MBA 701 Module 3 video Quiz | Questions and Answers | 2026
Update | 100% Correct - LSUS. - 169 Questions
Comprehensive examination on MBA 701 Module 3 video Quiz | Questions and Answers | 2026 Update | 100%
Correct - LSUS.. It contains 169 multiple-choice questions, each with four distractors and a fully worked rationale
that explains why the keyed answer is correct. Content is organized into 8 focused sections: Strategic
Management, Financial Accounting, Marketing Management, Operations and Supply Chain Management,
Organizational Behavior, Business Analytics, Business Ethics and Corporate Social Responsibility, Managerial
Economics. Targeted learning outcomes include: Demonstrate mastery of core concepts. Every item has been
reviewed for clinical accuracy, current guidelines, and clarity so that students can study with confidence and
self-correct as they work through the bank. Use it as a high-yield review immediately before the exam, or as a
structured practice tool during the unit - the rationales double as concise teaching notes. The recommended
writing time is 3 hours, with a passing score of 70%. Aligned with Aligned with US university standards.
standards and reflects the question style commonly seen on accredited program examinations. Students
consistently achieving above the cut score on this bank have historically gone on to earn A+ on the corresponding
course exam. Read every stem carefully - distractors are written to look plausible, and the best answer is
sometimes the one that addresses the patient's most immediate physiological or safety need. Where multiple
options appear correct, prioritize airway, breathing, circulation, safety, and Maslow's hierarchy before
Section 1: Strategic Management (Questions 1-22)
1 A firm's core competency yields a sustainable competitive advantage only
when it is valuable, rare, imperfectly imitable, and non-substitutable. Which
scenario best exemplifies a failure of non-substitutability?
A) A pharmaceutical company holds a patent on a blockbuster drug with no
close therapeutic alternatives.
B) A software firm's unique algorithm is protected by trade secrets and
cannot be reverse-engineered.
C) A luxury automaker's brand reputation is built on decades of heritage and
customer loyalty.
D) A logistics company's efficient route optimization can be replaced by a
third-party AI platform offering superior service.
Answer: D
Rationale: Non-substitutability requires no strategic equivalent. Option D
shows a substitute (AI platform) that erodes the advantage. Options A, B, and
C describe resources that are difficult to substitute.
2 In the context of the VRIO framework, a resource that is valuable but
common across competitors leads to:
A) Temporary competitive advantage
B) Competitive parity
,C) Sustained competitive advantage
D) Competitive disadvantage
Answer: B
Rationale: VRIO: valuable + rare + costly to imitate + organized to capture
value -> sustained advantage. If only valuable, the firm achieves parity because
competitors also possess the resource. Temporary advantage requires value and
rarity.
3 A company pursuing a blue ocean strategy would most likely:
A) Compete aggressively in an existing market with lower prices
B) Create a new market space where competition is irrelevant
C) Focus on incremental improvements to existing products
D) Acquire rivals to consolidate market share
Answer: B
Rationale: Blue ocean strategy involves creating uncontested market space,
making competition irrelevant. Option A is red ocean (competing in existing
markets). Options C and D are not blue ocean approaches.
4 Which of the following best describes the 'ambidexterity' challenge in
strategic management?
A) Balancing cost reduction with product differentiation simultaneously
B) Managing both exploration of new opportunities and exploitation of
existing capabilities
C) Allocating resources between domestic and international operations
D) Aligning shareholder interests with managerial incentives
Answer: B
Rationale: Ambidexterity refers to a firm's ability to simultaneously explore
new possibilities and exploit existing competencies. Option A is a generic
strategic trade-off; C and D are unrelated to the core concept.
5 A diversified conglomerate uses an economic value added (EVA) metric to
allocate capital across business units. Which strategic implication arises if a
division consistently has negative EVA?
A) The division should receive increased investment to turn around
performance
,B) The division destroys shareholder value and may be a candidate for
divestiture
C) The division is generating positive accounting profit but not economic
profit
D) The division's cost of capital is lower than its return on invested capital
Answer: B
Rationale: Negative EVA means the division's after-tax operating profit does
not cover the cost of capital, destroying value. Option D is the opposite. While
turnaround is possible, divestiture is a typical strategic response if persistent.
6 In scenario analysis for strategic planning, which step is critical to avoid
confirmation bias?
A) Identifying key drivers of change using external data
B) Assigning probabilities to each scenario based on historical trends
C) Deliberately developing a 'wild card' scenario that challenges assumptions
D) Selecting the most likely scenario as the basis for strategy
Answer: C
Rationale: Confirmation bias leads managers to favor scenarios that confirm
existing beliefs. Including a 'wild card' scenario forces consideration of
low-probability, high-impact events that challenge assumptions, reducing bias.
7 A multi-business firm uses the BCG matrix. A business unit with high
market share in a low-growth industry is classified as a 'cash cow'. The
recommended strategy for this unit is to:
A) Invest heavily to increase market share
B) Harvest profits and limit further investment
C) Divest the unit to free up resources
D) Build selectively to exploit growth opportunities
Answer: B
Rationale: Cash cows generate strong cash flows with low reinvestment needs.
The recommended strategy is to harvest (milk) profits while maintaining
position, not invest heavily (A) or divest (C). Building is for question marks.
8 Which of the following scenarios illustrates a firm effectively using 'real
options reasoning' in strategic investment decisions?
, A) A firm commits to a large, irreversible factory expansion based on
optimistic demand forecasts
B) A pharmaceutical company stages investment in a new drug by funding
Phase I trials before deciding on later phases
C) A retailer uses net present value (NPV) to evaluate a one-time investment
in a new store
D) A manufacturer benchmarks competitors' capital expenditures to set its
own budget
Answer: B
Rationale: Real options reasoning involves making sequential investments to
preserve flexibility under uncertainty. Option B exemplifies staging (option to
abandon or continue). Option A is irreversible commitment; C is standard NPV
without flexibility; D is imitation.
9 A firm pursuing a differentiation strategy must ensure that the premium price
customers pay exceeds the cost of delivering unique value. This condition is
known as:
A) Value-price-cost (VPC) framework
B) Price-value gap
C) Strategic fit
D) Break-even analysis
Answer: A
Rationale: The VPC framework states that differentiation is profitable only if
the customer's willingness to pay (value) minus price is positive and price
minus cost is positive. Option B is vague; C refers to alignment; D is not
specific to differentiation strategy.
10 A firm's board of directors is evaluating a CEO's proposal to pursue a
horizontal integration strategy. Which condition most strongly supports the
likelihood of value creation?
A) The target firm operates in a completely unrelated industry
B) The acquisition will increase market concentration and allow price
coordination
C) The combined entity can achieve economies of scale and eliminate
redundant operations
D) The target firm has a weak management team that can be replaced
Update | 100% Correct - LSUS. - 169 Questions
Comprehensive examination on MBA 701 Module 3 video Quiz | Questions and Answers | 2026 Update | 100%
Correct - LSUS.. It contains 169 multiple-choice questions, each with four distractors and a fully worked rationale
that explains why the keyed answer is correct. Content is organized into 8 focused sections: Strategic
Management, Financial Accounting, Marketing Management, Operations and Supply Chain Management,
Organizational Behavior, Business Analytics, Business Ethics and Corporate Social Responsibility, Managerial
Economics. Targeted learning outcomes include: Demonstrate mastery of core concepts. Every item has been
reviewed for clinical accuracy, current guidelines, and clarity so that students can study with confidence and
self-correct as they work through the bank. Use it as a high-yield review immediately before the exam, or as a
structured practice tool during the unit - the rationales double as concise teaching notes. The recommended
writing time is 3 hours, with a passing score of 70%. Aligned with Aligned with US university standards.
standards and reflects the question style commonly seen on accredited program examinations. Students
consistently achieving above the cut score on this bank have historically gone on to earn A+ on the corresponding
course exam. Read every stem carefully - distractors are written to look plausible, and the best answer is
sometimes the one that addresses the patient's most immediate physiological or safety need. Where multiple
options appear correct, prioritize airway, breathing, circulation, safety, and Maslow's hierarchy before
Section 1: Strategic Management (Questions 1-22)
1 A firm's core competency yields a sustainable competitive advantage only
when it is valuable, rare, imperfectly imitable, and non-substitutable. Which
scenario best exemplifies a failure of non-substitutability?
A) A pharmaceutical company holds a patent on a blockbuster drug with no
close therapeutic alternatives.
B) A software firm's unique algorithm is protected by trade secrets and
cannot be reverse-engineered.
C) A luxury automaker's brand reputation is built on decades of heritage and
customer loyalty.
D) A logistics company's efficient route optimization can be replaced by a
third-party AI platform offering superior service.
Answer: D
Rationale: Non-substitutability requires no strategic equivalent. Option D
shows a substitute (AI platform) that erodes the advantage. Options A, B, and
C describe resources that are difficult to substitute.
2 In the context of the VRIO framework, a resource that is valuable but
common across competitors leads to:
A) Temporary competitive advantage
B) Competitive parity
,C) Sustained competitive advantage
D) Competitive disadvantage
Answer: B
Rationale: VRIO: valuable + rare + costly to imitate + organized to capture
value -> sustained advantage. If only valuable, the firm achieves parity because
competitors also possess the resource. Temporary advantage requires value and
rarity.
3 A company pursuing a blue ocean strategy would most likely:
A) Compete aggressively in an existing market with lower prices
B) Create a new market space where competition is irrelevant
C) Focus on incremental improvements to existing products
D) Acquire rivals to consolidate market share
Answer: B
Rationale: Blue ocean strategy involves creating uncontested market space,
making competition irrelevant. Option A is red ocean (competing in existing
markets). Options C and D are not blue ocean approaches.
4 Which of the following best describes the 'ambidexterity' challenge in
strategic management?
A) Balancing cost reduction with product differentiation simultaneously
B) Managing both exploration of new opportunities and exploitation of
existing capabilities
C) Allocating resources between domestic and international operations
D) Aligning shareholder interests with managerial incentives
Answer: B
Rationale: Ambidexterity refers to a firm's ability to simultaneously explore
new possibilities and exploit existing competencies. Option A is a generic
strategic trade-off; C and D are unrelated to the core concept.
5 A diversified conglomerate uses an economic value added (EVA) metric to
allocate capital across business units. Which strategic implication arises if a
division consistently has negative EVA?
A) The division should receive increased investment to turn around
performance
,B) The division destroys shareholder value and may be a candidate for
divestiture
C) The division is generating positive accounting profit but not economic
profit
D) The division's cost of capital is lower than its return on invested capital
Answer: B
Rationale: Negative EVA means the division's after-tax operating profit does
not cover the cost of capital, destroying value. Option D is the opposite. While
turnaround is possible, divestiture is a typical strategic response if persistent.
6 In scenario analysis for strategic planning, which step is critical to avoid
confirmation bias?
A) Identifying key drivers of change using external data
B) Assigning probabilities to each scenario based on historical trends
C) Deliberately developing a 'wild card' scenario that challenges assumptions
D) Selecting the most likely scenario as the basis for strategy
Answer: C
Rationale: Confirmation bias leads managers to favor scenarios that confirm
existing beliefs. Including a 'wild card' scenario forces consideration of
low-probability, high-impact events that challenge assumptions, reducing bias.
7 A multi-business firm uses the BCG matrix. A business unit with high
market share in a low-growth industry is classified as a 'cash cow'. The
recommended strategy for this unit is to:
A) Invest heavily to increase market share
B) Harvest profits and limit further investment
C) Divest the unit to free up resources
D) Build selectively to exploit growth opportunities
Answer: B
Rationale: Cash cows generate strong cash flows with low reinvestment needs.
The recommended strategy is to harvest (milk) profits while maintaining
position, not invest heavily (A) or divest (C). Building is for question marks.
8 Which of the following scenarios illustrates a firm effectively using 'real
options reasoning' in strategic investment decisions?
, A) A firm commits to a large, irreversible factory expansion based on
optimistic demand forecasts
B) A pharmaceutical company stages investment in a new drug by funding
Phase I trials before deciding on later phases
C) A retailer uses net present value (NPV) to evaluate a one-time investment
in a new store
D) A manufacturer benchmarks competitors' capital expenditures to set its
own budget
Answer: B
Rationale: Real options reasoning involves making sequential investments to
preserve flexibility under uncertainty. Option B exemplifies staging (option to
abandon or continue). Option A is irreversible commitment; C is standard NPV
without flexibility; D is imitation.
9 A firm pursuing a differentiation strategy must ensure that the premium price
customers pay exceeds the cost of delivering unique value. This condition is
known as:
A) Value-price-cost (VPC) framework
B) Price-value gap
C) Strategic fit
D) Break-even analysis
Answer: A
Rationale: The VPC framework states that differentiation is profitable only if
the customer's willingness to pay (value) minus price is positive and price
minus cost is positive. Option B is vague; C refers to alignment; D is not
specific to differentiation strategy.
10 A firm's board of directors is evaluating a CEO's proposal to pursue a
horizontal integration strategy. Which condition most strongly supports the
likelihood of value creation?
A) The target firm operates in a completely unrelated industry
B) The acquisition will increase market concentration and allow price
coordination
C) The combined entity can achieve economies of scale and eliminate
redundant operations
D) The target firm has a weak management team that can be replaced
