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CRAFTING & EXECUTING STRATEGY: THE QUEST FOR
COMPETITIVE ADVANTAGE — 23RD EDITION
(THOMPSON) EXAM QUESTIONS WITH VERIFIED
QUESTIONS DETAILED RATIONALES GRADED A+
Crafting & Executing Strategy: The Quest for Competitive Advantage — 23rd Edition
(Thompson) — Practice Questions
SECTION 1: WHAT IS STRATEGY AND WHY IS IT IMPORTANT? (Questions 1–30)
1. A company's strategy is best defined as:
A) Its approach to beating competitors.
B) Management's game plan for growing the business.
C) The choices and commitments that define the company's mission, objectives, and how it
competes.
D) Its statement of financial goals for the next five years.
Answer: C
Rationale: A company's strategy consists of the competitive moves and business approaches
that managers employ to compete successfully, improve performance, and grow the business .
2. The primary role of a company's strategy is to:
A) Maximize shareholder value in the short term.
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B) Describe its operational policies and procedures.
C) Specify how it will achieve sustainable competitive advantage and superior profitability.
D) Outline the company's marketing and sales targets.
Answer: C
Rationale: Strategy specifies how the company will achieve sustainable competitive advantage
and superior profitability .
3. A winning strategy is one that:
A) Is the most ambitious and aggressive in the industry.
B) Fits the company's situation, builds competitive advantage, and improves company
performance.
C) Is copied from the industry's most successful player.
D) Focuses solely on innovation and new product development.
Answer: B
Rationale: A winning strategy fits the company's internal and external situation, builds
competitive advantage, and improves performance .
4. A company's strategic plan outlines:
A) The CEO's vision for the company without specific details.
B) The organization's direction, business model, and performance targets.
C) A detailed budget for the upcoming fiscal year.
D) The internal code of conduct and ethics for employees.
Answer: B
Rationale: The strategic plan maps out where the company is headed, establishes targets, and
outlines the business model and competitive approaches .
5. The strategy-making, strategy-executing process:
A) Is primarily the responsibility of top management.
B) Is a task for a company's strategic planning department.
C) Involves multiple levels of management and key personnel across the organization.
D) Is a one-time event conducted at annual corporate retreats.
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Answer: C
Rationale: Strategy-making and execution involves multiple levels of management and key
personnel across the organization .
6. Which of the following is NOT one of the managerial considerations in determining how to
compete successfully?
A) How can a company attract, keep, and please customers?
B) How can a company modify its entire product line to emphasize its internal service
attributes?
C) How should a company respond to changing economic and market conditions?
D) How should a company be competitive against rivals?
Answer: B
Rationale: Internal service attributes are modified to meet product line changes based on
market changes rather than vice versa. Managerial considerations serve consumers better while
increasing performance .
7. A company's business model:
A) Sets forth the economic logic for making money in a business, given the company's strategy.
B) Describes the company's mission and values.
C) Outlines the organizational structure.
D) Lists the company's financial objectives.
Answer: A
Rationale: The business model sets forth the economic logic for making money in a business,
given the company's strategy .
8. The customer value proposition portion of a company's business model concerns:
A) The company's approach to satisfying buyer needs and requirements at a price they will
consider a good value.
B) The company's cost structure.
C) The company's marketing budget.
D) The company's distribution channels.
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Answer: A
Rationale: The customer value proposition is the company's approach to satisfying buyer needs
and requirements at a price they will consider a good value .
9. The profit formula portion of a company's business model concerns:
A) The company's approach to satisfying customer needs.
B) A plan for a cost structure that will enable the company to deliver the customer value
proposition profitably.
C) The company's marketing strategy.
D) The company's organizational structure.
Answer: B
Rationale: The profit formula is a plan for a cost structure that will enable the company to
deliver the customer value proposition profitably .
10. A company achieves sustainable competitive advantage when:
A) It has the lowest costs in the industry.
B) It can meet customer needs more effectively or efficiently than rivals and the basis for this is
durable despite competitors' efforts to match or surpass it.
C) It has the largest market share.
D) It has the most innovative products.
Answer: B
Rationale: A company achieves sustainable competitive advantage when it can meet customer
needs more effectively or efficiently than rivals and the basis for this advantage is durable .
11. Strategy, at its essence, is about:
A) Matching rival businesses' products and quality dimensions.
B) Building profits for short-term success.
C) Realigning the market to provoke change in rival companies.
D) Developing lasting success that can support growth and secure the company's future over
the long term.
Answer: D
CRAFTING & EXECUTING STRATEGY: THE QUEST FOR
COMPETITIVE ADVANTAGE — 23RD EDITION
(THOMPSON) EXAM QUESTIONS WITH VERIFIED
QUESTIONS DETAILED RATIONALES GRADED A+
Crafting & Executing Strategy: The Quest for Competitive Advantage — 23rd Edition
(Thompson) — Practice Questions
SECTION 1: WHAT IS STRATEGY AND WHY IS IT IMPORTANT? (Questions 1–30)
1. A company's strategy is best defined as:
A) Its approach to beating competitors.
B) Management's game plan for growing the business.
C) The choices and commitments that define the company's mission, objectives, and how it
competes.
D) Its statement of financial goals for the next five years.
Answer: C
Rationale: A company's strategy consists of the competitive moves and business approaches
that managers employ to compete successfully, improve performance, and grow the business .
2. The primary role of a company's strategy is to:
A) Maximize shareholder value in the short term.
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B) Describe its operational policies and procedures.
C) Specify how it will achieve sustainable competitive advantage and superior profitability.
D) Outline the company's marketing and sales targets.
Answer: C
Rationale: Strategy specifies how the company will achieve sustainable competitive advantage
and superior profitability .
3. A winning strategy is one that:
A) Is the most ambitious and aggressive in the industry.
B) Fits the company's situation, builds competitive advantage, and improves company
performance.
C) Is copied from the industry's most successful player.
D) Focuses solely on innovation and new product development.
Answer: B
Rationale: A winning strategy fits the company's internal and external situation, builds
competitive advantage, and improves performance .
4. A company's strategic plan outlines:
A) The CEO's vision for the company without specific details.
B) The organization's direction, business model, and performance targets.
C) A detailed budget for the upcoming fiscal year.
D) The internal code of conduct and ethics for employees.
Answer: B
Rationale: The strategic plan maps out where the company is headed, establishes targets, and
outlines the business model and competitive approaches .
5. The strategy-making, strategy-executing process:
A) Is primarily the responsibility of top management.
B) Is a task for a company's strategic planning department.
C) Involves multiple levels of management and key personnel across the organization.
D) Is a one-time event conducted at annual corporate retreats.
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Answer: C
Rationale: Strategy-making and execution involves multiple levels of management and key
personnel across the organization .
6. Which of the following is NOT one of the managerial considerations in determining how to
compete successfully?
A) How can a company attract, keep, and please customers?
B) How can a company modify its entire product line to emphasize its internal service
attributes?
C) How should a company respond to changing economic and market conditions?
D) How should a company be competitive against rivals?
Answer: B
Rationale: Internal service attributes are modified to meet product line changes based on
market changes rather than vice versa. Managerial considerations serve consumers better while
increasing performance .
7. A company's business model:
A) Sets forth the economic logic for making money in a business, given the company's strategy.
B) Describes the company's mission and values.
C) Outlines the organizational structure.
D) Lists the company's financial objectives.
Answer: A
Rationale: The business model sets forth the economic logic for making money in a business,
given the company's strategy .
8. The customer value proposition portion of a company's business model concerns:
A) The company's approach to satisfying buyer needs and requirements at a price they will
consider a good value.
B) The company's cost structure.
C) The company's marketing budget.
D) The company's distribution channels.
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Answer: A
Rationale: The customer value proposition is the company's approach to satisfying buyer needs
and requirements at a price they will consider a good value .
9. The profit formula portion of a company's business model concerns:
A) The company's approach to satisfying customer needs.
B) A plan for a cost structure that will enable the company to deliver the customer value
proposition profitably.
C) The company's marketing strategy.
D) The company's organizational structure.
Answer: B
Rationale: The profit formula is a plan for a cost structure that will enable the company to
deliver the customer value proposition profitably .
10. A company achieves sustainable competitive advantage when:
A) It has the lowest costs in the industry.
B) It can meet customer needs more effectively or efficiently than rivals and the basis for this is
durable despite competitors' efforts to match or surpass it.
C) It has the largest market share.
D) It has the most innovative products.
Answer: B
Rationale: A company achieves sustainable competitive advantage when it can meet customer
needs more effectively or efficiently than rivals and the basis for this advantage is durable .
11. Strategy, at its essence, is about:
A) Matching rival businesses' products and quality dimensions.
B) Building profits for short-term success.
C) Realigning the market to provoke change in rival companies.
D) Developing lasting success that can support growth and secure the company's future over
the long term.
Answer: D
