Question 1

Which TWO of the following are the main questions normally addressed by a mission statement?

Options :

A : How will we compete?

B : What are we providing?

C : How will we increase our market share?

D : What is our preferred future?

E : Why do we exist?

Answer: B,E

Question 2

A software application development company sells its products to a laptop manufacturing company. The combined products better satisfy customer demands. The software development company is an example of a

Options :

A : new entry.

B : substitutor.

C : competitor.

D : complementor.

Answer: D

Question 3

Structural considerations affecting the threat of substitutes include all of the following except

Options :

A : Cost of switching to substitutes.

B : Customers’ inclination to use a substitute.

C : Brand identity.

D : Relative prices.

Answer: C

Question 4

The CEO of a company held a strategy brainstorming session to develop ideas for exploiting the company’s core competencies in order to derive competitive advantages. One question most likely asked during the session is whether

Options :

A : the core competencies can be imitated by other firms.

B : the company’s rivals have the same distinctive competencies.

C : further investment in these core competencies can expand them to other divisions.

Answer: A

Question 5

What kind of impact do increasing costs of capacity have on an organization's cost structure?

Options :

A : Reduces the relative proportion of variable costs in the organization

B : Reduces the gross margin, but increases the operating margin

C : Increases the gross margin, but reduces operating margin

D : Decreases the operational leverage in the cost structure

Answer: A

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