Top 10 Business Strategy Questions with Answers

Top 10 Business Strategy Questions with Answers

Developing a successful business strategy requires meticulous planning and insightful decision-making. Here are ten crucial questions often asked in crafting business strategies, along with concise and informative answers. These questions delve into key aspects such as market positioning, competitive advantage, operational efficiency, and growth opportunities. Understanding and addressing these queries is essential for businesses aiming to thrive in dynamic and competitive landscapes. Each answer provides strategic insights to assist in navigating the complexities of business management and achieving sustainable success.

Now, let’s move on to the Top 10 Business Strategy Questions with Answers

Q1. A company’s strategy can be considered “ethical” as long as:

Select one:
a. it does not entail actions/behaviors that cross the moral line from “can do” to “should not do” (because such actions are
unconscionable, injurious to others, or unnecessarily harmful to the environment).
b. as long as its actions and maneuvers in the marketplace positively affect the well-being of customers
c. so long as none of the company’s strategic actions adversely affect the business of rival firms
d. provided it keeps its prices as low as possible and its product quality as high as possible

Q2. Good strategy combined with good strategy execution:

Select one:
a. Offers a guarantee for avoiding periods of weak financial performance
b. Are the two best signs that a company is a true industry leader
c. Signal that a company has a superior business model
d. Are the most trustworthy signs of good management

Q3. A “cash cow” type of business:

Select one:
a. Generates negative cash flows from internal operations and thus requires cash infusions from its corporate parent to report a profit
b. Is one that generates cash flows that are too small to fully fund its operations and growth
c. Has declining sales revenues and chronic deficiencies of working capital
d. Generates positive cash flows over and above its internal requirements, thus providing a corporate parent with cash flows that can be used for other business activities

Q4. The competitive strategy of a firm pursuing a “think global, act local” approach to strategy making:

Select one:
a. Entails little or no strategy
b. Usually involves cross-subsidizing the prices in those markets where there are significant country-to-country differences in the product attributes in which customers are most interested
c. Involves selling a completely standardized product worldwide, but varying a company’s use of distribution channels and marketing approaches to accommodate local market conditions.
d. Is essentially the same in all country markets where it competes, but it may nonetheless give local managers room to make minor variations where necessary to better satisfy local buyers and to better match local market conditions.

Q5. A company’s values concern:

Select one:
a. How aggressively it will seek to maximize profits and shareholder value
b. The operating principles built into the company’s measurement of performance
c. How the company establishes its value chain
d. The beliefs, traits, and behavioral norms that company personnel are expected to display in conducting the company’s business and pursuing its strategic vision and mission

Q6. A company needs financial objectives:

Select one:
a. To overtake key competitors on measures such as net profit margins and return on investment
b. Because without adequate profitability and financial strength, the company’s ultimate survival is jeopardized
c. To convince shareholders that top management is acting in their interests
d. To translate the company’s business model into action items

Q7. A balanced scorecard for measuring company performance:

Select one:
a. Balances the drive for profits with social responsibility objectives
b. Entails striking a balance between financial objectives and strategic objectives
c. Provides a balance between management and human resources
d. Allows balance between long-term and short-term objectives

Q8. A company’s broad “macro-environment” refers to:

Select one:
a. The industry and competitive arena in which the company operates
b. The driving change factors of in the market
c. All the strategically significant forces and factors outside a company’s boundaries—economic conditions, demographics, societal values, technological factors, and governmental legislation and regulation
d. The company’s resource strengths, resource weaknesses, and competitive capability

Q9. Which of the following is NOT a good example of a substitute product that triggers stronger competitive pressures?:

Select one:
a. Artificial sweetener as a substitute for sugar
b. Coca-Cola as a substitute for Pepsi
c. Digital cameras as substitutes for film cameras
d. Wireless phone service as a substitute for a landline telephone

Q10. Two analytical tools useful in determining whether a company’s prices and costs are competitive are:

Select one:
a. SWOT analysis and key success factor analysis
b. Value chain analysis and benchmarking
c. Driving forces analysis and SWOT analysis
d. Competitive position and advertising


  1. a
  2. d
  3. d
  4. d
  5. d
  6. b
  7. b
  8. c
  9. b
  10. b