Free TMA Introduction to Strategy Questions and Answers — Questions and Answers

Question 1: Which of the following is often thought to be connected to decisions made at the strategic level?

The detailed planning of a department's work over the next month
The organization's long-term direction (Correct answer)
The scope of the organization's activities (Correct answer)
The values and expectations of powerful actors in the organization (Correct answer)

Correct answer: The organization's long-term direction

Strategic-level decisions concern the long-term direction and overall purpose of an entire organization, such as which markets to enter or what the company's mission is. Detailed department planning over a single month is operational-level work, focused on short-term execution rather than overarching direction.

Question 2: Which approach focuses on how to effectively compete in certain markets?

Operational-level strategy
Alliance-based strategy
Corporate-level strategy
Business-level strategy (Correct answer)

Correct answer: Business-level strategy

Business-level strategy focuses on how a company competes effectively within a specific market or industry — for example, through cost leadership or differentiation. Corporate-level strategy addresses which businesses to be in, operational strategy handles day-to-day efficiency, and alliance-based strategy concerns partnerships, none of which specifically address market competition.

Question 3: A group of managers is debating differentiation and price strategies. Which strategic level are the managers most likely to be operating at?

Mission and Vision
Corporate level
Operational level
Business level (Correct answer)

Correct answer: Business level

Differentiation and pricing strategies are classic business-level competitive tools used to gain advantage within a specific market. Corporate-level strategy deals with portfolio decisions across business units, operational-level covers daily processes, and mission/vision are foundational statements rather than a strategic level.

Question 4: The overarching goal of an organization is generally expressed by its:

Vision
Objective
Mission (Correct answer)
Goal

Correct answer: Mission

A mission statement defines an organization's core purpose — why it exists and what it fundamentally aims to achieve. A vision describes the desired future state, objectives are specific measurable targets, and goals are broader desired outcomes — none of these express the overarching organizational purpose the way a mission does.

Question 5: Which of the following phrases best sums up the definition of operational strategies? Operational strategies deal with how an organization's constituent elements implement strategies in terms of _ and _.

Alliances
People (Correct answer)
Resources (Correct answer)
Mission

Correct answer: People

Operational strategies define how the people and resources within an organization execute higher-level plans on a day-to-day basis. 'People' is correct because operational strategy is fundamentally about workforce roles, skills, and actions that carry out strategic goals. Alliances and mission belong to corporate or business-level strategy, not the operational layer where execution happens.

Question 6: Which three primary subfields of strategy research comprise the field of strategy studies?

Strategy processes (Correct answer)
Strategy content (Correct answer)
Strategic context (Correct answer)
Strategy lenses

Correct answer: Strategy processes

Strategy studies is divided into three subfields: strategy content (what strategies are), strategy process (how strategies are formed and implemented), and strategy context (the conditions under which strategies operate). 'Strategy processes' is one of these three pillars. 'Strategy lenses' is a separate analytical tool used within strategy research, not one of the three primary subfields.

Question 7: Under which heading in the Exploring Strategy Model are environment, capability, goals, and culture covered?

Strategic choices
Strategic applicability
Strategic position (Correct answer)
Strategy in action

Correct answer: Strategic position

In the Exploring Strategy Model, 'strategic position' is the foundational section that examines where an organization currently stands — covering its external environment, internal capabilities, overarching goals, and organizational culture. Strategic choices covers options like diversification or internalization, while strategy in action covers implementation. 'Strategic applicability' is not a component of this model.

Question 8: According to the experience lens, plans should evolve.

through the shared assumptions in the organisation, often thought of as the organisational culture
through the individual experience of a few top managers or strategic planners
through the shared assumptions across similar types of organisations within an industry (or organisational field)
All of the above (Correct answer)

Correct answer: All of the above

The experience lens holds that strategy evolves organically through accumulated learning rather than top-down design, so all three mechanisms listed — organizational culture, individual managerial experience, and shared industry assumptions — contribute to how plans adapt over time. Because the lens encompasses all of these channels together, 'All of the above' is the complete and correct answer. Selecting any single mechanism alone understates the breadth of the experience lens.

Question 9: Which of the following scenarios most likely has a high buyer power?

Where ultimate consumer power is weak
Where switching costs are low (Correct answer)
Where a few large customers account for the majority of sales (Correct answer)
Where the buyer can threaten to compete (Correct answer)

Correct answer: Where switching costs are low

Buyer power is high when customers face little cost or risk in switching to a competitor, because they can credibly threaten to leave, forcing sellers to offer better terms. Low switching costs are a textbook driver of high buyer power in Porter's Five Forces. Weak ultimate consumer power describes a different situation — downstream consumers having little leverage — which does not necessarily translate to high buyer power at the business level.

Question 10: When customers are able to eliminate middlemen like intermediaries, suppliers experience forward vertical integration.

TRUE (Correct answer)
FALSE

Correct answer: TRUE

Forward vertical integration means a firm moves downstream toward the end customer in the supply chain. When customers bypass intermediaries and deal directly with suppliers, the suppliers are effectively pushed into occupying that forward position — selling direct rather than through middlemen — which constitutes forward vertical integration for the supplier. This statement is therefore true.

Question 11: Which two sections may the pertinent traits be most effectively classified under when creating strategic groups?

PESTEL factors
Resource commitment (Correct answer)
Competitiveness
Scope of activities (Correct answer)

Correct answer: Resource commitment

Strategic groups are most usefully mapped along two dimensions: the scope of a firm's activities and its level of resource commitment (the depth of investment in particular capabilities or markets). These two axes reveal meaningful clusters of competitors pursuing similar strategies. PESTEL factors describe the macro-environment, not firm-level strategic choices, and 'competitiveness' is too broad to serve as a precise classification axis.

Free TMA Introduction to Strategy Questions and Answers

Which of the following is often thought to be connected to decisions made at the strategic level?