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.
Get started now by scrolling down!
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
51: What did companies replace their expansive multi-division portfolios with?
A. Corporations
B. Markets
C. Larger portfolios
D. Subsidiaries
52: As a business owner if you notice a large amount of market segmentation occurring you should...
A. Focus on finding a niche in the market
B. Put all your eggs in one basket
C. Leave that market
D. Have products in each market segmentation to see which technology excels
53: What is a Cyclical Industry?
A. An industry that changes over time, either through their own processes of evolution or by outside forces.
B. An industry in which its costs are fixed throughout the year due to low volatility.
C. A type of industry that tends to have high and low periods during speciific times
D. An industry where companies often invest in other competitors or complementary companies in order to profit throughout the entire product life cycle
54: What is a tariff?
A. A tax on imports or exports
B. Fees you charge customers to transport goods
C. Fees businesses charge other businesses for utlizing their product or service
D. The amount of income you receive after taxes
55: How could market segmentation benefit you from a business strategy standpoint?
A. It allows you to differentiate your product
B. None of these
C. It allows for more competition
D. It allows for maintaining the norms of a single industry
56: How can you benefit from forming a LLC?
A. You can create a holding company with several franchises and smaller companies underneath it without paying double taxes
B. You have limited liability like a corporation, but you do not pay corporate taxes.
C. You can license patents out to businesses tax free
D. You can receive protections as a non-profit company
57: What does the notion of a “learning organization” suggest?
A. Companies must learn by trial and error
B. Companies must be successful at collecting and analyzing data to remain successful
C. Companies must learn how to be successful
D. Companies must contribute to education-based charities to remain successful
58: What does CAPM stand for?
A. Capital Assets Price Management
B. Company Asset Pricing Model
C. Capital Assurance Population Model
D. Capital Asset Pricing Model
59: When can dynamic management provide a much better platform for solving problems?
A. In an idle situation when business is slow
B. In a situation when business is stable and well-managed
C. In a chaotic situation that has expanded beyond the boundaries of typical business function
D. In a situation where business is failing and near insolvency
60: What is disruptive innovation?
A. Innovation that causes markets to collapse
B. Innovation that focuses on creating new markets or adding value to existing technologies in order to displace older technologies
C. Innovation that causes customers to think differently about a market
D. Innovation that focuses on taking competitive actions to ensure domination in the market
61: Why might you use discovery-driven planning?
A. It helps build your brand
B. It provides a well defined set of actions to take when entering a new market
C. It gives you time to learn, explore, and probe emerging markets
D. It is the best way to become dominant in the market
62: Which of the following would probably NOT be considered wrongful termination of an employee?
A. Firing an employee who commits or threatens physical violence
B. Firing an employee due to his or her age
C. Firing an employee because he or she reported an illegal activity taking place in the workplace
D. Firing an employee for whistleblowing on a contract that is using government funds
63: True of False? A Cost Leadership strategy places an emphasis on lower selling prices rather than lower costs.
A. False
B. True
64: How can companies avoid falling prey to "The Icarus Paradox"?
A. Marketing
B. Low Pricing Strategy
C. Research and Development
D. Dominating the Competition
65: Which of the following is a benefit of Horizontal Integration?
A. Economies of Scale
B. Both Economies of scale and Economies of scope
C. Economies of Scope
66: Which framework determines the competitive intensity of a market?
A. The Fox Five Force analysis
B. The Five Porter analysis
C. Porter Competition analysis
D. The Porter Five Forces analysis
67: What is horizontal integration?
A. Forming strategic alliances with companies that provide complementary products
B. A strategy where companies acquire or create products that are alike or complementary to one another
C. Working with competitors to provide a standard process or product for the market
D. A style of growth and management control in which you integrate companies in your supply chian
68: According to the Growth-share matrix, a high market growth rate and market share means you are:
A. A Star
B. A dog
C. A cash cow
D. A question mark
69: Which is NOT a stage in the shifting basis of competition?
A. None of these
B. Reliability
C. Functionality
D. Convenience
70: What are profit margins?
A. It is a ratio of profitability, calculated by sales divided by net income
B. It is a ratio of profitability, calculated by revenue divided by sales
C. It is a ratio of profitability, calculated by sales divided by revenue
D. It is a ratio of profitability, calculated by net income divided by sales
71: What is a hostile takeover?
A. When a company invests in a holding company who owns one of its competitors and attempts to force it to close
B. To acquire a company through the company's shareholders rather than the company's management
C. When employees attempt to take over a companies management by threatening strike or refusing to work for several periods driving the company to either give in to management change wnated by the employees or face possible bankruptcy.
D. When a company "offers" to buy a smaller company with the threat of putting them out of business or making it very difficult for them to remain competive
72: If you are a company in a cyclical industry what is a good business strategy for you?
A. Deal with the volatility by implementating cuts to compensations, reducing employee work hours, or laying off workers during bad times. Paying bonuses, ensuring enough inventory, and hiring in mass during good times.
B. Close shop completly during bad times, and reopen when good times approach
C. Work with trade unions to ensure all work is approved beforehand and there is little risk of strike
D. Since costs are fixed, lower your workforce until you find the best formula for profit. Keep adjusting and improving this formula throughout the year.
73: What micro-economic analysis would you use to analyze economics, social factors, and government regulations?
A. Securities analysis
B. SWOT analysis
C. PET analysis
D. PEST or STEEP analysis
74: What is recombinant innovation?
A. Working with competitors to produce innovative products
B. Take ideas from one context and apply it to another context
C. The process of constantly innovating and creating new products
D. Revamping previously failed innovations
75: A competitive advantage suggests what?
A. A company is able to sell stock
B. A company is able to compete
C. A company is outperforming its competitors
D. A company is selling a unique product
76: What trait should an information-driven company have at its core?
A. A solid, unshakable core
B. An inflexible centralized core
C. A flexible, decentralized structure
D. An enterprising and motivated core
77: OPEC is an example of what?
A. Cartel
B. Oligopoly
C. Monopoly
78: Why must change be a strategic function of business?
A. Change is natural and doesn't require a strategy
B. Change in business is a constant disruption that can devastate the stability of a company
C. Change is a strategy in itself
D. Strategy is change and doesn't need further planning
79: What does the T stand for in the PEST analysis?
A. Technological
B. Team
C. Test
D. Threat
80: What are two internal environmental factors that must be considered when developing a sound marketing strategy?
A. Performance mix and marketing advantage
B. Strategic mix and performance matrix
C. Marketing mix and performance analysis
D. Marketing dominance and portfolio strategy
81: Oil companies' business models are examples of what?
A. Vertical Integration
B. Horizontal Integration
C. Economies of Scale
D. Supply Chains
82: What performance management tool do companies use to measure and retain their competitive advantage?
A. Competitive Framework
B. Competitive Metrics
C. Advantage Matrix
D. Balanced Scorecard
83: What is "The Icarus Paradox"?
A. Businesses who who spend money to grow, but end up growing too fast and expend all the resources
B. Businesses that bring about their own downfall through their own successes
84: A demand curve is more price elastic when a price____________ ?
A. Decreases
B. Increases
85: What is an example of a legal monopoly?
A. A company that owns all the possible patents related to a specific technology therefore no other company can legally enter into that market without violating their patent
B. A company that purchases all of its competitors
C. Utility companies
D. A company that defeats all its competitors due to superior product and price, and is able to charge whatever it wants since it is the only one in business
86: In which situation would a joint venture make the most sense?
A. A successful company that specializes in high end cat food with little market share and a successful company that specializes in low grade cat food with plenty of market share
B. A very competive industry in which one competitor wants to try something new and brings in another competitor to make the process is smoother
C. A telecommunications company who wishes to expand its network coverage and a competitor who owns several cell phone towers
D. A traditional software company that wants to expand into retail and a marketing company who specializes in retail sales
87: What company is an example of a brandnomer?
A. Band-Aid
B. Best Buy
C. Xerox
D. McDonalds
88: How many of porter's five forces refer to competition?
A. Three
B. Two
C. Four
D. One
89: What ratio is used as an indicator of the size of a leading firm in relation to its industry?
A. Sample ratio
B. Sharpe Ratio
C. Concentration ratio
D. Quick ratio
E. Market ratio
90: What market dominance trend is common in most industries?
A. A steady trend
B. A dominant trend
C. An increasing trend
D. A declining trend
91: Which is not a value chain function?
A. Innovation
B. Product Design
C. Distribution
D. Research
92: What is a time-series cross-sectional model that accounts for variation such as seasonality in the hospitality industry?
A. Company regression
B. Pooled Regression
C. Wide regression
D. Regression analysis
93: A firm employing a differentiation strategy is focusing on what?
A. Large market share
B. Small market share
C. Customer loyalty
D. Customer differentiation
94: What is another name for dynamic management?
A. Creative management
B. Corporate strategy
C. Strategic management
D. Non-strategic management
Which of the following would help maintain a competitive advantage?
A. Aggressive marketing
B. The management's commitment to excellence
C. communicating the company values to the entire organization
D. Patent or trademark on what creates the advantage
How is the SWOT analysis used in setting priorities?
A. Combinations of weaknesses and threats from the SWOT analysis become priorities
B. Combinations of weaknesses and threats from the SWOT analysis become priorities
C. Combinations of opportunities and threats from the SWOT analysis become priorities
D. SWOT is not used in setting priorities
What purpose does a balanced scorecard serve?
A. It allows the company to measure its financial performance.
B. It tracks the progress and performance of key performance indicators
C. It maps out historical performance
D. It allows the management to effect process change
How can a firm mitigate the risk of an employee with specialized knowledge leaving the company while empowering other employees?
A. By forcing the employees to sign commitment letters even when not allowed by law
B. By suing the employees who leave
C. By requiring weekly updates to employee procedure manuals
D. By cross training employees on all aspects of their positions as well as by creating documentation of job processes
How should a strategic plan be evaluated for financial viability?
A. By seeing if the strategic initiatives are profitable as a whole
B. By ensuring that the strategy does not impact finances
C. By estimating revenues and expenses for each of the strategic initiatives, and determining if they will be profitable
D. The management should make a rough judgment call.
Which of the following would be used to evaluate productivity?
A. Net Income
B. Quick Ratio
C. Return on Assets
D. Cash Balance
List of Business Strategy MCQs...
Available in:
Business Strategy MCQs
