Strategic Positioning and Strategic Renewal: Quiz :Business Strategy (Strategic Leadership and Management Specialization) Answers 2025

Question 1

What are the main “generic strategies” that companies can use to strategically position their business units?

✅ Cost leadership and differentiation advantage
❌ Cost advantage and product leadership
❌ Differentiation leadership and price advantage
❌ Price leadership and product advantage

Explanation:
According to Porter, firms achieve competitive advantage through cost leadership or differentiation (with either broad or narrow scope).

Question 2

What is a dual (or integrated) strategy?

✅ A strategy that combines the benefits of cost leadership and differentiation advantage
❌ A strategy that creates value through narrow and broad scope simultaneously
❌ A strategy that uses broad scope and cost leadership
❌ A strategy that uses narrow scope and differentiation advantage

Explanation:
A dual (integrated) strategy seeks to deliver differentiated value while maintaining relatively low costs.

Question 3

Which of the following is NOT a characteristic of a firm that is adopting differentiation advantage to gain competitive advantage?

❌ The firm produces products or services that are unique and different from competitors.
❌ The firm commands a price premium for its products or services.
❌ The firm emphasizes value creation for customers and produces higher EVA and profits in that way.
✅ The firm places its emphasis on controlling costs in order to produce higher EVA and profits.

Explanation:
Cost control is the primary focus of cost leadership, not differentiation.

Question 4

What are dynamic capabilities?

✅ Capabilities that enable companies to change their resource or capability base
❌ Capabilities that are flexible to multiple uses
❌ Capabilities that use dynamic processes
❌ Capabilities that face dynamic forces over time

Explanation:
Dynamic capabilities allow firms to sense, seize, and transform resources in changing environments.

Question 5

Better capacity utilization is a driver of differentiation advantage for firms.

❌ False
✅ True

Explanation:
Better capacity utilization is mainly a cost advantage driver, not a differentiation driver.

Question 6

Cost leadership strategy requires firms to have broad scope.

❌ True
✅ False

Explanation:
Cost leadership can be broad or narrow (e.g., cost focus). Broad scope is not mandatory.

Question 7

A significant challenge created by a company’s strategic misalignment is that it creates feedback effects that lead to internal decline, which further weakens the company’s strategic position.

❌ False
✅ True

Explanation:
Strategic misalignment leads to negative feedback loops, eroding performance and competitiveness.

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