Foundations of Business Strategy Coursera Quiz Answers

All Weeks Foundations of Business Strategy Coursera Quiz Answers

Develop your ability to think strategically, analyze the competitive environment, and recommend firm positioning and value creation. In this course, developed at the Darden School of Business at the University of Virginia, top-ranked faculty will help you explore the underlying theory and frameworks that provide the foundations of a successful business strategy and provide the tools you need to understand that strategy: SWOT, Competitor, Environmental, Five Forces, and Capabilities Analyses, as well as Strategy Maps.

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Foundations of Business Strategy Coursera Quiz Answers

Week 1: Introduction to Strategic Analysis

Q1. An organization’s strategy is embodied in its …

  • Mission, plan, and actions
  • Chief executive officer
  • Mission statement
  • Declared sales and targets

Q2. Which of the following best describes a strategist’s main challenge?

  • Understand answers to the three fundamental questions in order to recognize a firm’s best competitive position
  • Understand opportunities within an industry to improve a firm’s competitive position
  • Understand the capabilities of firms and industries in order to maximize their future profits
  • Understand a firm’s values and how they affect decision-making

Q3. How might entry impact a perfectly competitive market?

  • As an industry, prices rise.
  • As an industry, the amount of output increases.
  • Entry increases capacity constraints.
  • Entry increases both accounting and economic profits.

Q4. In a perfectly competitive market, economic profits…

  • Are a byproduct of low cost, efficient production processes
  • May persist for long periods
  • Are competed away as new entrants imitate incumbent firms
  • Will increase as firms learn about customer preferences

Q5. Which of the following cases BEST illustrates the generation of rents/economic profits?

  • A firm has higher returns than an established, less risky competitor
  • A firm has the greatest market share in its industry
  • A firm has higher returns than an investment of similar risk
  • A firm’s revenues exceed its costs

Q6. Why do strategy analysts care about economic profits and not just accounting profits?

  • Economic profits reflect the opportunity cost of deploying capital.
  • Economic profits calculate a firm’s profits after operating costs.
  • Economic profits are the same as accounting profits.
  • Economic profits reveal a firm’s market share.

Q7. Which of the following best describes who conducts a strategic analysis?

  • Strategic analyses are performed within a company by leadership and other employees.
  • Strategic analysts could be a wide variety of individuals within or associated with a firm as well as secondary stakeholders.
  • Strategic analyses are conducted by a range of primary stakeholders.
  • Most strategic analyses are conducted by business unit general managers, such as a manager reviewing a marketing plan.

Q8. In the real world…

  • Profits are consistent over time
  • Average industry returns vary even after controlling for risk.
  • Businesses rarely have a competitive advantage.
  • Product markets are perfectly competitive.

Q9. When is a firm more likely to earn higher profits?

  • There are barriers to entry or imitation
  • The firm’s key resources and capabilities are easily imitated
  • A firm and its rivals produces similarly designed products as that of a rival firm
  • Another firm holds a patent to a unique process or product

Q10. Would you complete a SWOT, competitor or environmental analysis to understand at the broadest level a firm’s internal capabilities and its external competitive environment?

  • SWOT analysis
  • Competitor analysis
  • Environmental analysis

Q11. A pharmaceutical company is issued a patent on a powerful new arthritis medication. What impact might that patent have on its profitability in the pharmaceutical industry?

  • A patent likely will have little impact on the firm’s profitability.
  • A patent makes it more likely the firm will earn a profit.
  • A patent makes it less likely the firm will earn a profit.

Q12. How might an analyst use the environmental analysis tool?

  • To understand and evaluate current or potential competitors
  • To understand the broad societal forces that impact a firm
  • To test a strategic position
  • To understand a firm’s competitive strengths

Week 2: Analyzing Industry Structure

Q1. Which of the following is a deterrent to entry into an industry?

  • The absence of learning curves in the industry
  • Minimum efficient scale is relatively unimportant
  • Incumbent firms are not aggressive
  • Excess capacity within the industry

Q2. The barriers to entry in a capital-intensive industry such as airlines or petroleum are higher because…

  • The market for the good is very large
  • Acquired capital can be easily redeployed for use in other industries
  • Capital investments cannot be recovered if the firm exits the industry
  • Financing for capital investment is easily secured

Q3. A customer purchasing a mobile phone for personal use has buying power than when purchasing mobile phones for __.

  • more, their family
  • Less, a large team at a Fortune 500 company
  • More, a sales team at a Fortune 500 company

Q4. Which of the following is likely to lead to weaker bargaining power for buyers?

  • Buyers are unaware of the prices fellow buyers are paying
  • Buyers are concentrated
  • Buyers may backward integrate
  • Buyers face low switching costs

Q5. Imagine you run a higher-end, fast food chain that emphasizes freshness. You rely on various suppliers for everything from paper goods to food products. These same producers sell to other fast food chains and markets. For some items, such as paper goods and dry goods, you have several supplier options. For other items, such as ketchup and soda, getting the name brand matters to your customers. For still others, such as organic produce and meats, you rely on a few select suppliers. What might an analysis of the power of suppliers reveal?

  • The power of your suppliers is relatively low overall, since you work with a diversity of vendors and can pick among them based on a balance of price and quality. Since organic produce and meats are a part of your brand, you need to stick with those suppliers.
  • The power of your suppliers is relatively high overall, since there are so many of them. You need to consolidate to one vendor who can supply all your needs, since that will enhance your bargaining position.
  • The power of your suppliers is relatively high in some key areas and relatively low in others. You might wish to explore alternatives for your organic produce and meats to ensure a more diverse supply.

Q6. Gasoline prices fluctuate significantly over time, but these price changes have little effect on car travel. This indicates that demand is _ and the threat of substitutes is _.

  • Inelastic, high
  • Elastic, low
  • Inelastic, low
  • Elastic, high

Q7. All else being equal, which of the following is likely to lead to less intense rivalry in an industry?

  • Heterogeneous yet similarly sized competitors
  • High degree of product differentiation
  • Many competitors
  • High exit barriers

Q8. Earthbound Farm dominates the growing organic produce market in the United States, selling nationally at markets such as Costco and Whole Foods. As an analyst, how might you describe their threat of rivalry within the organic produce market?

  • High
  • Low
  • Average

Q9. A small town has a thriving restaurant scene, with over a 150 dining establishments. Seeking to reduce costs, several restaurants join together to negotiate for table linen supplies and laundering. How might that impact firms in the table linen industry?

  • Firms have decreased bargaining power, because the service they provide is cyclical (more around the holidays and during festivals and sporting events) rather than steady.
  • Firms have increased bargaining power, since there are so many of them.
  • Firms have decreased bargaining power, since they are negotiating with a larger block of buyers and competing against each other.
  • Firms have increased bargaining power relative to the restaurants since they control valuable and necessary services.

Q10. Why is understanding industry structure important for firms?

  • Industry forces are constantly changing.
  • Firms cannot earn economic rents in industries with one or more strong competitive forces.
  • Firms can position themselves to minimize the threats posed by competitive forces.
  • Industry-level factors explain the bulk of the profit differences among firms in the US economy.

Q11. Review question: Which of the following describes a perfectly competitive market?

  • Knowledge is limited.
  • Barriers to entry and exit are non-existent.
  • There are few firms competing in an industry.
  • Products are varied.

Q12. Review question: Economic profits–or rents–are present when…

  • A firm has the greatest market share in its industry
  • A firm has higher returns than an investment of similar risk
  • A firm’s revenues exceed its costs
  • A firm has higher returns than an established, less risky competitor

Week 3: Analyzing Firm Capabilities

Q1. What type of advantage does a successful brand convey?

  • A cost advantage
  • Internal alignment
  • A tangible asset
  • A demand advantage

Q2. Which of the following assets is HARDEST to imitate?

  • A Coke bottling factory
  • The University of Virginia’s IT infrastructure
  • Google’s unique culture of success, transparency, and happiness
  • Expertise in social media and marketing

Q3. A hands-on training firm provides renowned personalized service. Its tech team is working on a low-touch web interface to provide online training, save costs, and scale growth. What threatens the sustainability of the competitive advantage the new interface might provide?

  • It’s not aligned with the company’s value proposition.
  • The new interface provides real value to customers.
  • It’s difficult for competitors to imitate the new interface’s unique capabilities.
  • The new interface is easily maintained and updated.

Q4. Soda can easily and cheaply be made at home using a product like Sodastream with delicious results. To what, then, do you attribute Coca-Cola’s sustained competitive advantage in the beverage industry?

  • Coke’s marketing efforts
  • There is no difference in cost between Coke products and home soda
  • Coke products taste the same as home soda
  • Coke’s brand and distribution system

Q5. Which of the following illustrates how an organization can build a superior capability?

  • Selling a patent portfolio
  • Avoiding possible sharing of information through alliances or partnerships
  • Acquiring it in perfect factor markets
  • Investing in R&D to innovate a new technology

Q6. An e-cigarette company is acquired by a major tobacco company for $25 million. Within a year, it generates $75 million of revenue in excess of previous estimates. What might explain how the tobacco company was able to make this deal?

  • Competitors did not recognize the intrinsic value of the e-cigarette market in general and this producer in particular.
  • Rivals had existing complementary capabilities that made the e-cigarette company more valuable to them.
  • E-cigarette technology is rapidly innovating, and competitors recognized the e-cigarette firm’s value may not actually be that high.
  • Competitors generated the capital to invest in the e-cigarette firm but not as quickly as the purchasing firm.

Q7. Which of the following conditions is necessary for a capability to produce rents?

  • The capability doesn’t need to be internally or externally aligned.
  • The capability does not need to be valuable.
  • The capability is easy to imitate.
  • The capability has few substitutes.

Q8. Under which of the following conditions may a firm be able to deter imitation of a valuable capability?

  • The firm is not credibly committed to a course of action.
  • The capability was developed with minimal R&D and investment in the past year. Review how to deter imitation in the “Sustainability: Imitation” video.
  • Legal barriers, such as a patent, are absent.
  • Value derives from tight combinations between resources and activities.

Q9. Several soccer (football) teams are vying for a valuable forward. They all know her stats (amazing!), previous earnings ($110K/year), and medical history (no major injuries). Additionally, each team has a strong defense, but needs a strong forward to drive their offense. One team finally wins the bidding war with an offer of $250K/year. Why is it likely that the highest bidder paid more to acquire this player, terrific though she is, than her actual value?

  • They thought their defense would be a great fit with her skills.
  • The team had inside information that allowed them to make a better deal.
  • All stakeholders had similar knowledge and so a bidding war likely occurred.
  • They are unlucky and things just won’t work out.

Q10. A capability is likely to continue to produce economic profits even when which of the following is true?

  • A firm chooses to let a rival use an asset for free.
  • Technology shifts so the asset is no longer relevant to producing value.
  • Many firms can imitate the asset, but consumers value the firm’s unique complementary capabilities.
  • One rival can develop a highly effective substitute for the asset.

Q11. Review question: Imagine several potato farmers operate in a competitive market. Farmer Jane decides to enter the market, shifting her 500 acre farm from corn to potatoes. What impact will her entry have on the profitability of the potato market?

  • The profitability of the potato market will remain the same.
  • The profitability of the potato market will decrease.
  • The profitability of the potato market will increase.

Q12. Review question: All else being equal, which of the following is likely to lead to less intense rivalry in an industry?

  • High exit barriers
  • High degree of product differentiation
  • Many competitors
  • Heterogeneous yet similarly sized competitors

Week 4: Peer Review Practice

Q1. How would you rate the sample final assignment’s analysis of competitors?

  • Does not define industry or mention competitors
  • Defines industry, mentions competitors
  • Defines industry, discusses and provides data on competitors

Q2. How would you rate the sample final assignment’s analysis of the environment?

  • Does not identify factors affecting the industry
  • Identifies key factors of interest in this competitive setting
  • Identifies key factors of interest in this competitive setting and provides relevant data explaining these factors

Q3. How would you rate the sample final assignment’s analysis of industry structure?

  • Does not discuss industry structure
  • Briefly analyzes the five forces or only analyzes a few of them
  • Analyzes all five forces in depth

Q4. How would you rate the sample final assignment’s analysis of firm capabilities?

  • Does not discuss firm capabilties
  • Identifies firm capabilities
  • Identifies firm capabilities, analyzes alignment with value proposition

Q5. How would you rate the sample final assignment’s use of data to support arguments?

  • Data is not provided
  • Some data is provided in exhibits to support analysis
  • Rich data is provided in several exhibits

Q6. How would you rate the sample final assignment’s strength of strategic logic and reasoning?

  • Makes no references to course concepts or incorrectly applies these concepts
  • Refers to course concepts and correctly applies these concepts
  • Refers to course concepts in depth and applies them accurately and with sophistication

Q7. How would you rate the sample final assignment’s flow and organization?

  • Report is either underdeveloped or overly wordy; arguments are unclear and hard to follow
  • Report is an appropriate length to explain ideas, some arguments are unclear and sometimes the topics do not flow logically
  • Report is succinct, compelling, and clearly argued; ideas flow logically

Q8. How would you rate the sample final assignment’s research citations?

  • Citations are not included
  • Most sources of information are cited, but not all
  • Sources are clearly cited throughout; a list of sources is provided

Q9. How would you rate the sample final assignment’s synthesis of findings?

  • Does not provide a logical assessment of the firm’s competitive position; fails to integrate findings from various tools
  • Provides a logical assessment of the firm’s competitive position, but does not integrate or ignores discrepancies from various tools
  • Provides a logical assessment of the firm’s competitive position based on a synthesis of findings from different tools

Q10. Which of the following additional feedback would best help the writer of this analysis improve the report?

  • This is a terrific analysis. You covered all the bases and used all the tools. I completely agree with your conclusion. Way to go!!!!
  • I’m so impressed with the depth of your analysis. I would add that when you review the five forces, your description of the threat of substitutes could use a little more detail. For example, what might happen if (as you noted) other grocery stores continue to build their organic capacity and are able to do so at a lower price? How might that impact Whole Foods?
  • I disagree completely with your conclusion. How could you suggest that Whole Foods is going to continue to grow? I don’t care what data you showed (and you showed a lot), I just don’t believe that people will continue to be able to afford their prices.
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