Strategy Sketch and Strategic Planning Practice Quiz (17 questions)

All questions and answers

1. What does an organization’s strategy describe?

The sequence of tasks employees complete during a typical workday
The features and functions included in a particular product
The prices charged for the organization’s current products
Its distinctive way of creating value that can be sustained over time

Its distinctive way of creating value that can be sustained over time

Explanation

Strategy describes an organization’s unique approach to creating sustainable value, rather than merely listing what a product offers. A product description identifies features or functions but does not explain how the organization creates value.

2. How can an organization’s strategy help it sustain its customer value creation?

By expanding its product range without considering competitors’ approaches
By matching competitors’ approaches and focusing on short-term customer demand
By lowering prices whenever competitors introduce similar offerings
By distinguishing its approach from competitors’ and maintaining that value creation over time

By distinguishing its approach from competitors’ and maintaining that value creation over time

Explanation

A strategy sets the organization’s way of creating customer value apart from competitors’ and aims to maintain that value creation over time. Matching competitors’ approaches does not describe the distinction that strategy is meant to establish.

3. What role does the Strategy Sketch serve?

It lists operational tasks in the order employees should complete them
It organizes ten core strategy elements in a coherent visual tool
It ranks products according to their current sales performance
It forecasts customer demand using a single market indicator

It organizes ten core strategy elements in a coherent visual tool

Explanation

The Strategy Sketch is a structured, coherent visual tool that combines ten core elements of strategy. A product sales ranking may inform decisions, but it does not serve as this strategy framework.

4. A company is identifying the resources and competences that make it distinctive. Which question best fits that task?

Which organizations do customers compare with it before deciding to buy?
What does the organization have, do especially well, and uniquely bring to its work?
What needs do its customers have, and what are they willing to pay for?
Which outside organizations have formal agreements to support its work?

What does the organization have, do especially well, and uniquely bring to its work?

Explanation

Resources and competences concern what an organization has, what it does well, and what makes it unique. Asking which outside organizations have formal agreements is a useful partner-mapping question, not a definition of resources and competences.

5. Which organization best fits the definition of a partner?

An organization that monitors the company’s financial performance for investors
An organization that purchases the company’s services to meet its own needs
An organization that works with the company and helps make its services more valuable
An organization that customers compare with the company when choosing a service

An organization that works with the company and helps make its services more valuable

Explanation

Partners work with an organization in ways that make its products or services more valuable. A competitor may offer a comparable service, but customers compare against it rather than collaborating with it to add value.

6. A team is identifying the people it serves and the problems its offering addresses. Which strategy area is it examining?

Resources and the capabilities the organization possesses
Customers and the needs the organization fulfills for them
Competitors and the alternatives customers compare against
Partners and the organizations that help add value

Customers and the needs the organization fulfills for them

Explanation

Customers and Needs identifies who the organization serves and the needs it fulfills for them. Competitors are alternatives customers compare against, rather than the people served by the organization.

7. When deciding whether to buy a service, customers compare the provider with another organization offering a similar service. What role does that other organization play?

It is a competitor because customers consider it as an alternative
It is a partner because it contributes value to the provider’s service
It is a resource because it contributes a capability the provider owns
It is a customer because it receives the provider’s service

It is a competitor because customers consider it as an alternative

Explanation

An organization customers compare against when deciding whether to buy is a competitor. A partner collaborates with the organization to add value, which is a different relationship.

8. What does a value proposition describe?

The financial and social risks an organization bears and how it manages them
The products and services offered, how they are offered, and the added value they provide to customers
The organization’s structure and culture and the practices that characterize them
The money an organization receives, who provides it, and when payment occurs

The products and services offered, how they are offered, and the added value they provide to customers

Explanation

A value proposition explains the customer-facing offer, how it is delivered, and the value customers receive from it. A revenue model instead describes what the organization receives in return for that offer.

9. A company is revising its value proposition. Which change is a valid way to develop the offer?

Reassign responsibility for a financial risk without changing the offer
Revise long-term ambitions while leaving products and services unchanged
Simplify an existing feature and add a complementary service
Change payment timing while keeping the customer offer unchanged

Simplify an existing feature and add a complementary service

Explanation

Developing a value proposition can involve simplifying features or adding related and complementary products or services. Changing payment timing is a revenue-model decision rather than a change to the offer itself.

10. A service provider wants to understand the payments it receives for its offer. Which set of questions belongs to its revenue model?

Who pays, what they pay for, how much they pay, and how or in what form they pay
Which risks arise, who bears them, how large they are, and how they are managed
Which costs are necessary, which can be avoided, and which strategy elements create them
Which products are offered, how they are delivered, and what value customers receive

Who pays, what they pay for, how much they pay, and how or in what form they pay

Explanation

Revenue analysis examines who pays, what they pay for, the amount, and the payment method or form. Questions about risks, their bearers, and their management concern what the organization bears rather than receives.

11. What does an analysis of Risks & Costs describe?

The organization’s culture and structure as reflected in its routines and symbols
The products and services the organization offers and the value they provide customers
The payments the organization receives, including who pays and when payment occurs
The financial, social, and other risks and costs the organization bears and how it manages them

The financial, social, and other risks and costs the organization bears and how it manages them

Explanation

Risks & Costs concern the financial, social, and other burdens an organization bears, along with how it manages them. Payments received for an offer belong to the revenue model, not to this analysis.

12. A leadership team is clarifying what matters to its organization and the direction it should pursue. Which concept addresses these concerns?

Value Proposition
Values & Goals
Organizational Climate
Revenue Model

Values & Goals

Explanation

Values & Goals express what is important to an organization and where it should go in the future. Organizational climate instead describes the organization’s characteristic structure and culture.

13. A researcher examines an organization’s structure and characteristic culture. Which aspect is being assessed?

Organizational Climate
Revenue Model
Values & Goals
Value Proposition

Organizational Climate

Explanation

Organizational Climate describes the structure and culture characteristic of an organization. Values & Goals concern what the organization considers important and its desired future direction.

14. Which statement best distinguishes a trend from an uncertainty in an organization’s broader environment?

A trend is an environmental development, while an uncertainty has a future course that is unclear.
A trend is an unclear future event, while an uncertainty is an established environmental development.
A trend is an internal strategic choice, while an uncertainty is an external societal development.
A trend is a possible organizational response, while an uncertainty is a change in current strategy.

A trend is an environmental development, while an uncertainty has a future course that is unclear.

Explanation

A trend is a development in the broader environment, whereas an uncertainty concerns something whose future course is unclear. The second choice reverses these two concepts.

15. A company faces an environmental change that could harm its business. Which response is consistent with the available strategic options?

It could assume the change will remain insignificant to its business.
It could postpone considering whether the change creates an opportunity.
It could focus on mapping its current strategy across ten elements.
It could reduce its dependence on changes in the environment.

It could reduce its dependence on changes in the environment.

Explanation

Reducing dependence on environmental changes is one way an organization can respond to trends and uncertainties. Mapping the current strategy is a Strategy Sketch activity, not a response to environmental change.

16. After participants have mapped the current strategy using the Strategy Sketch, what should they do next in the process?

Ask stakeholders to choose a preferred strategy before generating or developing ideas.
Select one idea immediately, implement it, and assess its results after execution.
Monitor organizational changes monthly, then replace the current strategy with a new Sketch.
Generate ideas, develop the three best into a coherent Sketch, and test them with stakeholders.

Generate ideas, develop the three best into a coherent Sketch, and test them with stakeholders.

Explanation

After mapping the current strategy, participants generate ideas, develop the three strongest into a coherent Sketch, and test them with stakeholders. Choosing a strategy before generating and developing ideas skips key steps in the process.

17. Which use of the Strategy Sketch would help an organization track how its strategy and environment change over time?

Use it to rank environmental uncertainties without mapping organizational strategy.
Use it to record only the organization’s original strategy before any changes occur.
Use it to monitor changes within and outside the organization, for example monthly.
Use it to replace stakeholder testing with a single review of the current strategy.

Use it to monitor changes within and outside the organization, for example monthly.

Explanation

The Strategy Sketch can monitor changes inside and outside an organization, including through regular reviews such as monthly monitoring. Recording the original strategy without tracking later changes does not serve this monitoring purpose.

Study with flashcards

Lock in the answers with 49 flashcards on Strategy Sketch and Strategic Planning.

What is an organization’s strategy?

Its unique way of creating sustainable value.

How does a strategy distinguish an organization from competitors?

By its approach to creating customer value.

What does a strategy aim to maintain over time?

Customer value creation.

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