Deck 6: Planning, Strategy, and Competitive Advantage

Question 1

A program-an integrated set of plans for achieving certain goals-is an example of a standing plan.

Answer 1

False
Explanation: Examples of single-use plans include programs, which are integrated sets of plans for achieving certain goals, and projects, which are specific action plans created to complete various aspects of a program.

Question 2

Top managers are primarily responsible for planning that takes place at the business level of an organization.

Answer 2

False
Explanation: In an organization, the managers of each division are primarily responsible for planning that takes place at the business level of the organization.

Question 3

The cluster of decisions about what goals to pursue,what actions to take,and how to use resources to achieve goals,is called an organization's strategy.

Answer 3

True
Explanation: Strategy is a cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals.

Question 4

Corporate-level planning is the primary responsibility of middle management in an organization.

Question 5

A written set of instructions that describes the series of actions that a manager should take in a specific situation is called an SOP of an organization.

Question 6

A good plan specifies not only which goals and strategies an organization is committed to but is also accountable for putting the strategies into action to attain the goals.

Question 7

Planning takes place at the corporate level and the business level of an organization,but not at the functional level of an organization.

Question 8

The number of months covered in the typical business plan is known as the time horizon of the plan.

Question 9

Single-use plans are useful in situations that involve programmed decisions in an organization.

Question 10

A rule is a general guide to action within an organization.

Question 11

The last step in the planning process is to determine an organization's mission and goals.

Question 12

A business plan that is updated every year depending on the changes in an organization and in the external environment that have taken place in the previous year is known as a standing plan.

Question 13

The corporate-level plan outlines the specific methods a division,business unit,or organization will use to compete effectively against its rivals in an industry.

Question 14

Planning involves identifying and selecting appropriate goals and courses of action for an organization.

Question 15

The divisions of an organization exist at the functional level of the organization.

Question 16

In the planning process,functional goals and strategies do not need to be consistent with divisional goals and strategies.

Question 17

A broad declaration of an organization's purpose,products,and customers is called a mission statement.

Question 18

At the functional level,the business-level plan provides the framework within which functional managers devise their plans.

Question 19

An intermediate-term plan has a time horizon between five and ten years.

Question 20

Each division's functional managers are responsible for the planning and strategy making necessary to increase the efficiency and effectiveness of their particular function.

Question 21

According to Michael Porter's theory,it is possible for managers to pursue both a low-cost strategy and a differentiation strategy at the same time.

Question 22

Synergy is obtained by apportioning financial resources among divisions to increase financial returns or spread risks among different businesses.

Question 23

A strategic alliance can take the form of a written contract between two or more companies to exchange resources,or it can result in the creation of a new organization.

Question 24

Scenario planning is often used to strengthen SWOT analysis.

Question 25

While conducting a SWOT analysis,the strengths and weaknesses are considered the external environment factors affecting an organization.

Question 26

Managers pursuing a focused differentiation strategy serve just one or a few segments of the market and aim to make their organization the most differentiated company serving that segment.

Question 27

In a strategic alliance,managers share their organization's resources and know-how with those of a foreign company,and the two organizations share the rewards or risks of starting a new venture in a foreign country.

Question 28

When a company is successful in pursuing the strategy of concentration on a single industry,it uses its divisional skills to develop new products or expand its locations.

Question 29

Organizational goals should be both challenging and realistic.

Question 30

Achievement of goals does not have any time constraints.

Question 31

The reason managers pursue vertical integration is that it allows them either to add value to their products by making them unique or to lower the costs of making and selling them.

Question 32

Strategy formulation begins with managers systematically analyzing the factors inside an organization and outside in the global environment that affect the organization's ability to meet its goals now and in the future.

Question 33

According to Michael Porter's five forces model,the more that companies compete against one another for customers,the higher is the level of industry profits.

Question 34

With a multidomestic strategy,managers decide to sell the same product with the same marketing approach in all of the countries in which the product is sold.

Question 35

The most complex global operations are exporting and importing.

Question 36

Corporate-level strategy involves choosing the industry in which a company will compete.

Question 37

Franchising is pursued primarily by manufacturing companies.

Question 38

Managers of Matrix Ltd.attempted to give the organization a competitive advantage by driving the production costs to as low a level as possible.We can say that the organization is pursuing a differentiation strategy.

Question 39

Organizations that use a global strategy typically customize the product to meet the needs of customers in different countries.

Question 40

The major advantage of a multidomestic strategy is that managers may be able to gain market share or charge higher prices for their products.

Question 41

The plan for implementing a new strategy requires the development of new functional strategies.

Question 42

A broad declaration of the organization's overriding purpose,intended to identify the organization's products and customer base,as well as to differentiate the organization from its competitors is known as a:

A) functional-level statement.
B) mission statement.
C) formulated strategy statement.
D) positioning statement.
E) vision statement.

Question 43

Frame Corporation updates its five-year plan annually to take into account changing conditions within the organization and in the organization's external environment.Which of the following best explains this plan implemented by Frame Corporation?

A) Standing plan
B) Short-term plan
C) Rolling plan
D) Single-use plan
E) Standard operating plan

Question 44

Managers at Ferwn Pvt.Ltd.which is number two in market share in the local sports equipments manufacturing industry,develop strategies to take over the number-one spot.Under which of the following levels of organizational strategies would this strategy fall?

A) Corporate-level
B) Top-management level
C) Functional-level
D) Business-level
E) Departmental-level

Question 45

Which of the following plans of an organization contains top management's decisions about the organization's mission,goals,strategy,and structure?

A) Corporate-level plan
B) Divisional-level plan
C) Functional-level plan
D) Business-level plan
E) Departmental-level plan

Question 46

Which of the following organizational strategies specifies the activities of managers at the departmental level of the organization?

A) Functional-level strategy
B) Business-level strategy
C) Corporate-level strategy
D) Divisional-level strategy
E) Top-level strategy

Question 47

DE Ltd.sets a goal that every product line of the company should be either first or second in its industry in market share.Which of the following levels of organizational strategies does this represent?

A) Corporate-level
B) Divisional-level
C) Functional-level
D) Business-level
E) Departmental-level

Question 48

The cluster of decisions that managers make to assist an organization to achieve its goals is known as:

A) strategy.
B) scenario planning.
C) organizing.
D) needs assessment.
E) related diversification.

Question 49

_____ strategy specifies in which industries and national markets an organization intends to compete and why.

A) Divisional-level
B) Departmental-level
C) Functional-level
D) Corporate-level
E) Business-level

Question 50

Another name for the business level of the organization is:

A) functional level.
B) department level.
C) corporate level.
D) divisional level.
E) first-line level.

Question 51

_____ means that planning is an ongoing process in which managers build and refine previous plans and continually modify plans at all levels; corporate,business,and functional,so that they fit together into one broad framework.

A) Continuity
B) Flexibility
C) Accuracy
D) Unity
E) Synergy

Question 52

Which of the following organizational strategies states the methods that a division or organization will use to compete against its rivals in the industry?

A) Functional-level strategy
B) Departmental-level strategy
C) Corporate-level strategy
D) Business-level strategy
E) Top-level strategy

Question 53

_____ means that at any one time only one central,guiding plan is put into operation to achieve an organizational goal.

A) Accuracy
B) Flexibility
C) Unity
D) Continuity
E) Synergy

Question 54

Establishing a wholly owned foreign subsidiary is much more expensive than the other global operations because it requires a higher level of foreign investment and presents managers with many more threats.

Question 55

Which of the following is used in situations in which programmed decision making is appropriate?

A) Standing plan
B) Scenario plan
C) Rolling plan
D) Single-use plan
E) Tactical plan

Question 56

Which of the following levels of an organization contains the organization's marketing department,R&D department,and human resources department?

A) Functional level
B) First-line level
C) Corporate level
D) Business level
E) Divisional level

Question 57

A plan that is updated and changed every year to take into consideration how the organization's external and internal environments have changed is known as a:

A) standing plan.
B) short-term plan.
C) rolling plan.
D) single-use plan.
E) standard operating plan.

Question 58

Managers should attempt to collect and use all available information in the organization's planning process.Which of the following aspects of planning is being emphasized?

A) Unity
B) Flexibility
C) Continuity
D) Accuracy
E) Synergy

Question 59

SynVens,a major retail chain in Hungary,is planning to diversify.It plans to enter the textiles industry and aims to be first or second in market share in this industry in five years.Which of the following levels of plan does this strategy fall under?

A) Business-level plan
B) Corporate-level plan
C) Functional-level plan
D) Divisional-level plan
E) Departmental-level plan

Question 60

An organization's level of involvement abroad decreases in a joint venture because the alliance rarely involves capital investment to produce goods or services outside the home country.

Question 61

While conducting a SWOT analysis,"slower market growth" would be categorized under which of the following?

A) Strength
B) Weakness
C) Opportunity
D) Threat
E) Alternative

Question 62

Managers at Dimensions,Inc.,analyze the current situation of their organization and then develop plans to help their organization accomplish its mission and achieve its goals.This is known as:

A) synergy planning.
B) strategy formulation.
C) functional planning.
D) SWOT analysis.
E) diversification.

Question 63

A general guide to action for the managers of an organization is known as a:

A) rolling plan.
B) rule.
C) policy.
D) standard operating procedure.
E) scenario plan.

Question 64

A group of managers at Power Explosives analyzes both the internal strengths and weaknesses of their organization as well as the opportunities and threats of the external environment.Which of the following planning exercises does this indicate?

A) Mission analysis
B) SWOT analysis
C) Functional analysis
D) Diversification
E) Related Diversification

Question 65

Which of the following is an advantage of the differentiation strategy?

A) Improved efficiency of equipment
B) Cheaper new products
C) Higher level of employee skills
D) Reduced turnover of employees
E) Greater barriers to entry

Question 66

The ability of the CEO and top managers to convey a compelling vision of what they want the organization to achieve to their subordinates is known as:

A) qualitative leadership.
B) strategic leadership.
C) autocratic leadership.
D) tactical leadership.
E) transformational leadership.

Question 67

BIC,makers of ballpoint pens and razors,concentrates on making its products cheaper than its rivals.Which of the following strategies is BIC pursuing?

A) Focused differentiation strategy
B) Diversification strategy
C) Differentiation strategy
D) Low-cost strategy
E) Market development strategy

Question 68

A written set of instructions which describes the series of actions that a manager should take in a specific situation is known as a:

A) policy.
B) standing operating procedure.
C) scenario plan.
D) rolling plan.
E) rule.

Question 69

The Stonehedge Bayonet Company aims at a market of hunters,and they try to keep prices lower than competition.Which of the following strategies is Stonehedge pursuing?

A) Low-cost
B) Differentiation
C) Focused low-cost
D) Focused differentiation
E) Diversification

Question 70

Which of the following corporate-level strategies becomes appropriate when managers see the need to reduce the size of their organizations to increase performance?

A) Vertical integration
B) International expansion
C) Diversification
D) Market development
E) Concentration on a single industry

Question 71

Arrow Corp.attempts to gain a competitive advantage by driving down its production costs per unit below those of its competitors.Which of the following strategies is Arrow pursuing?

A) Focused differentiation strategy
B) Low-cost strategy
C) Related diversification strategy
D) Unrelated diversification strategy
E) Concentration on a single business strategy

Question 72

While conducting a SWOT analysis,"an obsolete,narrow product line" would be categorized under which of the following?

A) Strength
B) Weakness
C) Opportunity
D) Threat
E) Alternative

Question 73

A company has a requirement that any manager who receives a gift from any of the company's customers that is worth more than $25 must report this gift to the company's human resources department.This is an example of which of the following requirements?

A) A tactical plan
B) A rolling plan
C) A policy
D) A rule
E) A single-use plan

Question 74

Coca-Cola spends an enormous amount of money on advertising to distinguish,and create a unique image for,their products.Which of the following strategies is Coca-Cola pursuing?

A) Diversification
B) Focused low-cost
C) Differentiation
D) Low-cost
E) Market development

Question 75

An organization purchases one of its suppliers in order to obtain access to the raw materials which it needs for its production.It also decides to sell its products through its own retail outlets.Which of the following corporate-level strategies is the organization using?

A) International expansion
B) Vertical integration
C) Diversification
D) Market development
E) Concentration on a single industry

Question 76

Concentration on a single industry,vertical integration,diversification,and international expansion are principle strategies of which of the following levels of an organization?

A) Functional-level
B) Top-management level
C) Department-level
D) Corporate-level
E) Business-level

Question 77

A formal,written guide to action for employees in an organization is known as a:

A) policy.
B) rule.
C) standard operating procedure.
D) rolling plan.
E) scenario plan.

Question 78

An organization attempts to succeed by distinguishing its products from those of the competition.Which of the following strategies is the organization using?

A) Differentiation strategy
B) Low-cost strategy
C) Related diversification strategy
D) Unrelated diversification strategy
E) Market development strategy

Question 79

To determine an organization's mission,managers must first define its:

A) vision.
B) strategy.
C) tactics.
D) business.
E) competition.

Question 80

BMW produces cars exclusively for high-income customers.Which of the following strategies is BMW pursuing?

A) Focused differentiation
B) Focused low-cost
C) Diversification
D) Low-cost
E) Differentiation