This is your makeup midterm for MGMT 494BI: Business Policy & Strategy. It tests the same skills as the in-class midterm — value creation, activity systems, brand protection, and Five Forces — through 20 multiple-choice questions.
Format: You will read a brief case about Brennan & Hale Audio, a company facing four strategic decisions. At each decision point, you will be presented with two strategic paths the team considered. You choose which path you want to analyze — then answer 5 questions about the logic, tradeoffs, and frameworks for that path.
The choice itself is not graded. Both paths are legitimate strategic framings. Your grade comes entirely from how well you answer the 5 questions that follow your chosen path.
Total questions: 20 (5 per situation, four situations). Scoring: 5 points per correct answer = 100 points total.
Brennan & Hale Audio was founded in 1978 in Burlington, Vermont, by two former Bell Labs engineers — Margaret Brennan and Tom Hale — who were convinced that mainstream consumer audio had drifted toward marketing gimmicks and away from sound quality. They started by hand-building a single bookshelf speaker called the BH-1, sold by mail order to a small but obsessive community of audiophiles.
Forty-eight years later, Brennan & Hale is a $310 million revenue company that still hand-assembles its flagship speakers in Vermont, but has expanded into headphones, integrated amplifiers, and — most recently — a wireless multi-room system that competes loosely with Sonos at the high end. The company is privately held. The founders retired in 2008. The current CEO, Anjali Desai, took over in 2020 and has been pushing the company to professionalize its operations without losing what makes it special.
Brennan & Hale's customers are not casual buyers. They read reviews, attend listening sessions, and treat speaker selection like a religious decision. Average selling price across the line is roughly four times the consumer-electronics industry median. The company has never advertised on television. Its growth has come almost entirely from word of mouth, magazine reviews (Stereophile, The Absolute Sound), and a network of roughly 180 specialty audio dealers across North America and Europe — many of whom have carried the brand for decades.
The audio industry has been changing fast. Wireless and streaming have upended the old separates-and-cables model. A new wave of well-funded startups (KEF, Audeze, FiiO, HiFiMan) are competing aggressively on price and feature set. Sonos sits at one end of the market, owning convenience. The traditional luxury audio names — McIntosh, Wilson, Magico — sit at the other, owning prestige. Brennan & Hale sits somewhere in the middle, with a reputation that is genuine but a market position that is starting to feel squeezed.
CEO Desai has assembled a small strategy team — and you are on it. The board has asked the team to bring forward analysis on four strategic questions. At each decision point, two serious paths were considered. Your job is to demonstrate that you understand the strategic logic of whichever path you choose to analyze.
Activity system for reference: The ten activities that define B&H's current competitive system are: (1) hand-assembly in Vermont, (2) 18-month engineering cycles, (3) specialty dealer network (180 dealers), (4) in-store listening rooms, (5) lifetime service guarantee, (6) no mass-market advertising, (7) editorial relationships with audiophile magazines, (8) privately held ownership, (9) pricing 3–5× industry median, and (10) 48-year continuous brand presence.
The board has asked the strategy team to articulate, in plain language, how Brennan & Hale actually creates value for its customers, and how it captures enough of that value to remain a healthy business. Two framings are on the table.
Your choice is not graded. Both framings are defensible. Choose the one you want to analyze, then answer the 5 questions that follow.
Select an answer for each question. You may change your selection until you confirm.
CEO Desai has asked the team to evaluate Brennan & Hale's distribution strategy. The existing specialty dealer network is the company's primary channel — but there are geographic gaps and growing pressure to meet customers where they shop. Two directions are on the table.
Your choice is not graded. Both paths are legitimate strategic directions. Choose one and answer the 5 questions about its logic.
Select an answer for each question. You may change your selection until you confirm.
Brennan & Hale has been approached by Apex Mobility, a major U.S. luxury automaker, with a co-branding proposal: Apex would integrate Brennan & Hale-branded audio systems as a premium upgrade option in its vehicles. The deal would generate approximately $42M in annual licensing and supply revenue (against $310M company revenue) and put the B&H name in front of roughly 180,000 affluent buyers per year. The CEO and CFO favored accepting; Margaret Brennan (retired founder, board observer) was opposed. Two positions are on the table.
Your choice is not graded. Both positions are defensible. Choose one and answer the 5 questions about its logic.
Select an answer for each question. You may change your selection until you confirm.
The strategy team has been asked to conduct a Five Forces analysis. Before you can apply the framework, you must define the industry. Two definitions are on the table: a narrow audiophile definition and a broader premium connected home audio definition. Both are analytical choices with real strategic implications.
Your choice is not graded. Both industry definitions are defensible. Choose one and answer the 5 questions testing your Five Forces application.
Final section — select an answer for each question, then submit.
Your responses have been submitted to your instructor. No further action is required.