Deck 9: Strategic Planning

Question 1

When an organization is analyzing its labor supply, it is studying its ________.

A) regulatory environment
B) internal environment
C) external environment
D) economic environment

Answer 1

C

Question 2

A strategy defines how a company is going to make money.

Answer 2

False

Question 3

Computer peripherals provider Ascent plans to enter a new market in another country. Which one of the following represents a threat for Ascent?

A) Ascent's profit margin in the previous year was its lowest on record and it will require long-term planning to improve margins.
B) Ascent lacks the resources to enter the market on its own and has to find a partner in the new market.
C) Ascent will have to plan its entry carefully as the laws in the country do not favor foreign businesses.
D) Ascent needs to improve its service capabilities in the new country as this is an important source of revenue.

Answer 3

C

Question 4

The main reason strategic management is important is ________.

A) it allows an organization to anticipate economic recessions
B) it can make a difference in how well an organization performs
C) it reduces uncertainty
D) it simplifies the environment

Question 5

________ are positive trends in the external environment.

A) Strengths
B) Threats
C) Weaknesses
D) Opportunities

Question 6

Strategic management involves only the planning function.

Question 7

The CEO is meeting with his top managers to determine how best to compete successfully in the company's market. This group is developing the company's ________.

A) strategy
B) competitive advantage
C) strengths and weaknesses
D) opportunities and threats

Question 8

The top managers of the corporation are meeting to discuss how they will compete in their chosen markets and how they will attract and satisfy customers. These managers are discussing ________.

A) the business model
B) strategy
C) their competitive advantage
D) core competencies

Question 9

Casey majored in marketing and really enjoyed studying market research as a subject. Through research on the Internet and in the university library, she discovers that this industry appears to have significant positive trends in employment. She interprets this as a(n) ________.

A) weakness
B) threat
C) strength
D) opportunity

Question 10

Managers perform an external analysis so that they know about ________.

A) the firm's basic beliefs and ethical priorities
B) what the competition is doing
C) what vendors want
D) their organization's core competencies

Question 11

Defining the organizational mission forces managers to identify what ________.

A) its competitive advantage is
B) the organization is in business to do
C) its capabilities are
D) pending legislation will affect the organization

Question 12

The CEO and his top managers have asked themselves two important questions: a. do customers value what the company is providing; and b. can the company make money doing that? This group is developing a ________.

A) strategy
B) competitive advantage
C) business model
D) BCG matrix

Question 13

Brutus' Fried Chicken patented the recipe for the spices used in the coating of the chicken. The patent protection lasts for 17 years. Brutus' Fried Chicken will view this patent protection as a(n) ________.

A) threat until the patent expires
B) opportunity during the time of the patent protection
C) weakness because the patent cannot be renewed
D) cost of doing business

Question 14

In a short essay, explain strategic management and why it is important.

Question 15

Patrick expects each person he hires for his online business to be involved in studying trends involving new technology, competitors, and customers. These employees are involved in ________.

A) external analysis
B) internal analysis
C) economic analysis
D) industry analysis

Question 16

Strategic management helps coordinate the efforts of all department and functional areas of an organization.

Question 17

Strategic management is not important for non-profit organizations because their focus is on providing a needed service, not on making a profit.

Question 18

A business model describes how a company is going to make money and what it is going to do with it.

Question 19

A ________ describes the rationale of how a company is going to make money.

A) mission statement
B) business model
C) SWOT analysis
D) core competency

Question 20

A study of the external environment allows a manager to understand the ________ and ________ for the organization.

A) threats; weaknesses
B) strengths; weaknesses
C) strengths; opportunities
D) opportunities; threats

Question 21

Evaluating an organization's intangible assets is part of conducting an internal analysis in the strategic management process.

Question 22

The major value-creating capabilities of the organization are known as its ________.

A) strengths
B) competitive advantages
C) core competencies
D) resources

Question 23

The final step in the strategic management process is implementing the objectives.

Question 24

Identify the six steps in the strategic management process and briefly explain what happens in each step.

Question 25

Activities that an organization does well or resources that it has available are called capabilities.

Question 26

Helen, the owner of Crazy Cupcakes, is conducting a SWOT analysis of her company. Which one of the following represents an opportunity for expansion?

A) There has been a trend toward personalized cupcakes for a variety of occasions.
B) The production process was found to be highly efficient and wastage was kept to a minimum.
C) In a taste test, Crazy Cupcakes products ranked higher than competitors in the taste and texture segments.
D) One of Crazy Cupcakes competitors has added cookies to its product line.

Question 27

A SWOT analysis includes an analysis of an organization's environmental opportunities and threats.

Question 28

Casey realizes that she has a personal characteristic that suggests she is not comfortable interacting with strangers. She interprets this as a(n) ________ if she is to get a job as a salesperson.

A) threat
B) strength
C) weakness
D) opportunity

Question 29

A firm's reputation in the marketplace would be considered a resource.

Question 30

Bella Vista Clothing targets teenage girls with a range of affordable ready-to-wear clothing. The company is opening two new outlets, as sales have been excellent. Which one of the following represents a strength for the company?

A) The company's in-house designers have a knack for identifying and popularizing fashion trends.
B) Disposable income is rising and consumers will have more money to spend on clothes.
C) Bella Vista has excess production capacity.
D) A long-time competitor recently went out of business and Bella Vista can cut down on its advertising budget.

Question 31

Harness International, a global wiring harness company, allows each customer to access its engineering drawings on the company's extranet, speeding up the design process for every project. Harness would consider this to be a(n) ________.

A) resource
B) capability
C) competitive advantage
D) opportunity

Question 32

The first step in the strategic management process is analyzing the external environment.

Question 33

Newmark RV is performing an internal analysis. Which of the following would be considered a resource?

A) a patent for a special design feature
B) a method of production not used by competitors
C) strongly positive reviews from existing customers
D) membership in RVIA, the industry association

Question 34

The final step in the strategic management process allows an organization to understand the ________.

A) effectiveness of the strategies used
B) implementation of the strategies
C) external environment
D) resources and capabilities it possesses

Question 35

When conducting a SWOT analysis, threats are activities the organization doesn't do well or resources it needs but doesn't possess.

Question 36

An organization's financial, physical, human, and intangible assets are known as its ________.

A) resources
B) capabilities
C) strengths
D) core competencies

Question 37

After the SWOT analysis is complete, managers are ready to ________.

A) begin production
B) identify competitors
C) formulate strategies
D) review the analysis

Question 38

Exceptional or unique organizational resources are known as core capabilities.

Question 39

A bank estimates the capabilities of its customer service employees prior to implementing a new training program designed to change their method of providing customer service. The bank is ________.

A) conducting an external analysis
B) formulating its competitive strategies
C) performing an internal analysis
D) performing an employee audit

Question 40

The combined external and internal analyses are called ________.

A) competitor analysis
B) industry analysis
C) market analysis
D) SWOT analysis

Question 41

Lower-level managers are responsible for ________ strategies.

A) functional
B) stability
C) corporate
D) tactical

Question 42

In ________, a company grows by combining with competitors.

A) concentrated integration
B) horizontal integration
C) vertical integration
D) lateral integration

Question 43

An organization that is diversifying its product line is exhibiting what type of corporate strategy?

A) turnaround strategy
B) retrenchment strategy
C) growth strategy
D) diversification strategy

Question 44

An organization that grows using ________ focuses on its primary line of business and increases the number of products offered or markets served in this primary business.

A) diversification
B) horizontal integration
C) vertical integration
D) concentration

Question 45

Hendricks Ceramics sells items it buys from ceramic factories. If it were to purchase one of these factories, it would be engaging in ________ integration.

A) forward vertical
B) backward vertical
C) horizontal
D) concentrated

Question 46

When a company combines with firms in different and dissimilar industries, it indulges in ________.

A) unrelated diversification
B) horizontal integration
C) vertical integration
D) focused diversification

Question 47

A ________ strategy is when an organization expands the number of markets served or the products offered.

A) growth
B) renewal
C) stability
D) retrenchment

Question 48

Top-level managers are responsible for ________ strategies.

A) tactical
B) corporate
C) competitive
D) functional

Question 49

When an organization continues serving the same clients by offering the same product or service, maintaining market share, and sustaining the organization's current business operations, it is following a ________ strategy.

A) renewal
B) stability
C) retrenchment
D) growth

Question 50

A(n) ________ strategy determines what businesses a company is in or wants to be in, and what it wants to do with those businesses.

A) competitive
B) functional
C) operating
D) corporate

Question 51

Florance is a chain of flower shops in the Chicago area. The company recently acquired Knick-knacks, which owns three gift shops. Which of the following is most similar to this acquisition?

A) A construction firm acquired a textile manufacturer as it seemed like a good investment.
B) Faced with mounting raw material costs, a consumer goods producer took over its supplier.
C) One shoe store chain buys out another shoe store chain and expands its distribution channels through the acquired chain's outlets.
D) A toy retailer acquired a children's book store chain and now retails both toys and books from co-branded outlets.

Question 52

Emily's Bakery's customers have asked her to open a second location in a neighboring town offering the same menu as the original location. If Emily decides to do this, she will be following a ________ strategy.

A) focus
B) differentiation
C) concentration
D) diversification

Question 53

Joe's Hardware bought Moe's hardware on the other side of town. This is an example of ________.

A) backward integration
B) forward integration
C) lateral integration
D) horizontal integration

Question 54

Tom's Welding has been supplying frames to the mobile home industry for many years. His business has remained steady despite the entry of other firms into the industry. Tom's is likely pursuing a ________ strategy.

A) retrenchment
B) renewal
C) stability
D) differentiation

Question 55

What are the three main types of corporate strategies?

A) stability, focus, and turnaround
B) growth, stability, and renewal
C) growth, cost leadership, and differentiation
D) stability, differentiation, and focus

Question 56

In ________ integration, the organization becomes its own supplier so it can control its inputs.

A) concentrated
B) backward vertical
C) forward vertical
D) horizontal

Question 57

________ takes place when a company combines with other companies in different, but associated, industries.

A) Stabilized diversification
B) Horizontal integration
C) Vertical integration
D) Related diversification

Question 58

The French fries at Ronald's fast food business have been its most popular product. During the past year, its profits have suffered because the farm that supplies it with potatoes has increased its prices drastically. What should Ronald's do to control its production costs?

A) Ronald's should expand its menu to include sweet potato fries.
B) Ronald's should buy out the farm and become its own supplier.
C) Ronald's should invest in more efficient fryers.
D) Ronald's should broaden its product range by introducing potato nuggets on its menu.

Question 59

In ________ integration, the organization gains control of its outputs by becoming its own distributor.

A) diversified
B) concentrated
C) backward vertical
D) forward vertical

Question 60

Organizations grow by using strategies of ________.

A) concentration, integration, or diversification
B) concentration, integration, or stabilization
C) integration, diversification, or differentiation
D) integration, diversification, or functionalization

Question 61

When Stratasys began making 3D printers in 1988, the future of this new invention was unknown but expected to grow. Stratasys was one of a handful of producers of these printers. According to the BCG matrix, Stratasys was a ________.

A) cash cow
B) question mark
C) dog
D) star

Question 62

In the BCG matrix, a ________ has a low anticipated growth rate and a low market share.

A) question mark
B) cash cow
C) dog
D) star

Question 63

Diversification is an example of a corporate retrenchment strategy.

Question 64

When a totally new product, such as laser discs years ago, is introduced, it would be considered a ________ according to the BCG matrix.

A) star
B) cash cow
C) question mark
D) dog

Question 65

In the BCG matrix, a business unit that has a high anticipated growth rate but a low market share is known as a ________.

A) star
B) dog
C) cash cow
D) question mark

Question 66

If Burger King were to buy out Mom and Pop's Burgers, Burger King would be growing by vertical integration.

Question 67

Which one of the following provides a framework for understanding diverse businesses and helps managers establish priorities for allocating resources?

A) a differentiation matrix
B) a competitive strategy
C) a corporate portfolio matrix
D) a business unit matrix

Question 68

The tobacco market in the United States has stagnated but Altria has a 50% share of it. According to the BCG Matrix, Altria is a ________.

A) star
B) cash cow
C) question mark
D) dog

Question 69

Managers should "milk" cash cows for as much as they can, limit any new investment in them, and use the large amounts of cash generated to invest in ________ and ________.

A) dogs; stars
B) cash cows; dogs
C) stars; question marks
D) question marks; dogs

Question 70

________ should be sold off or liquidated as they have low market share and low growth potential.

A) Cash cows
B) Stars
C) Question marks
D) Dogs

Question 71

AI Rubber is one of four suppliers of molded rubber products and has a 45% market share. The market for its products is shrinking. AI Rubber is part of a larger corporation that includes a total of seven different companies. In the BCG matrix, AI Rubber would be considered a ________.

A) star
B) cash cow
C) question mark
D) dog

Question 72

Corporate strategies determine what business a company is in or wants to be in, and what it wants to do with those businesses.

Question 73

As smartphone cameras improved, consumers turned away from traditional cameras. Polaroid lost market share and finally realized their product was no longer desired. At that point, Polaroid would be considered a ________ in the BCG matrix.

A) question mark
B) dog
C) cash cow
D) star

Question 74

During the Great Recession, Malcolm's Racing Bikes lost a considerable amount of its business because customers could no longer afford the expensive models in his shop. He was very near bankruptcy. Malcolm began carrying a line of less expensive bikes to appeal to recreational bicyclists and families and also opened a repair service. Malcolm used a ________ strategy.

A) retrenchment
B) diversification
C) turnaround
D) reorganization

Question 75

A ________ strategy is used to deal with minor performance problems. It helps an organization stabilize operations, revitalize organizational resources and capabilities, and prepare to compete once again.

A) turnaround
B) stability
C) renewal
D) retrenchment

Question 76

In the Boston Consulting Group (BCG) matrix, a business unit that has a low anticipated growth rate but a high market share is known as a ________.

A) cash cow
B) star
C) dog
D) question mark

Question 77

Heavy investment in ________ will help take advantage of the market's growth and help maintain high market share.

A) cash cows
B) stars
C) question marks
D) dogs

Question 78

In the BCG matrix, a ________ enjoys a high anticipated growth rate and a high market share.

A) question mark
B) star
C) cash cow
D) dog

Question 79

When a firm integrates backward, it becomes its own distributor.

Question 80

________ strategies address declining performance through retrenchment and turnaround strategies.

A) Renewal
B) Stability
C) Growth
D) Functional