Deck 6: Strategic Management: How Exceptional Managers Realize a Grand Design

Question 1

The best ways to avoid faddish management ideas are to

A)understand your own core values,and use this knowledge to create or accept the core values of your company.
B)adopt management by consensus and business process reengineering.
C)adopt MBO and TQM.
D)emphasize employee diversity and expand the business's operations globally.
E)implement a six-sigma quality system and manage by "walking around."

Answer 1

A

Question 2

The first three steps in the strategic-management process are establishing the mission and the values statement,assessing the current reality,and formulating the grand strategy.

Answer 2

True

Question 3

Organizational threats are an environmental factor that can hinder an organization's ability to achieve a competitive advantage.For example,managers may realize that the government is about to place restrictions on exports,which will limit the company's ability to sell its products overseas (which will in turn greatly reduce its profits).

Answer 3

True

Question 4

The vision statement is an organization's purpose or reason for being,and a company's mission statement is its long-term goal of what it wants to become.

Question 5

The strategic-management process is often touched off by a crisis.

Question 6

Competitive intelligence means gaining information about one's competitors' activities so that you can anticipate their moves and react appropriately.For example,managers gain competitive intelligence by reading business publications,such as the,in order to understand competitors' business plans,goals,and strategies.

Question 7

Execution consists of questioning,analysis,and follow-through to mesh strategy with reality,align people with goals,and achieve promised results.

Question 8

Donna's Restaurant is a popular café that specializes in home-cooked meals,friendly service,and a menu that contains vegan and vegetarian dishes, (menu items that no other restaurant in the area offers).Donna's Restaurant is engaging in strategic positioning by offering the unique menu items of vegan and vegetarian dishes.

Question 9

Frank is interested in rewriting the vision statement for his antique shops,and he wants his employees and his business to grow.Therefore,the vision for Frank's stores should be positive and inspiring,and it should stretch the company and his employees to achieve objectives that they believe are not possible.

Question 10

The three key principles of ______ are the creation of a unique and valuable position,trade-offs in competing,and creating a "fit" among activities.

A)company diversity
B)an increased MBO
C)a strong employee morale
D)an environment with few or no competitors
E)strategic positioning

Question 11

The managers of a small bakery,Butter & Batter,decided to do a SWOT analysis to study the strengths and weaknesses within the organization and the external environment.A key benefit of conducting a SWOT analysis is being able to better formulate strategies in pursuit of the firm's mission.

Question 12

_____ focuses on developing a comprehensive program for long-term success.

A)Strategic planning
B)Mission and vision statements
C)Organizational diversity
D)TQM
E)A synergy agenda

Question 13

According to Harvard Business School professor Michael Porter,strategic positioning means _____ to achieve sustainable competitive advantage.

A)aggressive growth
B)distinctive positioning
C)collaborative planning
D)strategic alliances
E)retrenchment

Question 14

A and B Office Supply,a small family-owned company,sells high-priced desks,some as expensive as $10,000,to executives in its area.Very few companies have chosen to market this product,and A and B has enjoyed record profits over the last 25 years.A and B Office Supply is an example of a company that would typically not choose to utilize strategic planning.

Question 15

In a single-product strategy,a company makes and sells only one product within its market.An example of a businessperson following a single-product strategy is a farmer who grows and sells only corn.

Question 16

To understand your own values,you should

A)understand how ethics differs from legal requirements.
B)take a course on value creation and definition.
C)articulate them in writing and test them through daily decision making.
D)focus on cutting costs while improving quality.
E)write a strong marketing plan that will help you achieve your desired profit level.

Question 17

Because all work ultimately entails some human interaction,effort,or involvement,Bossidy and Charan believe that focusing on organization synergy is the most important process in strategy execution.

Question 18

Brilliante Pens,a 125-year-old pen manufacturer,markets very high-quality pens,many of which cost more than $1,000 each,to executives globally,always maintaining its reputation of superior value in its narrow market.Brilliante is using a cost-focus strategy.

Question 19

When Pablo and his partner wrote the mission statement for their fitness center,P&P Fitness,it did not include descriptions of their customers or the products and services they offer,because those descriptions belong in a vision statement.

Question 20

For over 20 years,ABC Manufacturing produced only one product,a car part for Moraine Assembly (the Moraine,Ohio,General Motors truck factory).Because its single-product business is so closely tied to Moraine Assembly,ABC is a vulnerable company.

Question 21

With small businesses in very competitive industries,small differences in performance may affect that company's survival.In this case,it is worth the effort for the company's managers to implement

A)organizational diversity.
B)a synergy agenda.
C)MBO.
D)TQM.
E)strategic planning.

Question 22

Rashid,the CEO of Top Productions,said to his new vice president of accounting,"In the past I had resistance to new ideas by employees who felt that our plans threatened their influence or their jobs.So when you tell your collections department that we just hired a collection agency to handle bad debt,you may have to sell your collections manager and his supervisors on using the agency.You also have to emphasize the fact that nobody is going to be laid off." Selling middle and supervisory managers on changes to overcome their resistance is often a necessary part of

A)reality assessment.
B)strategy formulation.
C)strategic control.
D)operational control.
E)strategy implementation.

Question 23

The second step in the strategic-management process is a(n)________,where managers look at where the organization stands,and then determine what is working and what could be different to maximize efficiency and effectiveness in achieving the organization's mission.

A)organizational vision statement
B)company synergy assessment
C)current reality assessment
D)ethical and diversity evaluation
E)grand strategy

Question 24

Over the course of 40 years,Sal grew his company to six package shipping stores.With his retirement approaching and the increased competition,he decided to reduce the number of locations to two.Sal's reduction of effort represents a

A)merger approach.
B)fixed plan.
C)defensive strategy.
D)growth strategy.
E)stability strategy.

Question 25

Access Office Equipment has shifted to sales and service of laptops and PCs,where it has the potential to triple the number of its customers.The company is no longer offering repairs on older types of office equipment because the demand for service on this equipment is low,and profits in that part of the business have dropped significantly.Access Office Equipment is implementing a _____ strategy.

A)growth
B)cutting-edge
C)stability
D)defensive
E)diverse

Question 26

"Who are our customers? What are our major products or services? In what geographic areas do we compete?" A good _____ will answer these questions.

A)vision statement
B)code of ethics
C)mission statement
D)value pact
E)management belief statement

Question 27

Instructor Services is a technology company that offers many IT services in highly populated southern Ohio.The company's services and products include computer training,support,monitoring,repair,network design,virus removal,and software upgrades.It even sells refurbished computers.The source of Instructor Services' strategic position is

A)low-profit margin and many customers.
B)broad needs and few customers.
C)broad needs and many customers.
D)high-profit margin and many customers.
E)high-profit margin and few customers.

Question 28

_________ is another term for a defensive strategy.

A)A retrenchment strategy
B)A fixed plan
C)The aggressive approach
D)A growth strategy
E)A stability strategy

Question 29

"Is it appropriate for the organization and for the times? Does it set standards of excellence and reflect high ideals? Is it ambitious?" A good _______ will answer these questions.

A)belief agreement
B)code of ethics
C)mission statement
D)vision statement
E)values statement

Question 30

What are the three sources of a unique and valuable strategic position?

A)few needs,many customers;broad needs,few customers;broad needs,many customers
B)low-cost products;huge market needs;unique products
C)many needs,few customers;little need,many customers;narrow needs,few customers
D)poor products available;few products available;no products available
E)bad economy;strong economy;stable economy

Question 31

Delux Technology has a reputation of reliability and a winning customer service,qualities that helped to build this highly respected name brand over the last 15 years.Speaking at a recent business conference,Steve,the CEO of Delux,told his audience,"We have built our reputation by changing little over the last several years,but consistently helping customers with great,caring service and a reliable product." Which type of strategy does Delux Technology use?

A)defensive strategy
B)merger approach
C)retrenchment strategy
D)growth strategy
E)stability strategy

Question 32

The growth,stability,and defensive strategies are common

A)leadership strategies.
B)cost-leadership strategies.
C)types of differentiation plans.
D)stabilization strategies.
E)grand strategies.

Question 33

Gig companies,such as Amazon,Google,and Apple,are no longer content simply to enhance part of your life.Their new strategy is to build a device,sell it to consumers,and then

A)send customers to partner retailers to supply content.
B)sell them the content to play on their device.
C)sell them the maintenance agreements for their devices.
D)find service companies to assist customers if needed.
E)focus on selling more items and devices to their friends and families.

Question 34

Organic Foods International has decided to increase its market share by hiring a marketing rep to visit businesses in the area and invite their employees to shop at Organic Foods and attend monthly health events that take place at Organic Foods stores.Each of the individual stores has hired two new employees to handle the anticipated increase in customer traffic.Organic Foods is using a _____ strategy.

A)cutting-edge
B)stability
C)defensive
D)growth
E)diverse

Question 35

A local karate studio offers many services: karate lessons to young children (under age 10),judo lessons to preteens,kickboxing courses for teenagers and adults,and self-defense courses for older people.We can say that the studio has achieved _____ because the studio's activities interact and reinforce one another.

A)an effective defensive strategy
B)a blue ocean strategy
C)diversification
D)contingency
E)fit

Question 36

In order,the steps of the strategic-management process are

A)establish the mission and vision statements,assess the current reality,conduct a trend analysis,and maintain the feedback loop.
B)establish the mission statement,maintain strategic control,formulate the grand strategy,and implement the strategy.
C)establish the mission,vision,and values statements;assess the current reality;formulate the grand strategy;implement the strategy;and maintain strategic control.
D)establish the vision and values statements,develop a mission statement,formulate the grand strategy,implement the strategy,and maintain the feedback loop.
E)determine the strategy;carry out the strategic plans;and establish the mission,vision,and values statements.

Question 37

An organization's vision statement needs to describe

A)the organization's purpose or reason for being.
B)what the company will market and its business plan.
C)the organization's purpose or reason for being and its strategic intent.
D)the organization's ethical and diversity standards.
E)what the company wants to become and its long-term direction and strategic intent.

Question 38

Strategy formulation is the process of

A)gaining information about competition and then selecting which information to react to.
B)choosing among different strategies and altering them to best fit the organization's needs.
C)strategically controlling your employees' actions.
D)selecting the employees who best fit the organization.
E)developing a strong diversity plan.

Question 39

___________ is(are)included in strategic control.

A)Implementing MBO
B)A strong employee diversity and synergy agenda
C)Seldom making adjustments to a strategy
D)Monitoring the execution of strategy and making adjustments,if necessary,
E)Developing a diversity plan

Question 40

______ requires a manger to visit an earlier step in the strategic-management process in order to revise actions if necessary.

A)The organizational mission
B)Strategy formulation
C)The current reality assessment
D)The feedback loop
E)The planning process

Question 41

Don knows that one of the reasons people do not return to his electronics store is because of the slow service.How would a SWOT analysis classify the slow service at Don's electronic store?

A)as a strength
B)as a threat
C)as a weakness
D)as an opportunity
E)as intelligence

Question 42

George,a chef and owner of L'Auberge,a popular restaurant,is always visiting his competitors to observe how they are doing things in their restaurants.He told one of his managers,"I eat dinner at a lot of restaurants because I want to know what is going on.I am always concerned that one of our competitors will surprise us with a new service or menu item,like ours but better." In which activity is George engaging?

A)competitive intelligence
B)environmental scanning
C)TQM
D)corporate spying
E)management by observation

Question 43

Many customers shop at Organic Foods because of the employees' extensive product knowledge.In a SWOT analysis,the employees' high levels of product knowledge are an example of the company's

A)strengths.
B)threats.
C)weaknesses.
D)opportunities.
E)intelligence.

Question 44

Pedro,CEO of a successful IT company,is constantly reading press releases,ads,and news articles about his competition.He regularly checks information about new competitive products and visits trade shows to study his competition.Pedro is involved in

A)environmental observation.
B)TQM.
C)corporate spying.
D)management by observation.
E)competitive intelligence.

Question 45

Contingency planning is also known as

A)organizational opportunities.
B)scenario goal-setting and plans.
C)a trend analysis.
D)scenario planning and scenario analysis.
E)strategic planning.

Question 46

Sales this year at Donna's Pawn Shop have been high,and based on several factors,Donna projects next year's sales to also be good.However,even with her forecast of continued strong sales,Donna and her business partner need to develop a plan in case sales drop unexpectedly.________ is the type of planning for alternative future conditions.

A)Background planning
B)Trend analysis
C)A vision plan
D)Contingency planning
E)A managerial pact

Question 47

Tom and his family have developed a successful business selling a liquid spray fertilizer to farmers.The fertilizer consists of rich,organic,composted material.Recently NuBreed Seed,a national seed company,has been marketing a powdered chemical fertilizer to its customers;NuBreed's fertilizer is less expensive than Tom's product.NuBreed's efforts are an example of the ___ in Porter's model for industry analysis.

A)buyers' negotiating influence
B)competitive rivalry among competitors
C)threats of substitute products and services
D)power of the suppliers
E)threats of new ideas

Question 48

Bryan Barry suggests that to keep a strategic plan on track,organizations should

A)engage people,keep it simple,stay focused,and keep moving.
B)engage people,keep people happy,provide fun activities,and provide good benefits.
C)provide fun activities,provide good benefits,and keep it simple.
D)engage people,keep it simple,stay focused,and offer a good benefits package.
E)aggressively compete,cut costs,focus on customer service,and engage people.

Question 49

Organizational opportunities in a SWOT analysis are

A)environmental factors that the organization may exploit for a competitive advantage.
B)weaknesses within the organizational hierarchy.
C)MBO skills and opportunities that should be emphasized.
D)skills and capabilities that give an industry advantages in executing its strategies.
E)problems that a specific industry needs to correct.

Question 50

Christopher's Restaurant and Catering serves delicious vegetarian and vegan dishes.So when the local community became interested in eating a healthier diet,Christopher's benefited.In a SWOT analysis,the changing community attitudes are an example of a(n)_____ for Christopher's Restaurant.

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

Question 51

The owners of Smith's Yard Mart,a family-owned garden center in a rural community,are concerned over the news that a large retailer with a garden center is building a new store on the other side of town.According to a SWOT analysis,this new retailer is a(n)____ to Smith's.

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

Question 52

________ is the process by which a company compares its performance with that of high-performing organizations.

A)Trend analysis
B)Synergy
C)Contingency planning
D)Forecasting
E)Benchmarking

Question 53

In a SWOT analysis,organizational strengths are

A)external opportunities that a company can take advantage of.
B)environmental factors that the organization may exploit for competitive advantage.
C)MBO skills that should be emphasized.
D)skills and capabilities that give a company advantages in executing its strategies.
E)means that give a specific industry an advantage in a down economy.

Question 54

A SWOT analysis is

A)a search for the strengths,weaknesses,opportunities,and threats influencing an organization's competition.
B)a diversity and synergy method used in vertical integration.
C)a search for the strengths,weaknesses,opportunities,and threats affecting an organization.
D)an analysis of strategies,ways to improve,output methods,and threats influencing a company.
E)an inexpensive method of implementing a forecast.

Question 55

Michael Porter proposed that business-level strategies originate with the primary competitive forces in the firm's environment;these forces are

A)the threats of new entrants and the bargaining power of buyers and suppliers.
B)the threats of substitute products and the services and competitive rivalries.
C)the threats of new entrants and substitute products or services,the bargaining power of suppliers and buyers,and competitive rivalries.
D)the threats of government paperwork and tax increases,the bargaining power of suppliers,and competitive rivalries.
E)the bargaining power of suppliers.

Question 56

When organizations endeavor (1)to keep their costs (and hence the prices of their products or services)below those of competitors and (2)to target a wide market,they are utilizing a _____ strategy.

A)focused-differentiation
B)differentiation
C)cost-leadership
D)reinventing
E)cost-focus

Question 57

A forecast is a(n)

A)glimpse of what just happened.
B)execution of strategy and adjustments.
C)projection for the future.
D)analysis of the past.
E)plan for implementing strategic plans.

Question 58

Susana keeps a close eye on her company's internal and external environment to discover possible opportunities for new products and to discern possible threats from the competition.In which activity is Susana engaged?

A)the synergistic approach
B)environmental scanning
C)corporate spying
D)management by observation
E)competitive intelligence

Question 59

The basic assumption that the picture of the present can be projected into the future is the basis of a

A)strategic goal.
B)business plan.
C)vision statement.
D)SWOT analysis.
E)trend analysis.

Question 60

Porter's competitive strategies of cost-leadership and differentiation focus on ____ markets,while the cost-focus and focused-differentiation strategies focus on ____ markets.

A)narrow;wide
B)specific;broad
C)growth;specific
D)diverse;narrow
E)wide;narrow

Question 61

This question contains two parts;be sure to answer both.First,explain the three key principles that underlie strategic positioning.Next,explain whether strategic management works as well for small companies as it does for large organizations,providing an example of how a small company can offer personal connections as a source of competitive advantage.

Question 62

"What is the assessment of the external environment? What are the critical issues facing the business? Can the business execute the strategy?" According to Bossidy and Charan,a ______ should address these some of these questions.

A)code of ethics
B)value statement
C)diversity agenda
D)mission statement
E)strong strategic plan

Question 63

The BCG matrix is a means of evaluating strategic business units on the basis of their

A)business costs and share of the market.
B)differentiation and profitability.
C)business growth rates and share of the market.
D)BCG ratio.
E)product quality and profitability.

Question 64

Which of the following questions is NOT useful for evaluating a company's values statement?

A)Does it set standards of excellence and reflect high ideals?
B)Does it express the company's distinctiveness,its view of the world?
C)Is it tough,serving as the foundation on which difficult company decisions can be made?
D)Will it be unchanging,as valid 100 years from now as it is today?
E)Would you wish the organization to continue to hold these values,even if at some point they become a competitive disadvantage?

Question 65

The Golden Bed in Dayton,Ohio,sells high-quality,unique bedding that is a real value to upscale homes in the area.No other company in its local area markets bedding of such quality and value.By offering this type of product,The Golden Bed is utilizing a _____ strategy.

A)cost-leadership strategy
B)focused-differentiation
C)cost-focus
D)uniquely focused
E)differentiation

Question 66

Mountain Rescue Incorporated sells emergency safety and rescue products to ski patrols and rescue workers at prices that are below those of its competitors,which offer a larger line of more expensive products and focus on broader markets.Mountain Rescue Incorporated is pursuing a ____ strategy.

A)cost-focus
B)cost-leadership
C)differentiation
D)narrow
E)focused-differentiation

Question 67

Organic Market sells high-quality products and grocery items that are unique to its area;in addition it offers delivery for customers who are unable to leave their home and a number of regular workshops regarding healthy eating.By offering these types of products and services,Organic Market is pursuing a _____ strategy.

A)cost-savings
B)cost-focus
C)value-focused
D)differentiation
E)focused-differentiation

Question 68

Quality Services is an organization that operates several companies that market food products,restaurant equipment,and paper and plastic products,and it even has a division that counsels restaurant owners,helping them launch new restaurants successfully.Quality Services is pursuing a _____ strategy.

A)single-product
B)diversification
C)focused-differentiation strategy
D)differentiation
E)multiproduct

Question 69

Imagine that you are the CEO of Biggies,a chain of family-style restaurants.You are interested in implementing the strategic management process in your restaurants.Summarize the strategic management process and explain how you would execute each of the steps and the feedback loop of the strategic management process in your restaurant chain.

Question 70

In the 1970s,Atari singlehandedly created a market for home video games,offering a console and cartridges that contained games like Space Invaders,Centipede,and Asteroids.At the time,Atari effectively implemented a ______ strategy.

A)greenfield
B)diversification
C)blue ocean
D)defensive
E)multiproduct

Question 71

Successful controlling within an organization,according to Bossidy and Charan,demands that managers build a foundation of controlling using ___________,the three core processes.

A)leading,planning,and recruiting
B)people,strategy,and operations
C)diversity,people,and profitability
D)people,planning,and leading
E)leading,synergy,and diversity

Question 72

In the BCG matrix,_____ are companies that have high growth and high market share,and are definite keepers.

A)sleeping giants
B)stars
C)cash cows
D)turtles
E)sleepers

Question 73

In the BCG matrix,_______ are organizations that have slow growth but high market share,with income that often finances stars and question marks.

A)sleeping giants
B)dogs
C)cash cows
D)turtles
E)sleepers

Question 74

Global CEOs desire ___________ even more than profit growth,stimulating innovation,customer loyalty,and finding qualified employees.

A)an ethical workplace
B)organization diversity
C)an increased usage of MBO
D)happy employees
E)excellence in execution

Question 75

A company's overall ability to execute is a function of effectively executing according to three processes,but Bossidy and Charan believe that the _____ process is the most important.

A)operations
B)leading
C)people
D)planning
E)strategy

Question 76

When an organization operates several businesses to spread the risk,such as a landscaping company that offers not only landscaping services but also lawn care,snow removal,and other services,that business is utilizing a ____ strategy.

A)diversity
B)diversification
C)focused-differentiation
D)differentiation
E)multiservice

Question 77

Strategy involves creating a "fit" among activities." "Fit" has to do with the ways a company's activities interact and reinforce one another.The most effective companies have good or excellent fit among their activities.

Question 78

Motherboard Technology makes and sells only one product,a high-quality processor for mainframe computers,within its market-Silicon Valley,California.Which strategy is Motherboard Technology using?

A)cost-focus
B)focused-differentiation
C)diversification
D)single-product
E)differentiation

Question 79

This question contains two parts;be sure to answer both.First,summarize the three sources from which strategic position emerges,providing an example of a company with each strategic position.(You will be providing three examples. )Second,select either McDonald's or Apple Computer and discuss the company's strategic position.

Question 80

A ____ statement should describe what the organization stands for,its core priorities,the values its employees embody,and what its products contribute to the world.

A)mission
B)vision
C)values
D)diversity
E)strategy