Sample Exam

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Sample Exam Multiple Choice Questions Answers

1.The starting point of the strategic management process is
a.establishing objectives and target levels of performance.
b.formulating a corporate strategy.
c.defining an organisation's purpose and mission.
d.evaluating the organisation's operating environment.
e.All of these apply.

(c is correct)

2.A company committed to social responsibility
a.makes lower profits than a company that is not socially responsible.
b.is generally a manufacturer instead of a service company.
c.does not specify its corporate philosophy in its mission statement.
d.uses strategies that generate both high social returns and good profits.
e.pursues strategies that generate high social returns regardless of cost.

(d is correct)

3.Which of the following is not one of Porter's five competitive forces?
a.Rivalry among established firms
b.Threat of new entrants
c.Height of exit barriers
d.Bargaining power of suppliers
e.Bargaining power of buyers

(c is correct)

4.Which of the following is not a component of the macroenvironment?
a.Technological forces
b.Political and legal forces
c.Demographic forces
d.Sociocultural forces
e.Competitive forces

(e is correct)

5.Members of a strategic group
a.compete directly with members of other strategic groups.
b.are affected by Porter's five competitive forces to the same degree that members of other strategic groups are affected.
c.pursue the same basic strategy as other members of their group.
d.earn the same rate of return.
e.All of these apply.

(c is correct)

6.A company's distinctive competencies
a.represent the unique strengths of the company.
b.refer to company strengths that competitors cannot easily match or imitate.
c.form the bedrock of a company's strategy.
d.can be based in any of the value creation functions of the company.
e.All of these apply.

(e is correct)

7.Which of the following is not an intangible resource?
a.Plant and equipment
b.A well-known brand name
c.Technological know-how
d.Marketing know-how
e.A favorable corporate reputation

(a is correct)

8.Capabilities are
a.a company's physical plant and equipment.
b.a company's technological know-how.
c.a company's skills at coordinating resources and putting them to productive use.
d.a company's reputation.
e.All of these apply.

(c is correct)

9.A company's distinctive competency is more durable
a.when competitors are slow to respond to the competitive advantage it creates.
b.when barriers to imitation are high.
c.when the external environment is stable.
d.when the competency is based on a capability as opposed to a tangible resource.
e.when all of these are true.

(e is correct)

10.A company's competitive advantage is more durable when
a.barriers to imitation are low and there are few capable competitors.
b.barriers to imitation are high and there are many capable competitors.
c.there are few capable competitors and the industry is stable.
d.the industry is stable and there are many capable competitors.
e.the industry is stable and barriers to imitation are low.

(c is correct)

11.Economies of scale are
a.unit-cost reductions associated with learning effects.
b.unit-cost reductions associated with superior customer responsiveness.
c.realised when output is as large as possible.
d.realised when the point of maximum efficient scale is reached.
e.unit-cost reductions associated with a large-scale output.

(e is correct)

12.A company pursuing a cost-leadership strategy
a.imposes output controls on all functions except research and development.
b.generally has a structure with a low level of differentiation and a low level of integration.
c.should have cross-functional integration around the accounting function.
d.centralises authority.
e....
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