Test 9: answer key

Question 1 · 2 marks · Strategic Analysis: Internal Environment - Value Chain · medium

Scenario. FastTrack Logistics has integrated automated warehousing with its last-mile delivery fleet. Warehouse dispatch schedules, vehicle loading and route plans are coordinated to reduce waiting time and handling cost. The firm aims to compete through cost leadership.

The linkage between automated warehousing and the last-mile fleet most directly supports which generic strategy?

1. Differentiation
2. Cost leadership (correct answer)
3. Focus
4. Stuck in the middle

Answer: B — Cost leadership

Working. Conceptual: internal linkage reduces cost drivers such as handling and fleet idle time.

Explanation. Coordinated warehousing and fleet operations reduce waiting time and handling cost, which supports cost leadership. Differentiation is about unique features. Focus is about a narrow segment. Stuck in the middle is not a generic strategy.

Where it goes wrong. Treating any operational improvement as differentiation.

Authority. Chapter 3: Strategic Analysis: Internal Environment - Value Chain

Question 2 · 2 marks · Strategic Analysis: Internal Environment - Value Chain · medium

The coordination between warehouse dispatch and last-mile delivery is an example of:

1. A support activity linkage only
2. A primary activity linkage only
3. An internal linkage between operations and outbound logistics (correct answer)
4. An external linkage with suppliers

Answer: C — An internal linkage between operations and outbound logistics

Working. Conceptual: value chain linkages can be internal between primary activities.

Explanation. Warehousing relates to operations and delivery relates to outbound logistics. Their coordination is an internal linkage. Option a is incomplete. Option b is too broad. Option d involves outside suppliers, which are not described.

Where it goes wrong. Classifying all value chain activities as support activities.

Authority. Chapter 3: Strategic Analysis: Internal Environment - Value Chain

Question 3 · 2 marks · Strategic Analysis: Internal Environment - Value Chain · hard

Which action most appropriately strengthens the linkage for competitive advantage?

1. Sharing real-time dispatch data between warehouse and fleet (correct answer)
2. Increasing fleet size without warehouse automation
3. Outsourcing both activities separately
4. Reducing warehouse service levels

Answer: A — Sharing real-time dispatch data between warehouse and fleet

Working. Conceptual: linkage optimization requires information flow and coordination between activities.

Explanation. Real-time data sharing optimizes the linkage and reduces cost. Option b creates imbalance. Option c may break coordination. Option d harms service and does not strengthen linkage.

Where it goes wrong. Equating linkage with adding capacity rather than coordinating activities.

Authority. Chapter 3: Strategic Analysis: Internal Environment - Value Chain

Question 4 · 2 marks · Strategy Implementation and Evaluation - Organisation Culture · medium

Scenario. PrimeCare Hospitals has strong clinical departments but silos resist patient-centric service. The management wants to align clinical department norms, incentives and communication with a patient-centric culture.

Corporate culture becomes an ally to strategy execution when:

1. Culture is ignored during implementation
2. Culture conflicts with strategy
3. Culture is changed only after failure
4. Values and behavioural norms fit strategy needs (correct answer)

Answer: D — Values and behavioural norms fit strategy needs

Working. Conceptual: culture is an ally when it is compatible with strategy and performance targets.

Explanation. A strategy-supportive culture has values and norms that fit execution needs. Options a and b create obstacles. Option c is reactive and not the condition for culture as an ally.

Where it goes wrong. Assuming any strong culture is supportive regardless of strategy fit.

Authority. Chapter 5: Strategy Implementation and Evaluation - Organisation Culture

Question 5 · 2 marks · Strategy Implementation and Evaluation - Organisation Culture · medium

What is the first step in changing a problem culture?

1. Replace all employees
2. Diagnose which facets are strategy-supportive and which are not (correct answer)
3. Announce a new logo
4. Reduce training

Answer: B — Diagnose which facets are strategy-supportive and which are not

Working. Conceptual: diagnose culture-strategy fit first, then communicate and act.

Explanation. Culture change begins with diagnosis of supportive and non-supportive facets. Option a is excessive. Option c is cosmetic. Option d reduces capability.

Where it goes wrong. Starting with visible actions before diagnosing cultural misfit.

Authority. Chapter 5: Strategy Implementation and Evaluation - Organisation Culture

Question 6 · 2 marks · Strategy Implementation and Evaluation - Organisation Culture · hard

Clinical silos resist patient-centric service. Which action is most appropriate?

1. Strengthen silo boundaries
2. Issue circulars only
3. Align incentives, communication and role models to patient-centric norms (correct answer)
4. Outsource clinical services

Answer: C — Align incentives, communication and role models to patient-centric norms

Working. Conceptual: use multiple culture-changing actions to build strategy fit.

Explanation. Culture change requires coordinated actions such as incentives, communication and role modelling. Option a worsens silos. Option b is insufficient. Option d does not directly align culture.

Where it goes wrong. Believing a circular or slogan alone can change entrenched culture.

Authority. Chapter 5: Strategy Implementation and Evaluation - Organisation Culture

Question 7 · 2 marks · Strategic Analysis: Internal Environment - Strategic Drivers · medium

Scenario. A digital e-commerce business uses real-time customer data loops, dynamic pricing and rapid order fulfilment. It wants to evaluate its core processes and value chain activities.

In a digital e-commerce business, real-time customer data loops and dynamic pricing are examples of:

1. Core processes that convert inputs into customer value (correct answer)
2. Support activities only
3. Unrelated operational tasks
4. Financial control mechanisms

Answer: A — Core processes that convert inputs into customer value

Working. Conceptual: core processes include customer data, pricing and fulfilment routines that create value.

Explanation. These processes are central to how the digital business creates and delivers customer value. Option b is incomplete because they are not only support activities. Option c ignores their strategic role. Option d confuses them with financial controls.

Where it goes wrong. Treating digital processes as only IT support rather than core processes.

Authority. Chapter 3: Strategic Analysis: Internal Environment - Strategic Drivers

Question 8 · 1 marks · Strategic Analysis: Internal Environment - Value Chain · medium

Which of the following is a support activity in Porter's value chain for the digital business?

1. Real-time customer data loop
2. Dynamic pricing
3. Last-mile delivery
4. Technology development (correct answer)

Answer: D — Technology development

Working. Conceptual: support activities include firm infrastructure, human resource management, technology development and procurement.

Explanation. Technology development is a support activity. Real-time customer data, dynamic pricing and last-mile delivery are linked to primary activities. Option a supports marketing and sales but is not classified as a support activity in Porter's model. Option b is marketing and sales. Option c is outbound logistics.

Where it goes wrong. Classifying technology development as an operational primary activity.

Authority. Chapter 3: Strategic Analysis: Internal Environment - Value Chain