The document outlines various strategic considerations and business models relevant to industries and companies like Amazon, Uber, Nike, and Tesla. It discusses concepts such as customer valuation, competitive advantages, and the differentiation versus efficiency trade-off framework. Additionally, it presents examples of companies exemplifying different strategies, such as cost leadership and focus differentiation.

1. 1. A highly capable brick and mortar electronics retailer with a
loyal regional customer base (such as Fry's) should adopt which
of the following medium term strategies?
"50% off" sale every month
Divest
Niche or harvest
Invest in R&D
2. Amazon's strategy involves offering expanded variety but at
very competitive prices. This is primarily achieved through
Economies of scope
Focus on international markets

2. Economies of scale
Innovative products
3. Uber is an example of industry chaining in which of the
following ways?
Economies of scale for service providers
Economies of scope for customers
Improving access and reduced search costs for customers and
service providers
Lower wages for service providers and lower prices for
customers
4. Shareholder returns are primarily derived from

3. Growth in share value and dividend payments
dividend payments only
Growth in company profits
Growth in the share value only
5. Strategy is defined best as:
A unique value proposition supported by sound financial
decisions
A unique value proposition supported by synergies in operations
A unique value proposition supported by aggressive marketing
A unique value proposition supported by a complex supply
chain
6. The cost of attracting new customers is the highest with
which of the following groups?
Early adopters
Late majority

4. Laggards
Innovators
7. In the context of the Differentiation (Quality) vs Efficiency
trade-off curve, the efficient frontier refers to:
The company that provides maximum quality for a given cost
The company that provides minimum cost
The company that provides maximum quality
The company that maximizes efficiency
8. Nike hiring sports stars to be brand ambassadors is an
example of which of the following mechanisms?
Market development
Customer segmentation
Product development
Market penetration
9. Which of the following is an indication of
strategic committment of a company in an industry

5. Lowering wages of the workforce
Increased technology investment
Acquiring real-estate in an urban location of demand
Increased divident payments for two years in a row
10. A pharma company with a deep roster of capable engineers
and scientists and that is the market leader is best advised to
begin development of a new drug as:
A partnership with smaller competitors
License its innovation from other laboratories
An independent venture
Smaller scale effort
11. The most valuable competency in the declining phase of an
industry is:
Resposiveness
Innovation
Efficiency

6. Quality
12. There is often limited capacity relative to demand in the
early growth period of an industry because:
Capacity is very expensive in the later stages of an industry
Only few companies have products or technologies in a budding
industry
Prices tend to be low in the embryonic stage
Many companies compete for early advantage in an emerging
industry
13. If the willingness to pay of a customer for an automobile is
$18000, and the cost to produce that automobile is $14000, the
consumer surplus is:
Less that $4000
$4000
Cannot be determined with data provided
More than $4000
14. A short term profit maximizing strategy for a monopoly
would focus on:

7. Giving slightly greater surplus than the competitor
Maximizing consumer surplus
Minimizing consumer surplus
Ensuring the lowest possible cost of the product
15. Which of the following companies best exemplifies
broad cost leadership?
WalMart
Toyota
Costco
Amazon
16. Tesla's business model can be best described as:
Electric vehicles and services for the technology savvy drivers
with advanced engineering and in-house manufacturing
Electric vehicles and services for the technology savvy drivers
with an outsourced model of design and manufacturing

8. Electric vehicles and services for the technology averse drivers
with advanced engineering and in-house manufacturing
Electric vehicles and services for the budget conscious drivers
with advanced engineering and in-house manufacturing
17. Network amplifiers are critical in establishing a standard (in
a technology context) because:
Higher end customers have a greater voice
Vertical integration is no longer a feasible option for most
companies
Rate of adoption is a critical factor
Ease of use is paramount for any technology
18. Incumbents typically have a cost advantage as compared to
new entrants becuase:
Incumbents typically have a technogical edge compared to new
entrants
Incumbents have deeper connections to government and
regulatory bodies
Incumbents have greater fixed costs but lower variable
relative to new entrants typically

9. Incumbent market shares lead to greater economies of scale
19. Porter's Five forces helps with all of the following
objectives except:
Evaluate the attractiveness of an industry
Decide entry or exit from an industry
Evaluate the strengths and weaknesses of a firm
Evaluate opportunities and threats
20. In the context of the Differentiation (Quality) vs Efficiency
trade-off curve, Amazon is best described as a company:
Just below and to the left of the efficient frontier
On the same frontier but a different position compared to brick
and mortar competitors
A company that values quality over price every single day
That has been a value innovator
21. Which of the following best describes a mission statement?

10. An objective for a company to be debt free in 5 years
A children's clothing store aiming to make a difference in their
customer's lives
An energy company wanting to be the most sustainable company
on the planet
A car company wanting to change customers' behavior into to a
more sustainable lifestyle
22. According to the Mintzberg model of strategy development:
Most unplanned strategies lead to failures on a global scale
Most realized strategies are serendipitous and in response to
evolving markets
Startups often engage in planning emergent strategies
Most realized strategies are carefully planned and executed in
advance
23. The most valuable competency in the embryonic phase of an
industry is:
Resposiveness

11. Efficiency
Innovation
Quality
24. Which of the following companies best exemplifies broad
differentiation?
Volkswagen
Amazon
WalMart
Costco
25. Which of the following provides longer term competitive
advantage when it comes to efficiency:
Experience effect
Economies of scale
Relentless focus on lowering labor related costs
Learning effect
26. An equation that best describes customer valuation is:

12. Price/Quality
Quality/Procuct Price
Quality/Procuct Cost
Product Cost x Quality
27. The best possible context within which to apply Porter's
Five Forces model is for:
Market segment
Industry
Sector
Strategic group
28. The biggest impediment to an industry's consolidation is:
Lack of scale economies
Lack of adequate demand

13. Poor management
Lack of skilled resources
29. The efficient frontier has a concave shape (i.e. a bulging
shape) because:
Greater levels of efficiency come at a steep cost but only for
high-end segments
It costs progressively more for every increment in quality levels
Quality is free at lower levels of quality
There is a quadratic relationship between higher quality and
efficiency
30. High-tech companies can be distinguished from low-tech
companies primarily based on:
Level of fixed cost committment
Higher price premiums for high-tech firms
Extent of digital or on-line business transactions
Price to earnings ratios
31. Subway restaurants is able lower variety related costs
primarily through :

14. Modular design of its service
Choosing franchise partners carefully
Extensive franchising
Allowing customers to customize their sandwich
32. Strategy formulation and execution is ultimately a service
to:
Customers
Shareholders
Employees
Government regulators
33. Effective marketing directly contributes to a firm's
efficiency objective by
Reducing the cost of serving the average customer
Providing insight into customer expectations

15. Improving the market share among higher-end customers
Increasing the willingness to pay of customers
34. Which of the following companies best exemplifies focus
differentiation?
Costco
Amazon
Apple
WalMart
35. Which of the following companies best exemplifies a blue
ocean strategy?
Fedex
Costco
Tesla
Uber
36. A key feature of the cereal industry in recent years has
been:

16. National as opposed to global competition
Lower prices to attract customers
Fewer store brand competitors
Product proliferation
37. Which of the following best exemplifies a capability for a
company?
Low price
Supply chain management
Financial reserves
Ideal positioning
38. Absolute cost advantages for incumbents (over new entrants
to an industry) typically derive from:
Higher levels of experience
Control of inputs

17. Economies of scale from market share
All of the above
39. Amazon.com is a great example of a company that has
consistently delivered:
Spectacular profit growth
Profits year over year
Above average return on investment
Above average share value appreciation
40. Costco's strategy with respect to pricing of its products and
services can best be described as:
Ensuring the lowest total cost of the product within the market
Increasing consumer surplus no matter the segment or product
Reducing consumer surplus even at the expense of quality
Charging higher prices to boost marginal profits