STRATEGIC MANAGEMENT IN-CLASS ACTIVITY (2022-11-15)

NAME: SURNAME:

MULTIPLE CHOICE (3 POINTS)

1. An automobile manufacturer acquires a rental car company. This is an example of

a) A Backward integration.
b) Economies of scale.
c) Forward integration.
d) Product differentiation.

2. In the value net analysis, complementors are

a) Firms that produce substitute products.
b) Customers who compliment the company for their products and services.
c) Firms that produce goods or services that have a positive impact on the value of firm
products or services.
d) Firms that supply critical inputs to a company.

3. Which of the following would be an entry barrier?

a) Large economies of scale.
b) Low switching costs.
c) Easy access to raw materials.
d) Low capital requirements.

4. Strategic groups consist of

a) A group of top executives that makes strategies for a company.
b) A group of firms within an industry that follow similar strategies.
c) A group of executives drawn from different companies within an industry that makes
decisions on industry standards.
d) A group of firms within an industry that decides to collude rather than compete with
each other so that they can increase their profits.

5. Product differentiation by competitors act as an entry barrier because

a) New entrants cannot differentiate their products.
b) Incumbents will take legal action if new entrants do not differentiate their products.
c) New entrants will have to spend heavily to overcome existing customer loyalties.
d) It helps a firm to derive greater economies of scale.
6. The most intense rivalry results from
a) A numerous equally balanced number of competitors, slow industry growth, high fixed
or storage costs.
b) Few competitors, slow industry growth, lack of differentiation, high fixed or storage
costs.
c) Numerous equally balanced competitors, manufacturing capacity increases only in
large increments, low exit barriers.
d) A high level of differentiation.

7. In the general environment, many relationships exist among the various elements.
General environmental trends can have positive and negative impacts on various
industries. For example, the aging population might have a XXXX impact on the
health care industry and a YYYY impact on the baby product industry. These are
called ZZZZ impacts.
a) Negative, positive, demographic.
b) Positive, negative, technological.
c) Negative, positive, sociocultural.
d) Positive, negative, demographic.

8. The threat of new entrants is high when there are

a) Low economies of scale.
b) High capital requirements.
c) High switching costs.
d) High differentiation among competitors, products and services.

9. Firms would be most likely to face intense rivalry with competitors when they
a) Are in a high growth industry with low fixed costs.
b) Are in a protected market.
c) Have high fixed costs.
d) Have low exit barriers for easy transition to another industry.

10. Because the internet lowers barriers to entry in most industries, it

a) Decreases the threat of new entrants.
b) Increases the threat of new entrants.
c) Makes it easier to build customer loyalty.
d) Increases the supplier power.
STRATEGIC MANAGEMENT IN-CLASS ACTIVITY (2022-11-15)

NAME: SURNAME:

BRIEF QUESTIONS (3 POINTS)

1) Define the term ‘strategy’ what is its significance for any Business Organization?

The way an organization decides (strategy formulation) to adapt to its environment to

create value to fulfill its objectives and be able to survive (in some way).

2) What are the main uses of strategic groups analysis for strategy formulation?

Strategic groups analysis helps the organization to detect its closest competitors (and
what are the elements that define their strategy), and alternatives for growth (outside
the strategic group).

3) Define a “capability”. Give practical examples of dynamic capabilities and explain why
each constitutes a dynamic capability

A capability refers to the way an organization combines to employ its resources to

develop some activities (to compete successfully, if the organization is a firm
competing in a market).
Innovation is a dynamic capability, as it allows the organization to adapt by modifying
its activities, even migrating into new business (either new products or markets, or
both).

4) Is an organization that offers a cheap price operating a cost leadership strategy,

according to Michael Porter?

It is not necessary. Possibly to offer a cheap price the company has eliminated (total or
partially) some critical attributes that constitute the essence of the product.

Maybe due to that fact, it has affected to the target market of your product.

BUSINESS CASE. (3 POINTS). What elements define Xiaomi’s corporate strategy? What is the
role of alliances? How, in your opinion, Xiaomi’s corporate strategy supports its competitive
strategies? Please identify 3-4 resources or competences supporting their competitive
advantage.