Gazdasági Ismeretek | Vállalkozási ismeretek » Strategy Practice Exam, Maastricht University

Source: http://www.doksinet School of Business and Economics E Exam version Practice Course Code Date Time Location : Strategy : EBC1017 : April 2, 2013 : 13:00 – 16:00 : MECC Electronic communications devices are not allowed – put them in your bag and not in your pocket! Any writing after the official end of the examination will be considered as possible fraud and reported to the Board of Examiners Exam consists of: 17 pages, front page included, and 80 MC questions. Use and hand in the answer form You are allowed to make use of: The exam is closed book. The use of non-electronic dictionaries (Except English-English) is allowed. You can use a non-programmable pocket calculator Norm: The total number of points is 100, which are allocated as follows: # correct answers Points 020 10 2124 15 2528 20 2932 25 3336 30 3740 35 4144 40 4548 45 4952 50 53 55 5457 60 5861 65 6265 70 6669 75 7073 80 7475 85 7677 90 7879 95 80 100 The grade for the exam is computed

as the number of points divided by 10. Publication of the results: within 15 workdays Procedure for objections: Any complaints about the exam must be submitted within five working days after the date of the exam (before 09/04/13, 16.00) at the Secretariat of the O&S Department (room A216) Each complaint should be on a separate page. The complaint form is available on EleUM, under Course material, examination. Any other complaints will not be taken into consideration Only fully completed complaint forms will be processed. If you disagree with a question or an answer, you must give a clear argument as to why you disagree. In your argument you must refer to relevant pages in the textbook Students will be informed on the outcome of the complaint either by email and/or on EleUM. Particulars: Choose the one alternative which according to the textbook that best completes the statement or answers the question. It is not allowed to take home, copy or photograph the examination or parts of

it! You have to hand in the entire set. Source: http://www.doksinet 1. Strategy is primarily about . A. Maximizing firm profits B. Deriving operation effectiveness C. Creating superior value D. Competitive benchmarking 2. The never-ending cycle of analysis, formulation, implementation, and feedback is called what? A. The strategic management process B. A sustained competitive advantage C. The cycle of the bottom of the pyramid D. The interaction of firm and industry effects 3. The term "strategy" has grown in usage in a variety of fields today. Which of the following is the best use of the term for this course? A. Competitive benchmarking to improve the firms position B. The firms efforts to gain and sustain competitive advantage C. Implementing a company-wide Six Sigma program to strategically lower costs D. Aligning with key corporations to form a competitive landscape of co-opetition 4. Strategy formulation and implementation affect the organization

at every level. What is the top level of strategy within an organization? A. Business B. Functional C. Corporate D. Production 5. Gillette invented a "razor-razor-blade" model of business, whereby the razor handle is provided at a low cost and the replacement razor blades are sold relatively expensively. Which of the following is another example of this business model? A. Audiblecom audiobooks B. HP laser printers C. Toms shoe sales "1 for 1" D. The New York Times newspaper Source: http://www.doksinet 6. Business opportunities in the clean-tech economy have much potential. Production of solar panels in China has brought the prices down by 50%, while many countries are providing incentives to invest in the field. However, in strategy we must always look at both opportunities and threats Which of the following is NOT a threat to the growth of the clean-tech economy? A. The energy sector is rapidly growing worldwide B. It is not currently cost-competitive with

coal and oil C. The US has 30% of the worlds known coal reserves D. Market externalities are not priced into current fossil fuels 7. The text provides an example of stakeholder power in the investment banking industry. In 2007, the net income of the top five U.S investment banks was roughly $10 billion This sounds pretty good until you find out that in this same year the salary and bonuses paid to their employees was four times that amount ($40B). This is an example of what? A. Strong internal stakeholders capturing the value that would otherwise go to others (such as stockholders). B. Strong external stakeholders having an undue influence on managerial decisions inside the firm C. Weak internal stakeholders not getting inducements commensurate with their contributions to the firm. D. In the end, all stakeholder groups are rewarded well if the firm is successful 8. The process that describes the method by which managers conceive of and implement a strategy that can lead to a

sustainable competitive advantage is called what? A. Strategic process B. Strategic technology C. Strategic management D. Strategic planning 9. When it comes to a firms vision, mission, and values, it can be said that: A. Once instituted in the organization, the vision, mission, and values of a firm should be left alone, regardless of whether the company is successful or not. B. New firms have to create these by using a driving vision to shape their mission and values, and existing firms should fine-tune their mission and values and reaffirm their values periodically. C. New firms should modify their vision, mission, or values as they grow, but established firms should stick to what has worked in the past. D. Existing firms should regularly discard their vision and mission in a renewal process Source: http://www.doksinet 10. In order for managers to determine the vision, mission, and values for their organization, they should: A. Begin by asking "What is our competitive

advantage?" B. Determine what strategic group they belong to first C. Begin with the "end in mind" D. Seek employee feedback 11. As noted in Strategy Highlight 21, the small Japanese company with the electric rice cooker faced very long odds in getting a license from Bell Labs for using their transistor. The end result of the effort to get the license was what? A. The Japanese firm got the license but was not able to produce the desired radio B. The Japanese firm got the license and used it successfully in their rice cooker C. The Japanese firm introduced the first pocket-sized radio, but the market was not ready for it and sales were weak. D. The Japanese firm introduced the worlds first pocket-sized radio to great market success 12. A mission describes A. what a business will do in the future B. what a business actually does and why it does it C. what the norms are of the business D. what the business has done historically 13. Customer-oriented missions

are defined as A. providing solutions to employee needs B. providing solutions to customer needs C. providing solutions to executive needs D. providing solutions to stockholder needs 14. Which of the following is not true concerning a customer-oriented mission? A. It defines the means of how a customer need will be met B. It has more flexibility than a product-oriented mission C. It has a higher likelihood of remaining relevant in the long-term D. Organizations that have customer-oriented missions are more likely to be successful 15. It has been found that visionary companies outperform other companies by more than 1,400 percent One reason for this is: A. Their stated missions encapsulate their aspirations B. Their employees are better trained C. They are focused on profits D. They are typically start-ups and are thus more highly motivated Source: http://www.doksinet 16. Johnson Homes was a real estate development firm with $25 million in available capital The

owners mission was to "develop the highest-quality housing communities that deliver the ultimate lifestyle." His goal was to build high-end homes on a lake and develop biking trails and other recreational offerings. In order to accomplish this, he needed to pay 15 million dollars for a 10-year project to put in new water facilities, pave new entry and exit roads, and hire consultants to help him navigate state, city, and county regulations. Four years into the project, the owner did not hire the consultants and had only invested 25 percent of the required capital to build the water facility. In addition, he began to travel frequently and did not listen to his employees complaints. Not surprisingly, the company went bankrupt Which of these statements is most likely to be true? A. The company failed because it did not have sufficient financial resources B. The company failed because it was too diversified C. The company failed because it was not backed up with strategic

commitment D. The company failed because it was not a visionary company 17. Organizational values help people make choices that are ethical and company-goal-oriented These values answer which strategic management question? A. What do we want to accomplish as a firm? B. How do we accomplish our goals in the organization? C. What are we about as a firm relative to our competitors? D. What is the best way to compete in the marketplace? 18. Googles decision in 2010 to pull its servers out of mainland China and operate out of Hong Kong was a response to what? A. A drive to increase profits with a broader footprint in Asia B. A request from the Chinese government to leave the country C. A move to cut costs due to intense competition with the local search firm Baidu D. Googles decision to stop using self-censoring, as required by the Chinese government to stay operating in mainland China. 19. The 2001 collapse of Enron resulting in one of the biggest bankruptcies in US history demonstrates

that: A. An organization may have a mission statement promoting ethical behavior, but it must have strong organizational values to guide the behavior of employees. B. Employees observe managerial behavior and tend to follow it C. Having strong ethical values inside an organization is important for long-term success D. All of these Source: http://www.doksinet 20. Strategic flexibility is achieved by: A. Managers developing a dominant plan and sticking to it B. Managers responding when reality changes by activating alternate dominant plans C. Ignoring feedback from the marketplace while creating new plans D. Breaking the cycle of strategic planning-monitoring-responding 21. Animals Doll Company has manufactured and sold childrens dolls for 25 years In order to keep costs low, it sources its materials from China. An employee in one of its retail stores has noticed that there is increasing concern regarding the potential toxicity of the materials in the dolls. In response, she

researched and found a supplier that provides organic, non-toxic cloth and filling. She has taken this information to her manager and has suggested that the company consider producing dolls with these materials. This is an example of: A. A rational planning approach to strategy B. An emergent strategy process C. A good use of scenario planning D. A new dominant action plan 22. In Strategy Highlight 23, what type of strategy is the store manager of Starbucks using to develop new drinks for the stores? A. She is using a rational planning approach to strategy B. She is creating a dominant strategy plan C. She is using scenario planning D. She is using an emergent strategy process 23. Based on external and internal analyses, top-level executives design a rational and structured strategic plan that is called . A. scenario planning B. an emergent strategy C. an intended strategy D. an unrealized strategy 24. A real options perspective is similar to what corporate finance tool? A.

Present volume B. Future value C. Net present value D. Current yield Source: http://www.doksinet 25. The innovations in process efficiencies such as Six Sigma, the Internet, and biotechnology are all elements of which macro environmental force? A. Political factors B. Sociocultural factors C. Technological factors D. Economic factors 26. Which of the following is not a main industry group in the SCP model? A. Monopolistic competition B. An oligopoly C. Perfect competition D. A strategic group 27. Which of the main industry groups in the SCP model is described as having a few large firms, differentiated products, and high entry barriers? A. Monopolistic competition B. Oligopoly C. Monopoly D. Perfect competition 28. Which of the following is not one of Porters five forces? A. Substitutes B. Suppliers C. Complements D. Buyers 29. A process whereby formerly unrelated industries begin to satisfy the same customer need is often brought on by technological advances. What is this process

called? A. Strategic grouping B. Competitive advantage C. Industry convergence D. Complementor analysis Source: http://www.doksinet 30. Which of the following is not a criterion for a strategically important resource? A. Difficult to imitate B. Not everyone has it C. Valuable D. Tangible 31. When a firm possesses resources and capabilities that are valuable but not rare, it has a: A. Competitive disadvantage B. Competitive parity C. Temporary competitive advantage D. Resource immobility 32. The purpose of a firms is to add additional value through primary and support activities that competitors cannot easily replicate. A. VRIO network B. Resource network C. Value chain D. Strategic chain 33. All of the following are true concerning the importance of dynamic capabilities to a firm except: A. A firm is unable to create rare resources unless it is dynamic B. The firm must be able to change its resource base and activity systems when the external environment changes. C. The

firm must be able to modify, upgrade, and reconfigure its resources as needed D. Possessing dynamic resource capabilities helps the firm sustain competitive advantage(s) over time 34. Suppose several senior managers recently left Google and went to work at rival Microsoft What part of the "stocks and flows" of resources does this represent for Google? A. Leakage B. Resource stocks C. Dynamic capabilities D. Inflow of resources Source: http://www.doksinet 35. Which of the following is a question that managers must ask concerning internal firm factors when conducting a SWOT analysis? A. How can we use our resource base and core competencies to take advantage of an opportunity? B. What additional resources and capabilities are needed to take advantage of external opportunities? C. What resources and capabilities do we need to mitigate external threats? D. All of these 36. is created when a customer is willing to pay more for a good or service than it costs the

firm to produce it. A. Economic value B. Product value C. Consumer value D. Economic advantage 37. A(n) is the value lost due to choosing to use resources for one alternative over another. A. Opportunity cost B. Alternative loss C. Resource loss D. Opportunity loss 38. When a firm assesses its performance by asking questions such as "How do our customers view us?" and "What core competencies do we need?", it is using which tool? A. The strategy map B. The triple bottom line C. The balanced scorecard D. A PESTEL analysis 39. When a firm is able to achieve higher economic value creation than its competition through differentiation, the competitive advantage is reflected by: A. The firms ability to move into a new strategic group B. The firms ability to charge higher prices C. The firms ability to charge lower prices D. The firms ability to leverage complements Source: http://www.doksinet 40. In 2010, Levi Strauss & Co introduced a new line of

jeans called Levis Curve ID Levis launched this product based on research that found that 80 percent of women fall into three distinct body shapes. Customers can now go to Levis website and use a product configurator in order to determine their "Curve ID" and purchase jeans most appropriate for their body type. Levis is using what tool to improve their strategic position? A. A product differentiation strategy with complements as a value driver B. A product differentiation strategy with customization as a value driver C. A focused cost leadership with economies of scale as a cost driver D. A focused cost leadership with economies of learning as a cost driver 41. When a business drives costs down as its cumulative output increases, it is referred to as A. A learning curve B. An output curve C. A demand curve D. A distribution curve 42. The costs associated with the "make or buy" question when determining the scope of the firm are: A. Investment costs B. Transaction

costs C. Diversification costs D. Scale costs 43. When it would cost the firm less to pursue an activity in-house than obtaining that activity from a supplier in the external market, then the firm should: A. Enter into a joint venture B. Execute a short-term contract C. Vertically integrate D. Strategically outsource 44. If a firm wishes to expand beyond a single market and grow through being active in several different countries, it is pursuing the diversification strategy. A. Geographic B. Global C. Multi-country D. Market expansion Source: http://www.doksinet 45. When a firm is active in several different product markets, it is pursuing a(n) diversification strategy. A. Market B. Process C. Multipoint D. Product 46. A tool that helps managers evaluate how the firms core competencies can support certain diversification strategies is the: A. Core competence-market matrix B. Diversification matrix C. Acquisition matrix D. Competency leverage matrix 47. A

small-world phenomenon is a situation in which a network exhibits clusters, each with a high degree of centrality. A. Nonlocal B. Local C. Inter-organization D. Cross 48. Although there are "first-mover advantages" when it comes to bringing a new innovation to the market, there are also disadvantages. Which of the following is not one of these disadvantages? A. The firm builds a reputation as an innovator B. Potential customers must be educated about the product C. Distribution channels must be found D. Complementary assets need to be located 49. After the Internet was introduced, its value increased exponentially as the number of users increased This is the positive effect of a(n): A. Adopter force B. Network effect C. User effect D. Internet force 50. During the growth phase of an industry life cycle, demand is strong and: A. Both inefficient and efficient firms thrive. B. A firm should "harvest" its products. C. Only a cost leadership strategy should

be pursued. D. Market demand starts to decrease