©FYNDLAY 2025 ALL RIGHTS RESERVED
Chapter 1 STRATEGIC MANAGEMENT
Exam Questions and Answers 100% Pass
Strategy - ANS Set of related actions that managers take to increase their company's
performance
Strategic Leadership - ANS Creating competitive advantage through effective management of
the strategy-making process
Strategy Formulation - ANS Selecting strategies based on analysis of an organization's
external and internal environment
Strategy implementation - ANS Putting strategies into action
Risk Capital - ANS Equity capital for which there is no guarantee that stockholder will:
recoup their investment
Earn a decent return
Determinants of Shareholder Value - ANS Profitabilty
Effectiveness of strategies
Profit Growth
Shareholder Value
Shareholder value - ANS Returns that shareholders earn from purchasing shares in a
company: Sources:
©FYNDLAY 1
, ©FYNDLAY 2025 ALL RIGHTS RESERVED
Capital appreciation in the value of a company's shares
Dividend payments
Profitability - ANS Return a company makes on the capital invested in the enterprise
Return on invested capital (ROIC) - ANS Net profit over the capital invested in a firm
Profitability is the result of : - ANS Result of how efficiently the capital is used to satisfy
customer needs
Profit growth - ANS Increase in net profit over time
Profit Growth is achieved by: - ANS 1.Selling products in rapidly growing markets
2.Gaining market share from rivals
3.Selling more to existing customers
4.Expanding overseas
5. diversifying into new businesses
To boost profitability and profit growth, managers must: - ANS 1.Use strategies to give their
company a competitive advantage over rivals
2.Deliver high profitability and sustainable profit growth
Competitive advantage - ANS Occurs when a company's profitability is greater than the
average profitability and profit growth of firms in its industry
Sustained competitive advantage - ANS A company's strategies enable it to maintain above-
average profitability for a number of years
Strategic management Involves: - ANS 1. General Managers
©FYNDLAY 2
Chapter 1 STRATEGIC MANAGEMENT
Exam Questions and Answers 100% Pass
Strategy - ANS Set of related actions that managers take to increase their company's
performance
Strategic Leadership - ANS Creating competitive advantage through effective management of
the strategy-making process
Strategy Formulation - ANS Selecting strategies based on analysis of an organization's
external and internal environment
Strategy implementation - ANS Putting strategies into action
Risk Capital - ANS Equity capital for which there is no guarantee that stockholder will:
recoup their investment
Earn a decent return
Determinants of Shareholder Value - ANS Profitabilty
Effectiveness of strategies
Profit Growth
Shareholder Value
Shareholder value - ANS Returns that shareholders earn from purchasing shares in a
company: Sources:
©FYNDLAY 1
, ©FYNDLAY 2025 ALL RIGHTS RESERVED
Capital appreciation in the value of a company's shares
Dividend payments
Profitability - ANS Return a company makes on the capital invested in the enterprise
Return on invested capital (ROIC) - ANS Net profit over the capital invested in a firm
Profitability is the result of : - ANS Result of how efficiently the capital is used to satisfy
customer needs
Profit growth - ANS Increase in net profit over time
Profit Growth is achieved by: - ANS 1.Selling products in rapidly growing markets
2.Gaining market share from rivals
3.Selling more to existing customers
4.Expanding overseas
5. diversifying into new businesses
To boost profitability and profit growth, managers must: - ANS 1.Use strategies to give their
company a competitive advantage over rivals
2.Deliver high profitability and sustainable profit growth
Competitive advantage - ANS Occurs when a company's profitability is greater than the
average profitability and profit growth of firms in its industry
Sustained competitive advantage - ANS A company's strategies enable it to maintain above-
average profitability for a number of years
Strategic management Involves: - ANS 1. General Managers
©FYNDLAY 2
