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Test answers for Business Strategy 2020

(95) Last updated: January 22
Elance • Fin. & Mgt.
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95 Answered Test Questions:

1. What is a venture capital (VC) company?


• A company that primarily invests in mutual funds and large cap stocks

• Companies that specialize in conducting IPOs

• Companies that specialize in selling and dismantling smaller companies

• A company that speciliazes in providing investments to startups that usually have high a growth potential, but also higher risk than normal risk

2. What should be included in a business plan?


• Market Analysis

• Executive Summary

• Competitor Analysis

• All of these

3. Which is NOT a stage in the shifting basis of competition?


• None of these

• Reliability

• Convenience

• Functionality

4. If you are a company in a cyclical industry what is a good business strategy for you?


• Close shop completly during bad times, and reopen when good times approach

• Work with trade unions to ensure all work is approved beforehand and there is little risk of strike

• Since costs are fixed, lower your workforce until you find the best formula for profit. Keep adjusting and improving this formula throughout the year.

• Deal with the volatility by implementating cuts to compensations, reducing employee work hours, or laying off workers during bad times. Paying bonuses, ensuring enough inventory, and hiring in mass during good times.

5. Oil companies' business models are examples of what?


• Horizontal Integration

• Vertical Integration

• Supply Chains

• Economies of Scale

6. What trait should an information-driven company have at its core?


• A solid, unshakable core

• A flexible, decentralized structure

• An inflexible centralized core

• An enterprising and motivated core

7. Why must change be a strategic function of business?


• Strategy is change and doesn't need further planning

• Change in business is a constant disruption that can devastate the stability of a company

• Change is a strategy in itself

• Change is natural and doesn't require a strategy

8. What performance management tool do companies use to measure and retain their competitive advantage?


• Competitive Metrics

• Competitive Framework

• Advantage Matrix

• Balanced Scorecard

9. A demand curve is more price elastic when a price____________ ?


• Decreases

• Increases

10. What are two internal environmental factors that must be considered when developing a sound marketing strategy?


• Marketing dominance and portfolio strategy

• Marketing mix and performance analysis

• Strategic mix and performance matrix

• Performance mix and marketing advantage

11. OPEC is an example of what?


• Cartel

• Monopoly

• Oligopoly

12. What are profit margins?


• It is a ratio of profitability, calculated by sales divided by net income

• It is a ratio of profitability, calculated by net income divided by sales

• It is a ratio of profitability, calculated by revenue divided by sales

• It is a ratio of profitability, calculated by sales divided by revenue

13. What micro-economic analysis would you use to analyze economics, social factors, and government regulations?


• SWOT analysis

• PET analysis

• PEST or STEEP analysis

• Securities analysis

14. What is recombinant innovation?


• Working with competitors to produce innovative products

• Revamping previously failed innovations

• The process of constantly innovating and creating new products

• Take ideas from one context and apply it to another context

15. True of False? A Cost Leadership strategy places an emphasis on lower selling prices rather than lower costs.


• False

• True

16. What is horizontal integration?


• A strategy where companies acquire or create products that are alike or complementary to one another

• A style of growth and management control in which you integrate companies in your supply chian

• Working with competitors to provide a standard process or product for the market

• Forming strategic alliances with companies that provide complementary products

17. What does the T stand for in the PEST analysis?


• Threat

• Team

• Technological

• Test

18. Which of the following is a benefit of Horizontal Integration?


• Economies of Scale

• Both Economies of scale and Economies of scope

• Economies of Scope

19. What is a hostile takeover?


• When employees attempt to take over a companies management by threatening strike or refusing to work for several periods driving the company to either give in to management change wnated by the employees or face possible bankruptcy.

• When a company "offers" to buy a smaller company with the threat of putting them out of business or making it very difficult for them to remain competive

• When a company invests in a holding company who owns one of its competitors and attempts to force it to close

• To acquire a company through the company's shareholders rather than the company's management

20. A competitive advantage suggests what?


• A company is selling a unique product

• A company is outperforming its competitors

• A company is able to sell stock

• A company is able to compete

21. According to the Growth-share matrix, a high market growth rate and market share means you are:


• A dog

• A question mark

• A cash cow

• A Star

22. What is an example of a company  that uses horizontal integration?


• Shell oil who explores and drills its own oil

• Apple who create their own computers and sells them in their own stores

• Disney who creates movies, televison shows, toys, and theme parks for kids

• EA Games, which develop and publish their own video games

23. How can companies avoid falling prey to "The Icarus Paradox"?


• Marketing

• Dominating the Competition

• Research and Development

• Low Pricing Strategy

24. What is disruptive innovation?


• Innovation that focuses on creating new markets or adding value to existing technologies in order to displace older technologies

• Innovation that causes customers to think differently about a market

• Innovation that focuses on taking competitive actions to ensure domination in the market

• Innovation that causes markets to collapse

25. When can dynamic management provide a much better platform for solving problems?


• In a chaotic situation that has expanded beyond the boundaries of typical business function

• In a situation when business is stable and well-managed

• In an idle situation when business is slow

• In a situation where business is failing and near insolvency

26. What is an example of a legal monopoly?


• A company that defeats all its competitors due to superior product and price, and is able to charge whatever it wants since it is the only one in business

• Utility companies

• A company that purchases all of its competitors

• A company that owns all the possible patents related to a specific technology therefore no other company can legally enter into that market without violating their patent

27. Why might you use discovery-driven planning?


• It helps build your brand

• It gives you time to learn, explore, and probe emerging markets

• It is the best way to become dominant in the market

• It provides a well defined set of actions to take when entering a new market

28. Which framework determines the competitive intensity of a market?


• The Porter Five Forces analysis

• The Five Porter analysis

• The Fox Five Force analysis

• Porter Competition analysis

29. As a business owner if you notice a large amount of market segmentation occurring you should...


• Focus on finding a niche in the market

• Leave that market

• Put all your eggs in one basket

• Have products in each market segmentation to see which technology excels

30. Which of the following would probably NOT be considered wrongful termination of an employee?


• Firing an employee who commits or threatens physical violence

• Firing an employee for whistleblowing on a contract that is using government funds

• Firing an employee due to his or her age

• Firing an employee because he or she reported an illegal activity taking place in the workplace

31. What is a tariff?


• A tax on imports or exports

• The amount of income you receive after taxes

• Fees you charge customers to transport goods

• Fees businesses charge other businesses for utlizing their product or service

32. Which one of the following business structures is NOT a limited liability option?


• LLLP (Limited Liability Limited Partnership)

• These are all examples of limited liabity business structures

• LLP (Limited Liabity Partnership)

• Limited Liability Company (LLC)

33. What does the notion of a ???learning organization??? suggest?


• Companies must learn how to be successful

• Companies must learn by trial and error

• Companies must be successful at collecting and analyzing data to remain successful

• Companies must contribute to education-based charities to remain successful

34. How can you benefit from forming a LLC?


• You can license patents out to businesses tax free

• You have limited liability like a corporation, but you do not pay corporate taxes.

• You can receive protections as a non-profit company

• You can create a holding company with several franchises and smaller companies underneath it without paying double taxes

35. How could market segmentation benefit you from a business strategy standpoint?


• It allows for more competition

• It allows you to differentiate your product

• It allows for maintaining the norms of a single industry

• None of these

36. What does LLC stand for?


• Licensed Limited Corporation

• Limited Liberal Corporation

• Limited License Corporation

• Limited Liability Company

37. What is a Cyclical Industry?


• An industry that changes over time, either through their own processes of evolution or by outside forces.

• An industry where companies often invest in other competitors or complementary companies in order to profit throughout the entire product life cycle

• An industry in which its costs are fixed throughout the year due to low volatility.

• A type of industry that tends to have high and low periods during speciific times

38. When Facebook purchased Instagram, it employed what type of strategy?


• Price Skimming

• Product Differentiation

• Acquisition

• Growth Strategy

39. Democratic Leadership style is also known as_____?


• Laissez Faire Leadership

• Participative Leadership

• Autocratic Leadership

40. What did companies replace their expansive multi-division portfolios with?


• Subsidiaries

• Corporations

• Larger portfolios

• Markets

41. Which of the following statements is true about blue ocean markets?


• Blue ocean markets tend to redefine the problem customers have and create products and services to solve it.

• Are not about technology innovations, but about linking current technology creatively to solve customer needs.

• Incumbents often create blue oceans???usually within their core business.

• All of these

42. What does the term "cash cow" mean in business?


• A business venture that eats up cash due to high maintenance and investment cost

• A company that generates little revenue, but has the potential to generate a lot

• A business venture that generates a steady return profits with little maintenance or investment needed

• A company in a market that has plenty of money to invest or acquire other smaller companies

43. What trait exists for both high market share and low market share companies?


• They are both in bankruptcy

• Both of them are small

• They can both be very profitable

• Neither have a competitive advantage

44. What does CAPM stand for?


• Capital Assets Price Management

• Company Asset Pricing Model

• Capital Assurance Population Model

• Capital Asset Pricing Model

45. What is predatory pricing?


• Selling a product at a very low or unsustainable price in order to drive competitors out of business

• Selling at a competive price based on the industry standard

• Selling at a higher price for discriminatory reasons

• Selling a product at a very high price in order to take advantage of a situation

46. What is one valid criticism of why it is NOT advised to rely on SWOT analysis?


• All of these

• The list is not based on any theory and is vague

• SWOT is a brainstorming framework, not an analytical tool

• Opportunities can end up being threats

47. In consideration of marketing, what is customer churn, or attrition rate?


• The proportion of customers who leave the firm during a certain time period

• The amount of money customers generate

• The speed at which customers enter the business

• The interval that customers return to the business

48. What encompasses the lifetime value of a customer?


• The customer's total spending power

• The value of a customer as a person

• The value of the customer and all that they own

• The prediction of the net profit estimated for the entire future relationship with a customer

• The customer's net virality effect

49. What is an "angel investor"?


• None of these

• A benevolent investor who forgives debt when a startup fails

• An investor that provides a startup with a seed investment, oftentimes also acting as advisers and confidants.

• An investor that comes in to save a failing company from default

50. What does "markup" mean in retail businesses?


• It is your total profit on a product

• The difference between how much a good or service costs to provide vs its actual selling price.

• It is your total revenue on a product

• It is your profit margin when taking into account customer acquisition costs

51. Which is NOT one of Porter's Five Forces?


• Threat of Substiute products or services

• Monopolization

• Barganing Power of suppliers

• Threat of New Entrants

52. What is a legal monopoly?


• It is a monopoly that is protected by law from competition usually through government means where a company has been granted exclusive rights to offer a particlar service in a specific region

• An agreement between two dominant companies in which they agree to allow one company to prosper in one product area and another to prosper elsewhere

• An agreement between two companies in which one company agrees to create inferiror goods at a low price point, and another agrees to create high quality products at a high price point to prevent competition costs between the two companies

• When a single holding company owns all companies in one industry.

53. What is the advantage of a sole-proprietorship?


• Full ownership

• No corporate tax

• All of these

• Little to no paperwork needed to start

54. What is the major difference between operational management and strategic management?


• Operational management focuses on external issues, while strategic management focuses on internal issues

• Operational management focuses on internal issues, while strategic management focuses on external issues

• Operational management focuses on financial issues, while strategic management focuses on regulatory issues

• They are both the same and completely interchangeable

55. What is customer acquisition cost?


• It is the cost to keep existing customers

• The cost associated with converting a potential customer into an actual customer

• It is the total cost of all activities related to marketing

• The cost a customer pays to acquire a certain product or service

56. What is an example of a disruptive technology?


• All of these

• Desktop PC

• Ford Model T

• iPod

57. A firm that decides the price of a good or service is a __________?


• Price Discriminator

• Price Maker

• Profit Maximizer

58. Within the Porter Five Forces Analysis, what is defined as the ability of customers or suppliers to coerce the firm?


• Political power

• Sales power

• Corporate power

• Bargaining power

59. What is a disavantage for a sole-propietorship?


• Double taxation

• Risk of Liability

• Difficult to market

• Inflexible

60. How can a firm achieve a low cost operation?


• Price Differentiation

• Lower prices

• Market Differentiation

• Economies of Scale

61. What is the benefit of a broad portfolio of assets?


• It decreases the amount of products to sell

• It increases risk

• It reduces competition

• It reduces specific risk

62. Why is customer acquisition cost important?


• It can play a major role in calculating the value of a new customer and calculating your return on investment (ROI).

• It can disuade customers from purchasing your goods or products

• It is only important if you have little to no customers

• It can give you an idea of how much you need to spend in order to keep your current customers

63. What is the primary focus of business strategy?


• Business strategy focuses on making products

• Business strategy focuses on implementing cross-functional decisions involving resources and performance

• Business strategy focuses on generating profits

• Business strategy focuses on making money

64. What is an example of a company that could be considered to be in a cyclical industry?


• A high end furniture store that notices that during bad economic times it has less customers purchasing items

• An airline company that notices customers tend to fly more during months with holidays

• A company that makes winter coats and finds it demand decreases greatly during the summer and other hot periods

• All of these

65. What organizational failure can cripple a business strategy?


• Highly motivated employees

• Lack of organization-wide flexibility

• Strategic positioning

• Highly educated executives

66. What does IPO stand for?


• Initial Public Offering

• Initial Public Opportunities

• Identical Public Operations

• Internal Public Opportunities

67. True or False? A SWOT analysis can be used for a person, place, or product.


• True

• False

68. Which of these is illegal?


• All of these

• Competitors agreeing in advance on who will submit a winning bid on a contract to effectively raise the purchase price for the buyer

• Competitors agreeing to allocate their market into geographical regions in which they have exclusive rights to

• Competitors getting together to set fix price for their products

69. What does SWOT stand for?


• Strategy, Weaknesses, Opportunities, Targets

• Strength, Weaknesses, Open Markets, Threats

• Strengths, Weaknesses, Opportunities, Targets

• Strengths, Weaknesses, Opportunities, Threats

70. Define a Differentiation Strategy


• Charging high prices for a product

• Constantly reinforcing to consumers the reasons why you are superior compared to your competitors

• A company that has a competitive advantage related to its products or services that make itself unique when compared to products or services of other traditional companies.

• Be the leader in an industry by keeping your costs down

71. Why are profit margins important?


• It can be useful when comparing similar companies to one another

• It is often a good indicator of how well you are doing in your industry

• It measures how much of every dollar in sales a company keeps; thus giving you an idea of how profitable you can be based on your expected sales.

• All of these

72. What is an example of a company that uses vertical integration?


• A video game company that creates, publishes, markets, and sells its own games

• An oil company that drills, refines, and sells its own oil at gas stations it owns

• A grocery store that grows, processes them, packages, and sells its own crops.

• All of these

73. Within SWOT analysis, what is an example of a threat?


• Competition

• Earnings

• Business

• Partnerships

74. What is a strength of McDonald's business strategy?


• Brand Recognition

• food menu

• Low differentiation

• negative publicity

75. What does the S stand for in the SWAT analysis?


• Strong

• Strengths

• Start

• Study

76. What is a good way to avoid discrimination lawsuits?


• Have a documented hiring process

• Avoiding any topics during the interview process related to age, disability, familial status, race, or sexual orientation.

• All of these

• Running background checks on all potential hires, not just a select few

77. In discovery-driven planning, general managers should:


• All of these

• Develop the tools and frameworks for understanding technology's role in strategic competition

• Manage the creative process

• Ensure those that are directly involved in the creative process are using the right tools

78. What are some of the possible disadvantages on relying on business cases when making strategic moves in business?


• Reporting Bias

• Simplifications

• Representative Bias

• All of these

79. Which of the following is a strategy used to gain a competitive advantage?


• (all of these)

• Cost leadership

• Innovation

• Operational effectiveness

• Differentiation

80. What are the two main objectives of marketing?


• Maximize production and minimize sales

• Increase sales and obtain a durable competitive advantage

• Increase in waste and decrease in efficiency

81. In what scenario is your company ready for an IPO?


• You have multiple revenue streams

• All of these

• Your business revenue is predictable and easy to see for investors

• You have high growth potential

82. What is a strategic alliance?


• When two competitors work together to fix prices

• When a larger companies acquires smaller company

• A cooperative strategy in which two or more companies combine some of their resources and specialities for the purpose of creating a competive advantage

• When two competitors agree to divide market regions

83. What is an important factor when determining a company's value?


• Their sales revenue

• Their profit margins

• All of these

• Their assets

84. When does a Monopoly exist?


• A specific person or enterprise is the only supplier of a particular commodity

• when there is economic competition

• there are viable substitute goods

85. SWOT analysis is one of the earliest business strategy frameworks. What does it stand for?


• Streaks, Weaknesses, Oddities, and Threats.

• Streams, Weaknesses, Obligations, and Threats.

• Streams, Weaknesses, Obligations, and Treaties.

• Strengths, Weaknesses, Opportunities, and Threats.

86. What is "The Icarus Paradox"?


• Businesses that bring about their own downfall through their own successes

• Businesses who who spend money to grow, but end up growing too fast and expend all the resources

87. In which situation would a joint venture make the most sense?


• A successful company that specializes in high end cat food with little market share and a successful company that specializes in low grade cat food with plenty of market share

• A telecommunications company who wishes to expand its network coverage and a competitor who owns several cell phone towers

• A traditional software company that wants to expand into retail and a marketing company who specializes in retail sales

• A very competive industry in which one competitor wants to try something new and brings in another competitor to make the process is smoother

88. What company is an example of a brandnomer?


• Band-Aid

• Xerox

• McDonalds

• Best Buy

89. What ratio is used as an indicator of the size of a leading firm in relation to its industry?


• Sample ratio

• Concentration ratio

• Sharpe Ratio

• Market ratio

• Quick ratio

90. How many of porter's five forces refer to competition?


• Three

• Two

• One

• Four

91. What market dominance trend is common in most industries?


• A dominant trend

• A steady trend

• An increasing trend

• A declining trend

92. What is another name for dynamic management?


• Creative management

• Non-strategic management

• Corporate strategy

• Strategic management

93. What is a time-series cross-sectional model that accounts for variation such as seasonality in the hospitality industry?


• Company regression

• Regression analysis

• Pooled Regression

• Wide regression

94. A firm employing a differentiation strategy is focusing on what?


• Large market share

• Customer loyalty

• Small market share

• Customer differentiation

95. Which is not a value chain function?


• Distribution

• Innovation

• Product Design

• Research