Business Strategy MCQs
Business Strategy MCQs
Our experts have gathered these Business Strategy MCQs through research, and we hope that you will be able to see how much knowledge base you have for the subject of Business Strategy by answering these multiple-choice questions.
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1: What should be included in a business plan?
A. Competitor Analysis
B. Executive Summary
C. Market Analysis
D. All of these
2: What is an example of a company that uses horizontal integration?
A. Shell oil who explores and drills its own oil
B. EA Games, which develop and publish their own video games
C. Apple who create their own computers and sells them in their own stores
D. Disney who creates movies, televison shows, toys, and theme parks for kids
3: Which is NOT one of Porter's Five Forces?
A. Threat of New Entrants
B. Monopolization
C. Barganing Power of suppliers
D. Threat of Substiute products or services
4: What trait exists for both high market share and low market share companies?
A. Both of them are small
B. They are both in bankruptcy
C. Neither have a competitive advantage
D. They can both be very profitable
5: In consideration of marketing, what is customer churn, or attrition rate?
A. The interval that customers return to the business
B. The speed at which customers enter the business
C. The proportion of customers who leave the firm during a certain time period
D. The amount of money customers generate
6: What is an example of a disruptive technology?
A. Desktop PC
B. Ford Model T
C. iPod
D. All of these
7: What is an example of a company that uses vertical integration?
A. An oil company that drills, refines, and sells its own oil at gas stations it owns
B. A grocery store that grows, processes them, packages, and sells its own crops.
C. A video game company that creates, publishes, markets, and sells its own games
D. All of these
8: What does IPO stand for?
A. Internal Public Opportunities
B. Initial Public Opportunities
C. Identical Public Operations
D. Initial Public Offering
9: Within SWOT analysis, what is an example of a threat?
A. Earnings
B. Competition
C. Partnerships
D. Business
10: What is a venture capital (VC) company?
A. A company that primarily invests in mutual funds and large cap stocks
B. Companies that specialize in conducting IPOs
C. A company that speciliazes in providing investments to startups that usually have high a growth potential, but also higher risk than normal risk
D. Companies that specialize in selling and dismantling smaller companies
11: Why are profit margins important?
A. All of these
B. It is often a good indicator of how well you are doing in your industry
C. It can be useful when comparing similar companies to one another
D. It measures how much of every dollar in sales a company keeps; thus giving you an idea of how profitable you can be based on your expected sales.
12: In discovery-driven planning, general managers should:
A. All of these
B. Develop the tools and frameworks for understanding technology's role in strategic competition
C. Manage the creative process
D. Ensure those that are directly involved in the creative process are using the right tools
13: What is a good way to avoid discrimination lawsuits?
A. All of these
B. Running background checks on all potential hires, not just a select few
C. Have a documented hiring process
D. Avoiding any topics during the interview process related to age, disability, familial status, race, or sexual orientation.
14: What does the S stand for in the SWAT analysis?
A. Start
B. Strong
C. Study
D. Strengths
15: Which of the following is a strategy used to gain a competitive advantage?
A. Differentiation
B. Cost leadership
C. Operational effectiveness
D. Innovation
E. (all of these)
16: What is a strategic alliance?
A. When a larger companies acquires smaller company
B. When two competitors work together to fix prices
C. When two competitors agree to divide market regions
D. A cooperative strategy in which two or more companies combine some of their resources and specialities for the purpose of creating a competive advantage
17: SWOT analysis is one of the earliest business strategy frameworks. What does it stand for?
A. Streaks, Weaknesses, Oddities, and Threats.
B. Streams, Weaknesses, Obligations, and Treaties.
C. Streams, Weaknesses, Obligations, and Threats.
D. Strengths, Weaknesses, Opportunities, and Threats.
18: What is an important factor when determining a company's value?
A. Their profit margins
B. Their sales revenue
C. Their assets
D. All of these
19: When does a Monopoly exist?
A. when there is economic competition
B. A specific person or enterprise is the only supplier of a particular commodity
C. there are viable substitute goods
20: What are the two main objectives of marketing?
A. Increase in waste and decrease in efficiency
B. Maximize production and minimize sales
C. Increase sales and obtain a durable competitive advantage
21: In what scenario is your company ready for an IPO?
A. You have high growth potential
B. Your business revenue is predictable and easy to see for investors
C. You have multiple revenue streams
D. All of these
22: What is a strength of McDonald's business strategy?
A. Low differentiation
B. food menu
C. negative publicity
D. Brand Recognition
23: What are some of the possible disadvantages on relying on business cases when making strategic moves in business?
A. All of these
B. Reporting Bias
C. Simplifications
D. Representative Bias
24: Define a Differentiation Strategy
A. Charging high prices for a product
B. Constantly reinforcing to consumers the reasons why you are superior compared to your competitors
C. Be the leader in an industry by keeping your costs down
D. A company that has a competitive advantage related to its products or services that make itself unique when compared to products or services of other traditional companies.
25: Which of these is illegal?
A. All of these
B. Competitors agreeing in advance on who will submit a winning bid on a contract to effectively raise the purchase price for the buyer
C. Competitors agreeing to allocate their market into geographical regions in which they have exclusive rights to
D. Competitors getting together to set fix price for their products
26: True or False? A SWOT analysis can be used for a person, place, or product.
A. True
B. False
27: What does LLC stand for?
A. Limited Liberal Corporation
B. Limited License Corporation
C. Licensed Limited Corporation
D. Limited Liability Company
28: What is the primary focus of business strategy?
A. Business strategy focuses on generating profits
B. Business strategy focuses on implementing cross-functional decisions involving resources and performance
C. Business strategy focuses on making money
D. Business strategy focuses on making products
29: What organizational failure can cripple a business strategy?
A. Lack of organization-wide flexibility
B. Strategic positioning
C. Highly motivated employees
D. Highly educated executives
30: What is the benefit of a broad portfolio of assets?
A. It decreases the amount of products to sell
B. It reduces specific risk
C. It increases risk
D. It reduces competition
31: What is an example of a company that could be considered to be in a cyclical industry?
A. A high end furniture store that notices that during bad economic times it has less customers purchasing items
B. A company that makes winter coats and finds it demand decreases greatly during the summer and other hot periods
C. All of these
D. An airline company that notices customers tend to fly more during months with holidays
32: Why is customer acquisition cost important?
A. It is only important if you have little to no customers
B. It can disuade customers from purchasing your goods or products
C. It can play a major role in calculating the value of a new customer and calculating your return on investment (ROI).
D. It can give you an idea of how much you need to spend in order to keep your current customers
33: Within the Porter Five Forces Analysis, what is defined as the ability of customers or suppliers to coerce the firm?
A. Corporate power
B. Political power
C. Sales power
D. Bargaining power
34: What is a disavantage for a sole-propietorship?
A. Inflexible
B. Difficult to market
C. Double taxation
D. Risk of Liability
35: A firm that decides the price of a good or service is a __________?
A. Profit Maximizer
B. Price Discriminator
C. Price Maker
36: How can a firm achieve a low cost operation?
A. Lower prices
B. Economies of Scale
C. Price Differentiation
D. Market Differentiation
37: What encompasses the lifetime value of a customer?
A. The prediction of the net profit estimated for the entire future relationship with a customer
B. The value of a customer as a person
C. The customer's total spending power
D. The customer's net virality effect
E. The value of the customer and all that they own
38: What is the major difference between operational management and strategic management?
A. Operational management focuses on external issues, while strategic management focuses on internal issues
B. They are both the same and completely interchangeable
C. Operational management focuses on financial issues, while strategic management focuses on regulatory issues
D. Operational management focuses on internal issues, while strategic management focuses on external issues
39: What is a legal monopoly?
A. It is a monopoly that is protected by law from competition usually through government means where a company has been granted exclusive rights to offer a particlar service in a specific region
B. An agreement between two dominant companies in which they agree to allow one company to prosper in one product area and another to prosper elsewhere
C. An agreement between two companies in which one company agrees to create inferiror goods at a low price point, and another agrees to create high quality products at a high price point to prevent competition costs between the two companies
D. When a single holding company owns all companies in one industry.
40: What is an "angel investor"?
A. An investor that comes in to save a failing company from default
B. None of these
C. A benevolent investor who forgives debt when a startup fails
D. An investor that provides a startup with a seed investment, oftentimes also acting as advisers and confidants.
41: What is customer acquisition cost?
A. The cost a customer pays to acquire a certain product or service
B. The cost associated with converting a potential customer into an actual customer
C. It is the cost to keep existing customers
D. It is the total cost of all activities related to marketing
42: What is predatory pricing?
A. Selling at a competive price based on the industry standard
B. Selling at a higher price for discriminatory reasons
C. Selling a product at a very low or unsustainable price in order to drive competitors out of business
D. Selling a product at a very high price in order to take advantage of a situation
43: What is the advantage of a sole-proprietorship?
A. All of these
B. Little to no paperwork needed to start
C. Full ownership
D. No corporate tax
44: Which one of the following business structures is NOT a limited liability option?
A. These are all examples of limited liabity business structures
B. Limited Liability Company (LLC)
C. LLP (Limited Liabity Partnership)
D. LLLP (Limited Liability Limited Partnership)
45: What is one valid criticism of why it is NOT advised to rely on SWOT analysis?
A. The list is not based on any theory and is vague
B. All of these
C. SWOT is a brainstorming framework, not an analytical tool
D. Opportunities can end up being threats
46: What does "markup" mean in retail businesses?
A. It is your profit margin when taking into account customer acquisition costs
B. It is your total revenue on a product
C. The difference between how much a good or service costs to provide vs its actual selling price.
D. It is your total profit on a product
47: What does the term "cash cow" mean in business?
A. A company in a market that has plenty of money to invest or acquire other smaller companies
B. A business venture that generates a steady return profits with little maintenance or investment needed
C. A company that generates little revenue, but has the potential to generate a lot
D. A business venture that eats up cash due to high maintenance and investment cost
48: When Facebook purchased Instagram, it employed what type of strategy?
A. Product Differentiation
B. Price Skimming
C. Acquisition
D. Growth Strategy
49: Which of the following statements is true about blue ocean markets?
A. Blue ocean markets tend to redefine the problem customers have and create products and services to solve it.
B. Incumbents often create blue oceans—usually within their core business.
C. Are not about technology innovations, but about linking current technology creatively to solve customer needs.
D. All of these
50: Democratic Leadership style is also known as_____?
A. Participative Leadership
B. Laissez Faire Leadership
C. Autocratic Leadership
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