MGT 8803 STRATEGY FINAL EXAM
UPDATED ACTUAL QUESTIONS WITH CORRECT
ANSWERS
Question 1.
Disruptive Innovation
ANSWER
An innovation that creates a new market and value network and eventually disrupts an existing
market and value network, displacing established market-leading firms and products.
Question 2.
PESTEL Analysis
ANSWER
Framework analyzing Political, Economic, Socio-Cultural, Technological, Ecological, and Legal
factors.
Question 3.
Sometimes considered a "sixth force" to Porter's Five Forces Model
ANSWER
complements
Question 4.
What approach is appropriate in level 2 /level 3 uncertainty?
ANSWER
Scenario-Based Planning
Question 5.
Economies of Scope
ANSWER
Cost advantages that a firm gains by offering a wider range of products or services.
,Question 6.
Fragmented industries tend to be ___ profitable than consolidated ones.
ANSWER
Less
Question 7.
Effective goals should be...
ANSWER
specific, measurable, achievable, relevant, and time-bound (SMART).
Question 8.
Co-competition
ANSWER
A relationship between firms where they both cooperate and compete, often involving the
development and use of complements.
Question 9.
T or F: A Functional strategy is one that determines how capital will be allocated across various
businesses (or strategic business units).
ANSWER
False
"Capital allocation across SBUs occurs at the Corporate level of strategy formulation."
Question 10.
Organic growth
ANSWER
growth achieved through the expansion of current business activities
, Question 11.
4 different industry types identified in SCP model
ANSWER
Perfect competition, monopolistic competition, oligopoly, and monopoly.
Question 12.
What can managers use to prioritize PESTEL factors?
ANSWER
(1) probability of occurrence
(2) potential impact on the firm
Question 13.
How do strategic and tactical plans differ?
ANSWER
Strategic plans are long-term, broad, and developed at senior levels, focusing on overall
direction.
Tactical plans are short-term, narrow, and developed at lower levels, concentrating on specific
actions to implement strategic goals.
Question 14.
T or F: If a firm has no single line of business that represents 70% or more of the firms total revenues
the firm is considered to be diversified.
ANSWER
True
Question 15.
Benchmarking
ANSWER
Includes internal (across organizational units), competitive (comparing to competitors), non-
competitive/functional (comparing a specific function), process, product, financial, and
performance benchmarking
UPDATED ACTUAL QUESTIONS WITH CORRECT
ANSWERS
Question 1.
Disruptive Innovation
ANSWER
An innovation that creates a new market and value network and eventually disrupts an existing
market and value network, displacing established market-leading firms and products.
Question 2.
PESTEL Analysis
ANSWER
Framework analyzing Political, Economic, Socio-Cultural, Technological, Ecological, and Legal
factors.
Question 3.
Sometimes considered a "sixth force" to Porter's Five Forces Model
ANSWER
complements
Question 4.
What approach is appropriate in level 2 /level 3 uncertainty?
ANSWER
Scenario-Based Planning
Question 5.
Economies of Scope
ANSWER
Cost advantages that a firm gains by offering a wider range of products or services.
,Question 6.
Fragmented industries tend to be ___ profitable than consolidated ones.
ANSWER
Less
Question 7.
Effective goals should be...
ANSWER
specific, measurable, achievable, relevant, and time-bound (SMART).
Question 8.
Co-competition
ANSWER
A relationship between firms where they both cooperate and compete, often involving the
development and use of complements.
Question 9.
T or F: A Functional strategy is one that determines how capital will be allocated across various
businesses (or strategic business units).
ANSWER
False
"Capital allocation across SBUs occurs at the Corporate level of strategy formulation."
Question 10.
Organic growth
ANSWER
growth achieved through the expansion of current business activities
, Question 11.
4 different industry types identified in SCP model
ANSWER
Perfect competition, monopolistic competition, oligopoly, and monopoly.
Question 12.
What can managers use to prioritize PESTEL factors?
ANSWER
(1) probability of occurrence
(2) potential impact on the firm
Question 13.
How do strategic and tactical plans differ?
ANSWER
Strategic plans are long-term, broad, and developed at senior levels, focusing on overall
direction.
Tactical plans are short-term, narrow, and developed at lower levels, concentrating on specific
actions to implement strategic goals.
Question 14.
T or F: If a firm has no single line of business that represents 70% or more of the firms total revenues
the firm is considered to be diversified.
ANSWER
True
Question 15.
Benchmarking
ANSWER
Includes internal (across organizational units), competitive (comparing to competitors), non-
competitive/functional (comparing a specific function), process, product, financial, and
performance benchmarking
