Executive Post Graduate Diploma in Management

Subject: Business Strategy

Sample Question paper (Reference only)
Level 1: Objective Type (2 marks each)
1.

The way in which a company decides to group its customers, based on important differences in their
needs and preferences, in order to gain a competitive advantage is termed as:
(a) Market segmentation
 (b) Process differentiation
 (c) Market mapping
 (d) Product differentiation

2.

The 3 factors, barriers to imitation, the capability of competitors and the general dynamism of the
industry environment dictate: (a) Superior profitability
 (b) Customer response time
 (c) Process innovation

(d) Durability of competitive advantage

3.

Almost every parent tends to believe that viewing violent programs on television is directly linked to
increase levels of aggressive behaviour in children. Research has found this to be untrue. The bias
that led to parents' erroneous conclusion is termed as: (a) Illusion of Control
 (b) Representativeness
 (c) Reasoning by Analogy

(d) Prior Hypothesis Bias

4.

A company is said to have a competitive advantage over its rivals when its: (a) Revenues are greater than the average revenues of all firms in its industry
 (b) Average revenues are greater than the average revenues of all firms in all the industries
 (c) Profitability is greater than the average profitability of all firms in all industries

(d) Profitability is greater than the average profitability of all firms in its industry

5.

In the process of formulating a mission statement, the first step is to define an organization's
business which in turn requires every company to ask three questions, namely, 'What is our
business'?, 'What will it be'? and: (a) When should we start?
 (b) Why should we be?

(c) What should it be?
 (d) How can we grow?

6.

The presence of a(a)____________________is an indication of strategic planning as an ongoing

process.
(a)  Top down approach  Process movement
Feedback loop  SWOT analysis

7.

The birth of Scotch Guard through an accident at 3M demonstrates that at times strategy can also
be a result of(a)____________________rather than well thought out plans.
(a)  Casual outlook  Slack approach
Serendipity  Lazing

8.

The success of the sale of Honda Cubs through retail stores demonstrates the possibility of: (a) Deliberate strategy being the realized strategy
 (b) Stated strategy being the realized strategy
 (c) Planned strategy being the realized strategy

(d) Emergent strategy being the realized strategy

9.

The recognition that uncertainty makes it difficult to forecast the future is what led to the pioneering
of this approach to planning: (a) Comprehensive approach
 (b) Lackadaisical approach
 (c) Planning approach

(d) Scenario approach

10. Among other components, what makes up Emotional Intelligence is:
(a)
 (b)
 (c)
 (d)

Empathy
Activity
Research
Character

11. Strategic leaders playing the power game with skill and attempting to build consensus for their ideas
rather than use their authority to force ideas through is a characteristic of leaders, termed as: (a) Emotional Intelligence
 (b) Classic Methods

(c) Astute Use of Power
 (d) Networked Circles

12. When a strategist uses simple stories to make sense out of complex problems, he/she is susceptible
to a bias termed as:
(a) Reasoning by Analogy
 (b) Illusion of Control
 (c) Prior Hypothesis Bias
 (d) Representativeness

13. (a)____________________requires the generation of both a plan and a critical analysis of the plan.
(a)
Devil's Advocacy  Dialectic Enquiry  Paraphrased Technique  Cognitive Application

14. When strategic planners are formulated in a vacuum by Top Managers who have little understanding
or appreciation of current operating realities, the approach they use is termed as:
(a) Ivory Tower
 (b) Unplanned Moves
 (c) Disorganized Setup
 (d) Cumulative Focus

15. Well constructed goals set by strategists must possess a characteristic of being:
(a)
 (b)
 (c)
 (d)

Challenging but realistic

Hard to achieve
Realistic but not challenging
Easy to achieve

16. In the Abel's framework for defining business, how customers needs are being satisfied would be
dictated by:
(a) Distinctive Competencies
 (b) Intellectual Capital
 (c) Distinct Identity
 (d) Emotional Capital

17. Cultural values can determine the way a company treats its employees, which can in turn determine
productivity.

(a) True
 (b) False

18. A company's closest competitors are those, who: (a)

 (b)

(c)
 (d)

Make substitute products or services

Make similar products or services
Serve the same basic customer needs
Operate within the same industry

19. The same basic customer needs that are served by a market define: (a)
 (b)

(c)
 (d)

Market characteristics
Market controls
Industry boundary
Industry competition

20. Distinct groups of customers within a market that can be differentiated from each other on the basis
of their distinct attributes and specific demands is termed as:
(a) Market segment
 (b) Customer profile
 (c) Industry boundary
 (d) Competition analysis

21. Colgate toothpaste enjoys high patronage amongst Indian consumers making it difficult for any new
entrant to wean away consumers to its own toothpaste offering. For Colgate, this brand loyalty acts
as a source of: (a) Learning curve effects

(b) Barrier to entry of potential competitors
 (c) Economies of scale
 (d) Switching costs

22. (a)____________________arise when a company can take advantage of its environment to

formulate and implement strategies that enable it to become more profitable.
(a)  Risks  Threats
Opportunities  Growth

23. A group of closely related industries is termed as:
(a)

 (b)
 (c)
 (d)

Sector
Cluster
Segment
Area

24. Superior production operations and processes due to experience, patents or secret processes can
help a company to attain: (a) Economies of Scale

(b) Absolute Cost Advantages
 (c) Switching Costs
 (d) Brand Loyalty

25. If a person currently uses Microsoft's Windows Operating System and has a library of related
software applications, for. e.g. word processing software and document files, it becomes expensive
for this person to switch to another computer operating system. In effect, Microsoft has this user:
(a) Locked in
 (b) Blocked in
 (c) Closed in
 (d) Shut in

26. One of the factors that dictates the intensity of rivalry in an industry is height of: (a) Customer barriers

(b) Exit barriers
 (c) Entry barriers
 (d) Merger barriers

27. Declining demand in an industry results in: (a)

 (b)

(c)
 (d)

Lesser rivalry among companies in an industry

No effect on rivalry
Greater rivalry among companies in an industry
Entry of new entrants into industry

28. The auto components supply industry, whose buyers are large automobile manufacturers such as
GM, Ford and Toyota is a good example of an industry in which: (a) Customers have strong bargaining power
 (b) Substitutes have strong bargaining power

(c) Buyers have strong bargaining power
 (d) Suppliers have strong bargaining power

29. There are no close substitutes for microprocessors. This give companies like Intel and AMD the
ability to charge higher prices than would be the case, if there were any substitutes for
microprocessors. In this scenario, the force, 'threat of substitutes' can be interpreted as:
(a) Weak competitive force
 (b) Neutral competitive force
 (c) Strong competitive force
 (d) All of the above

30. The implication of strategic group analysis on any company helps it in identifying: (a)
 (b)

(c)
 (d)

Who its suppliers are

Who its customers are
Who its immediate competitors are
All of the above

31. Within an industry, factors that inhibit the movement of companies between strategic groups is
termed as: (a) Entry barriers
 (b) Growth barriers
 (c) Merger barriers

(d) Mobility barriers

32. The shakeout stage in the industry life cycle ends, when it enters its: (a)
 (b)

(c)
 (d)

Growth stage
Embryonic stage
Maturity stage
Decline stage

33. One of the prime reasons behind the breakdown of an industry's state of equilibrium, resulting in the
unfreezing and subsequent refreezing of the industry state is: (a) Quality
 (b) Cost overruns
 (c) Economies of scale

(d) Innovation

34. Interest rates have a strong influence on a company's cost of capital and therefore can effect the
company's ability to raise funds and invest in new assets.

(a) True
 (b) False

35. Boeing Company's commercial jet aircraft, the 777, uses 132.500 engineered parts that are
produced around the world by 545 suppliers. This scenario demonstrates the effect of: (a) Globalization of customers

(b) Globalization of production
 (c) Liberalization of customers
 (d) Liberalization of markets

36. One of the four attributes of a national or country specific environment that has an important impact
on global competitiveness of companies located within that nation is: (a) Industry life cycle
 (b) Facility situations
 (c) Manufacturing bases

(d) Factor endowments

37. BJ wholesale's profitability was 50% higher than the average for retailing industry in the United
states between the period 1996-2001. For this period BJ's can be termed as possessing:
(a) Competitive advantage
 (b) Guerilla marketing
 (c) Innovative capabilities
 (d) All of the above

38. The more firm specific and difficult to imitate is a resource, the more likely a company is said to have
a: (a)
 (b)

(c)
 (d)

Innovative capabilities
Economies of scale
Distinctive competency
Learning effects

39. One of the four functions that make up the support activities in the value chain is: (a)

(b)
 (c)
 (d)

Macro environment
Materials management
Feedback loop
Superior innovation

40. Amongst resources that companies possess, 'Brand names' can be termed as: (a)
 (b)

(c)
 (d)

Virtual resource
Tangible resource
Intangible resource
Physical resource

Level 2: Descriptive Type (10 marks each)

1.

How the four generic building blocks of competitive advantage are related to each other?

2.

Why it is difficult for a company from being in one strategic group to change in a different strategic
group?

3.

What are the main ways in which companies can turn a fragmented industry into a consolidated
one?

4.

When is a company's competitive advantage is most likely to endure over time?

5.

Why are standards so important in many high technology industries? What are the competitive
implications of this?

6.

What are the benefits a firm can draw from a strategy of strategic outsourcing?

7.

What are the disadvantages that can accrue through Vertical Integration?

8.

What are the basic principles/steps of successful organization change?

9.

Explain the term 'Technological Paradigm Shift' and when does it occur?

10. Differentiate a tactical move of 'Price Signaling' from 'Price Leadership'.