Deck 7: Long-Term Objectives and Strategies

Question 1

Which of the following is NOT a commonly pursued long-term objective as described in the text?

A)Profitability
B)Public responsibility
C)Efficiency
D)Productivity

Answer 1

C

Question 2

Safety programs,employee stock option plans and worker representation on management committees are all commonly directed toward achieving which type of long-term objectives?

A)Employee relations
B)Public responsibility
C)Employee development
D)Competitive position

Answer 2

A

Question 3

"To achieve our vision,how will we sustain our ability to change and improve?" is part of which perspective in the Balanced Scorecard?

A)Financial
B)Customer
C)Learning and growth
D)Internal business process

Answer 3

C

Question 4

Establishing objectives for minority training is an example of which type of long-term objective?

A)Competitive position
B)Employee development
C)Public responsibility
D)Productivity

Question 5

Competitive position as a measure of corporate success is typically measured as:

A)The input-output relationship of the company
B)The earnings per share of the company
C)The company's relative dominance in the marketplace
D)The firm's stock value

Question 6

Larger firms often establish an objective by which to gauge their comparative ability for growth and profitability.This is often stated in terms of:

A)Competitive product line
B)Competitive position
C)Product innovation
D)Competitive edge

Question 7

A properly constructed Balanced Scorecard is balanced between:

A)Short and long-term measures
B)Stakeholder financial measures
C)Organizational and stakeholder performance perspectives
D)Pricing and packaging of the firm's products

Question 8

The function of objectives is:

A)To provide a specific statement of the desires of the firm
B)To deal with profitability,growth and survival without specific targets or time frames
C)To provide specific benchmarks for evaluating the company's progress in achieving its aims
D)To enhance stock market optimism

Question 9

Striving to create and market unique products for varied customer groups is called:

A)Cost leadership
B)Differentiation
C)Focus
D)Concentrated growth

Question 10

Which of the following is a generic strategy developed by Michael Porter?

A)Market development
B)Differentiation
C)Liquidation
D)Innovation

Question 11

Objectives should be suited to the broad aims of the organization which are expressed in the statement of the company:

A)Profile
B)Mission
C)Philosophy
D)Goals

Question 12

Which one of the following is NOT a perspective found in the Balanced Scorecard?

A)Stakeholder performance
B)Financial performance
C)Customer knowledge
D)Learning and growth

Question 13

Which of the following qualities of an objective improves its chances of being attained?

A)Timeliness
B)Flexibility
C)Cost efficiency
D)Ground breaking

Question 14

To achieve long-term prosperity,strategic planners commonly establish objectives in which of the following?

A)Profitability,employee relations and public responsibility
B)Acceptability
C)Flexibility
D)Joint ventures only

Question 15

Which of the following are intended to provide benchmarks for the evaluation of the company's progress in achieving its aim?

A)Mission
B)Long-term objectives
C)Grand strategies
D)Business policies

Question 16

To achieve long-term prosperity,strategic managers commonly establish long-term objectives in seven areas.Which of the following describes one of these areas?

A)Technological leadership
B)Technological innovation
C)Social change
D)Marketing

Question 17

Grand strategies provide a comprehensive general approach to guide the organization's:

A)Major actions designed to accomplish long-term objectives
B)Major actions designed to accomplish short-term objectives
C)Operational actions designed to accomplish short-term objectives
D)Operational actions designed to accomplish intermediate term objectives

Question 18

Which of the following does NOT describe a good objective?

A)Flexible
B)Acceptable
C)Marketable
D)Achievable

Question 19

Which of the following is NOT a fundamental criterion for a long-term objective?

A)Acceptable
B)Sustainable
C)Measurable
D)Suitable

Question 20

Flexibility is usually increased at the expense of:

A)Reliability
B)Timeliness
C)Specificity
D)Mobility

Question 21

Typical risks facing the firm that follow a concentrated growth strategy include:

A)Riskier in stable conditions
B)Extra funds required
C)Faltering markets
D)Defining a broad market correctly

Question 22

Under changing conditions,concentrated growth is characterized as:

A)Higher risk
B)Lower risk
C)Decreasing resource needs
D)Lowering revenues

Question 23

Which of the grand strategies is typically lowest in risk?

A)Horizontal integration
B)Concentrated growth
C)Market development
D)Divestiture

Question 24

Marketing present products,often with only cosmetic modification,to customers in related market areas describes:

A)Diversification
B)Concentrated growth
C)Product development
D)Market development

Question 25

A "new and improved" product describes:

A)Diversification
B)Concentrated growth
C)Product development
D)Market development

Question 26

Methods to develop new product features include:

A)Inverse
B)Modify
C)Review
D)Retreat

Question 27

Under stable conditions,concentrated growth is characterized as:

A)Higher risk
B)Lower risk
C)Increasing resource needs
D)Increasing costs

Question 28

Specific options under the concentration grand strategy include which of the following?

A)Opening additional geographic markets
B)Increasing present customer's rate of usage
C)Developing new products
D)Selling to a differentiated customer

Question 29

The grand strategy in which the firm directs its resources to the profitable growth of a single product,in a single market and with a single technology is termed:

A)Product development
B)Market development
C)Concentrated growth
D)Vertical integration

Question 30

Intense supervision of labor is a commonly required skill for which one of Michael Porter generic strategies?

A)Differentiation
B)Market development
C)Product development
D)Overall cost leadership

Question 31

Specific approaches to the grand strategy of market development include which of the following?

A)Entering additional channels of distribution
B)Attracting competitors' customers
C)Reducing prices
D)Attracting current non-users

Question 32

Market development encompasses attracting other market segments.This includes:

A)Increasing promotional effort
B)Including trial use
C)Advertising in other media
D)Opening more branches in the same city

Question 33

_______ strategy allows firms to leverage some of their traditional strengths by identifying new uses of existing products and by finding new demographic or psycho graphic markets.

A)Innovation
B)Product development
C)Market development
D)Horizontal integration

Question 34

Concentration encompasses increasing present customer rate of usage.This includes:

A)Increasing size of purchase
B)Pricing up or down
C)Developing quality variations
D)Marketing in new channels

Question 35

Firms that focus on a specific product and market combination are utilizing a _______ strategy.

A)Concentrated growth
B)Turnaround
C)Innovation
D)Product development

Question 36

Grand strategies are often called:

A)Corporate strategies
B)Coordinate strategies
C)Master strategies
D)Directed action

Question 37

Grand strategies are designed to accomplish which of the following?

A)Short-term objectives
B)Long-term goals
C)Short-term goals
D)Long-term objectives

Question 38

Which of the following is NOT a value discipline?

A)Operational excellence
B)Cost leadership
C)Customer intimacy
D)Product leadership

Question 39

The grand strategy commonly ranked second in low risk and cost is:

A)Market development
B)Vertical integration
C)Joint venture
D)Concentrated growth

Question 40

Attracting competitors' customers encompasses:

A)Decreasing promotional efforts
B)Establishing sharper brand similarities
C)Initiating price cuts
D)Increasing purchase size

Question 41

A spin-off usually indicates:

A)Integration
B)Diversification
C)Joint venture
D)Retrenchment

Question 42

If a shirt manufacturer acquires a textile manufacturer,this strategy is called:

A)Backward vertical acquisition
B)Diversification
C)Joint venture
D)Horizontal acquisition

Question 43

If a textile producer acquires a shirt manufacturer,this is called:

A)Vertical horizontal acquisition
B)Backward horizontal acquisition
C)Backward vertical acquisition
D)Forward vertical acquisition

Question 44

Conglomerate diversification is concerned primarily with:

A)Stock appreciation
B)Product development
C)Market synergy
D)Financial returns

Question 45

Few innovative ideas prove to be profitable because of:

A)Low development costs
B)Low pre-marketing costs
C)High research costs
D)High post-marketing costs

Question 46

The grand strategy involving the acquisition of businesses that serve as a customer for the firm's outputs,such as warehouses for finished products is called:

A)Backward concentric diversification
B)Pooled horizontal integration
C)Forward vertical acquisition
D)Sequential horizontal integration

Question 47

When the long-term strategy of a firm is based on growth through the acquisition of one or more similar businesses operating at the same stage of the production-marketing chain,this is called:

A)Vertical integration
B)Conglomeration
C)Horizontal acquisition
D)Liquidation

Question 48

Creating a new-product life cycle is the underlying philosophy of a grand strategy of:

A)Product development
B)Innovation
C)Horizontal integration
D)Market development

Question 49

When the principal or sole consideration of the acquiring firm is the profit pattern of the venture,the grand strategy is usually one of:

A)Innovation
B)Horizontal integration
C)Concentric diversification
D)Conglomerate diversification

Question 50

The grand strategy involving the acquisition of businesses that supply the firm with inputs such as raw materials is termed:

A)Forward concentric diversification
B)Sequential horizontal integration
C)Backward vertical acquisition
D)Retrenchment

Question 51

The grand strategy that provides access to new markets for a company while at the same time eliminating competitors is termed:

A)Concentric diversification
B)Horizontal acquisition
C)Vertical acquisition
D)Conglomerate diversification

Question 52

If Cola Creations acquires Seltzer Spirit Co.,this merger would describe what type of strategy?

A)Joint venture
B)Horizontal acquisition
C)Vertical acquisition
D)Divestiture

Question 53

The acquisition of one or more businesses operating at the same stage of the production-marketing chain is an example of:

A)Market development
B)Product development
C)Innovation
D)Horizontal acquisition

Question 54

If a firm plans to acquire a business because it represents the most promising investment opportunity available,the grand strategy is:

A)Conglomerate diversification
B)Joint venture
C)Concentric diversification
D)Liquidation

Question 55

If a shirt manufacturer acquired a chain of men's clothing outlets,this would be an example of:

A)Forward acquisition
B)Backward acquisition
C)Horizontal acquisition
D)Conglomerate diversification

Question 56

Improving the way a detergent smells is an example of:

A)Market expansion
B)Product development
C)Product innovation
D)Product extinction

Question 57

With this type of grand strategy,the new businesses selected possess a high degree of compatibility with the current business:

A)Conglomerate diversification
B)Concentric diversification
C)Joint venture
D)Divestiture

Question 58

When diversification involves additions of a business related to the firm in terms of technology,markets or products,it involves:

A)Concentrated growth
B)Horizontal integration
C)Concentric diversification
D)Vertical diversification

Question 59

Motivations of acquiring firms include:

A)Decreased stock price
B)Increased market share
C)Different debt/equity ratio
D)Decreased P/E ratio

Question 60

If a donut corporation acquires a flour company,this strategy would be called:

A)Vertical acquisition
B)Diversification
C)Conglomeration
D)Joint venture

Question 61

More than 75 percent of financially desperate firms file for a:

A)Reorganization bankruptcy
B)Partial bankruptcy
C)Liquidation bankruptcy
D)Chapter 12 bankruptcy

Question 62

Chapter 11 of the Bankruptcy Code deals with:

A)Reorganization
B)Liquidation
C)A second chance
D)A conditional second chance

Question 63

When the grand strategy is liquidation,the business is:

A)Typically sold in parts
B)Sold as a going concern
C)Sold for "good will" value
D)Leased with the option to repurchase

Question 64

If a business is sold for its tangible asset value,the strategy is one of:

A)Divestiture
B)Conglomeration
C)Liquidation
D)Diversification

Question 65

Which is considered the least attractive grand strategy?

A)Joint venture
B)Liquidation
C)Concentrated growth
D)Divestiture

Question 66

When companies lack a necessary component for success in a particular environment,they may participate in types of joint ventures which include:

A)Leasing
B)Strategic alliance
C)Joint ownership
D)Divestiture

Question 67

The type of strategy typically accomplished either by cost reduction and/or asset reduction is known as:

A)Market development
B)Innovation
C)Liquidation
D)Turnaround

Question 68

The motivations of acquiring firms using diversification strategy include:

A)Steadying the growth rate of the firm
B)Decreasing productivity
C)Increasing stock value of the firm
D)Gaining shareholders

Question 69

When a firm agrees to a complete distribution of its assets to creditors,most of whom will receive a small fraction of the amount that they are owed,this form of bankruptcy is called a:

A)Reorganization bankruptcy
B)Liquidation bankruptcy
C)Partial bankruptcy
D)Organizational bankruptcy

Question 70

Occasionally,two or more capable companies lack a necessary component for success in a particular competitive environment.The optimal strategy in such a case would be:

A)Concentric integration
B)Diversification
C)Conglomerate diversification
D)Joint venture

Question 71

The grand strategy that involves the sale of a business or major business component is called:

A)Divestiture
B)Integration
C)Diversification
D)Liquidation

Question 72

Which of the following types of bankruptcies provides the firm with a conditional second chance?

A)Liquidation bankruptcy
B)Total bankruptcy
C)Organizational bankruptcy
D)Reorganization bankruptcy

Question 73

Concentric diversification may be undertaken as a grand strategy because the acquiring firm wishes to:

A)Acquire an investment opportunity
B)Sell off unneeded assets quickly
C)Balance or fill out its product line
D)Trim its product line

Question 74

Which kind of bankruptcy provides time and protection to the debtor firm?

A)Chapter 5 bankruptcy
B)Chapter 7 bankruptcy
C)Chapter 11 bankruptcy
D)Chapter 12 bankruptcy

Question 75

Retrenchment is typically accomplished through:

A)Asset reduction
B)Profit reduction
C)Cost escalation
D)Revenue enhancement

Question 76

According to researchers,the grand strategies of retrenchment/turnaround are most often accomplished in extreme circumstances through which of the following?

A)Cost reductions
B)Asset reductions
C)Changes in top management
D)Diversification

Question 77

_______ is partnerships that exist for a defined period during which partners contribute their skills and expertise to a cooperative project.

A)Licensing agreements
B)Franchising agreements
C)Export agreements
D)Strategic alliances

Question 78

As a long-term strategy,this minimizes the loss to all stockholders of the firm:

A)Concentrated growth
B)Divestiture
C)Turnaround
D)Liquidation

Question 79

The second phase of the turnaround process is called:

A)Recovery response
B)Turnaround
C)Retrenchment
D)Divestiture

Question 80

When a firm attempts to persuade its creditors to temporarily freeze their claims while it undertakes to reorganize and rebuild its operations more profitably,this form of bankruptcy is called:

A)Reorganization bankruptcy
B)Liquidation bankruptcy
C)Partial bankruptcy
D)Organizational bankruptcy