MGT 8803 STRATEGY FINAL EXAM
UPDATED ACTUAL QUESTIONS AND CORRECT
ANSWERS
Question 1.
Match the Industry Characteristics to the best Porter 5 Forces Model Conclusion:
Many small competitors (rivals); many substitute products; high supplier bargaining power; little
investment required to start a new business or any other barrier to entry; limited ways to differentiate
a product; unsophisticated buyer with some brand loyalty and moderate switching costs; and a low
industry growth rate
ANSWER
Threat of substitutes
Question 2.
Considering the two growth strategies suggested above -- the Alabama Woods and the National
Timber company -- which one would be best described as an organic strategy?
- Alabama Woods
- National Timber
- Both are organic strategies
- neither are organic strategies
ANSWER
neither are organic strategies
Question 3.
Match the Industry Characteristics to the best Porter 5 Forces Model Conclusion:
Monopolistic competition: multiple strategic groups some that compete on cost leadership, some that
complete based on differentiation; strong brand loyalty reinforced by significant marketing expenses;
psychological and monetary buyer switching costs; and low supplier bargaining power.
ANSWER
Competitive rivalry
1/6
, Question 4.
Which term best matches the situation: When a corporation enters a new business in a different
industry from that in which it currently operates and does not expect to achieve any value chain
synergies through the combination.
- Unrelated diversification
- horizontal integration
- concentration
- vertical integration
- corporate integration
ANSWER
Unrelated diversification
Question 5.
Concluding the Georgia Lumber Company, George has been approached by entrepreneur who has
been successful in the business of installing solar energy panels on the roofs of rural barns in the
North and Central Georgia farm belt. The entrepreneur has offered to sell a controlling interest in his
company to the Georgia Lumber Company in exchange for cash and the opportunity to stay on and
continue to run the solar panel installation company. The company would continue to be run
autonomously as a subsidiary of the Georgia Lumber Company and the Georgia Lumber Company
would be entitled to 80% of the company's profits. Although there would be no synergies between the
solar SBU and the other SBUs George still likes the idea and believes that solar power could be a large
growth area for the firm. If the Georgia Lumber Company decided to pursue this opportunity, this
strategy would be best described as an example of _________
ANSWER
unrelated diversification
Question 6.
Consider both statements regarding combination strategies:
- Statement 1: Combination strategies are often difficult because they are inherently contradictory
- Statement 2: The goals of a combination strategy is to provide unique value in an efficient manner
ANSWER
Both statements are true
2/6
UPDATED ACTUAL QUESTIONS AND CORRECT
ANSWERS
Question 1.
Match the Industry Characteristics to the best Porter 5 Forces Model Conclusion:
Many small competitors (rivals); many substitute products; high supplier bargaining power; little
investment required to start a new business or any other barrier to entry; limited ways to differentiate
a product; unsophisticated buyer with some brand loyalty and moderate switching costs; and a low
industry growth rate
ANSWER
Threat of substitutes
Question 2.
Considering the two growth strategies suggested above -- the Alabama Woods and the National
Timber company -- which one would be best described as an organic strategy?
- Alabama Woods
- National Timber
- Both are organic strategies
- neither are organic strategies
ANSWER
neither are organic strategies
Question 3.
Match the Industry Characteristics to the best Porter 5 Forces Model Conclusion:
Monopolistic competition: multiple strategic groups some that compete on cost leadership, some that
complete based on differentiation; strong brand loyalty reinforced by significant marketing expenses;
psychological and monetary buyer switching costs; and low supplier bargaining power.
ANSWER
Competitive rivalry
1/6
, Question 4.
Which term best matches the situation: When a corporation enters a new business in a different
industry from that in which it currently operates and does not expect to achieve any value chain
synergies through the combination.
- Unrelated diversification
- horizontal integration
- concentration
- vertical integration
- corporate integration
ANSWER
Unrelated diversification
Question 5.
Concluding the Georgia Lumber Company, George has been approached by entrepreneur who has
been successful in the business of installing solar energy panels on the roofs of rural barns in the
North and Central Georgia farm belt. The entrepreneur has offered to sell a controlling interest in his
company to the Georgia Lumber Company in exchange for cash and the opportunity to stay on and
continue to run the solar panel installation company. The company would continue to be run
autonomously as a subsidiary of the Georgia Lumber Company and the Georgia Lumber Company
would be entitled to 80% of the company's profits. Although there would be no synergies between the
solar SBU and the other SBUs George still likes the idea and believes that solar power could be a large
growth area for the firm. If the Georgia Lumber Company decided to pursue this opportunity, this
strategy would be best described as an example of _________
ANSWER
unrelated diversification
Question 6.
Consider both statements regarding combination strategies:
- Statement 1: Combination strategies are often difficult because they are inherently contradictory
- Statement 2: The goals of a combination strategy is to provide unique value in an efficient manner
ANSWER
Both statements are true
2/6
