Answer: B. Position a firm to compete Strategic management combines analysis, choices, implementation, and evaluation to position an organization for success.
Which statement usually expresses a firm’s broad purpose?
A Market forecast
B Staffing plan
C Operating budget
D Vision statement
Answer: D. Vision statement A vision broadly expresses why a firm exists and what it hopes to accomplish.
What does a mission statement generally explain?
A How vision becomes reality
B How results are audited
C How daily tasks are assigned
D How taxes are calculated
Answer: A. How vision becomes reality A mission gives a broad account of how the organization intends to fulfill its vision, including what it offers or whom it serves.
How does a mission differ from a vision?
A It reports quarterly earnings
B It lists all job titles
C It describes how to serve
D It forecasts currency rates
Answer: C. It describes how to serve The vision expresses the broad purpose; the mission describes how the organization will serve markets or fulfill that purpose.
Why do managers conduct strategic analysis before choosing a strategy?
A Avoid setting any objectives
B Inform choices with evidence
C Replace customer research
D Guarantee a market leader
Answer: B. Inform choices with evidence Strategic analysis assesses external conditions and internal capabilities so later choices fit the situation.
Which SWOT elements describe internal conditions?
A Prices and promotions
B Opportunities and threats
C Customers and competitors
D Strengths and weaknesses
Answer: D. Strengths and weaknesses Strengths and weaknesses are internal capabilities or gaps within an organization.
What does a rising customer segment represent in SWOT?
A Opportunity
B Strength
C Weakness
D Threat
Answer: A. Opportunity An opportunity is an external condition that may help a firm if it has or builds the right capabilities.
What does SWOT classify as a threat?
A Staff development need
B Cost reduction target
C External obstacle to success
D Internal skill advantage
Answer: C. External obstacle to success Threats are external conditions that may make organizational success more difficult.
Which framework scans political, economic, social, technological, environmental, and legal forces?
A Balanced scorecard
B PESTEL analysis
C BCG matrix
D Value chain
Answer: B. PESTEL analysis PESTEL organizes broad external forces that can affect an organization.
What does Porter’s Five Forces help managers analyze?
A Employee performance ratings
B Internal cash controls
C Supplier invoice accuracy
D Industry competitive pressures
Answer: D. Industry competitive pressures Five Forces examines the competitive pressures that shape an industry’s attractiveness and profitability.
How can intense rivalry among existing firms affect competition?
A Price and market pressure
B No customer alternatives
C Guaranteed profit growth
D Higher switching costs always
Answer: A. Price and market pressure Strong rivalry can increase pressure on prices, costs, and customer retention.
Which force considers suppliers’ ability to raise input costs?
A Threat of substitutes
B Buyer bargaining power
C Supplier bargaining power
D Threat of new entrants
Answer: C. Supplier bargaining power Supplier power reflects suppliers’ leverage over price, quality, or terms.
When do customers tend to have greater bargaining power?
A Switching is impossible
B They have credible alternatives
C Only one supplier exists
D Products are fully unique
Answer: B. They have credible alternatives Buyer power rises when customers have choices and can credibly switch or negotiate.
In VRIO, what does the letter I represent?
A International
B Incremental
C Integrated
D Inimitable
Answer: D. Inimitable VRIO asks whether resources are valuable, rare, difficult to imitate, and supported by the organization.
What does the O in VRIO assess?
A Organization ready to use
B Easy to replace
C Owned by competitors
D Kept out of strategy
Answer: A. Organization ready to use VRIO includes whether the organization is arranged to capture value from its resources.
When does a firm have competitive advantage?
A It copies every competitor
B It adds more internal rules
C It creates greater customer value
D It raises costs without benefit
Answer: C. It creates greater customer value Competitive advantage comes from delivering superior value or operating at lower cost than rivals.
What does cost leadership prioritize?
A One narrow customer group
B Lower operating costs
C Frequent product redesign
D Unique premium features
Answer: B. Lower operating costs Cost leadership seeks a cost position that lets a firm compete effectively on price or margins.
How does a differentiation strategy seek advantage?
A Serve no defined market
B Match every rival’s price
C Reduce all product features
D Offer valued uniqueness
Answer: D. Offer valued uniqueness Differentiation adds features, service, quality, or brand value that customers are willing to value.
Which market does a focus strategy target?
A A narrower market segment
B Every possible customer
C Only internal departments
D All supplier industries
Answer: A. A narrower market segment Focus concentrates activity on a narrower segment while pursuing cost or differentiation within it.
What is a strategic objective?
A A record of past invoices
B A competitor’s annual report
C Specific goal supporting mission
D A list of daily tasks
Answer: C. Specific goal supporting mission Strategic objectives translate the mission and strategy into major goals the organization will pursue.
Which decision belongs at the corporate strategy level?
A A department’s weekly checklist
B Direction of multiple businesses
C A single store’s shift roster
D One product’s package color
Answer: B. Direction of multiple businesses Corporate strategy guides the overall direction and portfolio of a multi-business organization.
What does business-level strategy mainly address?
A How a corporation files taxes
B How departments record attendance
C How suppliers set wages
D How a business competes
Answer: D. How a business competes Business-level strategy positions a business or unit to compete in its product or service market.
How should functional strategies relate to broader plans?
A Support broader business strategy
B Replace customer priorities
C Operate without coordination
D Ignore corporate objectives
Answer: A. Support broader business strategy Functional plans in areas such as marketing and operations should support the organization’s broader direction.
Which grand strategy seeks to expand revenue or reach?
A Exit strategy
B Stability strategy
C Growth strategy
D Defensive strategy
Answer: C. Growth strategy A growth strategy aims to increase scale, revenue, market share, or geographic reach.
What does a stability strategy seek to maintain?
A Rapid geographic expansion
B Maintaining current position
C Immediate business closure
D Entering unrelated industries
Answer: B. Maintaining current position A stability strategy seeks to maintain the organization’s current scale or position.
Which approach can help a challenged firm reduce costs and survive?
A Differentiation strategy
B International strategy
C Growth strategy
D Defensive strategy
Answer: D. Defensive strategy Defensive strategies can reduce costs or scale when a firm faces serious challenges.
Why might a firm use an international strategy?
A Compete in foreign markets
B Replace its mission
C Change internal job titles
D Avoid all local customers
Answer: A. Compete in foreign markets International strategy addresses how a firm enters and competes in markets across national borders.
Which plan translates a strategic goal into near-term actions?
A Vision statement
B Industry analysis
C Action plan
D Resource audit
Answer: C. Action plan An action plan assigns tasks, timing, responsibilities, and resources needed to carry out strategy.
What does strategic environmental scanning monitor?
A Only daily task completion
B External changes and trends
C Only internal meeting notes
D Only past payroll data
Answer: B. External changes and trends Environmental scanning tracks changes outside the firm that may create opportunities or threats.
Why should managers identify key stakeholders?
A Remove accountability
B Avoid all external input
C Guarantee unanimous support
D Understand affected groups and interests
Answer: D. Understand affected groups and interests Stakeholder analysis helps managers understand which groups are affected and what interests may influence implementation.
Which measure is most useful for tracking a strategic objective?
A Relevant key performance indicator
B Unrelated vanity metric
C Unrecorded impression
D Competitor’s private data
Answer: A. Relevant key performance indicator A relevant KPI tracks progress toward an objective using information connected to the intended outcome.
What makes an objective easier to evaluate?
A No deadline or owner
B Changing definitions each month
C Clear measurable target
D Broad inspiring wording alone
Answer: C. Clear measurable target Clear, measurable targets let managers compare actual progress with intended outcomes.
Why use scenario planning?
A Remove strategic choices
B Explore plausible future conditions
C Predict one exact future
D Replace environmental scanning
Answer: B. Explore plausible future conditions Scenario planning considers plausible futures so managers can prepare for uncertainty.
What does strategy formulation involve?
A Recording only past expenses
B Setting employee passwords
C Approving routine invoices
D Choosing a path to goals
Answer: D. Choosing a path to goals Formulation evaluates alternatives and selects approaches for reaching strategic objectives.
Which resource choice supports implementation?
A Fund prioritized initiatives
B Freeze all skill development
C Delay every decision
D Spread budgets without priorities
Answer: A. Fund prioritized initiatives Implementation requires resources aligned with the chosen priorities.
Why should organizational roles support a new strategy?
A Prevent information sharing
B Increase duplicated work
C Clarify responsibility for execution
D Hide decision ownership
Answer: C. Clarify responsibility for execution People need clear responsibilities and authority to execute strategic actions.
When may current culture need to change?
A Customer needs stay fixed
B Current norms block the strategy
C Every process already fits
D No employees are affected
Answer: B. Current norms block the strategy Organizational culture can enable or obstruct implementation when norms conflict with strategic priorities.
What is strategic control intended to do?
A Replace all planning
B Record only meeting attendance
C Set product colors
D Compare results with objectives
Answer: D. Compare results with objectives Strategic control monitors performance against objectives and identifies when corrective action may be needed.
What should managers do when results miss a target?
A Diagnose causes and context
B Ignore the gap
C Assume employees caused it
D Change the mission immediately
Answer: A. Diagnose causes and context Managers should examine why results differ before selecting a response.
Why review strategy regularly?
A Strategies never need revision
B Budgets always stay constant
C Conditions and capabilities change
D Competitors stop innovating
Answer: C. Conditions and capabilities change External conditions and internal capabilities change, so strategies may need adjustment.
What is a strategic alliance?
A A hiring shortlist
B Cooperation between independent organizations
C A supplier invoice
D A department merger
Answer: B. Cooperation between independent organizations Strategic alliances let organizations cooperate while remaining separate entities.
How can an acquisition support growth?
A Stopping product development
B Removing all market research
C Reducing customer choice to zero
D Adding a business or capability
Answer: D. Adding a business or capability Acquisitions can expand market reach, capabilities, or the business portfolio.
How can innovation strengthen differentiation?
A Create valued new offerings
B Remove all service features
C Copy existing prices
D Ignore customer feedback
Answer: A. Create valued new offerings Innovation can create products, services, or experiences that customers value and competitors do not match.
How can economies of scale support cost leadership?
A Adding unneeded product steps
B Reducing output predictability
C Lowering average unit cost
D Increasing waste per unit
Answer: C. Lowering average unit cost Economies of scale can lower average costs as output grows, when added scale is managed effectively.
What does value-chain analysis examine?
A Competitor payroll files
B Activities that create customer value
C Only external tax rates
D Employee private messages
Answer: B. Activities that create customer value Value-chain analysis examines linked activities that contribute to value and cost.
Which perspective emphasizes internal resources and capabilities?
A Only market prices
B Only customer complaints
C Only legal filings
D Internal resources and capabilities
Answer: D. Internal resources and capabilities The resource-based view considers how internal resources and capabilities can support sustained advantage.
When should managers reconsider a strategy?
A Evidence shows key assumptions changed
B A logo color changes
C One invoice arrives
D One meeting ends late
Answer: A. Evidence shows key assumptions changed Strategic review should respond to material changes in assumptions, performance, or the environment.
What is the main role of strategic evaluation?
A Replace the organization’s mission
B Guarantee a certain outcome
C Learn whether choices work
D Avoid measuring performance
Answer: C. Learn whether choices work Evaluation measures results and provides learning that can inform future strategic choices.
How do objectives and strategy relate?
A Objectives replace all actions
B Strategy guides actions toward objectives
C Strategy records past results
D They are unrelated statements
Answer: B. Strategy guides actions toward objectives Objectives describe desired outcomes; strategy explains the broad approach for pursuing them.
Why align strategy with organizational capabilities?
A Ensure every rival copies
B Remove the need for goals
C Avoid all investment
D Make plans feasible and distinctive
Answer: D. Make plans feasible and distinctive Strategies are more feasible when they use or build capabilities the organization can execute.