Which of the following is not a characteristic of strategic

management that makes it different from other types of

management?

a. It is interdisciplinary.
b. It has an external focus.
c. It has an internal focus.
d. It concerns the present direction of the organization.

Which of the following is NOT a major element of the strategic

management process?

a. Formulating strategy
b. Implementing strategy
c. Evaluating strategy
d. Assigning administrative tasks

When defining strategic management the most important

thing to remember is that it is:

a. Not as easy as you think

b. Mainly the province of senior managers
c. An evolving process
d. More conceptual than practical
e. A way of determining responsibilities
 The primary focus of strategic management is:

a. Strategic analysis
b. The total organisation
c. Strategy formulation
d. Strategy implementation.

Q1. The fundamental purpose for the existence of any

organization is described by its:

a) Policies
b) Mission
c) Procedures
d) Strategy

Q6. Which of the following is not an advantage of strategic

management?

a. It provides organizations with a clearer sense of direction and

purpose
b. It helps improve the political, economic, social and technological
environment of the organisation
c. It helps orientate management decisions to relevant environmental
conditions
d. It helps organizations be proactive rather than reactive
 Q7. Which of the following defines what business or
businesses the firm is in or should be in?

a. Business strategy
b. Corporate strategy
c. Functional strategy
d. National strategy

Q.8 Which of the following defines how each individual

business unit will attempt to achieve its mission?

e. Business strategy
f. Corporate strategy
g. Functional strategy
h. National strategy
C

Which of the
following is
not a part of Economic environment?
 A. Monetary & Fiscal policy
B. Inflation
C. Employment    
D. Recession
E. Culture

What changes have you noticed in the Socio-economic

profile of Women in India lately?

A. Higher literacy rate

B. More women joining labor pool
C. Higher financial freedom
D. Significant role in decision making
E. All above

Which of the following organizations is a parent organization of

Tata Motors:

A. Tata Group

B. Tata Steel
 C. Tata Consultancy Services

D. Tata Chemicals

These units are clear misfits. They offer little opportunity

to add value and the parent does not understand them
anyway. Exit is definitely the best strategy:

A. Ballast

B. Heartland

C. Edge of Heartland

D. Value trap

E. Alien Businesses

Parent understands these units well but can do little for.

They would probably be at least as successful as
independent companies. 

A. Ballast

B. Heartland

C. Edge of Heartland

D. Value trap

E. Alien Businesses
 These units appear attractive because there are
opportunities to add value but they are deceptively
attractive, because the parent lacks a deeper
understanding of KSFs:

A. Ballast

B. Heartland

C. Edge of Heartland

D. Value trap

E. Alien Businesses
 Strategic management process activate in the sequence
of_______

A. Environmental scanning, Strategy formulation,

Implementation, control and evaluation
B. Strategy formulation, Environmental scanning,
Implementation, control and evaluation
C. Environmental scanning, Strategy Implementation,
formulation, control and evaluation
D. Strategy formulation, Implementation, control, evaluation,
Environmental scanning

Which of the following can be a strategy to engage the

staff in implementation process:

A. Linking rewards with engagement

B. Provide feedback & updates
C. Communicate more frequently
D. Create goal-congruence 
E. All above

Which of the following can be the reasons for Poor

Strategic Implementation:

A. Poor Coordination Within Management/Inter-departments

 B. Employees Aren’t Buying In
C. Inadequate Change Within the Work Unit
D. There Exists No Measurement of Progress
E. All above

"The world on Time", is:

A. UPS
B. Indian Post
C. FedEx
D. Amazon Prime

Which of the following can take-away the profits of a firm:

A. Competitor
B. Supplier
C. Customers
D. Substitutes 
E. All above

What is the height of entry barriers to enter in Aviation

Industry?

A. High
B. Low
C. Very High
 D. Very low

What is the Bargaining power of Suppliers in Aviation

Industry?

A. High
B. Low
C. Very High
D. Very low

What is the Bargaining power of Buyers in Aviation

Industry?

A. High
B. Low
C. Very High
D. Very low

What is the threat of Substitutes in Indian Telecom

Industry?

A. High
B. Low
C. Very High
D. Very low
What is the intensity of rivalry in Indian Telecom Industry?

A. High
B. Low
C. Very High
D. Very low

Which of the following is an example of concentration strategyof

Concentration strategy
A) Tesla

B) Samsung

C) Sony

D) Xiaomi 

Which of the following market conditions enable a firm

practice Concentration strategy

A. Industry is resistant to major technological advancements

B. Market is not product saturated
C. Product markets are sufficiently distinct   
D. Firms inputs are stable in price and quantity and are available in
amounts needed
E. All above
 Which of the following is an example of Market
development:

A. Starbucks & Ikea entering India

B. Vaseline Lip Therapy
C. Walmart acquiring stake in Flipkart
D. Mi coming up with MI-Stores
E. All above

1. This time when keeping beard is a fashion statement, Gillette has launched a
new campaign around benefits of shaving. It is an example of:
a) Market penetration b) Product development
c) Market development d) Diversification
2. Johnson & Johnson's tagline ‘Good for the baby, good for YOU’ is an
example of:
a) Market penetration b) Product development
c) Market development d) Diversification
3. Airtel is launching an unlimited internet pack for 198 Rs. for Indian
consumer. It is an example of:
a) Market penetration b) Product development
c) Market development d) Diversification
4. Tata and Mahindra investing a fortune towards the development of electric
vehicles in India is an example of:
a) Market penetration b) Product development
c) Market development d) Diversification
5. Nissan is willing to launch the famous ‘Nissan-Leaf’ an electric car in India.
It is an example of:
a) Market penetration b) Product development
c) Market development d) Diversification

Which of the following tools can be used to evaluate an

industry's attractiveness?

A) Michael Porter's Five Forces Model

B) Value Chain Analysis

C) Resource Based View of the Firm

D) PESTEL

What is the value proposition of IKEA:

A. High end classic furniture 

B. High cost durable furniture
C. Low cost fashion forward furniture
D. Low cost durable furniture 

Which of the following can be the reasons for Poor

Strategic Implementation:
 A. Poor Coordination Within Management/Inter-departments
B. Employees Aren’t Buying In
C. Inadequate Change Within the Work Unit
D. There Exists No Measurement of Progress
E. All above

At the core, implementing strategy depends on essential

elements like:

A. Building and sustaining an organizational culture that

facilitates and accelerates change
B. Fostering a culture that advocates a sense of personal
accountability for strategy execution ownership at every
agency level
C. Fostering a culture of Flexibility & autonomy
D. Fostering a culture of innovation
E. All above

the world’s most valuable AI start-up is: 

A) SenseTime
B) Facego

C) FaceSense

D) SenseGo

Which of the following entity is in talks to acquire a minority stake

in Reliance Retail

A. Google
B. Walmart
C. Target
D. Facebook

Why do firm diversify?

A. To grow/expand
B. To fully utilize existing resources and capabilities; make use of surplus
cash flows.
C. To escape from undesirable or unattractive industry environments.
D. To act as Internal markets 
E. All above

Reliance Retail acquiring Future group is an example of:

A. Horizontal integration
 B. Vertical forward integration
C. Vertical backward integration
D. None of the above

Flipkart acquiring e-Kart is an example of:

A. Horizontal integration
B. Vertical forward integration
C. Vertical backward integration
D. None of the above

Which of the following is a Portfolio analysis tool:

A. Five Forces Model

B. VRIO Framework
C. PESTEL Analysis
D. SWOT Analysis
E. BCG Matrix

Which best describes the process of benchmarking?

a) Comparison of actual performance with budget
b) Comparison of the costs of one product with another
c) Comparison of direct competitors' performance
d) Comparison of the performance of one operation or business with another

Which Strategies aim at improving internal by taking advantage of

external_________________
 A Weakness; Opportunities
B Weakness; Operations
C Wealth; Opportunities
D None of given option
• Competitive profile matrix include in of Strategy-Formulation
Framework.
A Stage-1
B Stage-2
C Stage-3
D Stage-4

In Porter's Five Forces, the 'threat of new entrants' relates to:

A. Barriers to entry.
B. Substitutes.
C. Switching costs.
D. Buyer power.

Which of the following is not considered a primary activity in the value

chain framework developed by Michael Porter?

Inbound logistics
Procurement
Sales and service
Outbound logistics
 Which of the following is not considered a secondary activity in the value
chain framework developed by Michael Porter?

Technology development
Firm infrastructure management
Sales and service
Procurement

• The _________ answers the question "What do we want to become?"

whereas ______ answers the question "What is our business?“

A. Vision statement, mission statement

B. Short-term objectives; long term objectives

C. Objectives; strategies

D. Mission vision

•
Strategic Management involves
• A. The determination of the organiation's mission, strategic
policies and strategic objectives
• B. Cost
• C. The determination of price of the product and service
 • D. Planning with high cost

1. Focusers seek out weak spots of broad cost-leaders and differentiators

- district segment needs
- distinct segment value chains
- viable segment of economics
Cost focuser
- Iceland foods concentrates on frozen and chilled foods
- Ryanair focuses on price-conscious holiday travellers
Differentiation focuser
- ARM holdings - mobile phone chips(No Answer)

1. Generic competitive strategies: Differentiation

2. Definition: Competitive strategy

3. CORRECT: Generic competitive strategies: focus strategies

4. Generic Competitive Strategies

b. is development into activities concerned with the inputs into the

company's current business.

1. Integration

2. Horizontal integration

3. Vertical integration

4. CORRECT: Backward integration

b. McDonalds: Our mission is to be our customers' favourite place and way

to eat.

Amazon: to be earth's most customer-centric company where people can

find and discover anything they want to buy online

Virgin: Space matters!(No Answer)

1. Vertical integration

2. Definition SBU

3. CORRECT: E.g. Vision and Mission

4. Forward integration
b. Market penetration: increasing share if current markets with current
product range
- companies may face retaliation or legal constraints

Product development: deliver modified or new products to existing markets

- forces to develop new strategic capabilities
- risk factors

Market development: offering existing products to new markets

- new user and new geographies

Diversification
- related diversification - diversifying into products/services with
relationship to the existing business
- conglomerate (unrelated) diversification - diversifying into
products/services with no relationship to existing businesses(No Answer)

1. CORRECT: Strategic options

2. Strategic choices

3. Strategy @Daimler

4. Strategic lock-in

b. units are clear misfits. They offer little opportunity to add value and the
parent does not understand them anyway. Exit is definitely the best
strategy.

1. Definition SBU

2. Ballast business

3. Value trap business

4. CORRECT: Alien business

b. (No Answer)

1. Failure strategy

2. Hybrid Strategy
 3. Integration

4. CORRECT: SBU Strategies

b. (No Answer)

1. Generic Competitive Strategies

2. Three types of corporate parenting roles

3. CORRECT: Value adding potential of corporate rationales

4. Competition and collaboration

b. We aim to achieve our goals through four strategic growth areas:

- further strengthen our core business

- grow in new markets
- take lead with green technology
- lead the way with the development if new mobility concepts and
services(No Answer)

1. CORRECT: Strategy @Daimler

2. Strategic options

3. Synergy Manager

4. Strategic choices

b. - Establish a separate brand for the low-price business to avoid confusion

- Run the business separately and ensure it is well resources. Problem is

that it is often seen as second class

- Ensure benefits to the diffrentiated offering from the low-price alternative.

E.g. banks charge lower fees for online transactions.

- Allow the business to compete. Launching the low-price business purely

defensively is unlikely to be effective. It has to be allowed as a viable
separate SBU.(No Answer)

1. 3. Way of responding to competitive threat: change their own

business model
 2. How to respond to competitive threat?

3. Generic competitive strategies: focus strategies

4. CORRECT: How to respond to competitive threat if decided to set

up low-price strategy

b.
Star: a business unit which has a high market share in a growing market

?: is a business unit in a growing market, but without a high market share

Cash cow: is a business unit with a high market share in a mature market

Dogs: are business units with a low share in static or declining markets(No
Answer)

1. Forward integration

2. Problems with BCG Matrix

3. CORRECT: Growth share BCG matrix

4. Low-Price strategy

b. seeks to achieve a lower price than competitors whilst trying to maintain

similar perceived product or services benefits to those offered by
competitors(No Answer)

1. CORRECT: Low-Price strategy

2. Dangers of low-price strategy

3. Failure strategy

4. SBU Strategies

b. units are ones the parent understands well but can do little for. They
would probably be at least as successful as independent companies. If not
 divested, they should be spared as much corporate bureaucracy as possible.
(No Answer)

1. CORRECT: Ballast business

2. Heartland Business

3. SBU Strategies

4. Value trap business

b. Speed, flexibility, innovation and the willingness to change successful

strategies are an important bases.(No Answer)

1. CORRECT: What is key in hypercompetitive environment

2. How to respond to competitive threat?

3. Competitive strategies in hyper competitive conditions

4. Sustaining competitive advantage

b. is a corporate parent seeking to enhance value across business units by

managing synergies across business units.(No Answer)

1. Strategy @Daimler

2. Portfolio Manager

3. CORRECT: Synergy Manager

4. Synergy

b.
Introduces parental fit as an important criterion for including businesses in
the portfolio. Businesses may be attractive in terms of the BCG or directional
policy matrices, but if the parent cannot add value, then the parent ought to
be cautious about acquiring or retaining them.

> A corporate parent should avoid running businesses that it has no feel for
and should avoid it if no benefit.(No Answer)
 1. What are drivers for diversification?

2. CORRECT: The parenting matrix: the ashridge portfolio display

(Michael Goold and Andrew Campbell)

3. Three types of corporate parenting roles

4. Advantage of directional policy matrix over BCG matrix

b. - offer uniqueness that is valued by customers to allow a price premium

Requires:
- focus on strategic customers
- key competitors (crucial otherwise impossible strategy)(No Answer)

1. CORRECT: Generic competitive strategies: Differentiation

2. Generic competitive strategies: focus strategies

3. Generic Competitive Strategies

4. Definition: Competitive strategy

b. is concerned with the basis on which a business unit might achieve

competitive advantage in its market.(No Answer)

1. Differentiation Strategy

2. CORRECT: Definition: Competitive strategy

3. Dangers of low-price strategy

4. Generic Competitive Strategies

b. Because they compete in different markets or market segments.(No

Answer)

1. CORRECT: Why do companies have a number of SBUs?

2. Generic Competitive Strategies

3. Strategic business units (SBUs)

4. Management process

b. 1. The nine cells of the directional matrix acknowledge the possibility of a

difficult middle ground. Here managers have to be carefully selective. In this
sense, the directional policy matrix is less mechanistic than BCG.

2. The two axes of the directional policy matrix are not based on single
measures (that is market share and market growth). Business strength can
 derive from many other factors and industry attractiveness does not
limit(No Answer)

1. Strategic directions and corporate-level strategy

2. Directional policy (GE-McKinsey) matrix

3. CORRECT: Advantage of directional policy matrix over BCG matrix

4. Strategic directions (Ansoff matrix)

b. SBU is a part of an organisation for which there is a distinct external

market for goods or services that is different from another SBU(No Answer)

1. Strategic options

2. Alien business

3. Synergy

4. CORRECT: Definition SBU

b.
It was developed by Cliff Bowman and David Faulkner as an elaboration of
the three Porter generic strategies. As with Porter's Generic Strategies,
Bowman considers competitive advantage in relation to cost advantage or
differentiation advantage. Bowman's Strategy Clock represents eight
possible strategies in four quadrants defined by the axes of price and
perceived added value. The resulting star shape is reminiscent of a clock
face, giving this tool its name.(No Answer)

1. CORRECT: Bowman's: Strategy clock

2. Failure strategy

3. Low-Price strategy

4. Levels of strategy
b.
...(No Answer)

1. CORRECT: Strategic choices

2. SBU Strategies

3. Strategic options

4. Strategic lock-in

b. (No Answer)

1. Failure strategy

2. SBU Strategies

3. CORRECT: Levels of strategy

4. Hybrid Strategy

b. units are dangerous. They appear attractive because there are

opportunities to add value but they are deceptively attractive, because the
parent's lacks of feel will result in more harm than good. The parent will
need to acquire new capabilities if it is to be able to move value trap
businesses into the heartland. It might be easier to divest to another
corporate parent who could add value, and will pay well for the chance.(No
Answer)

1. Integration

2. CORRECT: Value trap business

3. Failure strategy

4. Parental Developer
b. (No Answer)

1. CORRECT: Management process

2. Failure strategy

3. Alien business

4. Heartland Business

b. is one that does not provide perceived value for money in terms of
product features, price or both(No Answer)

1. SBU Strategies

2. Integration

3. Ballast business

4. CORRECT: Failure strategy

b. Market-based criteria:
Different parts of an organisation might be regarded as the same SBU if they
are targeting the same customer types, through the same sorts of channels
and facing similar competitors.

Capabilities-based criteria:
Parts of an organisation should only be regarded as the same SBU if they
have similar strategic capabilities. For for manufacturer branded products
and own-brand products should be different SBU.(No Answer)

1. Strategic directions (Ansoff matrix)

2. Generic competitive strategies: focus strategies

3. CORRECT: Criteria's that help in identifying appropriate SBUs

4. Three types of corporate parenting roles

b. refers to the levels of management above that of the business units, and
therefore without direct interaction with buyers and competitors.(No
Answer)

1. Integration
 2. Low-Price strategy

3. CORRECT: Corporate parent

4. Portfolio Manager

b.
An organisation typically starts in Box A with its existing products and
existing markets. According to matrix org has a choice between developing
new products for existing markets or brining its existing products into new
markets; most radical step diversification(No Answer)

1. E.g. Vision and Mission

2. Strategic business units (SBUs)

3. CORRECT: Strategic directions (Ansoff matrix)

4. Strategic directions and corporate-level strategy

b. is development into activities which are complementary to present

activities.(No Answer)

1. Integration

2. Backward integration

3. Vertical integration

4. CORRECT: Horizontal integration

b. is development into activites which are concerned with a company's

outputs(No Answer)

1. Integration

2. CORRECT: Forward integration

3. Focused differentiation

4. Horizontal integration

b. seeks to provide products or services that offer benefits that are different
from those of competitors and that are widely valued by buyers (No Answer)

1. CORRECT: Differentiation Strategy
 2. Low-Price strategy

3. Failure strategy

4. Hybrid Strategy

b. Strategic business unit supplies goods or services for a distinct domain of

activities

SBU effects within the organization:

- decentralization
- vary strategies according to different needs of markets that they service
- accountability

SBU boundaries
- market-based criteria
- capabilities-based criteria(No Answer)

1. Strategic lock-in

2. Strategic choices

3. CORRECT: Strategic business units (SBUs)

4. Alien business

b. - Cannibalise bases of success: Sustaining old advantages distracts from

developing new advantages

- Attacking competitors weaknesses can be unwise as they learn to build

their strategy accordingly

- Smaller moves may be more effective than bigger ones because long-term
direction is difficult predict.

- Disruption of the status quo is strategic behaviour. The ability to

constantly 'break the mould' could be core competence.

- Be unpredictable. Otherwise competitors might predict a pattern.

- Mislead the competition(No Answer)

1. Generic Competitive Strategies

2. How to respond to competitive threat?

 3. CORRECT: Characteristics of successful hyper-competitive
strategies

4. Dangers of low-price strategy

b. seeks simultaneously to achieve differentiation and a price lower than

that of competitors(No Answer)

1. CORRECT: Hybrid Strategy

2. Failure strategy

3. Levels of strategy

4. SBU Strategies

b.
An organisation pursuing competitive advantage through low price might be
able to sustain this in a number of ways:
- Operation with lower margins
- Unique cost structure
- Organisationally specific capabilities(No Answer)

1. How to respond to competitive threat?

2. Generic Competitive Strategies

3. CORRECT: Sustaining competitive advantage

4. Portfolio Manager

b. - Economies of scope: Efficiency gains by applying the organisation's

existing resources or capabilities to new markets and products or services.

- Dominant logic - for value creation

- Superior internal processes
- Increasing market power
- Synergy(No Answer)

1. Focused differentiation
 2. Horizontal integration

3. CORRECT: What are drivers for diversification?

4. Related diversification

b. - Build multiple bases of differentiation. E.g B&O: product design linked

with product innovation

- Ensure a meaningful basis of differentiation. Customers need to be able to

discern a meaningful benefit. E.g Gillette could not convince customers to
buy Duracell batteries

- Minimise price differences for superior products or services. Reason why

hybrid strategy can be so effective.

- Focus less on price-sensitive market segments. E.g. BA has switched

strategic focus on long-haul flights with a particular emphasis on business
travellers.(No Answer)

1. CORRECT: How to respond to competitive threat?

2. Definition: Competitive strategy

3. Sustaining competitive advantage

4. Generic Competitive Strategies

b. combines a low price, low perceived product/service benefits and a focus

on a price-sensitive market segment(No Answer)

1. Levels of strategy

2. CORRECT: 'No-frills' strategy

3. Low-Price strategy

4. Hybrid Strategy

b. is corporate development beyond current products and markets, but

within the capabilities or value network of the organisation.(No Answer)

1. Integration

2. Forward integration

3. Focused differentiation

4. CORRECT: Related diversification
b. is backward or forward integration into adjacent activities in the value
network(No Answer)

1. Horizontal integration

2. Forward integration

3. Integration

4. CORRECT: Vertical integration

b. - Competitors might be able to do the same

- Customers start to associate low price with low product benefits
- Cost reduction may result in inability to pursue a differentiation
strategy(No Answer)

1. Differentiation Strategy

2. Low-Price strategy

3. CORRECT: Dangers of low-price strategy

4. Definition: Competitive strategy

b.
- cost leadership
- differentiation
- cost focus
- differentiation focus(No Answer)

1. Generic competitive strategies: cost leadership

2. CORRECT: Generic Competitive Strategies

3. Definition: Competitive strategy

4. Sustaining competitive advantage

b. - Definitional vagueness: It can be hard to decide what high and low

growth or share mean. Managers are often keen to define themselves as
 'high share' by defining their market in a particularly narrow way.

- Capital market assumptions: the notion that a corporate parent needs a

balanced portfolio to finance investments from internal sources assumes
that capital cannot be raised in external markets.

- Unkind to animals. Treatment of dogs and cash cows can cause

motivational problems, as managers in these units see little point in
working hard for the sake of other businesses.(No Answer)

1. CORRECT: Problems with BCG Matrix

2. Levels of strategy

3. Growth share BCG matrix

4. Portfolio matrices

b.
Corporate parenting - portfolio management - diversification - penetration
consolidation development

Summarizes the key themes of strategic direction and corporate level

strategy. After reviewing Ansoff strategic directions, focus on
diversification. Diversification in turn raises the two related topics of the
role of the corporate parent and the use of business portfolio matrices.(No
Answer)

1. Dangers of low-price strategy

2. Definition: Competitive strategy

3. Strategic directions (Ansoff matrix)

4. CORRECT: Strategic directions and corporate-level strategy

b. refers to the benefits that are gained where activities or assets
complement each other so that their combined effect is greater than the
sum of the parts.(No Answer)

1. Integration

2. CORRECT: Synergy

3. SBU Strategies

4. Synergy Manager

b.
It suggests that the business with the highest growth potential and the
greatest strength are those in which to invest for growth.(No Answer)

1. Strategic business units (SBUs)

2. Strategic directions and corporate-level strategy

3. CORRECT: Strategy guidelines based on the directional policy

matrix

4. Advantage of directional policy matrix over BCG matrix

b. - Become solutions provider: Many engineering firms have realised the

higher-value potential of design and consultancy services rather than
labour-based engineering operations that are easily undercut in price.

- Become a low-price provider: most radical response would be to abandon

the reliance on differentiation and learn to compete head-on with the low-
price competitor.(No Answer)

1. CORRECT: 3. Way of responding to competitive threat: change their

own business model

2. How to respond to competitive threat if decided to set up low-price

strategy

3. How to respond to competitive threat?

4. Strategy clock: competitive strategy options (model)

b. Definition

Vertical
- forward
- backward

Horizontal(No Answer)

1. Backward integration

2. CORRECT: Integration

3. Vertical integration

4. Strategic options

b. - input costs
- economies of scale
- experience
- product/process design

example: Ryanair(No Answer)

1. Generic competitive strategies: focus strategies

2. CORRECT: Generic competitive strategies: cost leadership

3. Generic competitive strategies: Differentiation

4. Strategy clock: competitive strategy options (model)

b.
Overcoming bases of competitive advantage by:
- Imitation: One competitor may seek to achieve advantage by developing
new products or entering new market -> easy to imitate
- Strategic Repositioning: e.g. low-price strategy against differentiated
competitor.
- Blocking first mover advantage: one competitor may try to achieve
advantage as a first-mover. Key> not allow that competitor establishes a
dominant position before a response is made
- Overcoming Barriers to Entry:
 Characteristics of successful hypercompetitive strategies:
- cannibalise bases of success
- smaller moves more effective
- disruption of status quo
- be unpredictable
- mislead competition(No Answer)

1. What is key in hypercompetitive environment

2. CORRECT: Competitive strategies in hyper competitive conditions

3. Characteristics of successful hyper-competitive strategies

4. Generic competitive strategies: Differentiation

b. units are ones which the parent understands well and can continue to add
value to. They should be at the core of future strategy(No Answer)

1. Ballast business

2. Alien business

3. CORRECT: Heartland Business

4. Value trap business

b. is where an organisation achieves a proprietary position in its industry; it

becomes an industry standard.

Achievement of lock-in is likely to be dependent on:

- size or market dominance
- First-mover dominance
- Self-reinforcing commitment
- Insistence on the preservation of the lock-in position(No Answer)

1. CORRECT: Strategic lock-in

2. Strategic options

3. Synergy Manager

4. Strategic choices
b.
Competitiveness might be improved by collaboration to achieve:

- increased selling power

- increased buying power
- Increased barriers to entry
- decreased risk of substitution
- entry to new markets
- shared work with customers
- stakeholder expectations(No Answer)

1. CORRECT: Competition and collaboration

2. Vertical integration

3. Horizontal integration

4. E.g. Vision and Mission

b. - Create difficulties of imitation

- Imperfect mobility:
>>intangible assets such as brand, image and reputation.
>> High switching costs for buyers
>> Co-specialisation: a whole element of the value chain for one org
- Lower cost-positions(No Answer)

1. CORRECT: Ways of attempting advantage through differentiation

2. Generic competitive strategies: Differentiation

3. Focused differentiation

4. What are drivers for diversification?

b.
Positions SBUs according to (i) how attractive the relevant market is in which
they are operating, an (ii) the competitive strength of the SBU in that market.

Attractiveness can be defined with PESTEL/five forces(No Answer)

1. CORRECT: Directional policy (GE-McKinsey) matrix

2. Dangers of low-price strategy

3. Advantage of directional policy matrix over BCG matrix

4. Vertical integration

b. 1. No frills
Likely to be segment specific

2. Low price
Risk of price war and low margins: need to be cost leader

3. Hybrid
Low cost base and reinvestment in low price and differentiation

4. Differentiation (without price premium)

Perceived added value by user, yielding market share benefits
(With price premium)
Perceived added value sufficient to bear price premium

5. focused differentiation
Perceived added value to a particular segment, warranting price premium

6. Increased price/standard value

Higher margins if competitors do not follow, risk of losing market share

7. Increased price/low value

Only feasible in monopoly situation
 8. Low value/standard price
Loss of market share(No Answer)

1. How to respond to competitive threat if decided to set up low-price

strategy

2. Generic competitive strategies: Differentiation

3. Competitive strategies in hyper competitive conditions

4. CORRECT: Strategy clock: competitive strategy options / Different

bases of competitive strategy:

b. is a corporate parent seeking to employe its own competences as a parent

to add value to its businesses and build parenting skills that are appropriate
for its portfolio of business units.(No Answer)

1. CORRECT: Parental Developer

2. Portfolio Manager

3. Corporate parent

4. Synergy Manager

b.
-Portfolio managers (main emphasis: downard, investing and intervening -
offices small - Backstone Group)
-synergy managers (main emphasis: across, facilitating cooperation -
offices large - Daimler)
-parental managers (main emphasis: downward, providing parental
capabilities - offices large - Virgin)(No Answer)

1. Corporate parent

2. CORRECT: Three types of corporate parenting roles

3. Generic Competitive Strategies

4. Related diversification
b.
Customers at 1 & 2 are primarily focused with price, but only if the product
benefits meet their threshold requirements.

Customers at 5 require a customised product/service for which they are

willing to pay a price premium.(No Answer)

1. Generic Competitive Strategies

2. CORRECT: Strategy clock: competitive strategy options (model)

3. Definition: Competitive strategy

4. Generic competitive strategies: focus strategies

b. Financial investment or divestment

- balance of the portfolio e.g. In relation to its markets and the needs of the
corporation
- attractiveness of the business units in terms of how strong they are
individually and how profitable their markets or industries are likely to be
- the fit that the business unites have with each other in terms of potential
synergies or the extent to which the corporate parent will be good at
looking after them(No Answer)

1. Strategic choices

2. Strategic options

3. Low-Price strategy

4. CORRECT: Portfolio matrices

b. Strategy seeks to provide high perceived product/service benefits

justifying a substantial price premium, usually to a selected market segment
(niche)(No Answer)

1. Vertical integration

2. Related diversification

3. Integration
 4. CORRECT: Focused differentiation

b. is a corporate parent acting as an agent on behalf of financial markets

and shareholders(No Answer)

1. Strategic choices

2. Corporate parent

3. CORRECT: Portfolio Manager

4. Synergy Manager
b.  A decision made at the business level of a firm would be:
c. Business-level strategy is concerned with how to compete in the market. Corporate
strategy is concerned with the overall logic of the portfolio but may give businesses
considerable autonomy over competitive strategy.
Page reference: 175
d. The degree of synergy between the businesses in the portfolio incorrect
e. Which industries to enter incorrect
f. How to compete in a given market correct
g. How to add value to the businesses in the portfolio incorrect
h. 2. At corporate level, the scope of an organization relates to:
i. At corporate level, scope of portfolio means the degree to which the SBUs are serving
different industries.
Page reference: 175
j. The breadth of the portfolio of SBUs correct
k. The number of SBUs incorrect
l. The size of the SBUs incorrect
m. The number of customers served incorrect
n. 3. Substantial changes to the range of offerings or the markets served or both are
known as:
o. Diversification can occur if this product range is new or substantially altered or if
serving new markets.
Page reference: 177
p. Differentiation incorrect
q. Diversification correct
r. Relocation incorrect
s. Brand extension incorrect
t. 4. Which of the following outcomes is not an advantage of a completely vertically
integrated business?
u. Whilst vertical integration can increase control over quality and lower transaction
costs, there is the disadvantage of requiring specialized knowledge of different
business activities, such as manufacturing and retailing in the case of Zara and
Benetton. Lowering of risk is not achieved because the business is only operating in
 one industry.
Page reference: 178
v. Potentially greater control is achieved incorrect
w. Potentially greater quality is achieved incorrect
x. Lowering of risk is achieved correct
y. Lower price of supplies is achieved incorrect
z. 5. 'Synergy' can best be explained by which of the sums below?
aa. Synergy is where two or more units or companies work better together than they do
apart. They are 'more than the sum of their parts'. However, quite often attempted
synergies result is less than sum of parts.
Page reference: 176
bb. 2+2=5 correct
cc. 2+2=4 incorrect
dd. 2-2=1 incorrect
ee. 2-2=0 incorrect
ff. 6. The Boston Group Portfolio Matrix is used to assess:
gg. This type of matrix became popular in the 1970s. It was thought at the time that a
'balanced portfolio' was necessary i.e. a mix of cash generators, fast growing, small,
large, etc. However, it has not been proven that a balanced portfolio offers any
benefits.
Page reference: 188
hh. The size of a portfolio of businesses incorrect
ii. The extent to which the corporate centre can add value to the businesses incorrect
jj. The balance of the portfolio of businesses correct
kk. The scope of the portfolio incorrect
ll. 7. The parenting fix matrix is used to assess whether:
mm. The parenting fix matrix is for the purpose of identifying whether businesses
within the portfolio are ones that the corporate parent understands and can add value
to.
Page reference: 196
nn. The businesses are a good fit with the parent company correct
oo. The portfolio is balanced incorrect
pp. The portfolio has opportunities for synergies incorrect
qq. The portfolio is too diversified incorrect
rr. 8. In the parenting fix matrix, a business that the parent understands but doesn't add
any value to is known as:
ss. A ballast business is one where the parent cannot add much value. It would be
mutually beneficial for the parent company to sell the business.
Page reference: 197
tt. A heartland business incorrect
uu. An alien business incorrect
vv. A value trap business incorrect
ww. A ballast business correct
xx. 9. When evaluating a strategic option a firm can test the option against the criteria of
suitability, feasibility, and acceptability. Suitability in this context means:
yy. This is just one method of evaluating strategic options. If a strategy is suitable, it
addresses the issues identified in the strategic analysis.
Page reference: 198
zz. The strategy satisfies the shareholders incorrect
aaa. The strategy will work in practice because it has the necessary resources and
capabilities incorrect
bbb. The strategy is consistent with the strengths, weaknesses, opportunities, and
threats identified in the strategic analysis correct
ccc. The strategy satisfies the relevant stakeholders incorrect
ddd. 10. Ansoff's growth vector matrix is used for:
eee. Ansoff's matrix was devised in 1965. It shows the potential growth directions
a firm can take using the variables of new/present and products/markets.
Page reference: 176
fff. Analyzing the different strategic directions an organization can pursue correct
ggg. Analyzing the balance of the portfolio incorrect
hhh. Assessing whether the corporate parent is adding value incorrect
iii. Assessing the market share of a business incorrect
jjj. 11. In Ansoff's matrix, 'product development' involves going in the direction of:
kkk. Product development and market development are medium risk strategies. The
highest risk is 'diversification' - new products to new markets.
Page reference: 176
lll. Present products to present markets incorrect
mmm. Present products to new markets incorrect
nnn. New products to present markets correct
ooo. New products to new markets incorrect
ppp. 12. Horizontal integration is where:
qqq. Horizontal integration can also be where a firm offers complementary
products at the same stage within its value chain.
Page reference: 179
rrr. A firm takes over a supplier incorrect
sss. A firm takes over a distributor incorrect
ttt. A firm takes over a competitor correct
uuu. A firm takes over a manufacturer incorrect
vvv. 13. Conglomerate diversification is another name for:
www. Unrelated diversification involves moving into areas where there are no
linkages with existing businesses.
Page reference: 179
xxx. Unrelated diversification correct
yyy. Related diversification incorrect
zzz. Portfolio diversification incorrect
aaaa. Acquisition diversification incorrect
bbbb. 14. Which of the following statements is true when describing the merits of
related and unrelated diversification?
cccc. The evidence is not conclusive on whether related or unrelated diversification
is more successful.
Page reference: 180
dddd. Unrelated diversification has been shown to be more successful incorrect
eeee. Related diversification has been shown to be more successful incorrect
ffff. The evidence on diversification strategies is contradictory correct
gggg. Related diversification is more successful up to a certain size of
corporation incorrect
hhhh. 15. What did Peters and Waterman (1982) mean when they implored
businesses to 'stick to the knitting'?
iiii. Peters and Waterman's mantra was aimed at corporations that had become too
diversified for no good reason.
Page reference: 180
jjjj. Corporations should strip down to core activities correct
kkkk. Corporations follow low-risk diversification strategies incorrect
llll. Corporations should follow the same generic strategy across all businesses incorrect
mmmm. Corporations should have a balanced portfolio incorrect