Deck 6: Planning, Strategy, and Competitive Advantage

Question 1

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

Answer 1

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 2

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

Answer 2

False
Explanation: Long-term plans have a time horizon of five years or more;intermediate-term plans have a time horizon between one and five years;and short-term plans have a time horizon of one year or less.

Question 3

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

Answer 3

False
Explanation: At the business level are the different divisions or business units of a company that compete in distinct industries.

Question 4

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

Question 5

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 6

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

Question 7

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 8

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

Question 9

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.

Question 10

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

Question 11

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 12

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

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

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

Question 16

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

Question 17

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 18

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

Question 19

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

Question 20

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

Question 21

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 22

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 23

Achievement of goals does not have any time constraints.

Question 24

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 25

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 26

The most complex global operations are exporting and importing.

Question 27

Franchising is pursued primarily by manufacturing companies.

Question 28

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

Question 29

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 30

Organizations that use a global strategy typically sell a different product and use a different marketing approach in each national market which they compete.

Question 31

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

Question 32

Scenario planning is often used to strengthen SWOT analysis.

Question 33

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 34

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 35

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

Question 36

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 37

Organizational goals should be both challenging and realistic.

Question 38

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 39

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 40

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 41

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 ______________ plan.

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

Question 42

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

Question 43

DE Ltd. ,sets a goal that every product line of the company should be either first or second in its industry in market share.This would be an example of a ______________-level strategy.

A) corporate
B) divisional
C) functional
D) business
E) departmental

Question 44

The industries and national markets an organization intends to compete in and the reasons why are specified in a company's _____________-level strategy.

A) divisional
B) departmental
C) functional
D) corporate
E) business

Question 45

Another name for the business level of the organization is the ______________ level.

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

Question 46

The plan of an organization that contains top management's decisions about the organization's mission,goals,strategy,and structure is an example of a ______________-level plan.

A) corporate
B) divisional
C) functional
D) business
E) departmental

Question 47

The level of an organization that contains the organization's marketing department,R&D department,and human resources department is the ______________ level.

A) functional
B) first-line
C) corporate
D) business
E) divisional

Question 48

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

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

Question 49

Managers should attempt to collect and use all available information in the organization's planning process.This emphasizes the ______________ aspect of planning.

A) unity
B) flexibility
C) continuity
D) accuracy
E) synergy

Question 50

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 51

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 52

When only one central,guiding plan is put into operation to achieve an organizational goal,the organization is experiencing ________________.

A) accuracy
B) flexibility
C) unity
D) continuity
E) synergy

Question 53

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.This would be an example of a ______________-level strategy.

A) corporate
B) top-management
C) functional
D) business
E) departmental

Question 54

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 55

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 56

The organizational strategy that specifies the activities of managers at the departmental level of the organization is a _____________-level strategy.

A) functional
B) business
C) corporate
D) divisional
E) top

Question 57

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.This is an example of a ______________-level plan strategy.

A) business
B) corporate
C) functional
D) divisional
E) departmental

Question 58

The strategy that explains the methods that a division or organization will use to compete against its rivals in the industry is a ______________-level strategy.

A) functional
B) departmental
C) corporate
D) business
E) top

Question 59

The tool that is used in situations when programmed decision making is appropriate is a ______________ plan.

A) standing
B) scenario
C) rolling
D) single-use
E) tactical

Question 60

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,is known as:

A) continuity.
B) flexibility.
C) accuracy.
D) unity.
E) synergy.

Question 61

An advantage of the differentiation strategy is:

A) improved efficiency of equipment.
B) less expensive new products.
C) higher level of employee skills.
D) reduced turnover of employees.
E) greater barriers to entry.

Question 62

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

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

Question 63

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

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

Question 64

BMW produces cars exclusively for high-income customers.BMW is pursuing a ______________ strategy.

A) focused differentiation
B) focused low-cost
C) diversification
D) low-cost
E) differentiation

Question 65

The Stonehedge Bayonet Company aims at a market of hunters,and they try to keep prices lower than competition.Stonehedge is pursuing a ______________ strategy.

A) low-cost
B) differentiation
C) focused low-cost
D) focused differentiation
E) diversification

Question 66

Arrow Corp.attempts to gain a competitive advantage by driving down its production costs per unit below those of its competitors.Arrow is pursuing a(n)______________ strategy.

A) focused differentiation
B) low-cost
C) related diversification
D) unrelated diversification
E) concentration on a single business

Question 67

Coca-Cola spends an enormous amount of money on advertising to distinguish,and create a unique image for,their products.Coca-Cola pursuing a ______________ strategy.

A) diversification
B) focused low-cost
C) differentiation
D) low-cost
E) market development

Question 68

The corporate-level strategy that becomes appropriate when managers see the need to reduce the size of their organizations to increase performance is ____________.

A) vertical integration
B) international expansion
C) diversification
D) market development
E) concentration on a single industry

Question 69

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 70

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

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

Question 71

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 72

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 73

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 74

An organization purchases one of its suppliers in order to obtain access to the raw materials it needs for its production.The organization is using a ______________ corporate-level strategy.

A) international expansion
B) vertical integration
C) diversification
D) market development
E) concentration on a single industry

Question 75

BIC,makers of ballpoint pens and razors,concentrates on making its products less expensive than its rivals.BIC is pursuing a ______________ strategy.

A) focused differentiation
B) diversification
C) differentiation
D) low-cost
E) market development

Question 76

An organization attempts to succeed by distinguishing its products from those of the competition;this is a(n)______________ strategy.

A) differentiation
B) low-cost
C) related diversification
D) unrelated diversification
E) market development

Question 77

Concentration on a single industry,vertical integration,diversification,and international expansion are principle strategies of a ______________-level of an organization.

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

Question 78

While managers at ABC Manufacturing were conducting a SWOT analysis,they concluded that their product line is obsolete and narrow.Their product line would be categorized as a:

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

Question 79

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 80

Ace Real Estate conducted a SWOT analysis,and their managers believe that this year's local market growth will be slower than in the past.The predicted slow market growth is a(n):

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