EXAM QUESTIONS

Business Policy and Strategy Exam Questions

Business Policy and Strategy

EXAM Chapter (s) 1 through 12

200 Point Exam

Answer:

Strategic competitiveness is result of the successful formulation and implementation of a value-creating strategy. Above-average returns are those returns which are in excess of what an investor can expect to earn from investments that have similar risk. The strategic management activities are separated into four aspects. Two of the aspects lie under strategy formation; they are generating wisdom and creating art. The other two aspects are under strategy execution; they are applying science and waging war.

Answer:

The general environment involves the dimensions in the broader society that influence an industry and the firms within it. The factors in the general environment include Economic, Sociocultural, Global, Demographic and Political/Legal. The industry environment includes a whole set of factors that directly influence a firm and its competitive actions and competitive responses. These factors include the threat of new entrants, the threat of product substitutes, the power of buyers, the power of suppliers and the intensity of rivalry among competitors. These differences are important, because the organization must deal with all the factors and be able to analyze the competitive environment correctly.

Answer:

The four steps of the external environment analysis process are i) Identify the Market, ii) Identify environment factor (s). / Focus on factor (s) which most impact your business, iii) Classify as threat or opportunity & estimate magnitude of threat/opportunity and iv) Evaluate importance of factor and its impact on product/market. The firm wants to learn to identify attractive markets with the help of this process. Value is the result of giving benefits to customers and subtracting the cost of providing those benefits. It is very important for the firm to create value, because they must satisfy their customers as well as the investors. The return on investment is greatly affected by the value created by a firm.

Answer:

The internal analysis of a firm is important, because the firms must analyze its internal strengths and weaknesses. They must do an analysis of the internal environment as it will help them identify where they are lacking and need to improve to ensure success of the firm. It gives an organization certain advantages and disadvantages in meeting the needs of its target market. The firm can even identify its core competencies. Capabilities are the firm's basic elements that it uses to achieve the opportunities. They are the strengths of the firm and act as the key success factors.

Answer:

The three main questions that the firm must answer when choosing a business-level strategy are 'who it will serve?', 'what needs those target customers have that it will satisfy?' and 'how those needs will be satisfied?'. These questions are important, because they help the firm to offer superior value to customers. The firm can gage a lot of information and then develop a strategy that offers maximum value to customers and earns high returns or above-average returns.

Answer:

The cost leadership strategy allows the firm to earn above-average returns, because the low cost means ...