SPP Strategy Formulation & Development 4

Question 1

According to Porter's Generic Strategies, a firm pursuing a 'differentiation focus' strategy is targeting:

Accepted Answer

A narrow market segment with a highly differentiated product or service

Answer

Differentiation focus combines a narrow target market (focus) with distinctive attributes that justify premium pricing, creating a defensible position within a specific segment.

Question 2

When applying the Value Chain Analysis to strategy formulation, 'primary activities' include:

Accepted Answer

Inbound logistics, operations, outbound logistics, marketing and sales, and service

Answer

Porter's Value Chain identifies five primary activities — inbound logistics, operations, outbound logistics, marketing/sales, and service — directly involved in creating and delivering value.

Question 3

A strategy that involves two or more companies cooperating to achieve mutual goals while remaining independent is known as:

Accepted Answer

A strategic alliance

Answer

A strategic alliance is a formal agreement between independent firms to pursue shared objectives by combining resources, capabilities, or technologies without full merger.

Question 4

Which of the following is an example of an 'emergent strategy' as described by Henry Mintzberg?

Accepted Answer

A strategic direction that develops through experimentation and adaptation to market conditions

Answer

Emergent strategies arise unplanned from patterns in actual organizational decisions and actions, contrasting with deliberate strategies that follow prescribed plans.

Question 5

In the context of competitive strategy, 'switching costs' serve as a barrier to entry primarily because:

Accepted Answer

They make it expensive or difficult for customers to change from an incumbent's product to a new entrant's offering

Answer

High switching costs lock customers into existing relationships, making it difficult for new entrants to attract customers away from established competitors even with superior offerings.

(SPP) Strategic Planning Professional Practice Test

(SPP) Strategic Planning Professional Practice Test

SPP Strategy Formulation & Development 4