BBM Degree in Business Management Strategy 5

Question 1

A strategic business unit (SBU) is best described as:

Accepted Answer

A semi-autonomous division of a larger firm that has its own strategy and competitive environment

Answer

An SBU is a distinct division within a large corporation that operates independently, serving specific markets and having its own strategy, competitors, and profit responsibility.

Question 2

Which pricing strategy is most consistent with a cost leadership competitive strategy?

Accepted Answer

Competitive pricing at or below industry average to capture volume

Answer

Cost leaders leverage their lower cost structures to price at or below competitors, attracting price-sensitive customers and building market share through volume.

Question 3

The concept of 'dynamic capabilities' in strategic management refers to a firm's ability to:

Accepted Answer

Sense, seize, and reconfigure resources in response to rapidly changing environments

Answer

Dynamic capabilities, associated with Teece, Pisano, and Shuen, describe higher-order capabilities that allow firms to adapt, integrate, and reconfigure internal and external competences to address fast-changing environments.

Question 4

When a firm assesses its 'PESTLE' environment, the 'L' factor refers to:

Accepted Answer

Legal and regulatory factors affecting business operations

Answer

In PESTLE analysis, 'L' stands for Legal factors, including laws, regulations, employment legislation, consumer protection, and industry-specific compliance requirements.

Question 5

A company that licenses its brand and business model to independent operators for a fee is using which growth strategy?

Accepted Answer

Franchising

Answer

Franchising allows a company (franchisor) to expand rapidly with lower capital risk by granting franchisees the right to operate under its brand and system in exchange for fees and royalties.

BBM - Business Management Degree Practice Test

BBM - Business Management Degree Practice Test

BBM Degree in Business Management Strategy 5