competitive advantage can be defined as:
a. A firm’s ability to establish market leadership
b. A firm’s ability to grow faster than its competitors
c. A firm’s superiority over its rivals in creating value for its stakeholders
d. A firm’s potential for increase its stock market value at a faster rate than its rivals
c
