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Strategic Management Practice Test: Introduction to strategy

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Strategic Management Practice Test: Introduction to strategy

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1. A winning strategy is one that

can pass the ethical standards test, the strategic intent test, and the profitability test. results in a company becoming the dominant industry leader.is highly profitable and boosts the company's market share.builds strategic fit, is socially responsible, and maximizes shareholder wealth.fits the company's internal and external situation, builds sustainable competitive advantage, and improves company performance.

2. The heart and soul of a company's strategy-making effort

concerns how to improve the efficiency of its business model.involves coming up with moves and actions that produce a durable competitive edge over rivals.is figuring out how to maximize the profits and shareholder value.deals with how management plans to maximize profits while, at the same time, operating in a socially responsible manner that keeps the company’s prices as low as possible.is figuring out how to become the industry’s low-cost provider.

3. Which one of the following questions can be used to test the merits of one strategy over another and distinguish a winning strategy from a mediocre or losing strategy?

How good is the company’s business model?Is the company putting too little emphasis on behaving in an ethical and socially responsible manner?How well does the strategy fit the company’s situation?Is the company a technology leader?Does the company have low prices in comparison to rivals?

4. A company’s strategy and its quest for competitive advantage are tightly connected because

without a competitive advantage a company cannot become the industry leader.how a company goes about trying to please customers and outcompete rivals is what enables senior managers choose an appropriate strategic vision for the company.without a competitive advantage a company cannot have a profitable business model.a competitive advantage is what enables a company to achieve its strategic objectives.crafting a strategy that yields a competitive advantage over rivals is a company’s most reliable means of achieving above-average profitability and financial performance.

5. Which of the following questions ought to be used to test the merits of one strategy over another and distinguish a winning strategy from a mediocre or losing strategy?

Is the company putting too little emphasis on growth and profitability and too much emphasis on behaving in an ethical and socially responsible manner?Does the strategy strike a good balance between maximizing shareholder wealth and maximizing customer satisfaction?Is the strategy helping the company achieve a sustainable competitive advantage and is it resulting in better company performance?Is the company’s strategy ethical and socially responsible and does it put enough emphasis on good product quality and good customer service?Is the strategy resulting in the development of additional competitive capabilities?

6. Which of the following is a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage?

Outcompeting rivals on the basis of such differentiating features as higher quality, wider product selection, added performance, better service, more attractive styling, technological superiority, or unusually good value for the moneyDeveloping expertise and resource strengths that give the company competitive capabilities that rivals can't easily imitate or trump with capabilities of their ownStriving to be the industry's low-cost provider, thereby aiming for a cost-based competitive advantageAll of theseFocusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of serving the special needs and tastes of buyers comprising the niche

7. In crafting a strategy, management is in effect saying

and who our customers will be in the years to come.""among all the many different business approaches and ways of competing we could have chosen, we have decided to employ this particular combination of competitive and operating approaches in moving the company in the intended direction, strengthening its this is who we are and where we are headed. what products/services we will sellthis is our model for making money in our particular line of business.",we intend to launch these new moves to outcompete our rivals.""

8. A company's strategy can be considered “unethical” or shady

if it entails actions or behaviors that cross the moral line from “can do” to “should not do” (because such actions are “unsavory” or unconscionable or unnecessarily harmful to the environment).All of the above call the company’s actions/behaviors into question from an ethical standpoint.if the company’s actions/behaviors are harmful to its stakeholders—customers, employees, shareholders, suppliers, and the communities in which the company operates.if the company engages in actions or behaviors that are contrary to the general public interest.if any of its actions constitute “unfair competition.”

9. A company achieves sustainable competitive advantage when

it is able to maximize shareholder wealth.its strategy and its business model are well-matched and in sync.an attractive number of buyers have a lasting preference for its products or services as compared to the offerings of competitors.it has a profitable business model.it is consistently able to achieve both its strategic and financial objectives.

10. It is normal for a company’s strategy to end up being

more a product of clever entrepreneurship than of efforts to clearly set a company’s product/service offering apart from the offerings of rivals.a close imitation of the strategy employed by the recognized industry leader.a blend of proactive actions to improve the company’s competitiveness and financial performance and as-needed reactions to unanticipated developments and fresh market conditions.a combination of conservative moves to protect the company’s market share and somewhat more risky initiatives to set the company’s product offering apart from rivals.a blend of offensive actions on the part of managers to improve the company’s profitability and defensive moves to counteract changing market conditions.

11. A company whose strategy has shady or unethical elements

risks only being required to 'cease and desist' if governmental authorities determine that its strategic actions constitute “unfair competition.”puts the reputation of the company and its top executives at risk and may even jeopardize the company’s long-term well-being and survival, especially if it is required to pay out considerable sums of money to settle punitive lawsuits and compensate customers, employees, shareholders, suppliers, rival companies and any others for the injuries they have suffered.stands a good chance that its unethical behavior will go undetected and unnoticed.risks being temporarily embarrassed if its actions are discovered and publicized by the media—but as long as this risk is tolerable, company managers are well advised to pursue whatever unethical or unsavory actions they believe the company can get away wis automatically barred by the Securities and Exchange Commission from filing annual reports and having its stock publicly traded.

12. A company's strategy consists of

the actions it is taking to develop a more appealing business model than rivals. the plans it has to outcompete rivals and establish a sustainable competitive advantage.the competitive moves and business approaches that managers are employing to grow the business, stake out a market position, attract and please customers, compete successfully, conduct operations, and achieve targeted objectives.its strategic vision, its strategic objectives, and its strategic intent.the offensive moves it is employing to make its product offering more distinctive and appealing to buyers.

13. One of the keys to successful strategy-making is

to come up with a business model that enables a company to earn bigger profits per unit sold than rivals.to aggressively pursue all of the growth opportunities the company can identify.to come up with one or more strategy elements that act as a magnet to draw customers and yield a lasting competitive edge.to charge a lower price than rivals and thereby win sales and market share away from rivals.to develop a product/service with more innovative performance features than what rivals are offering and to provide customers with better after-the-sale service.

14. Which of the following is not a primary focus of a company's strategy?

How to attract and please customersHow each functional piece of the business will be operatedHow to grow the business How to achieve above-average gains in the company’s stock price and thereby meet or beat shareholder expectationsHow to compete successfully

15. In the course of crafting a strategy, it is common for management to

All of these.take proactive actions to improve this or that piece of the strategy.modify the current strategy in response to the fresh strategic maneuvers of rival firms.decide to abandon certain strategy elements that have grown stale or become obsolete.modify the current strategy when market and competitive conditions take an unexpected turn or some aspects of the company’s strategy hit a stone wall.

16. A company’s strategy stands a better chance of succeeding when

it is predicated on competititive moves aimed at appealing to buyers in ways that set the company apart from rivals.managers copy the strategic moves of successful companies in its industry.managers focus on meeting or beating shareholder expectationsmanagers employ conservative strategic moves.it is developed through a collaborative process involving managers from all levels of the organization.

17. Which of the following actions would not typically be employed by senior executives with strong ethical convictions?

Ensuring each element of the company’s strategy complies only with legal standardsPlacing organizational checks and balances in place to monitor employee behviorsProviding guidance to employees regarding gray areas related to ethical behaviorsClearly indicating all company personnel are expected to act with integrityForbidding the pursuit of ethically questionable business opportunities

18. A company's business model

sets forth management’s long term action plan for achieving market leadership.sets forth management’s game plan for maximizing profits for shareholders.details exactly how management's strategy will result in the achievement of the company’s strategic intent.sets forth the key components of the enterprise’s business approach, indicates how revenues will be generated, and makes a case for why the strategy can deliver value to customers in a profitable manner.explains how it will achieve high profit margins while at the same time charging relatively low prices to customers.

19. In endeavoring to craft an ethical strategy, company managers

need only take care to ensure that each piece of the strategy entails actions and behaviors that are within the letter and spirit of the law.have to go beyond what strategic actions and behaviors are legal and address whether all the various elements of the company’s strategy can pass the test of moral scrutiny.have to back off aggressive efforts to maximize profits (many strategic actions to maximize profits cross over the line to unsavory or shady—or, at least, are borderline unethical).are well advised to have the company’s board of directors review the strategy and “certify” whether each element of the company’s strategy is ethical or not.are well advised to implement managerial training sessions that help define what strategic actions are ethical (and which will be pursued) and which are unethical (and will not be tolerated).

20. Good strategy combined with good strategy execution

offers a surefire guarantee for avoiding periods of weak financial performance.are the most trustworthy signs of good management.signal that a company has a superior business model.are the two best signs that a company is a true industry leader.are more important management functions than forming a strategic vision and setting objectives.

21. In crafting a company’s strategy,

management’s biggest challenge is how closely to mimic the strategies of successful companies in the industry.managers are wise not to decide on concrete courses of action in order to preserve maximum strategic flexibility.managers have comparatively little freedom in choosing the hows of strategy.managers are well-advised to be risk-averse and develop a “conservative” strategy—“dare-to-be-different” strategies rarely are successful.managers need to come up with some distinctive “aha” element to the strategy that draws in customers and produces a competitive edge over rivals.

22. Which of the following is something to look for in identifying a company's strategy?

Actions to strengthen marketing standing and competitiveness by merging with or acquiring rival companiesActions to enter new geographic or product markets or exit existing onesActions and approaches used in managing R&D, production, sales and marketing, finance, and other key activitiesActions to gain sales and market shareAll of above are pertinent in identifying a company’s strategy.

23. Which of the following is not something to look for in identifying a company's strategy?

Actions to strengthen competitive capabilities and correct competitive weaknessesActions to gain sales and market share via lower prices, more performance features, more appealing design, or other such actions.Actions to respond to changing market conditions or other external factorsManagement actions to revise the company's financial and strategic performance targetsActions to capture emerging market opportunities and defend against external threats to the company's business prospects

24. A company's business model

concerns the actions and business approaches that will be used to grow the business, conduct operations, please customers, and compete successfully.concerns how management plans to pursue strategic objectives, given the larger imperative of meeting or beating its financial performance targets.concerns what combination of moves in the marketplace it plans to make to outcompete rivals.deals with how it can simultaneously maximize profits and operate in a socially responsible manner that keeps its prices as low as possible.is management’s storyline for how it will generate revenues ample to cover costs and produce a profit—absent the ability to deliver good profitability, the strategy is not viable and the survival of the business is in doubt.

25. A company's strategy concerns

the long-term direction that management believes the company should pursue.management’s action plan for running the business and conducting operations—its commitment to pursue a particular set of actions in growing the business, staking out a market position, attracting and pleasing customers, competing successfully, conducting operations, and achieving targeted objectives.how it plans to make money in its chosen business.its market focus and plans for offering a more appealing product than rivals.whether it is employing an aggressive offense to gain market share or a conservative defense to protect its market position.

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25 Questions

❤ If you liked Fatskills, consider supporting us by checking out The Life Manuals You Never Got.

About | Explore | User Guide | Topics | Subjects | Doubt Solver | Career Aptitude Test | Answers | Free Tools | OSHA Basics Quiz | What Should We Know? Privacy | Terms |

Without work one finishes nothing. - Ralph Waldo Emerson© 2026 Fatskills.com

All trademarks, logos and brand names are the property of their respective owners. All company, product and service names used in this website are for identification purposes only. Use of these names, trademarks and brands does not imply endorsement.

About | Explore | User Guide | Topics | Subjects | Doubt Solver | Career Aptitude Test | Answers | Free Tools | OSHA Basics Quiz | What Should We Know?
Privacy | Terms |

Without work one finishes nothing. - Ralph Waldo Emerson
© 2026 Fatskills.com