Arab Academy for Science & Technology & Maritime Transport
College of Graduate- Qena MBA program
Mid-Term exam
Course Title: Strategic Management
Exam Duration: 3 hours
Grade: 40Marks
Answer the following questions:
Course Code:
Lecturer: Dr. Hesham Abdelhamid
Exam Date: 11/12/2020
Question One (10 Marks):
Answer the following questions (true / false) and correct ONLY false one:
1. The Strategy is the process of how the company will match its internal strengths and
weaknesses with external opportunities and threats in order to maintain a competitive
advantage? True
2. The Vision step in strategic planning is to define company’ current business.
Specifically, what products do we sell, where do we sell them, and how our products
or services differ from our competitors? True
3. The Rivalry among competing firms is usually the most powerful of porter’s five
forces model? True
4. Political forecasts can be the most important part of an external audit for firms that
depend heavily on government contracts? True
5. In Porter five forces model price ceiling equate to profit ceiling and more intense
competition among rivals? True
6. One of the possible barriers to entry is product differentiation? True
7. When the strategic plan achieved its financial objectives that always mean the plan
was successful?
8. If an organization chooses to have both a mission and a vision, the mission statement
should be established first, as mission identifies where we are and vision would
indicate where we want to go?
9. Changes in the external environment of any business in most of the situations leads to
changes in consumers demand?
10. Gaining a differentiation advantage is a primary reason for pursuing forward,
backward, and horizontal integration strategies?
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Question Two (10 Marks):
 Evaluate the following vision statements using the discussed criteria:
The vision of DELL is to provide structurally and functionally efficient computers to
visually impaired individuals globally. It is the vision of the company and thinks
about the future.
The vision of PepsiCo is to be the Global Leader in Convenient Foods and Beverages
 Evaluate the following mission statements according to the nine components
evaluation criteria:
Dell's is the most successful computer company in the world at delivering the best
customer experience in markets we serve. In doing so, dell will meet customer
expectations of highest quality; leading technology; competitive pricing; individual
and company accountability; best-in class service and support; flexible customization
capability; superior corporate citizenship; financial stability.
We aspire to make PepsiCo the world premier consumer products company, focused
on convenient foods and beverages. We seek to produce healthy financial rewards for
investors as we provide opportunities for growth and enrichment to our employees,
our business partners and the communities in which we operate. And in everything we
do we strive to act with honesty, openness, fairness, and integrity.
Question Three (10 Marks)
Assumptions:
1. Success or failure in business is all about gaining and sustaining competitive
advantages, Do you agree or disagree and why?
2. Organizational Culture has three different layers such as (visible, invisible,
Personal) varies in depth, all of them can be changed except personal culture can
be only controlled in work environment, Do you agree or disagree and why?
3. Differentiation strategies is considered the highest in risk in all porter generic
strategies, Do you agree or disagree and why?
4. Producing long-term objectives and strategies are centralized activities, Do you
agree or disagree and why?
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Question Four (10 Marks)
Evaluate the following mission statement according to the nine components
evaluation criteria:
“In recent years, the airline industry becomes increasingly competitive. Since being
deregulated during the 1970s in the United States, long established airlines such as
Pan American and Eastern have gone out of business as new upstarts like Midwest
Express and Southwest have successfully entered the market. It appeared that almost
anyone could buy a few used planes to serve the smaller cities that the larger airlines
no longer wanted to serve. These low-cost small-capacity commuter planes were able
to make healthy profits in these markets where it was too expensive to land large jets.
Rail and bus transportation either did not exist or was undesirable in many locations.
Eventually the low-cost local commuter airlines expanded services to major cities and
grabbed market share from the majors by offering cheaper fares with no frills
services. In order to be competitive with these lower cost upstarts, United Airlines and
Northwest Airlines offered stock in the company and seats on the Board of Directors
to their unionized employees in exchange for wages and benefits reductions. Delta
and American Airlines, among other major carriers, reduced their costs by instituting
a cap on travel agent commissions. Travel agencies were livid at this cut in their
livelihood, but they needed the airlines’ business in order to offer customers a total
travel package.
Globally it seemed as though every nation had to have its own airline for national
prestige. These state-owned airlines were expensive, but the governments subsidized
them with money and supporting regulations. For example, a foreign airline was
normally allowed to fly only into one of a country’s airports, forcing travelers to
switch to the national airline to go to other cities. During the 1990s and 2000s, many
countries began privatizing their national airlines as governments tried to improve
their budgets, to be viable in an alliances and even purchase an airline in another
country or region. For example, the Dutch KLM Airline acquired half interest in the
U.S Northwest Airlines in order to obtain not only U.S destinations, but also
Northwest’s Asian travel routes, thus making it one of the few global airlines.
Costs were still relatively high of the worlds’ major airlines because of the high cost
of new airlines, just a one new jet plane costs anywhere from $50 million to
$200million and more. By 2011, only two airplane manufacturers provided almost all
of the large commercial airliners: Boeing and Airbus. Major airlines were forced to
purchase new planes because they were more fuel efficient, safer, and easier to
maintain. Airlines that choose to stay with an older fleet of planes had to deal with
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higher fuel and maintenance costs, factors that often made it cheaper to buy new
planes.
Company X (Foreign large airline company) is planning to launch a new market in
USA, for doing so, CEO assign an urgent task to your department, using Porter’s
approach to industry analysis, evaluate each of the five forces to ascertain what
drives the level of competitive intensity in this industry, and advise him whether to
join the market or not?
The Five forces evaluation
1. The rivalry among competing firms
2. Potential entry of new competitors
3. Threats of substitute products or services
4. Bargaining power of Suppliers
5. Bargaining power of Buyers
Wish you all the best of success
Wish you all the best of success
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