1.

The origins of Business Policy & Strategic Management can be retraced to

1930

1911

1879

1938

2. BCG in BCG matrix stands for

Boston Calmette Group

British Consulting Group

Boston Corporate Group

Boston Consulting Group

3. Which of the following is not part of the micro environment?

Technology

Shareholders

Competitors

Public

4. Which of the following is not a part the Macro Environment?

Laws & Policies

Demographics

Suppliers

Social Values

5. Cultural values would be part of which of the following factor in macro environment?

Demographic

Social

Ecological

Natural

6. What does Dog symbolize in BCG matrix?

Introduction

Growth

Maturity

Decline

7. What does Stars symbolize in BCG matrix?

Introduction

Growth

Maturity

Decline

8. What does Question Mark (?) symbolize in BCG matrix?

Remain Diversified

I nvest

Stable

Liquidate

9. What do Cash Cows symbolize in BCG matrix?

Remain Diversified

Invest

Stable

Liquidate

10. What does Green symbolize in BCG matrix?

Invest & Expand

Select & Earn

Harvest & Divest

Both a & b

11. What does Yellow symbolize in BCG matrix?

Invest & Expand

Harvest & Divest

Select & Earn

Both a & b

12. What does Red symbolize in BCG matrix?

Invest & Expand

Harvest and Earn

Harvest & Divest

Select & Earn

13. The GE 9 cell model is based on

Industry attractiveness & Business Strength

Industry Growth rate & Business strength

Industry Attractiveness & Relative market share

Industry Growth & Relative market share

14. The BCG Matrix is based on

Industry attractiveness & Business Strength

Industry Growth rate & Business strength

Industry Attractiveness & Relative market share

Industry Growth rate & Relative market share

15. In strategic thinking, how long is the long term, approximately?

1 Month to 1 year

2 to 3 years

3 to 5 years

More than 5 years

16. Low cost, Differentiation and Focus are examples of __________________

Corporate strategies

Operational Strategies

Business Strategies

Functional Strategies

17. The word tactic is most likely to be associated with:

Business Strategy

Corporate strategy

Operational Strategy

Functional Strategy

18. In BCG matrix, what is the label of the horizontal axis?

Relative Market share

Business Strength

Industry Growth Rate

Market Growth Rate

19. In BCG Matrix, what is the label of the Vertical axis?

Relative Market share

Business Strength

Industry Growth Rate

Market Growth Rate

20. In GE 9 cell matrix, what is the label of the horizontal axis?

Relative Market share

Industry Attractiveness

Industry Growth Rate

Market Growth Rate

21. Another name for GE 9 cell model is

Three colour matrix

Stop light matrix

Strategic Portfolio Matrix

Colour light matrix

22. To find out what an organization's strategy is, you should:

Read the mission statement

Look at what the organization actually does

Read the strategic plan

Ask the CEO

23. Which of the following statements is not true when describing a successful strategy?

It provides some property that is unique or distinctive

It provides the means for renewing competitive advantage

It addresses changes in the external environment

It guarantees long term survival

24. In the context of strategic management, stakeholders can be defined as:

An individual or group with a financial stake in the organization

An external individual or group that is able to impose constraints on the organization

Internal groups or individuals that is able to influence strategic direction of the

organization

An individual or group with an interest in the organization's activities and who

seeks to influence them

25. Which of the following is NOT part of the micro environment?

Competitors

Customers

Technology

Publics

26. In companys environment, companys customers are part of which of the following?

Internal environment

Micro environment

Macro environment

External environment

27. Cultural values would be part of which of the following factor in macro
environment?

Economic

Natural

Social

Ecological

28. In the case where an organization acquires its supplier, this is an example of:

Horizontal integration

Forwards vertical integration

Backwards vertical integration

a and b

29. When a firm seeks the benefits of global integration and local adaptation, it is best
described as which type of strategy?

Transnational

Global

Multi-national

Global-local

30. 'Reputation' in the context of an organization's resources can provide competitive

advantage because:

It is difficult to copy

It is based on word-of-mouth

It is a threshold resource

It is explicit

31. A strategic manager that seeks to reach acceptable profit targets as opposed to
making as much profit as possible is making decisions of which type?

Satisfactory

Satisfying

Irrational

Optimal

32. In strategic thinking, how long is the long term, approximately?

1 to 12 months

1 to 5 years

More than 5 years

Less than 5 year

33. What are stages 2, 3 and 4 of the outline strategy process?

Generate options; select strategy; implement strategy

Strategy selection; strategy implementation; strategic control

Deliberate strategy; emergent strategy; realized strategy.

Appraisal of strengths and weaknesses; choice of strategic direction; strategy

implementation

34. The strategy of TATA Motors would be:

Functional Strategy

Corporate Strategy

Business Strategy

both b and c

35. Growth, retrenchment and stability are examples of __________________?

Corporate strategies

Business Strategies

Functional Strategies

Both a and c

36. The word tactic is most likely to be associated with:

Corporate strategy

Business Strategy

Operational Strategy

Both a and b

37. Which of these is not a reason why some firms do not have strategic planning?

Laziness

Competitive leadership

Honest difference of opinion

Poor reward structures

38. Developing a vision and mission, identifying an organization's external opportunities

and threats, and determining internal strengths and weaknesses are all __________
activities.

Strategy-formulation

Strategy-implementation

Long-range planning

Short-range planning

39. The _________ answers the question "What do we want to become?" whereas
_________answers the question "What is our business?"

Vision statement; mission statement

Short-term objectives; long-term objectives

Objectives; strategies

Mission; vision

40. What is the recommended length of an effective mission statement?

One page

Less than 200 words

One sentence of 10 to 20 words.

There is no recommendation.

41. Which one of these is NOT a __________ part of Porter's competitive forces in
industry analysis?

Potential entry of new competitors

Bargaining power of suppliers

Development of substitute products

Threat of substitute products and services

42. __________ is based on the assumption that the future will be just like the past.

Delphi forecasts

Econometric models

Linear regression

Scenario forecasts

43. __________ is adding new, unrelated products or services for present customers.

Concentric diversification

Horizontal diversification

Conglomerate diversification

Product development

44. Which of the following is not a limitation of SWOT (Strengths, Weaknesses,

Opportunity, Threats) analysis?

Organizational strengths may not lead to competitive advantage

SWOT gives a one-shot view of a moving target

SWOT's focus on the external environment is too broad and integrative

SWOT overemphasizes a single dimension of strategy

45. A marketing department that promises delivery quicker than the production
department's ability to produce is an example of a lack of understanding of the

Synergy of the business units.

Need to maintain the reputation of the company.

Organizational culture and leadership.

Interrelationships among functional areas and firm strategies.

46. XYZ Corp. is centering on the objective of low-cost, high quality, on-time
production by curtailing idle productive facilities and workers. The XYZ Corp. is
taking advantage of a ____________ system.

Just-In-Time (JIT)

Last In, First Out (LIFO)

First In, First Out (FIFO)

Highly mechanized

47. Which of the following lists is comprised of support activities:

Human resource management, information systems, procurement, and firm

infrastructure

Customer service, information systems, technology development, and procurement

Human resource management, technology development, customer service, and

procurement

Human resource management, customer service, marketing and sales, and operations

48. Although firm infrastructure is quite frequently viewed only as overhead expense, it
can become a source of competitive advantage. Examples include all of the following
except:

Negotiating and maintaining ongoing relations with regulatory bodies.

Marketing expertise increasing a firm's revenues and enabling it to enter new

markets.

Effective information systems contributing significantly to a firm's overall cost

leadership strategy.

Top management providing a key role in collaborating with important customers.

49. The competencies or skills that a firm employs to transform inputs into outputs are:

Tangible resources.

Intangible resources.

Organizational capabilities.

Reputational resources.

50. An array of firm resources includes interpersonal relations among managers in the
firm, its culture, and its reputation with its customers and suppliers. Such competitive
advantages are based upon

Physical uniqueness.

Path dependency.

Social complexity.

Tangible resources.

51. A company's ability to meet its short-term financial obligations is measured by

which of the following categories?

Liquidity ratios

Profitability ratios

Activity ratios

Leverage ratios

52. The "balanced scorecard" supplies top managers with a _____________ view of the
business.

Long-term financial

Detailed and complex

Simple and routine

Fast but comprehensive

53. The CEO of Lucent Technologies made a lot of mistakes, such as committing errors
in assessing the market and competitive conditions, as well as improperly redesigning
the organization into 11 business units. Such errors led to performance declines.
According to the text, this example illustrates the _________________ perspective of
leadership.

Romantic

Internal mechanism

Operational

External control

54. The "advance work" in the strategic management process is comprised of

Strategy formulation.

Strategy implementation.

Strategic posturing.

Strategy analysis.

55. Members of an organization's board of directors should, while working to prioritize

and fulfil their responsibilities,

Direct all actions of the CEO.

Emphasize the importance of short-term goals.

Represent their own interests.

Represent the interests of the shareholders.

56. The "triple bottom line" approach to corporate accounting, according to the text,
includes which three components

Financial, organizational, and psychological.

Financial, environmental, and customer.

Financial, organizational, and customer.

Financial, environmental, and social.

57. As our world increases in complexity, the global environment is increasingly

challenging and competitive. The key to effective globalization is

More people speaking more languages.

The flow of capital, people, and information.

Governmental regulations.

The flow of goods.

58. Which of the following lists is the hierarchy of organizational goals in order from
least specific to most specific?

Mission statements, strategic objectives, vision statements.

Mission statements, vision statements, strategic objectives.

Vision statements, strategic objectives, mission statements.

Vision statements, mission statements, strategic objectives.

59. An organization's mission, in contrast to its vision, should

Be less detailed.

Encompass all the major rules and regulations of the corporate work force.

Encompass both the purpose of the company as well as the basis of competition.

Be shorter in length.

60. Vision statements are used to create a higher understanding of the organization's
overall direction and purpose. Vision statements

Provide specific objectives.

Are very specific.

Evoke powerful and compelling mental images.

Set organizational structure.

61. Which of the following would be thought of as part of a firm's general environment?

Increased trade deficit

Decreased entry barriers

Increased bargaining power of the firm's suppliers

Increased competitive intensity

62. Interest rate increases have a ________ impact on the residential home construction
industry and a ___ effect on industries that produce consumer necessities, such as
prescription drugs or basic grocery items.

Positive; negligible

Positive; negative

Negative; positive

Negative; negligible

63. An independent group of suppliers, such as farmers, gather to form a cooperative in

order to sell their products to buyers directly, replacing their previous distributor. This
is an example of

Forward integration.

Backward integration.

Threat of substitute products.

Threat of entry.

64. The bargaining power of the supplier is less than that of the buyer when

Volume of purchase is low.

The buyer's profit margin is low.

Cost savings from the supplier's product are minimal.

Threat of backward integration by buyers is low.

65. As seen in Porter's Five Forces model, conditions under which a supplier group can
be powerful include all the following except

Lack of importance of the buyer to the supplier group.

High differentiation by the supplier.

Readily available substitute products.

Dominance by a few suppliers.

66. The most extreme rivalry results from

A high level of differentiation.

Few competitors, slow industry growth, lack of differentiation, high fixed or storage
costs.

Numerous equally balanced competitors, manufacturing capacity increases only in

large increments, low exit barriers.

Numerous equally balanced competitors, slow industry growth, high fixed or

storage costs.

67. Which of the following is an example of the interrelationship between the

competitive and general environments?

A decline in a nation's educational standards results in a decline in the nation's

productivity.

Increased awareness of personal health leads to lower demand, and greater

rivalry in the alcoholic beverages industry.

A country's technological inferiority results in its enactment of strong trade barriers

against importation.

Greater awareness of the environment results in environmental legislation.

68. The value chain is subdivided into two main headings. These are primary activities
and:

Peripheral activities

Support activities

Secondary activities

Outsourced activities

69. In the value chain, primary activities are:

Directly involved in the production, marketing and delivery of the product or

service

Those activities that are all undertaken in-house

Those activities that support the production, marketing and delivery of the product or
service

Directly involved in the production and delivery of the product or service

70. The 'operations' in a passenger airline service would be:

The manufacture of the aircraft

Getting passengers and baggage from A to B by means of flying in an aircraft

The design of the price structure and yield plan

Selling the tickets to passengers

71. One of the strategic decisions relating to the value chain concerns vertical
integration. This would involve:

Deciding whether to locate operations in the home country or in a foreign location

Deciding whether the activity should be performed within the organization or by

a different firm

Deciding to link all activities using Enterprise Resource Planning

Deciding whether to share certain activities across different products and markets

72. Firm A has decided to use an outside travel firm for making travel arrangements but
it is based on the premises of Firm A. This is an example of:

Nearshoring

Offshoring

Insourcing

Outsourcing

73. A network of firms providing different parts of a value-chain in the production of a

product or service is known as:

Franchising

Nearshoring

Orchestrating

Co-specialization

74. A firm outsources many of its value chain activities. Compared to a firm that does
everything in-house this is likely to incur:

Higher transaction costs, lower control

Higher transaction costs, higher control

Lower transaction costs, higher control

Lower transaction costs, lower control

75. When a firm promises more than it can actually deliver to win a contract, this is
known as:

Adverse selection

Inverse selection

Moral hazard

Trust hazard

76. Which of the following outcomes is a potential benefit of outsourcing?

Higher flexibility

Higher control

Lower transaction costs

Better linkages between activities

77. A joint venture can be defined as:

Two firms collaborate together on a specific project

One firm licenses its intellectual property to another firm

Two firms merge together

Two firms come together to form a third, legally separate firm

78. Substantial changes to the range of offerings or the markets served or both are
known as:

Differentiation

Diversification

Relocation

Brand extension

79. At corporate level, diversification comes about when a firm is involved in two or
more:

Businesses

Markets

Segments

Industries

80. On average, the highest levels of profitability are shown by:

Firms focused on just one or two products

Firms with a moderately diverse range of related products and businesses

Firms with a very diverse range of related products and businesses

Firms with a diverse range of unrelated products and businesses

81. Economies of scale are derived from:

Achieving cheaper unit costs through making larger quantities

Using cheaper raw materials

Increasing the breadth of the portfolio

Increasing the number of markets served

82. Which of the following outcomes is NOT an advantage of a completely vertically

integrated business?

Potentially greater control is achieved

Potentially greater quality is achieved

Lowering of risk is achieved

Lower price of supplies is achieved

83. Which of the following might be sources of synergy between two business units?

They have similar customers and use the same distribution channels

The profits from one can be used to finance the other when its gets into trouble

They both have a website

They are both located in the same town

84. Which of the following might NOT be an advantage of increasing the number of
countries in which a clothing firm does business?

Exposure to demanding customers with exotic tastes

Increased efficiency

Making life more difficult for competitors

Increased access to funding

85. Which of the following are NOT likely to be sources of relatedness between
businesses?

Similarities in size

Operating in industries with similar success factors

Similarities in production technologies

Selling to customers with similar demographic characteristics

86. Synergies allow businesses to add value to one another whereas the extent to which
the corporate centre can add value to each of its businesses is called:

Relatedness

Size

Competencies

Vision

87. Learning from trying out new and different things is termed:

Absorptive capacity

Exploitation

Exploration

Economies of scope

88. Businesses without a competitive advantage are not likely to earn more than
"normal" profits in the long run. Normal profits are

Profits one would expect to earn on investments that have a similar level of risk.

Profits received by corporations in the normal course of business.

What one would receive on U.S. Treasury securities.

Profits earned by a corporation on a diversified portfolio of stocks.

89. Primary value chain activities that involve the effective layout of receiving dock
operations (inbound logistics) and support value chain activities that include expertise
in process engineering (technology development) characterize what generic strategy?

Differentiation

Overall cost leadership

Differentiation focus

Stuck-in-the-middle

90. Which of the following is false regarding how a differentiation strategy can help a
firm to improve its competitive position Porter's five forces?

By increasing a firm's margins, it avoids the need for a low cost position

It helps a firm to deal with supplier power and reduces buyer power since buyers lack
comparable alternatives

Supplier power is increased because suppliers will be able to charge higher prices
for their inputs

Firms will enjoy high customer loyalty, thus experiencing less threat from substitutes
than its competitors

91. A narrow market focus is to a differentiation-based strategy as a

Growth market is to a differentiation-based strategy.

Growth market is to a cost-based strategy.

Technological innovation is to a cost-based strategy.

Broadly-defined target market is to a cost leadership strategy.

92. The total profits in an industry at all points along the industry's value chain is called
the

Profit maximizer.

Revenue enhancer.

Profit outsourcing.

Profit pool.

93. The emphasis on product design is very high, the intensity of competition is low, and
the market growth rate is low in the ______ stage of the industry life cycle.

Maturity

Growth

Introduction

Decline

94. In the _______ stage of the industry life cycle, there are numerous segments,
competition is very intense, and the emphasis on process design is high.

Introduction

Maturity

Growth

Decline

95. As markets mature

There is increasing emphasis on efficiency.

Costs continue to increase.

Application for patents increase.

Differentiation opportunities increase.

96. The most probable time to pursue a harvest strategy is in a situation of

High growth.

Decline in the market life cycle.

Strong competitive advantage.

Mergers and acquisitions.

97. An 'industry recipe' can be defined as:

An accepted pattern of operating and competing

A tactic for anticipating a competitor's next move

The hidden competences that are difficult to imitate

A strategic group

98. Which of the following industries is least likely to follow the conventional life-cycle
model?

Software development

Coal mining

Insurance broking

Hairdressing

99. Brandenburger and Nalebuff added a sixth force to Porter's Five Forces. It is known
as:

The threat of substitutes

The power of complementors

Seller power

Government regulation

100. An industry characterized by irregular patterns of stability, rapid technological

change, high uncertainty and global competition can be described as:

Hypercompetitive

Hyperactive

Atypical

Co-optetive