Deck 6: Strategy Analysis and Choice

Question 1

The match an organization makes between its internal resources and skills and the opportunities and risks created by its external factors can be defined as

A) input.
B) concept formulation.
C) strategy.
D) SWOT.
E) weakness.

Answer 1

C

Question 2

An organization's present strategies, objectives, vision, and mission, coupled with the external and internal audit information, provide a basis for generating and evaluating feasible alternative strategies.

Answer 2

True

Question 3

Explain the concept of matching in the strategy-formulation framework.

Answer 3

Stage 2 of the strategy-formulation analytical framework is called the matching stage. It focuses on generating feasible alternative strategies by aligning key external and internal factors.

Question 4

Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies?

A) Input
B) Output
C) Decision
D) Throughput
E) Matching

Question 5

Which section of the SWOT Matrix involves matching internal strengths with external opportunities?

A) The WT cell
B) The SW cell
C) The WO cell
D) The ST cell
E) The SO cell

Question 6

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix, the Strategic Position and Action Evaluation (SPACE) Matrix, the Boston Consulting Group (BCG) Matrix, the Internal-External (IE) Matrix, and the Grand Strategy Matrix are included in stage two of the strategy-formulation framework.

Question 7

When completing the matching stage of the strategy-formulation framework, the SWOT Matrix needs to be completed before the SPACE Matrix.

Question 8

Good intuitive judgment is always needed to determine appropriate weights and ratings in the input stage matrices.

Question 9

The first stage of the strategy-formulation framework is the input stage, and it is directly followed by the decision stage.

Question 10

Which stage of the strategy-formulation framework includes an IFE Matrix and the Competitive Profile Matrix?

A) Input
B) Matching
C) Decision
D) Penetration
E) Research

Question 11

Strategy analysis and choice largely involves making ________ decisions based on ________ information.

A) long-term; short-term
B) subjective; objective
C) short-term; long-term
D) subjective; short-term
E) objective; subjective

Question 12

To objectively evaluate feasible alternative strategies identified in Stage 1, the Quantitative Strategic Planning Matrix (QSPM) uses input information derived from Stage 2.

Question 13

Which matrix is included in the decision stage of the strategy formulation framework?

A) Internal Factor Evaluation (IFE) Matrix
B) Quantitative Strategic Planning Matrix (QSPM)
C) Boston Consulting Group (BCG) Matrix
D) Grand Strategy Matrix
E) Strategic Position and Action Evaluation (SPACE) Matrix

Question 14

Stage 2 in the strategy-formulation framework involves the Quantitative Strategic Planning Matrix.

Question 15

Alternative strategies don't come out of the blue; they are derived from the firm's vision, mission, objectives, external audit, and internal audit.

Question 16

It is vital that strategists always consider all feasible alternatives that could benefit the firm.

Question 17

Strategy analysis and choice largely involves making subjective decisions based on objective information.

Question 18

Which stage of the strategy-formulation framework involves the Quantitative Strategic Planning Matrix?

A) Stage 1
B) Stage 2
C) Stage 3
D) Stage 4
E) Stage 5

Question 19

An organization's present strategies, objectives, vision, and mission, coupled with the external and internal audit information, provide a basis for

A) generating structural strategies, but not evaluating those strategies.
B) evaluating structural strategies, but not generating those strategies.
C) generating feasible alternative strategies, but not evaluating those strategies.
D) evaluating feasible alternative strategies, but not generating those strategies.
E) generating and evaluating feasible alternative strategies.

Question 20

Which stage of the strategy-formulation framework includes the IFE Matrix?

A) Input stage
B) Analysis stage
C) Matching stage
D) Decision stage
E) Output stage

Question 21

Strengths-opportunities strategies are based on using a firm's internal strengths to take advantage of external opportunities.

Question 22

What are the two external dimensions of the SPACE Matrix?

A) Stability position and industry position
B) Stability position and competitive position
C) Industry position and competitive position
D) Competitive position and financial position
E) Financial position and industry position

Question 23

The purpose of matching key factors is to generate feasible alternative strategies.

Question 24

Which strategies are defensive tactics directed at reducing internal weaknesses and avoiding external threats?

A) SO
B) WO
C) SW
D) ST
E) WT

Question 25

What type of strategies would you recommend when a firm's SPACE Matrix directional vector has the coordinates (-2, +3)?

A) Aggressive
B) Conservative
C) Competitive
D) Defensive
E) Integrative

Question 26

Market penetration can be classified as either a conservative, aggressive, or competitive strategy when using the Strategic Position and Action Evaluation (SPACE) Matrix.

Question 27

In the SPACE analysis, what does a (+6, +3) strategy profile portray?

A) A strong industry position
B) An unstable environment
C) A stable environment
D) A weak industry position
E) A weak financial position

Question 28

Which of the following is NOT one of the steps involved in constructing a SWOT Matrix?

A) List the firm's key external threats.
B) Match internal strengths with external opportunities, and record the resultant SO strategies in the appropriate cell.
C) Match internal strengths with external threats, and record the resultant ST strategies.
D) List the firm's external weaknesses.
E) List the firm's external opportunities.

Question 29

The stability position (SP) and competitive position (CP) dimension variables in a SPACE Matrix are assigned a numerical value ranging from -1 (best) to -7 (worst).

Question 30

The four strategies of the SPACE Matrix are aggressive, conservative, offensive, and defensive.

Question 31

One of the steps of the SWOT Matrix is to list the firm's key external opportunities.

Question 32

A SWOT Matrix is composed of four cells for the four types of strategies it creates.

Question 33

Which of the following is a limitation associated with a SWOT Matrix?

A) Viewing every business as a Star, Cash Cow, Dog, or Question Mark is an oversimplification.
B) Many businesses fall right in the middle of the matrix.
C) It is a static assessment in time.
D) Other variables besides relative market share position and industry growth rate in sales need to be considered.
E) The matrix does not reflect whether or not various divisions or their industry are growing over time.

Question 34

The most important determinants of an organization's overall strategic position are considered to be the two internal dimensions, financial position (FP), and competitive position (CP), and the two external dimensions, industry position (IP), and stability position (SP).

Question 35

The SWOT matrix, if used appropriately, does not have any limitations.

Question 36

How many cells are in a SWOT Matrix?

A) Two
B) Four
C) Six
D) Eight
E) Nine

Question 37

Which strategies aim at improving internal weaknesses by taking advantage of external opportunities?

A) SO
B) WO
C) SW
D) ST
E) WT

Question 38

The two positive-rated dimensions on the SPACE Matrix are

A) FP and CP.
B) CP and SP.
C) FP and IP.
D) IP and SP.
E) FP and SP.

Question 39

Which of these is NOT a SPACE Matrix quadrant?

A) Aggressive
B) Defensive
C) Competitive
D) Offensive
E) Conservative

Question 40

The two internal dimensions represented on the axes of the SPACE Matrix are

A) stability position and industry position.
B) industry position and internationalization.
C) internationalization and competitive position.
D) competitive position and financial position.
E) financial position and stability position.

Question 41

Forward integration would be an appropriate strategy for which of the following types of divisions in the Boston Consulting Group (BCG) Matrix?

A) Dogs
B) Failures
C) Question Marks
D) Cat
E) Star

Question 42

The Boston Consulting Group (BCG) Matrix is designed specifically to enhance which type of firm's efforts to formulate strategies?

A) Companies with more than one division
B) Large companies
C) Companies with annual sales greater than $1 million
D) Companies with annual sales of less than $1 million
E) All companies

Question 43

All of the following are limitations of the Boston Consulting Group (BCG) Matrix EXCEPT

A) viewing every business as a star, cash cow, dog, or question mark can be an oversimplification.
B) the matrix requires at least three years worth of data.
C) the matrix does not reflect divisional or industry growth over time.
D) the matrix does not allow a company to be classified as somewhere in between two categories.
E) variables such as size of market and competitive advantages are not considered in the Matrix.

Question 44

The midpoint on the x-axis of a Boston Consulting Group (BCG) Matrix is typically set at 0.05.

Question 45

Relative market share position is given on the x-axis of the Boston Consulting Group (BCG) Matrix.

Question 46

In the BCG Matrix, when a division of an organization has a high relative market share and is in a fast-growing industry, it is called a

A) Star.
B) Cash Cow.
C) Cat.
D) Question Mark.
E) Dog.

Question 47

Industry growth rate is given on the x-axis of the Boston Consulting Group (BCG) Matrix.

Question 48

The firm should pursue aggressive strategies if the coordinates of a SPACE directional vector are (+5, +4).

Question 49

In the Boston Consulting Group (BCG) Matrix, which strategy would be most appropriate for a division classified as a Dog?

A) Market penetration
B) Market development
C) Product development
D) Retrenchment
E) Forward integration

Question 50

A firm should pursue defensive strategies if the coordinates of a SPACE directional vector are (+2, +3).

Question 51

In a BCG Matrix the y-axis represents the industry growth rate.

Question 52

The firm should pursue conservative strategies if the coordinates of a SPACE directional vector are (-1, +4).

Question 53

Conservative strategies in a SPACE Matrix most often include product development, market development, market penetration, and related diversification.

Question 54

In the Boston Consulting Group (BCG) Matrix, which element represents the industry growth rate in sales, measured in percentage terms?

A) X-axis
B) Y-axis
C) First quadrant
D) Second quadrant
E) Third quadrant

Question 55

Give five sets of coordinates of SPACE Matrix directional vectors that would suggest conservative strategies to be most appropriate.

Question 56

The size of the circle in a BCG Matrix corresponds to the proportion of corporate revenue generated by that business unit.

Question 57

In the Boston Consulting Group (BCG) Matrix, how would a division with a low relative market share position in a high growth industry be described?

A) Question Mark
B) Cash Cow
C) Star
D) Stuck-in-the-middle
E) Dog

Question 58

In the BCG Matrix, a division with a high relative market share position in a low-growth industry can be described as a

A) Star.
B) Cash Cow.
C) Question Mark.
D) Dog.
E) Failure.

Question 59

The pie slice in a BCG Matrix corresponds to the proportion of corporate revenue generated by that business unit.

Question 60

What are two of the strategies that you might recommend, if the Strategic Position and Action Evaluation (SPACE) Matrix directional vector points to the lower left quadrant?

Question 61

Stars, Question Marks, Cash Cows, and Dogs are the four quadrants exhibited by the Boston Consulting Group (BCG) Matrix.

Question 62

On the x-axis of the IE Matrix, an IFE total weighted score of 2.5 represents a weak internal position.

Question 63

According to the Grand Strategy Matrix, which strategy is recommended for a firm with rapid market growth and a strong competitive position?

A) Market penetration
B) Unrelated diversification
C) Joint venture
D) Retrenchment
E) Liquidation

Question 64

Having no temporal qualities, the BCG Matrix is a snapshot of an organization at a given point in time.

Question 65

The BCG Matrix does not reflect whether or not various divisions or their industries are growing over time.

Question 66

Cash Cows represent the organization's best long-run opportunities for growth and profitability.

Question 67

The IE Matrix can be divided into three major regions that have different strategy implications: grow and build; hold and maintain; and harvest or divest.

Question 68

The major benefit of the Boston Consulting Group (BCG) Matrix is that it draws attention to the cash flow, investment characteristics, and needs of an organization's various divisions.

Question 69

What analytical tool has four quadrants based on two dimensions: competitive position and market growth?

A) Competitive Profile Matrix (CPM)
B) Internal-External (IE) Matrix
C) Strategic Position and Action Evaluation (SPACE) Matrix
D) Grand Strategy Matrix
E) Quantitative Strategic Planning Matrix (QSPM)

Question 70

Although a firm positioned in Quadrant ________ of the Grand Strategy Matrix is in a growing industry, it is unable to compete effectively and needs to determine why the firm's current approach is ineffective and how to best change to improve competitiveness.

A) I
B) II
C) III
D) IV
E) V

Question 71

Compare and contrast the Internal-External (IE) Matrix with the Boston Consulting Group (BCG) Matrix.

Question 72

Firms located in which quadrant of the Grand Strategy Matrix are in an excellent strategic position?

A) I
B) II
C) III
D) IV
E) V

Question 73

Which of the following analytical tools consists of a nine-cell matrix?

A) Boston Consulting Group (BCG) Matrix
B) Competitive Profile Matrix (CPM)
C) Strategic Position and Action Evaluation (SPACE) Matrix
D) Grand Strategy Matrix
E) Internal-External (IE) Matrix

Question 74

For companies located in Quadrant III of the Grand Strategy Matrix, the first strategy recommended is

A) extensive cost and asset reduction.
B) asset expansion.
C) employee expansion.
D) immediate liquidation of assets.
E) divestiture.

Question 75

Viewing every business as either a Star, Cash Cow, Dog, or Question Mark is an oversimplification.

Question 76

Both the Internal-External (IE) and Boston Consulting Group (BCG) Matrices are called ________ matrices.

A) portfolio
B) security
C) strategy
D) vector
E) velocity

Question 77

The Boston Consulting Group (BCG) Matrix requires more information about the divisions than the Internal-External (IE) Matrix.

Question 78

Explain the benefits and limitations of developing a Boston Consulting Group (BCG) Matrix.

Question 79

Both the Internal-External (IE) and Boston Consulting Group (BCG) Matrices are called portfolio matrices.

Question 80

In a Boston Consulting Group (BCG) Matrix, all divisions are classified as either Question Marks, Stars, Cash Cows, or Dogs. Define each of these terms.