Deck 9: Strategic Planning: Strategies, Tactics, and Competitive Dynamics

Question 1

Competitor motivation refers to the incentives that an organization has to take action.

Answer 1

True

Question 2

The commitment principle is a management guideline that advises managers to totally commit themselves to strategic planning.

Answer 2

False

Question 3

Competitor capability refers to a firm's ability to undertake an action.

Answer 3

True

Question 4

According to the GE Multifactor Portfolio Matrix,businesses falling in cells that form a diagonal from lower left to upper right are the strongest and the ones the company should invest in and help to grow.

Question 5

Because tactical plans are based primarily on a prediction of the future,and strategic plans are based on known circumstances that exist within the organization,tactical plans are generally less detailed than strategic plans.

Question 6

The first step in the strategic management process is the establishment of organizational direction.

Question 7

Strategic management is the process of ensuring an organization possesses and benefits from the use of an appropriate organizational strategy.

Question 8

Strategic implementation is the last step of the strategic management process.

Question 9

The legal component of the general environment is related to government affairs.

Question 10

Demographics are the statistical characteristics of a population.

Question 11

In general,the strategic management process is thought to consist of sequential and continuing steps.

Question 12

Because strategic planning focuses on the long term and tactical planning on the short term,strategic plans cover a relatively long period of time whereas tactical plans cover a relatively short period of time.

Question 13

SWOT is an acronym for Social Welfare Operating Test.

Question 14

"In what kind of environment does the organization now exist?" is one of the four basic questions required for critical question analysis.

Question 15

Strategy is the end result of strategic planning.

Question 16

Managers only perform environmental analysis to help them understand what is happening outside their organization.

Question 17

Tactical planning is long-range planning that emphasizes the current operations of various parts of the organization.

Question 18

The GE Multifactor Portfolio Matrix was designed to be more complete than the BCG Growth-Share Matrix.

Question 19

The general environment of an organization's external environment contains international,labor,customer,competitor,and supplier components.

Question 20

Motivations,status symbols,and attitudes of the other country are all important aspects of the international component of the organization's operating environment.

Question 21

Which of the following components includes new approaches to producing goods and services?

A)the technology component
B)the political component
C)the labor component
D)the legal component
E)the productive component

Question 22

The first step of strategic management is designed to ________.

A)establish an organizational direction
B)formulate strategy
C)study the organizational environment
D)advise managers to commit funds for planning
E)control the environment

Question 23

Axis Cars is an automobile company based out of Delaware.They need to follow an organizational strategy to regain the market share they recently lost to Toyota.Which of the following strategies will accomplish this objective?

A)They should increase people efficiency.
B)They should resize and downsize present models.
C)They should increase machine efficiency.
D)They should modernize the car batteries.
E)They should merge with another top-selling automobile brand.

Question 24

According to Porter,________ refers to the power that customers have over the firms operating in an industry.

A)the threat of new entrants
B)buyer power
C)supplier power
D)the threat of substitute products
E)intensity of rivalry

Question 25

In strategic planning,managers consider the organization as a total unit and ask themselves what must be done in the long term,which is usually ________.

A)three to five years into the future
B)in the coming year
C)one to two years into the future
D)five to ten years from now
E)five to twenty years from now

Question 26

The level of an organization's external environment that contains components having broad long-term implications for managing the organization is the ________.

A)general environment
B)financial environment
C)demographic environment
D)internal environment
E)operating environment

Question 27

Which of the following is true about social values?

A)Social values are the statistical characteristics of a population.
B)It includes changes in numbers of people among various population segments.
C)Changes in social values can influence the reception of goods and services within the organization's environment.
D)Social values are helpful for developing a strategy aimed at recruiting new employees to fill positions within an organization.
E)The relative degrees of worth that society places on the ways in which it functions can change dramatically over time.

Question 28

________ is the process of ensuring that an organization possesses and benefits from the use of an appropriate organizational strategy.

A)Strategic planning
B)Strategy visualization
C)Decision making
D)Strategic management
E)Integrated business planning

Question 29

A management guideline that advises managers to commit funds for planning only if in the foreseeable future they can anticipate a return on planning expenses as a result of the long-range planning analysis is termed ________.

A)strategic planning
B)the commitment principle
C)organizational planning
D)tactical planning
E)the principle of the objective

Question 30

The level of an organization's external environment that contains components normally having relatively specific and immediate implications for managing the organization is the ________.

A)demographic environment
B)general environment
C)industry environment
D)international environment
E)internal environment

Question 31

The ________ component is that part of the general environment that indicates how resources are being distributed and used within the environment.

A)social
B)economic
C)political
D)international
E)legal

Question 32

The relative degrees of worth that society places on the way in which it exists and functions are ________.

A)political ideologies
B)economic conditions
C)demographics
D)social values
E)environmental factors

Question 33

Long-range planning that focuses on the organization as a whole is ________.

A)operational planning
B)organizational planning
C)strategic planning
D)tactical planning
E)managerial planning

Question 34

Porter's model emphasizes ________.

A)strengths,weaknesses,opportunities,and threats
B)stars,dogs,cash cows,and question marks
C)competitive forces in an industry
D)business strength and industry attractiveness
E)environmental analysis

Question 35

A broad and general plan developed to reach long-term organizational objectives is a(n)________.

A)tactic
B)scenario
C)operational plan
D)organizational goal
E)strategy

Question 36

Which of the following is true about strategy?

A)Strategy is a general plan developed to reach short-term goals without any planning.
B)Organizational strategy focuses only on the marketing and financial aspects of a business.
C)Smaller organizations are more precise than large organizations in developing organizational strategy in order to meet their goals sooner.
D)Strategy is actually the end result of strategic planning.
E)Research and development are not a part of an organization's strategy.

Question 37

Lobbying efforts by interest groups and progress on the passage of laws are examples of the ________ component of the general environment.

A)social
B)political
C)legal
D)technological
E)international

Question 38

Pasta Central,a fast-food chain,has realized that if it wants to beat its leading competitor and improve market share,it must improve its productivity.Which of the following strategies is most likely to help Pasta Central to achieve this objective?

A)reassess their market
B)downsize
C)decrease machine efficiency
D)develop valuable real estate holdings
E)increase people efficiency

Question 39

The last step in the strategic management process is ________.

A)establishment of an organizational direction
B)environmental analysis
C)strategy formulation
D)strategy implementation
E)strategic control

Question 40

According to Porter,threat of new entrants refers to ________.

A)the power that customers have over the firms
B)the power that suppliers have over the firms
C)the extent to which customers may use services from another industry instead of the focal industry
D)the ability of new firms to enter an industry
E)the intensity of the rules of an organization

Question 41

An SBU with a large market share of a low-growth market is a ________.

A)star
B)dog
C)cash cow
D)question mark
E)low-cost leader

Question 42

Which level of the organization's environment exists inside the organization and normally has immediate and specific implications for managing the organization?

A)the general environment
B)the internal environment
C)the operating environment
D)the external environment
E)the political environment

Question 43

Which of the following is true about a star SBU?

A)Star SBUs may barely support themselves; in some cases,they actually drain off cash resources generated by other SBUs.
B)Star SBUs provide the organization with large amounts of cash because their market is not growing significantly.
C)An SBU that is a star has a small share of a high-growth market.
D)An SBU that is a star has a high share of a high-growth market and typically needs large amounts of cash to support rapid and significant growth.
E)Because the market of star SBUs is not growing significantly,the cash is generally used to meet the financial demands of the organization in other areas.

Question 44

An SBU of FlexiTech Inc.manufactures CD drives.Although it has a large share in the market and the product makes significant profits for the company,market growth potential is limited.Under which quadrant of the BCG Growth-Share Matrix does the CD manufacturing unit fall?

A)dog
B)question-mark
C)star
D)cash cow
E)low-cost leader

Question 45

An SBU with a small market share of a high-growth market is a ________.

A)star
B)dog
C)cash cow
D)question mark
E)low-cost leader

Question 46

GenEx Group manufactures a variety of products for different markets.One of its SBUs,GenEx Textiles,is one of its leading revenue generators.GenEx Textiles is the leading player in the market for textiles.However,the parent company has realized that growth prospects in the textile industry is limited.The company has already exploited the market to the fullest and sustained growth in the future is unlikely.In fact,a substantial amount of the revenue generated from this textile business is used to fund other SBUs of the parent company.GenEx Textiles is an example of a ________ for the GenEx Group.

A)star
B)dog
C)cash cow
D)question mark
E)cost-leader

Question 47

Which of the following statements accurately reflects the relationship between the mission and the objectives?

A)The mission statement reflects and flows naturally from the objectives.
B)The objectives reflect and flow naturally from the mission.
C)There is no direct relationship between the mission and the objectives.
D)The mission statement stands alone and has no influence on the objectives.
E)The mission and the objectives influence each other.

Question 48

Which of the following strategy formulation tools outlines the primary forces that determine competitiveness within an industry and illustrates how those forces are related?

A)Porter's Model for Industry Analysis
B)the BCG Growth-Share Matrix
C)SWOT analysis
D)the GE Multifactor Portfolio Matrix
E)the Delphi technique

Question 49

Which of the following is true about the GE Multifactor Portfolio Matrix?

A)Businesses falling in the cells that form a diagonal from lower left to upper right in the matrix are strong businesses that should be invested in regularly.
B)Businesses in the cells below and to the right of the diagonal are medium-strength businesses that should be invested in only selectively.
C)The GE Multifactor Portfolio Matrix does not consider factors such as various types of risk associated with product development.
D)In the matrix,businesses above and to the left of the diagonal are the weakest and serious candidates for divesture.
E)This tool helps managers develop organizational strategy that is based primarily on market attractiveness and business strengths.

Question 50

Which of the following strategy formulation tools was specifically developed to expand on the BCG Growth-Share Matrix?

A)Porter's Model for Industry Analysis
B)the critical questions analysis
C)SWOT analysis
D)the GE Multifactor Portfolio Matrix
E)environmental analysis

Question 51

An SBU with a relatively small market share of a low-growth market is a ________.

A)star
B)dog
C)cash cow
D)question mark
E)low-cost leader

Question 52

Kreme Industries has an SBU Kreme Makeups,Inc.,that offers a wide variety of makeup products and accessories for women.Although market growth rate is high,the SBU's current market share is low and it needs substantial investment.The parent company is trying to decide if Kreme Makeups has long-term sustainability before investing any more cash in it.In the context of the BCG matrix,this SBU of Kreme Industries would be classified as a ________.

A)question mark
B)cash cow
C)dog
D)star
E)low-cost leader

Question 53

The answer to which of the following critical questions indicates whether the organization is progressing satisfactorily or not?

A)What are the purposes and objectives of the organization?
B)Where is the organization presently going?
C)In what kind of environment does the organization now exist?
D)What can be done to better achieve organizational goals in the future?
E)What does our SWOT analysis show?

Question 54

With the GE Multifactor Portfolio Matrix,the businesses falling in the cells that form a diagonal from lower left to upper right are ________.

A)the strongest and the ones the company should invest in and help grow
B)the strongest and the ones the company should sell
C)medium-strength and should be invested in only selectively
D)the lowest in strength and serious candidates for divestiture
E)the lowest in strength and serious candidates for retrenchment

Question 55

The Razzmatazz Group of companies plans to launch a new flavor of crackers that is distinct and unusual.Which of the following strategies is the company following to become more competitive?

A)stability
B)cost leadership
C)divestiture
D)focus
E)differentiation

Question 56

________ is the process of determining appropriate courses of action for achieving organizational objectives and thereby accomplishing organizational purpose.

A)Establishment of organizational direction
B)Strategy implementation
C)Strategy control
D)Strategy formulation
E)Environmental analysis

Question 57

The document that is written by management and describes and explains what the purpose for which the organization exists is the ________.

A)mission statement
B)strategic plan
C)operating plan
D)annual budget
E)vision statement

Question 58

Which strategy is an organization following when it focuses on making an organization more competitive by developing a product or products that customers perceive as being different from products offered by competitors?

A)cost leadership
B)differentiation
C)focus
D)stability
E)divestiture

Question 59

Which of the following is true about a cash cow?

A)Cash cows can barely support themselves; in some cases,they actually drain off cash resources generated by other SBUs.
B)An SBU that is a cash cow has a small share of a high-growth market.
C)An SBU that is a cash cow has a large share of a market that is growing only slightly.
D)An SBU that is a cash cow has a high share of a high-growth market and typically needs large amounts of cash to support rapid and significant growth.
E)Cash cows generate large amounts of cash for the organization and are usually segments in which management can make additional investments and earn attractive returns.

Question 60

________ is the purpose for which - and the reason why - an organization exists.

A)Organizational objective
B)Organizational strategy
C)Organizational mission
D)Organizational policy
E)Organizational rule

Question 61

In an attempt to offer better deals to customers and thereby increase its market share,Dun's Burgers integrates backward to buy out its main supplier of beef.Dun's Burgers is using which of the following strategies to attract customers?

A)focus
B)technology enhancement
C)differentiation
D)cost leadership
E)focused differentiation

Question 62

Which business strategy is generally applied to cash cows?

A)divestiture
B)stability
C)growth
D)retrenchment
E)focus

Question 63

________ is usually applied to SBUs that are dogs or question marks that have failed to increase market share but still require significant amounts of cash.

A)Focus
B)Divestiture
C)Growth
D)Stability
E)Retrenchment

Question 64

One of the SBUs under the Retro Group of companies is not generating a satisfactory amount of business.Extensive analysis shows that the company is losing its market share because its competitors have more sustainable processes.Analysts also feel that the growth prospects in this industry are extremely limited.Which of the following organizational strategies should the company adopt?

A)focus
B)stability
C)retrenchment
D)growth
E)divestiture

Question 65

When an organization focuses on making itself more competitive by producing products more cheaply than competitors can,it is following a ________.

A)stability strategy
B)differentiation strategy
C)focus strategy
D)cost leadership strategy
E)divestiture strategy

Question 66

________ is a strategy adopted by management to maintain or slightly improve the amount of business that an SBU is generating.

A)Focus
B)Stability
C)Retrenchment
D)Growth
E)Divestiture

Question 67

________ is a strategy adopted to eliminate an SBU that is not generating a satisfactory amount of business and that has little hope of doing so in the near future.

A)Growth
B)Divestiture
C)Retrenchment
D)Stability
E)Focus

Question 68

Which of the following is the ability to use information to determine whether a problem has arisen that is blocking implementation?

A)allocating skill
B)interacting skill
C)monitoring skill
D)organizing skill
E)tactical skill

Question 69

________ is a strategy adopted by management to increase the amount of business that an SBU is currently generating.

A)Differentiation
B)Divestiture
C)Retrenchment
D)Growth
E)Focus

Question 70

Which of the following is the ability to manage people during implementation?

A)allocating skill
B)interacting skill
C)monitoring skill
D)organizing skill
E)tactical skill

Question 71

________ is the strategy through which management attempts to strengthen or protect the amount of business an SBU is generating.

A)Differentiation
B)Divestiture
C)Retrenchment
D)Growth
E)Focus

Question 72

The last step of the strategic management process,consisting of monitoring and evaluating the strategic management process as a whole,is ________.

A)strategy implementation
B)strategy formulation
C)strategic control
D)environmental analysis
E)strategic action

Question 73

________ is a strategy that emphasizes making an organization more competitive by targeting a particular customer.

A)Differentiation
B)Cost leadership
C)Stability
D)Focus
E)Divestiture

Question 74

In a retrenchment strategy,managers attempt to ________.

A)eliminate an SBU
B)increase the amount of business of a "star"
C)maintain or slightly improve the amount of business an SBU is generating
D)develop new products that are perceived by customers as different
E)strengthen or protect the amount of business an SBU is generating

Question 75

________ strategy is generally applied to cash cows or stars that are beginning to lose market share.

A)Focus
B)Retrenchment
C)Stability
D)Divestiture
E)Growth

Question 76

________ is the ability to create throughout the organization a network of people who can help solve implementation problems as they occur.

A)Organizing skill
B)Interacting skill
C)Monitoring skill
D)Allocating skill
E)Tactical skill

Question 77

A business strategy that is generally applied to star or question mark SBUs is ________.

A)stability
B)focus
C)retrenchment
D)growth
E)divestiture

Question 78

________,the fourth step of the strategic management process,is putting formulated strategies into action.

A)Strategy implementation
B)Environmental analysis
C)Strategic control
D)Strategy formulation
E)Strategic feedback

Question 79

Dun's Burgers has decided to open takeaway counters across the city that will be open until 11 p.m.to cater to people who return late from work.This turns out to be an excellent strategy as Dun's becomes a hot favorite with the people who work late shifts.This is an example of ________.

A)differentiation strategy
B)technology enhancement strategy
C)cost leadership strategy
D)divestiture strategy
E)focus strategy

Question 80

The Forrester Group of companies has many products,including a fertilizer manufacturing unit.While this unit has never been a source of high revenues in the past,the SBU has increasingly become an area of concern.For the last few years,this SBU has not generated enough business for the Forrester Group and the parent company does not see things changing in the future without substantial investment.In a market with low growth potential,its already low market share has declined further.Which of the following strategies is the Forrester Group likely to choose for this SBU?

A)stability
B)focus
C)retrenchment
D)growth
E)divestiture