Exam (elaborations)
Exam questions and answers Strategy for Premasters
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This document contains 113 exam questions that come from old exams and lessons. All questions are unique and prepare you well for the exam.
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1. A too narrow industry definition implies that your firmA) Has many substitutes and potential entrants and is a powerless price taker
B) Has many substitutes and potential entrants and is a monopolist
C) Has no substitutes and potential entrants and is a powerless price taker
D) Has no substitutes and potential entrants and is a monopolist
2. The SCP model proposes that
A) Organization structure influences employee conduct
B) Organization structure influences firm strategy
C) Industry structure influences employee conduct
D) Industry structure influences firm strategy
3. High entry barriers make an industry
A) Attractive for incumbents and new entrants
B) Attractive for incumbents but unattractive for new entrants
C) Unattractive for incumbents but attractive for new entrants
D) Unattractive for incumbents and new entrants
4. Apple’s brand name is an example of what kind of resource
A) Financial
B) Physical
C) Human
D) Organizational
5. What is an example of intangible resources over tangible resources?
A) They are much easier to acquire
B) They are much easier to protect
C) They are more likely to create a sustainable competitive advantage
D) All of the above
6. Imagine a bakery. The threat ‘high grain prices’ and the strength ‘high quality bread’ will likely ... in
the confrontation matrix.
A) Strengthen each other
B) Weaken each other
C) Not applicable
7. What is NOT a desirable effect of economies of scale?
A) Increasing employee specialization
B) Using more specialized machines
C) Spreading of overhead costs
D) Rising distance to markets and suppliers
8. If a firm has such a company structure that it can innovate better and quicker with results in
making higher quality projects, which differentiation style is it good in?
A) Relationships between firm and customer
B) Attributes of the product or service
C) Linkages within the firm
D) Linkages between the firm and other firms
9. In a declining industry that lacks strong pockets of continuing demand, what would NOT be
suitable strategy?
A) Process innovation
B) Market leadership
C) Market niche
D) Divest
,10. Cost leadership strategy compares best with...?
A) Reactor
B) Defender
C) Prospector
D) Analyzer
11. Which of the following companies has both an above-average accounting performance and an
above-normal economic performance?
A) Firm A: ROA = 10.4%, WACC = 8.8%, Industry average ROA = 13%.
B) Firm B: ROA = 3.2%, WACC = 3.4%, Industry average ROA = 3%.
C) Firm C: ROA = 4.5%, WACC = 4%, Industry average ROA = 3.8%
D) Firm D: ROA = 7,3%, WACC = 7.6%, Industry average ROA = 8%
12. Which of the following statements concerning the strategic management process is true?
A) Firm cannot survive a clear mission.
B) Proper strategies can only arise when firms go through all the steps of the strategic
management process.
C) Strategic choice is the most important step of the strategic management process.
D) Strategy implementation is just as important as a strategy choice.
13. As an investor, you own Ahold stock. You hear from some fellow investors the rumor that the firm
will not be able to pay the bills fort their suppliers this month. To which kind of financial ratios
would you look to verify whether this rumor is true?
A) Profitability ratios
B) Liquidity ratios
C) Activity ratios
D) Leverage ratios
14. You are looking on the Internet to buy the book for your Strategy course. Bol.com and Studystore
are selling the book “Strategic Management and Competitive Advantage”. The first selling the
book with cases, the second without cases.
Bol.com sells their version with cases for €95. You would have been willing to pay €105. Costs for
the publishing rights, printing and sending the book are are €75. At Studystore, the book without
cases is sold for €72. The preceived costs of copying the cases is €22 (copy costs you have to
pay your friends for example). The Studystore has a marge of €30 per book.
Which of the companies has a competitive advantage over the other and what is the size of
that competitive advantage?
A) Bol.com has a competitive advantage over Studystore and the size of the competitive
advantage is LESS than €5.
B) Studystore has a competitive advantage over bol.com and the size of the competitive
advantage is LESS than €5.
C) Bol.com has a competitive advantage over Studystore and the size of the competitive
advantage is MORE than €5.
D) Studystore has a competitive advantage over bol.com and the size of the competitive
advantage is MORE than €5.
, 15. Monsanto, an American company and biotechnology company offered a bid of 66 billion on the
German company Bayer. However, the European Commision is worried about this acquisition as
the combined company would get too much power within certain markets. Especially, since there
have been several large acquisitions among chemical companies in the last three years. The
European Union started to enforce the existing anti-trust rules more strictly.
You are asked by Monsato to analyze their external environment. To which of the element of
Monsato’s General Environment would fit the above mentioned?
A) Legal and political conditions
B) Cultural trends
C) Economic trend
D) This does not belong to the general environment
16. Green Frog is an environmentally friendly firm in the cosmetic industry. The firm wants to expand
by means of alliances. In which kind of situation is Green Frog able to use alliances? Green Frog
can use alliances:
A) To expand within the cosmetic industry
B) To expand to another industry, like the pharmaceuticals
C) For both A and B
D) For neither A or B
17. Which of the following set of goods are the most obvious example of substitutes?
A) Airplanes and engines
B) Airplanes and phones
C) Airplanes and gasoline
D) Airplanes and airports
18. Imagine that Amazon is considering to go into the pharmaceutical industry. Which of the following
industry characteristics would complicate into this industry?
A) The absence of economies of scale
B) The absence of mobility barriers
C) Undifferentiated products
D) Protective government policies
19. Which set of elements helps you to define an industry?
A) Similar production functionality and production process
B) Similar strategies and strategic dimensions
C) Similar markets and resources
D) Similar strategies and resources
20. @Sports is an American fitness chain offering fitness facilities as well various group lessons such
as Zumba, yoga and spanning in the US. While people remain interested in their health,
companies are struggeling to keep their profitability stable. Demand has been stable over past
years. New customers are mostly due to members switching their gym for another. In addition a
European chain, FatFree, has entered the American market. On what should @Sports focus their
efforts, given the characteristics of the industry?
A) Take over a competitor in order to create economies of scale
B) Introducing a radically new type of fintess class
C) Reducing the range of services to eventually sell the chain
D) Optimize the operational process
21. What is correct about the ‘organization’ question in the VRIO framework?
A) The ‘organization’ question determines the difference between a sustained and temporal
competitive advantage
B) The ‘organization’ question is the least important
C) A negative answer to the ‘organization’ question can lead to a competitive disadvantage
D) The ‘organization’ question becomes irrelevant if any of the other questions were negatively
answered
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