COMPXM CAPSTONE BUSINESS
SIMULATION EXAM SCRIPT WITH VERIFIED
QUESTIONS AND ANSWERS
●● Which of the following is not one of the basic reasons that a
company's strategy evolves over time?
a. An ongoing need to abandon those strategy features that are no longer
working well
b. The proactive efforts of company managers to improve the company's
financial performance and secure a competitive advantage
c. The need on the part of company managers to make no adjustments to
the company's business model
d. The need to respond to the actions and competitive moves of rival
firms
e. The need to keep strategy in step with changing industry and
competitive conditions
Answer: c. The need on the part of company managers to make no
adjustments to the company's business model
,Explanation
Regardless of whether a company's strategy changes gradually or
swiftly, the important point is that the task of crafting strategy is not a
one-time event but is always a work in progress.
●● A pharmaceutical giant acquires a manufacturer of rare specialty
drugs to improve its falling share prices and invests all its wealth into the
deal. Due to a deficit, it agrees to do a joint venture for the acquisition
and involves a major automobile giant to fund the deal. After a rocky
start, the companies now have a strong market position and generate
good profits. Which of the following regarding the company's strategy is
true?
a. It fails the performance test.
b. It fails the competitive advantage and the fit tests.
c. It is a winning strategy.
d. It fails in all three tests.
e. It fails the fit test, but passes the competitive advantage and
performance tests.
,Answer: c. It is a winning strategy.
Explanation
The pharmaceutical giant assessed the market, identified a suitable
solution to accentuate its market position, gained a competitive edge by
adding a specialty drug to its product line, and realized financial profits
and a strong market position. The strategy is a winner as it clears all
three tests.
●● Rainbow Resorts Inc. has multiple tropical resorts in various
locations. In a crowded market that caters to all kinds of consumers, this
resort caters mainly to LGBTQ customers with a guaranteed hassle-free
holiday experience at a premium price. What strategy is Rainbow using
to gain competitive advantage?
a. A low-cost provider strategy
b. A broad differentiation strategy
c. A focused low-cost strategy
d. A focused differentiation strategy
e. A best-cost provider strategy
, Answer: d. A focused differentiation strategy
Explanation
Rainbow Resorts caters to LGBTQ customers, focusing on a narrow
customer base and providing a unique holidaying experience. It has
adopted a focused differentiation strategy concentrating on a narrow
customer segment and outcompeting rivals by offering customers
attributes that meet their specialized needs and tastes better than rivals'
offerings.
●● It is normal for a company's strategy to end up being
a. left unchanged from management's original planned set of actions and
business approaches since making on-the-spot changes is too risky.
b. a combination of defensive moves to protect the company's market
share and offensive initiatives to set the company's product offering
apart from its rivals.
c. like the strategies of other industry members since all companies are
confronting much the same market conditions and competitive pressures.
d. a blend of deliberate planned actions to improve the company's
competitiveness and financial performance and as-needed unplanned
reactions to unanticipated developments and fresh market conditions.
SIMULATION EXAM SCRIPT WITH VERIFIED
QUESTIONS AND ANSWERS
●● Which of the following is not one of the basic reasons that a
company's strategy evolves over time?
a. An ongoing need to abandon those strategy features that are no longer
working well
b. The proactive efforts of company managers to improve the company's
financial performance and secure a competitive advantage
c. The need on the part of company managers to make no adjustments to
the company's business model
d. The need to respond to the actions and competitive moves of rival
firms
e. The need to keep strategy in step with changing industry and
competitive conditions
Answer: c. The need on the part of company managers to make no
adjustments to the company's business model
,Explanation
Regardless of whether a company's strategy changes gradually or
swiftly, the important point is that the task of crafting strategy is not a
one-time event but is always a work in progress.
●● A pharmaceutical giant acquires a manufacturer of rare specialty
drugs to improve its falling share prices and invests all its wealth into the
deal. Due to a deficit, it agrees to do a joint venture for the acquisition
and involves a major automobile giant to fund the deal. After a rocky
start, the companies now have a strong market position and generate
good profits. Which of the following regarding the company's strategy is
true?
a. It fails the performance test.
b. It fails the competitive advantage and the fit tests.
c. It is a winning strategy.
d. It fails in all three tests.
e. It fails the fit test, but passes the competitive advantage and
performance tests.
,Answer: c. It is a winning strategy.
Explanation
The pharmaceutical giant assessed the market, identified a suitable
solution to accentuate its market position, gained a competitive edge by
adding a specialty drug to its product line, and realized financial profits
and a strong market position. The strategy is a winner as it clears all
three tests.
●● Rainbow Resorts Inc. has multiple tropical resorts in various
locations. In a crowded market that caters to all kinds of consumers, this
resort caters mainly to LGBTQ customers with a guaranteed hassle-free
holiday experience at a premium price. What strategy is Rainbow using
to gain competitive advantage?
a. A low-cost provider strategy
b. A broad differentiation strategy
c. A focused low-cost strategy
d. A focused differentiation strategy
e. A best-cost provider strategy
, Answer: d. A focused differentiation strategy
Explanation
Rainbow Resorts caters to LGBTQ customers, focusing on a narrow
customer base and providing a unique holidaying experience. It has
adopted a focused differentiation strategy concentrating on a narrow
customer segment and outcompeting rivals by offering customers
attributes that meet their specialized needs and tastes better than rivals'
offerings.
●● It is normal for a company's strategy to end up being
a. left unchanged from management's original planned set of actions and
business approaches since making on-the-spot changes is too risky.
b. a combination of defensive moves to protect the company's market
share and offensive initiatives to set the company's product offering
apart from its rivals.
c. like the strategies of other industry members since all companies are
confronting much the same market conditions and competitive pressures.
d. a blend of deliberate planned actions to improve the company's
competitiveness and financial performance and as-needed unplanned
reactions to unanticipated developments and fresh market conditions.
