Deck 6: Organizational Strategy

Question 1

_{3. In a situational analysis, a strategic group is a group of that top managers choose for comparing,}
Evaluating, and benchmarking their company's strategic threats and opportunities.

A) non-industry-specific companies
B) expert managers
C) trade journals and other relevant periodicals
D) other firms within an industry
E) consulting firms that use the Delphi technique

Answer 1

D

Question 2

The research on diversification in portfolio management indicates that the best approach is probably:

A) related differentiation
B) related diversification
C) unrelated diversification
D) repositioning
E) no diversification

Answer 2

B

Question 3

Which of the following is a mechanism used to examine external threats and opportunities facing a firm as well as its internal strengths and weaknesses?

A) organizational scanning
B) internal marketing
C) shadow-strategy task forces
D) benchmarking
E) a situational analysis

Answer 3

E

Question 4

The first step in the strategy-making process is to:

A) assess the need for strategic change
B) conduct a situation analysis
C) choose strategic alternatives
D) evaluate the impact of changes on the internal environment
E) create a strategic budget

Question 5

Companies often choose a stability strategy when their external environment doesn't change much, or after they have struggled with periods of explosive growth.

Question 6

The first step in the strategy-making process is to:

A) assess the need for strategic change
B) conduct a situation analysis
C) choose strategic alternatives
D) evaluate the impact of changes on the internal environment
E) create a strategic budget

Question 7

Resource similarity and competition with each other.

A) market commonality
B) resource similarity
C) related diversification
D) product differentiation
E) customer autonomy are factors that determine the extent to which firms will be in direct

Question 8

Which of the following is a condition that must be met if a firm's resources are to be used to achieve a sustainable competitive advantage?

A) differentiation
B) imperfectly imitable resources
C) diversification
D) entrepreneurial orientation
E) a matrix organizational structure

Question 9

Reactors follow the consistent strategy of anticipating and reacting to potential external opportunities and threats prior to their occurrence.

Question 10

There are four conditions that must be met if a firm's resources are to be used to achieve a sustainable competitive advantage. The resources must be valuable, rare, imperfectly imitable, and nonsubstitutable.

Question 11

According to Michael Porter, five industry forces determine an industry's overall attractiveness and potential for long-term profitability. Which of the following is one of those forces Porter identified?

A) existence of complementary products
B) organizational structure
C) existing benchmarks
D) span of management
E) bargaining power of suppliers

Question 12

An analysis of an organization's external environment begins with an assessment of the company's distinctive competencies and core capabilities.

Question 13

An organization implementing a(n) strategy would NOT follow a consistent strategy.

A) defender
B) pioneer
C) analyzer
D) reactor
E) prospector

Question 14

_{7. The is a portfolio strategy that managers use to categorize their corporation's businesses by growth}
Rate and relative market share. This strategy guides them on how to decide how to invest corporate funds.

A) investment matrix
B) SWOT matrix
C) BCG matrix
D) portfolio management matrix
E) Maslow grid

Question 15

Significant cost reductions, layoffs of employees, closing of poorly performing stores, offices, or manufacturing plants, or closing or selling entire lines of products or services would be characteristic of a strategy.

A) portfolio
B) retrenchment
C) stability
D) firm-level
E) rehabilitation

Question 16

_{5. In any organization, the are the less visible, internal decision-making routines, problem-solving}
Processes, and organization cultures that determine how efficiently inputs can be turned into outputs.

A) imperfectly imitable resources
B) valuable resources
C) distinctive competencies
D) core capabilities
E) sources of innovation

Question 17

_{6. In a situational analysis, a strategic group is a group of that top managers choose for comparing,}
Evaluating, and benchmarking their company's strategic threats and opportunities.

A) non-industry-specific companies
B) expert managers
C) trade journals and other relevant periodicals
D) other firms within an industry
E) consulting firms that use the Delphi technique

Question 18

Which of the following is a mechanism used to examine external threats and opportunities facing a firm as well as its internal strengths and weaknesses?

A) organizational scanning
B) internal marketing
C) shadow-strategy task forces
D) benchmarking
E) a situational analysis

Question 19

_{8. In any organization, the are the less visible, internal decision-making routines, problem-solving}
Processes, and organization cultures that determine how efficiently inputs can be turned into outputs.

A) imperfectly imitable resources
B) valuable resources
C) distinctive competencies
D) core capabilities
E) sources of innovation

Question 20

_{6. The term refers to the overall organizational strategy that addresses the question "What business or}
Businesses are we in or should we be in?"

A) firm-level strategy
B) corporate-level strategy
C) industry-level strategy
D) portfolio strategy
E) vision

Question 21

Strategic dissonance is a discrepancy between upper management's intended strategy and the strategy actually implemented by the lower levels of management.

Question 22

According to Strategic Reference Point Theory, managers have two basic strategic alternatives. They are:

A) risk-avoiding strategy and pioneering strategy
B) risk-avoiding strategy and risk-seeking strategy
C) risk-maintenance strategy and conflict-avoidance strategy
D) frontal attack strategy and guerrilla strategy
E) none of these

Question 23

A strategic group is a group of other companies, within an industry, that top managers choose for comparing, evaluating, and benchmarking their company's strategic threats and opportunities.

Question 24

An analysis of an organization's external environment begins with an assessment of the company's distinctive competencies and core capabilities.

Question 25

The research on diversification in portfolio management indicates that the best approach is probably:

A) related differentiation
B) related diversification
C) unrelated diversification
D) repositioning
E) no diversification

Question 26

Companies that succeed are often constantly re-examining strategies or competitive practices that have been successful in the past in order to ascertain their probable future success.

Question 27

Based on the research evidence, related diversification appears to be a better strategy for portfolio management than unrelated diversification.

Question 28

A competitive advantage becomes a sustainable competitive advantage when other companies have found it very expensive to duplicate the what the firm is providing to customers.

Question 29

Companies face very little uncertainty in their strategic business environments.

Question 30

Industry-level strategy is a corporate strategy that addresses the question "How should we compete against a particular firm in our industry?"

Question 31

Corporate-level strategy is the overall organizational strategy that addresses the question "What business or businesses are we in or should we be in?"

Question 32

Companies use their resources to improve organizational efficiency and effectiveness.

Question 33

Portfolio strategy is a corporate-level strategy that minimizes risk by diversifying investment among various businesses or product lines.

Question 34

When companies are performing above or better than their strategic reference points, top management is more likely to choose a daring, risk-taking strategy.

Question 35

Companies often choose a stability strategy when their external environment doesn't change much or after they have struggled with periods of explosive growth.

Question 36

Which of the following is NOT one of the five industry forces that determine an industry's overall attractiveness and potential for long-term profitability?

A) character of rivalry
B) existing complementary products
C) bargaining power of suppliers
D) threat of substitute products
E) bargaining power of buyers

Question 37

If retrenchment works, it is typically followed by a stability strategy.

Question 38

_{12. The purpose of strategies is to choose an industry-level strategy that is best suited to changes in the}
Organization's external environment.

A) positioning
B) differentiation
C) growth
D) adaptive
E) diversification

Question 39

There are four conditions that must be met if a firm's resources are to be used to achieve a sustainable competitive advantage. The resources must be valuable, rare, imperfectly imitable, and nonsubstitutable.

Question 40

The three steps of the strategy-making process are (1) assess the need for strategic change, (2) conduct a situational analysis, and (3) choose the strategic alternatives.

Question 41

The two factors that determine the extent to which firms will be in direct competition with each other are market commonality and resource similarity

Question 42

Deutsche Bank is the largest bank in the world. Would this give it a sustainable competitive advantage?

A) yes, because it would make its operations synergistic
B) no, because size is not a criteria for sustainable competitive advantage
C) no, because large institutions make more effective use of resources
D) no, because large organizations are always targeted for anti-trust activities
E) yes, because size is directly and positively related to efficiency

Question 43

From a competitive standpoint, resource similarity means that the strategic actions your company takes could probably be matched by your direct competitors.

Question 44

A(n) is a resource that is impossible or extremely costly or difficult for other firms to duplicate.

A) rare
B) imperfectly imitable
C) nonsubstitutable
D) strategically dissonant
E) reliable

Question 45

A(n) resource is a resource that is not controlled or possessed by many competing firms.

A) rare
B) imperfectly imitable
C) nonsubstitutable
D) strategically dissonant
E) permanent

Question 46

According to the text, valuable, rare, imperfectly imitable resources can produce sustainable competitive advantage only if they are resources.

A) nonsubstitutable
B) substitutable
C) reliable
D) expensive
E) imitable

Question 47

Which of the following must be met if a firm's resources are to be used to achieve a sustainable competitive advantage?

A) differentiation
B) imperfectly imitable resources
C) related diversification
D) unrelated diversification
E) a matrix organizational structure

Question 48

Differentiation is the positioning strategy of producing a product or service of acceptable quality at consistently lower production costs than competitors.

Question 49

The only kinds of adaptive strategies are defending, analyzing, and reacting.

Question 50

A focus strategy entails using either a cost leadership or a differentiation approach to producing a good or service.

Question 51

Aveda is a manufacturer and marketer of cosmetics, perfumes, hair-care, and skin-care products. To differentiate its products from other similar brands, Aveda focuses on educating its customers on general skin and hair care. Its salespeople are trained to answer questions and help customers find solutions. Aveda has used customer education and employee training to .

A) create synergy through relationship marketing
B) prevent product duplication
C) make efficient use of imitative resources
D) eliminate the need for nonsubstitutable resources
E) create a competitive advantage

Question 52

Character of the rivalry is a measure of the intensity of competitive behavior between companies in an industry.

Question 53

When making travel plans, many tourists have selected Thomas Cook, a British tour operation, because they perceive that no other tour company can duplicate the customer service and satisfaction that Thomas Cook has provided over its years of operation. Thomas Cook has apparently created a sustainable competitive advantage by using resources.

A) synergistic
B) valuable
C) tangible
D) nonsubstitutable
E) rare

Question 54

The three positioning strategies are cost leadership, differentiation, and focus.

Question 55

Reactors follow the consistent strategy of anticipating and reacting to potential external opportunities and threats prior to their occurrence.

Question 56

A sustainable competitive advantage exists for an organization when other companies have tried unsuccessfully to duplicate the advantage and .

A) those companies have been prohibited from duplicating the advantage by federal law
B) those companies have, for the moment, stopped trying to duplicate the advantage
C) the organization is able to implement exclusive distribution
D) the organization operates in the international marketplace
E) the organization has a follower strategic stance

Question 57

The greater the market commonality, the less intense the direct competition between two companies.

Question 58

The threat of substitute products or services is a measure of the ease with which customers can find substitutes for an industry's goods or services.

Question 59

Bargaining power of buyers tends to be higher when a company sells a popular product to multiple buyers than when a company is dependent on just a few high-volume buyers.

Question 60

Most companies compete directly with all the firms in their industry.

Question 61

_{45. A , also called a SWOT analysis for strengths, weaknesses, opportunities, and threats, is an assessment of}
The strengths and weaknesses in an organization's internal environment and the opportunities and threats in its external environment.

A) market audit
B) firm-level strategy
C) competitive advantage
D) differentiation analysis
E) situational analysis

Question 62

While are tangible, are not.

A) core capabilities; distinctive competencies
B) competitive advantages; differential advantages
C) strengths and weaknesses; opportunities and threats
D) opportunities and threats; strengths and weaknesses
E) distinctive competencies; core capabilities

Question 63

_{55. When doing an analysis of strategic groups to assess external environmental threats and opportunities, firms}
Are firms that use related but somewhat different strategies than

A) secondary; pioneering
B) secondary; core
C) transient; core
D) pioneering; secondary
E) core; transient

Question 64

For companies whose main products will not be seen by consumers and whose skills lie in productivity anonymity, a could be to create a brand image to create a distinctive competence.

A) strategic reference point
B) tactical benchmark
C) strategic mission
D) core advantage
E) competitive sustainability

Question 65

According to strategic reference point theory, managers have two basic strategic alternatives. They are .

A) risk-avoiding strategy and pioneering strategy
B) risk-maintenance strategy and conflict-avoidance strategy
C) risk-avoiding strategy and risk-seeking strategy
D) frontal attack strategy and guerilla strategy
E) none of these

Question 66

Which of the following is a mechanism used to examine external threats and opportunities facing a firm as well as its internal strengths and weaknesses?

A) organizational scanning
B) internal marketing
C) corporate strategy
D) benchmarking
E) a situational analysis

Question 67

The first step in the strategy-making process is to .

A) assess the need for strategic change
B) conduct a situation analysis
C) choose strategic alternatives
D) evaluate the impact of changes on the internal environment
E) create a strategic budget

Question 68

The highly fragmented chemical industry in Europe has experienced decreasing profits in an industry reluctance to change the way it conducts business, especially in how it competes against lower-priced U.S. imports. This is an example of .

A) competitive dissonance
B) strategic apathy
C) competitive inertia
D) strategic inertia
E) competitive apathy

Question 69

_{43. An organization is experiencing when there is a discrepancy between upper management's intended strategy}
And the strategy actually implemented by the lower levels of management.

A) horizontal conflict
B) character of the rivalry
C) strategic dissonance
D) competitive inertia
E) an organizational roadblock

Question 70

_{50. In a situational analysis, a strategic group is a group of that top managers choose for comparing, evaluating,}
And benchmarking their company's strategic threats and opportunities.

A) non-industry specific companies
B) expert managers
C) trade journals and other relevant periodicals
D) other firms within an industry
E) consulting firms that use the Delphi technique

Question 71

Top-Flite manufactures Strata golf balls and prices these balls at about three times what ordinary golf balls cost. The Strata ball sells exceptionally well because customers perceive its patented three-layer construction to improve handling and increase distance. The patent on these golf balls gives Top-Flite a(n) .

A) sustainable competitive advantage
B) aggregate marketing strategy
C) reliable differentiation
D) strategic stance
E) differential stance

Question 72

NTL is the largest cable company in the United Kingdom. The company has recently declared bankruptcy and needs to engage in restructuring in order to give it more flexibility and allow it to raise capital. Since it has identified the need for strategic change, what would be the organization's next step in this strategy-making process?

A) finding the optimal strategic solution
B) brainstorming
C) conducting focus groups
D) assessing the need for strategic change
E) conducting a situation analysis

Question 73

_{44. While is a problem strongly associated with top managers,
is a problem more likely to be associated}
With middle and lower-level managers.

A) competitive dissonance; strategic inertia
B) differentiation discrepancy; strategic dissonance
C) strategic inertia; competitive dissonance
D) strategic dissonance; competitive discrepancy
E) competitive inertia; strategic dissonance

Question 74

Imagine Dow Chemical is conducting a situational analysis. According to its sales, Dow is the second largest chemical company in the world. BASF is the largest. Both companies use a similar strategy. Within Dow's situational analysis, BASF would be classified as a .

A) cash cow
B) primary firms
C) unrelated firm
D) core firm
E) secondary firm

Question 75

Specialized Bicycle Components, Inc. introduced the first major production mountain bike in 1980. Two-thirds of its profits come from the sale of mountain bikes. It is recognized worldwide for its ability to design and produce superior mountain bikes. This ability is its .

A) customer sustainability
B) organizational advantage
C) relative competence
D) distinctive competence
E) superlative advantage

Question 76

An organization is experiencing been successful in the past.

A) strategic dissonance
B) strategic inertia
C) competitive dissonance
D) competitive inertia _{e. sustained competitive disarray}
When it is reluctant to change strategies or competitive practices that have

Question 77

_{48. In any organization, the are the less visible, internal decision-making routines, problem-solving processes, and}
Organizational cultures that determine how efficiently inputs can be turned into outputs.

A) imperfectly imitable resources
B) valuable resources
C) distinctive competencies
D) core capabilities
E) sources of innovation

Question 78

Which of the following statements about the strategic reference point theory is true?

A) The theory does not consider risk factors.
B) The theory is deterministic.
C) The theory may lead to bureaucratic management.
D) This theory recommends that managers do not change strategic reference points.
E) None of these statements about the Strategic Reference Point Theory is true.

Question 79

Specialized Bicycle Components, Inc. introduced the first major production mountain bike in 1980. Since then, the company has maintained a technological leadership in the production of bike and bike accessories and an organizational culture that encourages innovation. Technological leadership, as well as its organizational culture, are the company's .

A) customer sustainabilities
B) organizational advantages
C) relative competencies
D) core capabilities
E) superlative advantages

Question 80

A situational analysis for a manufacturer of pet food might reveal which of the following facts .

A) a growing dog and cat population in the United States
B) scientific research that indicates dogs need less calcium in their diet
C) a less expensive, more nutritious imported brand of pet food
D) a growing demand for gourmet pet food
E) all of these