Strategic Management of Resources (SMR)

Free Exam Practice Questions

1) Rivalry is generally strong when

Costs to switch brands are high

Buyer demand is growing fast

Competing products are weakly differentiated

There are only a few sellers in the market

1) Rivalry is generally strong when

Costs to switch brands are high

Buyer demand is growing fast

Competing products are weakly differentiated

There are only a few sellers in the market

 Explanation

Weakly differentiated products generally cause high levels of competition due to low
numbers of differentiators.
2) What is the yearly inventory turnover rate in a company that has a sales revenue of $900.000,
cost of goods sold equal to $520.000, and an average inventory value of 60.000?

6.33

15

1.73

8.67
2) What is the yearly inventory turnover rate in a company that has a sales revenue of $900.000,
cost of goods sold equal to $520.000, and an average inventory value of 60.000?

6.33

15

1.73

8.67
 Explanation

The Inventory turnover rate is a measure of the number of times inventory is turned over
in a period of time. It is calculated by dividing the cost of goods sold by the average
inventory value.
3) Which of the following is true when a company is primarily focusing on performance
improvement of order qualifiers?

The company will not achieve significant improvements in competitiveness

The company will assure its competitive position in the market

The company is following a future prove strategy

The company will improve its financial performance

3) Which of the following is true when a company is primarily focusing on performance
improvement of order qualifiers?

The company will not achieve significant improvements in competitiveness

The company will assure its competitive position in the market

The company is following a future prove strategy

The company will improve its financial performance

 Explanation

Order qualifiers represent the characteristics a product or business must demonstrate in

order to be a viable competitor in the market. Features that significantly improve
competitiveness are however called order winners.
4) How is the process called when a car manufacturer is acquiring a car dealership?

Backward integration

Diversification

Forward integration

Deconsolidation
4) How is the process called when a car manufacturer is acquiring a car dealership?

Backward integration

Diversification

Forward integration

Deconsolidation
 Explanation

Forward integration is a form of vertical integration whereby a business acquires the

channels of distribution of its products.
5) Which of the following is not included in the profit and loss statement?

Sales revenue

Cashflow

Cost of goods sold

Tax
5) Which of the following is not included in the profit and loss statement?

Sales revenue

Cashflow

Cost of goods sold

Tax
 Explanation

A Profit and Loss or income statement measures a companys sales and expenses over a
specified period. It typically includes Sales revenue, cost of goods sold as well as tax. Cash
flow, on the other hand, is generally not part of the P&L statement but part of the cash
flow statement.
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