Take this Quiz: A-Level Business: Strategy | Zestly

Question 1

A small artisan bakery in York, which currently sells sourdough bread to local residents, decides to start selling its bread through a national supermarket chain. According to Ansoff's Matrix, which strategic direction is the bakery taking?

Accepted Answer

Market development

Answer

Market penetration

Answer

Product development

Answer

Diversification

Question 2

A firm decides to grow by purchasing a direct competitor in the same industry to increase its market share. What is the primary risk associated with this method of growth compared to organic growth?

Accepted Answer

The firm struggles to integrate different organisational cultures

Answer

The firm loses control over its own brand identity

Answer

The firm faces higher costs of research and development

Answer

The firm fails to achieve economies of scale

Question 3

A budget airline offers the lowest ticket prices in the industry by stripping away all non-essential services. If this airline suddenly attempts to offer luxury cabin features, what is the most likely outcome according to Porter's generic strategies?

Accepted Answer

It becomes stuck in the middle and loses its competitive advantage

Answer

It achieves a hybrid strategy and gains more customers

Answer

It successfully differentiates itself from competitors

Answer

It improves its cost leadership position

Question 4

Kestrel Tools, an invented firm, is worried that a large competitor may enter its market next year, and commissions a PESTLE analysis. The analysis is done well: it sets out the political, economic, social, technological, legal and environmental factors bearing on the industry. Why will it not, on its own, answer the question the firm actually asked?

Answer

Because PESTLE covers only political and economic factors.

Answer

Because PESTLE describes conditions as they stand rather than forecasting what will happen — and whether a competitor enters is a prediction, which needs judgement about how those factors will move and who will act on them.

Answer

Because PESTLE can only be applied to domestic markets, not to competitors from abroad.

Answer

Because PESTLE is a quantitative technique and this is a qualitative question.

Question 5

A manufacturing firm with a 'Power Culture' (Handy's classification) is planning to implement a new, collaborative team-based project management system. Why might this change face significant resistance?

Answer

The employees are too focused on long-term career progression

Answer

The culture is already too collaborative for the new system

Answer

The culture relies on centralised decision-making, which conflicts with team autonomy

Answer

The employees are afraid of losing their job security