GM105 Practice Exam
Select the most appropriate answer to each question.
1. Two of the primary drivers of the new competitive landscape are:
a. Slow technological changes and increased inflation
b. Rapid technological changes and emergence of a global economy and technology
c. Increased competition and decreasing tariffs
d. Increased availability of capital and increased competition
2. The I/O model and the resource-based view of the firm suggest conditions that firms should study in order
a. Compete in domestic but not international markets
b. Examine strategic outputs achieved mainly in the last 5-year period
c. Engage in different sets of competitive dynamics
d. Gain strategic inputs to successfully formulate and implement strategies
3. The environmental segments that comprise the general environment typically will not include:
4. The threat of new entrants is increased if:
a. Access to distribution channels is hard to gain
b. Economies of scale in the industry are high
c. Product differentiation the industry is low
d. Capital requirements in the industry are high
5. A nonequity strategic alliance exists when:
a. Two firms join together to create a new company.
b. A contract is granted to a company to supply, produce, or distribute a firm’s goods.
c. Two partners in an alliance own equal shares in the combined entity.
d. The partners agree to sell bonds instead of stock in order to finance a new venture.
6. A benefit of being a second mover is:
a. An absence of the need to be the largest firm in the industry.
b. That a firm may be able to respond to first movers’ competitive actions without the risks and
development costs experienced by the first movers.
c. The absence of any risk.
d. The ability to lead the industry into new areas of product development and gain customer loyalty from
7. The two types of complementary strategic alliances are:
a. Vertical and horizontal
b. Macro and micro
c. Outsourcing and insourcing
d. Top and bottom
8. A company’s distinctive competencies
a. represent the unique strengths of the company.
b. refer to company strengths that competitors cannot easily match or imitate.
c. form the bedrock of a company’s strategy.
d. can be based in any of the value creation activities of the company.
e. are all of these.
9. Which of the following statements describes the relationship between strategies and competencies
a. only corporate-level strategies build competencies.
b. competencies shape strategy.
c. strategies help an organization develop new competencies.
d. competencies shape strategy, and strategies help an organization develop new competencies.
e. all of these.
10. The risks of a cost leadership strategy include all of the following EXCEPT:
a. investment in manufacturing equipment can become obsolete due to technological changes.
b. firms may fail to detect changes in customer preferences.
c. competitors may learn how to successfully imitate their strategy.
d. firms may fail to include enough unique features in the product.
e. the price elasticity is low in the market.
Answer Key to Practice Exam