MEM Strategic Management 5

Question 1

The 'innovator's dilemma,' as described by Clayton Christensen, explains why established firms often fail to adopt disruptive technologies because:

Accepted Answer

Serving existing profitable customers prevents investment in lower-margin disruptive innovations

Answer

Incumbents rationally focus on their best customers, ignoring initially inferior disruptive technologies that eventually overtake the market.

Question 2

When an engineering company evaluates a potential acquisition using a 'synergy analysis,' it is primarily assessing:

Accepted Answer

Whether the combined entity will create more value than the two firms operating independently

Answer

Synergy analysis quantifies the additional value—cost savings, revenue growth, capability gains—created by combining two organizations.

Question 3

In strategic management, 'co-opetition' refers to a situation where firms:

Accepted Answer

Simultaneously cooperate and compete with one another

Answer

Co-opetition, coined by Brandenburger and Nalebuff, describes firms that cooperate to grow the overall pie (e.g., setting standards) while competing for their individual share.

Question 4

Which of the following is an example of a 'real option' in engineering strategy?

Accepted Answer

Phased investment in a new manufacturing plant that can be scaled up if demand grows

Answer

Real options give firms the right—but not the obligation—to make future investments, analogous to financial options, allowing staged commitment under uncertainty.

Question 5

A 'turnaround strategy' for a struggling engineering division would most likely begin with:

Accepted Answer

Stabilizing cash flow by cutting costs and divesting non-core assets

Answer

Turnaround strategies first stabilize the firm by stopping cash hemorrhage before pursuing growth, since survival is the prerequisite for any longer-term strategic move.

MEM - Master of Engineering Management Practice Test

MEM - Master of Engineering Management Practice Test

MEM Strategic Management 5