Question 1

The set of measures used to compare organisation performance with key competitors is:
A)	market penetration, financial performance, service performance, technological performance
B)	market position, financial performance, service performance, technological performance
C)	market posture, financial performance, strategy perfection, environmental performance
D)	market position, environmental performance, strategy performance, capability performance

Accepted Answer

The set of measures used to compare organisation performance with key competitors should include market position, as it is a key indicator of competitive advantage, financial performance to assess profitability and growth potential, service performance to evaluate the quality of services offered, and technological performance to determine the level of innovation and efficiency. The other options (A, C, and D) either include irrelevant measures or do not cover all the necessary performance dimensions.

Question 2

The circumstances that may justify unrelated diversification are:
A) counter-intuitive diversification
B) counter-cyclical diversification
C) excess industry capacity in existing and related industries
D) opportunity to use scarce, difficult to imitate organisational capabilities

Accepted Answer

B

Question 3

The product-market matrix does NOT offer the option of:
A) more existing product(s) into existing market(s)
B) new product(s) into existing market(s)
C) existing product(s) into foreign market(s)
D) imported product(s) into new market(s)

Accepted Answer

The product-market matrix only includes options for expanding into existing and new markets with new or existing products. It does not include the option of importing products into new markets.

Question 4

The leader strategy suggested by the TQM movement combines:
A) differentiation and high quality
B) differentiation and low cost
C) disaggregation and low quality
D) disaggregation and low cost

Accepted Answer

The answer of The leader strategy suggested by the TQM...

Question 5

A current competitive strength may disappear because of:
A) future competitor responses
B) changes in technology
C) the organisation's own complacency
D) all of the above

Accepted Answer

A current competitive strength may disappear due to future competitor responses, changes in technology, or the organisation's own complacency. Competitors may respond by introducing better or cheaper products or services, which can erode a company's competitive advantage. Technological advancements can also make a company's current strengths obsolete. Additionally, if an organisation becomes complacent and fails to innovate or adapt to changing market conditions, it can lose its competitive edge. Therefore, all the options mentioned in the multiple-choice question are possible reasons for a current competitive strength to disappear.

Question 6

Considering organisational performance in relation to strategy choice and implementation,Hubbard et al.and Treacy & Wiersema argue that:
A) some organisations underperform because they implement their strategy better than others
B) some organisations outperform despite choosing a different strategy than others
C) some organisations outperform because they implement their strategy better than others
D) some organisations underperform despite choosing a different strategy than others

Accepted Answer

Both Hubbard et al. and Treacy & Wiersema argue that organisational performance is largely determined by how well a strategy is implemented. This means that some organisations outperform others because they are better at executing their chosen strategy. Therefore, option C is the correct answer. Options A and D are incorrect because they suggest that strategy choice alone is the main determinant of organisational performance, which is not supported by the literature. Option B is also incorrect because it implies that strategy choice has no impact on organisational performance, which is also not supported by the literature.

Question 7

The risks of differentiation strategy do NOT include:
A) degree of differentiation is not sustained
B) differentiation is not sufficient for the cost difference to the customer
C) a focuser will out-differentiate the differentiator
D) differentiation is not sufficient for the cost difference to the differentiator

Accepted Answer

The risks of differentiation strategy include the degrees of differentiation not being sustained, differentiation not being sufficient for the cost difference to the customer, and a focuser out-differentiating the differentiator. However, differentiation generally allows for the differentiator to charge a premium and achieve higher profit margins, so differentiation is usually sufficient for the cost difference to the differentiator. Therefore, option D is not a valid risk of differentiation strategy.

Question 8

Porter's original three generic strategies were:
A) desegregation, focus, high quality
B) disaggregation, forecast, low quality
C) differentiation, focus, low cost
D) disaffection, focus, high cost

Accepted Answer

Porter's original three generic strategies were differentiation, focus, and low cost. The combination of these three strategies is what helps a company gain a competitive advantage in the marketplace. By choosing one or more of these strategies, a company can position itself in a way that sets it apart from its competitors and appeals to its target market. Option A, B and D are not the correct strategies offered by Porter.

Question 9

The 'value discipline' approach to generic strategy rests on:
A) operational excellence, customer loyalty, product leadership
B) operational excellence, customer intimacy, product leadership
C) operational excellence, customer intimacy, product ownership
D) focused excellence, customer relevance, proximity leadership

Accepted Answer

The 'value discipline' approach to generic strategy is based on three core value disciplines, which are operational excellence, customer intimacy, and product leadership. These three disciplines form the basis of the approach, and companies must choose one discipline to focus on in order to achieve a sustainable competitive advantage. The discipline of operational excellence is focused on providing the lowest cost of operations and delivering products or services at a low price. The discipline of customer intimacy is focused on understanding and meeting the unique needs of individual customers through personalized service and customization. The discipline of product leadership is focused on delivering innovative and high-quality products or services that are differentiated from those of competitors. Choice B is the correct answer as it lists the three core value disciplines of the 'value discipline' approach accurately.

Question 10

Family-owned small businesses do not desire to achieve growth due to many factors excluding:
A) need to delegate authority to non-family member
B) taking on responsibility of employing large number of people
C) making sufficient profits
D) threat of attracting scrutiny of anti-competitive authority such as ACCC

Accepted Answer

The answer of Family-owned small businesses do not desire to...

Question 11

Which growth option may be appropriate for organisations operating in mature industries?
A) withdrawal
B) consolidation
C) liquidation
D) adumbration

Accepted Answer

Organisations operating in mature industries may find it appropriate to choose consolidation as a growth option. This involves seeking to increase market share, improve efficiency, and reduce competition by acquiring or merging with other companies in the same industry. It allows for economies of scale, cost savings, and the ability to diversify the product or service offering. This option may be more viable than withdrawal, liquidation, or adumbration, depending on the specific circumstances of the organisation.

Question 12

The 'ESC' in the ESC gap analysis process stands for:
A) external strategic capability
B) environmentally sustainable corporation
C) exogenously suitably consistent
D) environment strategy capability

Accepted Answer

The answer of The 'ESC' in the ESC gap analysis...

Question 13

The capability versus comparative strength exercise is often based on:
A) an assessment of current position
B) present capability analysis
C) both of the above
D) none of the above

Accepted Answer

The answer of The capability versus comparative strength exercise is...

Question 14

A way that closely related product development for existing markets can take place is to:
A) remove product features and refinements
B) expand the production mix
C) develop a new-generation product
D) develop new products for new markets

Accepted Answer

The answer of A way that closely related product development...

Question 15

The two ways that related markets can be developed for existing products are:
A) target new customer segments and/or expand geographically
B) target old customer segments and/or expand regionally
C) target new consumer segments and/or expand internationally
D) target old consumer markets and/or expand locally

Accepted Answer

Targeting new customer segments or expanding geographically are the two most common and effective ways to develop related markets for existing products. This allows companies to reach new consumers who may not have been previously targeted or expand their reach to new regions where demand for their products may exist. Expanding into new international markets may also be an option, but this can be more complex and require additional resources and expertise. Similarly, focusing on old customer segments or limiting expansion to a local region may not result in significant growth opportunities.

Question 16

Which of the following is NOT a key element of 'blue ocean' strategy developed by Kim and Mauborgne?
A) creating or finding uncontested market space by seeking opportunities based on customer needs, and what competitors currently do
B) making the competition irrelevant by offering new and different products that cross industry boundaries
C) creating and capturing new demand
D) pursuing differentiation and low cost simultaneously

Accepted Answer

The 'blue ocean' strategy focuses on creating uncontested market space and making competition irrelevant, but it does not emphasize seeking opportunities based on what competitors currently do. Instead, it focuses on innovation and differentiation.

Question 17

A key feature of 'stuck in the middle' organisations is:
A) inability to choose a clear generic strategy
B) products which have unique value to customers
C) communicating their business strategy to their operating staff
D) implementing a set of control systems which are consistent with defined business strategy

Accepted Answer

A key feature of 'stuck in the middle' organisations is the inability to choose a clear generic strategy, meaning they are not able to differentiate themselves effectively from their competitors or lower their costs sufficiently to compete on price. This can result in them being caught in the middle and struggling to achieve long-term success.

Question 18

The risks of a low-cost strategy do NOT include:
A) too narrow a focus on profit margins
B) too narrow a focus on cost control
C) cost leadership is not sustained
D) focus strategy is able to offer even lower costs

Accepted Answer

A low-cost strategy primarily focuses on maintaining low operational costs to offer products or services at a lower price than competitors. The risk of having too narrow a focus on profit margins is not associated with a low-cost strategy; instead, this strategy inherently involves a broad focus on minimizing costs to maintain competitive pricing, rather than narrowly focusing on profit margins.

Question 19

A focus strategy can be achieved by competing on the basis of:
A) broad product line, customer or geographic segmentation, focused functional capability
B) narrow product line, customer or geographic segmentation, focused functional capability, keeping costs down
C) narrow product line, customer or geographic segmentation, focused production capability
D) small profit margin, customer or geographic segmentation, focused functional capability

Accepted Answer

A focus strategy involves serving a narrow segment of the market and competing on specific factors such as product features, customer service, or price. Option B includes all the necessary elements for a successful focus strategy. A narrow product line and customer or geographic segmentation create a clear target market. Focused functional capability speaks to the ability to deliver specialized product features or exceptional customer service, which are key factors in a focus strategy. Finally, keeping costs down is essential to creating a sustainable competitive advantage in this strategy. Option A includes a broad product line, which is not compatible with a focus strategy. Option C mentions focused production capability, but it is not clear how this relates to a focus strategy. Option D suggests small profit margins, which does not necessarily align with a focus strategy that relies on creating value for a specific market segment, not simply cutting costs.

Question 20

Porter and Kramer suggested four reasons why organisations should address CSR.Which of the following was NOT mentioned by them?
A) moral obligation  
B) the necessity to maintain a licence to operate
C) organisation's reputation
D) pressures from customers

Accepted Answer

Porter and Kramer did mention the importance of the organization's reputation, the necessity to maintain a license to operate, and moral obligation as reasons to address CSR, but they did not mention pressures from customers.

Quiz 6: Gap analysis and business-level strategic options

The set of measures used to compare organisation performance with key competitors is:

The circumstances that may justify unrelated diversification are:

The product-market matrix does NOT offer the option of:

The leader strategy suggested by the TQM movement combines:

A current competitive strength may disappear because of:

Considering organisational performance in relation to strategy choice and implementation,Hubbard et al.and Treacy & Wiersema argue that:

The risks of differentiation strategy do NOT include:

Porter's original three generic strategies were:

The 'value discipline' approach to generic strategy rests on:

Family-owned small businesses do not desire to achieve growth due to many factors excluding:

Which growth option may be appropriate for organisations operating in mature industries?

The 'ESC' in the ESC gap analysis process stands for:

The capability versus comparative strength exercise is often based on:

A way that closely related product development for existing markets can take place is to:

The two ways that related markets can be developed for existing products are:

Which of the following is NOT a key element of 'blue ocean' strategy developed by Kim and Mauborgne?

A key feature of 'stuck in the middle' organisations is:

The risks of a low-cost strategy do NOT include:

A focus strategy can be achieved by competing on the basis of:

Porter and Kramer suggested four reasons why organisations should address CSR.Which of the following was NOT mentioned by them?