**MGT 8803 – Strategy
Actual Exam Questions & Correct Answers**
Multiple-Choice Questions (MCQ)
1. Which of the following best defines a firm’s strategy?
A. A set of operational activities to maximize efficiency
B. A long-term plan to achieve competitive advantage
C. A budgeting and forecasting process
D. A mission statement describing company values
Correct Answer: B
A strategy focuses on long-term positioning and competitive advantage, not day-to-day
tactics.
2. According to Porter, competitive advantage arises from:
A. Superior accounting ratios
B. Operational effectiveness alone
C. Performing different activities or similar activities differently
D. Maximizing scale economies
Correct Answer: C
3. A firm pursuing a differentiation strategy typically emphasizes:
A. Lowest cost in the industry
B. Unique value drivers such as design, quality, or brand
C. Undercutting rivals’ prices
D. Outsourcing all non-core activities
Correct Answer: B
4. The Resource-Based View (RBV) argues that sustainable competitive
advantage is achieved through resources that are:
, A. Visible, countable, and easy to track
B. Valuable, rare, inimitable, and non-substitutable
C. Operationally efficient and low cost
D. Primarily financial
Correct Answer: B
These are the VRIN/VRIO criteria.
5. In game theory, a Nash equilibrium occurs when:
A. Players collude to maximize joint profits
B. Each player chooses the best response given the other players’ choices
C. One player gains at the expense of others
D. The dominant strategy is used by all players
Correct Answer: B
6. In a five-forces analysis, high bargaining power of buyers typically results
in:
A. Higher industry profitability
B. Price sensitivity and pressure on margins
C. Increased barriers to entry
D. Lower threat of substitutes
Correct Answer: B
7. Which of the following is an example of a corporate-level strategy decision?
A. Should we lower product price?
B. How many sales reps should we hire?
C. Should the firm diversify into healthcare services?
D. What should the supply chain lead time be?
Correct Answer: C
8. A firm is most likely to pursue vertical integration when:
A. Suppliers have low bargaining power
B. Transaction costs in the market exceed internal coordination costs
Actual Exam Questions & Correct Answers**
Multiple-Choice Questions (MCQ)
1. Which of the following best defines a firm’s strategy?
A. A set of operational activities to maximize efficiency
B. A long-term plan to achieve competitive advantage
C. A budgeting and forecasting process
D. A mission statement describing company values
Correct Answer: B
A strategy focuses on long-term positioning and competitive advantage, not day-to-day
tactics.
2. According to Porter, competitive advantage arises from:
A. Superior accounting ratios
B. Operational effectiveness alone
C. Performing different activities or similar activities differently
D. Maximizing scale economies
Correct Answer: C
3. A firm pursuing a differentiation strategy typically emphasizes:
A. Lowest cost in the industry
B. Unique value drivers such as design, quality, or brand
C. Undercutting rivals’ prices
D. Outsourcing all non-core activities
Correct Answer: B
4. The Resource-Based View (RBV) argues that sustainable competitive
advantage is achieved through resources that are:
, A. Visible, countable, and easy to track
B. Valuable, rare, inimitable, and non-substitutable
C. Operationally efficient and low cost
D. Primarily financial
Correct Answer: B
These are the VRIN/VRIO criteria.
5. In game theory, a Nash equilibrium occurs when:
A. Players collude to maximize joint profits
B. Each player chooses the best response given the other players’ choices
C. One player gains at the expense of others
D. The dominant strategy is used by all players
Correct Answer: B
6. In a five-forces analysis, high bargaining power of buyers typically results
in:
A. Higher industry profitability
B. Price sensitivity and pressure on margins
C. Increased barriers to entry
D. Lower threat of substitutes
Correct Answer: B
7. Which of the following is an example of a corporate-level strategy decision?
A. Should we lower product price?
B. How many sales reps should we hire?
C. Should the firm diversify into healthcare services?
D. What should the supply chain lead time be?
Correct Answer: C
8. A firm is most likely to pursue vertical integration when:
A. Suppliers have low bargaining power
B. Transaction costs in the market exceed internal coordination costs
