Exam 3: Foundations of Planning

Application of Porter's Competitive Strategy Stacie sighed. Her general manager had just left after giving her the latest assignment- readdress the competitive advantage of their company. By Friday's meeting, Stacie was to have developed three differing strategies the business could use in order to maintain its competitive advantage. Its computer business was slowly losing market share to its competitors, and everyone realized something needed to be done. Stacie glanced through the article by Michael Porter that her manager had left with her. According to Porter, there were three differing types of strategies they could choose from. Stacie began wondering if there was a way they could make their computers cheaper, which would allow them to then sell at a lower price. If they could reduce price by $100 a machine, they would be the industry leaders in price. Stacie wondered if they could find any lower- priced suppliers for the more expensive parts of their computers. She knew that their computers appealed particularly to small business owners due in part to price. They were able to offer the lower price because their computers were not as powerful or fast as some machines, but did contain the necessary word processing, database, and spreadsheet capabilities necessary for a typical small business owner. The lack of frills with the solid three program capabilities, plus their known reputation for quality had worked for them in the past. Stacie wondered if perhaps they needed to look at a smaller segment of the market, maybe small businesses with large accounts receivables that would fully utilize their specific database. She knew that would cut their market by 1/8 but maybe achieving a definite market niche would help. Stacie began compiling her report for Friday's meeting. -The source of competitive advantage that makes the focused strategy possible by creating unique features for a growing market segment is referred to as a

A differentiation strategy is a strategy that an organization follows when it wants to establish a competitive advantage in a narrow market segment.

A company that states that its product is reliable, even to the extent of never needing a service call, such as Maytag, is practicing which of the following competitive strategies?

The grand strategies are growth, differentiation, stability, and combination strategies.

Application of SWOT Analysis Terry had been told to reexamine the strategic niche their company held in the cosmetic industry. Top management did not want the company caught unaware of any changes occurring. Terry began reviewing a list of factors in his mind. There had been some negative publicity lately due to cosmetic testing on animals. The animals were well treated, but they were used to test new products. Positively, sales industry- wide was up 10%. Women were buying more cosmetics in general, which was nothing but good for the company. Another positive factor was their personnel. They had good people working in the company, particularly in research and development. The only other negative Terry could find was that the advertising campaign that was begun last year had not shown the results they had hoped for. Something needed to be done in that department. Terry began to compile his report. -The negative publicity due to the testing of cosmetics on animals would be classified as which of the following?

Managers can overcome the criticisms of management by objectives by

Strategic plans include

The importance of environmental scanning (outside of national security agencies)was first recognized by firms in the___________ industry.

A combination strategy is a strategy that an organization follows when it wants to be unique in its industry within a broad market segment.

What are the four ingredients common to MBO programs?

Stacy's Company continues to offer the same quality beauty products it has for the last 10 years. The company is successful and has no current plans for change. Which of the following types of strategies is it employing?

What types of goals produce higher levels of output?

___________ occurs when Navistar a large shipping company buys smaller tugboat operations in several major ports and incorporates them into their operations.

What is the difference between short term and long- term planning?

Michael Porter proposed that management must select a(n)___________ , which will give its unit a distinct advantage by capitalizing on the strengths of the organization and the industry it is in.

Each MBO objective must have

Which of the following is not a popular way to describe plans?

Studies have supported the premise that companies that plan strategically

The Director of Marketing at Warner Publications sends out a broad, flexible plan that sets out the guidelines and targets for sales every year. This plan is called a___________ plan.

When Maria Murdock assists her employees with setting objectives, she establishes specific and challenging goals for each key task. Which of the following would she not advise employees to do?