SCHOOL OF ARTS, SOCIAL SCIENCES AND MANAGEMENT DIVISION OF BUSINESS, ENTERPRISE AND MANAGEMENT LEVEL 3 DIET 2 MODULE CODE: B3132 MODULE TITLE: Exploring Strategy DATE: 29 July 2013 WRITING TIME: 2 Hours TIME: 9.30am READING TIME: 5 minutes PAPER SETTER: GORDON CAMPBELL
INSTRUCTIONS: The paper is divided into two sections. Students should attempt both sections in line with the following advice. Section One: Multiple Choice (40%) This section of the exam comprises 20 multiple choice questions. Students should complete all questions on the answer sheet provided. Each multiple choice question carries two marks. Section Two: Short Essays (60%) In this section of the exam, students should answer three of the six short essay questions listed in section two. Answers for each question should be completed in the booklet provided. Each question answered is for 20 marks. Please ensure before leaving the exam hall, that your multiple choice answer sheet is attached to your answer booklet.
SECTION 1: MULTIPLE CHOICE (40%) Complete all questions. 1. In which of the categories of the Exploring Corporate Strategy model would you place the organisation's environment, purpose, culture and capability? a) Strategy in action b) Strategic choices c) Strategic position 2. What is the difference between a mission and a vision? a) The terms 'mission' and 'vision' refer to the same thing. The two terms are synonymous. b) A vision expresses why an organisation exists, while a mission specifies what an organisation is trying to achieve in the foreseeable future. c) A vision is what the organisations leaders would like to achieve, while a mission is the task they have accepted as more realistic d) A mission specifies why the organisation exists, while the vision expresses what the organisation is trying to achieve in the foreseeable future 3. Which of the following does not relate to the VRIN criteria? a) Which value creating activities are especially significant for an organisation in meeting customer needs? b) To what extent does an organisation have bases of value creation that are rare? c) The relative importance of activity costs internally? d) What aspects of value creation are difficult for others to imitate? e) What aspects of the value chain are or are not vulnerable to substitution? 4. Which of the following should you consider in segmenting the market? a) Supplier needs b) Competitor needs c) Organisational core competences d) Organisational resources e) Customer needs
5. Which approach would you use if you wanted to identify the attractiveness of an industry or sector in terms of competitive forces? a) Porter's 5 forces b) PESTEL c) SWOT d) Porter's diamond 6. What term is used to describe a business unit which has low market growth but high market share? a) Star b) Cash cow c) Question mark d) Dog 7. Which of the following is an example of a social issue from the PESTEL analysis? a) Development of 3G phones b) Rising demand for pre-school nursery places c) China joins the WTO d) Rise in interest rates 8. What does Ghemawat mean by cultural distance? a) Differences in language, ethnicity, religion and social tastes. b) Differences in the time for which meetings can be expected to be held. c) The geographical distance from one country to another. d) The degree to which people from the two countries interact.
9. What do you understand by the term 'strategic direction'? a) 'Strategic direction' refers to the direction the organisation would like to move in the next five years. b) 'Strategic direction' refers to the underlying intent of a strategy, e.g. growth, consolidation, market entry or diversification. c) 'Strategic direction' refers to the general direction in which an industry as a whole is moving. d) 'Strategic direction' refers to the leadership offered by the senior management team of an organisation. 10. Which of the following is not a way to sustain differentiation based advantage? a) Creating difficulties of imitation b) Developing high switching costs c) Entering a price war d) Co-specialisation with the buyers organisation 11. Which of the following is a danger for an organisation that uses outsourcing as part of its strategy for reconfiguring its value chain? a) That they will select companies on the basis of lowest price b) That the firm loses control of activities c) That the organisation's employees will be replaced by cheaper staff d) That core activities will be outsourced and core competencies lost 12. Which of the following statements best defines a barrier to entry? a) A barrier to entry is anything that stops an organisation from moving from one strategic group to another. b) A barrier to entry is anything that stops a firm in the industry developing a new product for a market segment not currently served. c) A barrier to entry is anything that stops a firm not currently operating in an industry from joining that industry. d) A barrier to entry is anything that makes an identified market segment unattractive to firms.
13. What is the primary aim of market penetration? a) To gain market share. b) To develop new products. c) To fight off competitor retaliation. d) To defend market share. 14. Which of the decisions listed below is not an example of a strategic decision? a) Decision to launch new product b) Decision to enter a new market c) Decision to invest in a new production plant d) Decision to launch a new advertising campaign 15. Which of the following reasons explains why many organisations are seeking external linkages as a way of creating more value? a) Partnership arrangements with suppliers are the key to effective JIT. b) Outsourcing is currently fashionable in many industry sectors. c) Outsourcing non-core activities allows the organisation to focus on maximising value creation in its core. d) Outsourcing is a way of reducing the complexity involved in managing an organisation and creates a 'lean organisation'. 16. Which of the following organisations do you think is more likely to engage in transformational change rather than incremental change? a) A well established incumbent b) A company in crisis c) A local council d) A company operating in a stable environment
17. How does a joint venture differ from a strategic alliance? a) A joint venture is when two or more organisations set up a new enterprise, whereas a strategic alliance is a temporary collaboration to achieve a shared goal. b) The two terms are interchangeable and both describe collaboration between two or more organisations. c) A joint venture is where two organisations act as venture capitalists to fund the development of a third organisation, whereas an alliance involves contributing expertise rather than money. d) A joint venture is where two companies own equal shares in a third, whereas a strategic alliance is where one of them is a junior partner, owning less than an equal share. 18. Which of the following is not a way in which governments contribute to globalisation? a) Favourable trade policies b) Compatible technical standards c) Common marketing regulations d) Erecting trade barriers e) Helping with host government concerns 19. Which of the following factors might explain why an industry experiences a rash of mergers and acquisitions? a) High growth b) High profitability c) Falling profitability d) Innovation 20. Which of the following does stakeholder mapping not help us to understand? a) Whether the levels of interest and power of stakeholders properly reflect the corporate governance framework b) What the sources of funding for the organisation are c) Who the key blockers and facilitators of a strategy are d) Whether repositioning of certain stakeholders is desirable or feasible
SECTION 2: SHORT ESSAYS (60%) Answer three of the six questions: 1. In developing corporate strategy, we can distinguish between process, content and context. Lynch suggests that process is usually the area that presents most problems. Critique Lynch s position and explain if you agree. 2. Review different strategic influences which impact upon the stated purpose of an organisation. 3. The decision to make (in house) or buy (outsource) is critical for any organisation. With reference to the arguments of the value chain and competitive advantage, critique the strategic benefits and risk of each. 4. Critically evaluate the assertion that an understanding of the external environment is crucial to strategic success 5. Critically discuss the pervasiveness of decision making within the Strategy process 6. Based upon a critical discussion, analyse the strategic nature of a corporate parent relationship and value creation