Deck 10: Strategy and Strategic Management

Question 1

Competitive advantage is the ability to do something so well that one outperforms competitors.

Answer 1

True

Question 2

In a large conglomerate,while the enterprise on a whole will have a corporate strategy,each SBU will have its own business strategy.

Answer 2

True

Question 3

In the process of strategic management,strategic implementation is typically followed by strategic analysis.

Answer 3

False

Question 4

The presence of strong core values helps build a clear organizational identity.

Question 5

In an attractive industry,there are many competitors.

Question 6

Emergence of new competitors and resource scarcities are environmental threats.

Question 7

Stakeholders are individuals and groups unaffected by the organization and its strategic accomplishments.

Question 8

An unattractive industry is one in which there are high barriers to entry.

Question 9

The purpose of corporate strategy is to guide activities within one specific area of operations.

Question 10

In the context of the BCG matrix,the preferred strategy for Stars is retrenchment.

Question 11

The less attractive the industry structure,the harder it will be to make good strategic choices.

Question 12

A growth strategy involves expansion of the organization's current operations.

Question 13

The BCG Matrix recommends making further resource investments in dogs.

Question 14

Bankruptcy under U.S.law protects a firm from creditors while management reorganizes to restore solvency.

Question 15

In single-product enterprises,business strategies are distinct from corporate strategies.

Question 16

In the context of vertical integration,when a business acquires suppliers,it is referred to as forward vertical integration.

Question 17

The strategic management process begins with analysis of mission,values,and objectives.

Question 18

Core values are broad beliefs about what is or is not appropriate behavior.

Question 19

In a hypercompetition situation,a firm faces only a few competitors.

Question 20

Restructuring by divestiture is mostly followed by organizations that are focused and not complex.

Question 21

Questions such as "How can we best utilize resources within a specific area of operations to implement our business strategy?" are typically asked while discussing the ________ strategy.

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

Question 22

A globalization strategy adopts standardized products and advertising for use worldwide.

Question 23

In a supplier alliance,firms join together to sell and distribute products or services.

Question 24

Restructuring by turnaround often occurs along with a change in top management.

Question 25

A ________ strategy typically sets long-term direction for the total enterprise.

A)branding
B)business
C)corporate
D)functional
E)marketing

Question 26

When strategic control fails at the level of top management,it is supposed to kick in at the level of middle management.

Question 27

Failures of substance in strategic management show up in poor analysis and bad strategy selection.

Question 28

Which of the following best defines the term "sustainable competitive advantage"?

A)It is the ability to outperform rivals in ways that are difficult or costly to imitate.
B)It is the ability to formulate technology to gain market exposure.
C)It is the ability to focus organizational energies on a unifying and compelling goal.
D)It is the ability to formulate strategies efficiently to accomplish long-term goals.
E)It is the ability to identify the things that the organization has or does exceptionally well in comparison with competitors.

Question 29

A ________ strategy guides activities within one specific area of operations.

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

Question 30

Which of the following best describes a strategy?

A)It is a comprehensive plan guiding resource allocation to achieve long-term organization goals.
B)It is the same as the mission of the organization.
C)It is the document expressing the organization's reason for existence in society.
D)It is the predominant value system of the organization as a whole.
E)It is a special strength that gives an organization a competitive advantage.

Question 31

A ________ strategy primarily identifies how a division or strategic business unit will compete in its product or service domain.

A)branding
B)business
C)corporate
D)functional
E)marketing

Question 32

The difference between a corporate strategy and a business strategy is that:

A)the former sets long-term direction for the total enterprise and the latter is concerned with how a division or strategic business unit will compete in its product or service domain.
B)the former focuses on how a division will compete in its product or service domain and the latter is concerned with guiding the use of organizational resources to implement business strategies.
C)the former is concerned with formulating and implementing strategies while the latter is involved in crafting strategies to guide the allocation of resources.
D)the former adopts standardized products and advertising for use worldwide and the latter seeks efficiencies of global operations with attention to local markets.
E)the former adopts standardized products and advertising for use worldwide and the latter customizes products and advertising to best fit local needs.

Question 33

Decisions related to choices about product and service mix,facilities locations,and new technologies are most likely to be a part of the ________ strategy of an organization.

A)branding
B)marketing
C)corporate
D)functional
E)business

Question 34

The strategic objective of the differentiation strategy is to attract customers who stay loyal to the firm's products and lose interest in those of its competitors.

Question 35

A strategic leader needs to reduce the sense of urgency so as to achieve the best results.

Question 36

It is a strategic leader's job to teach the strategy and make it a "cause."

Question 37

It is advisable to combine a cost leadership strategy with a differentiation strategy to get better results.

Question 38

The term ________ is often used to describe a business firm that is part of a larger enterprise.

A)supplier alliance
B)strategic business unit
C)joint venture
D)cash cow
E)co-opetitor

Question 39

Inside directors are chosen from the ranks of middle managers.

Question 40

The transnational strategy focuses on working with rivals on projects of mutual benefit.

Question 41

Which of the following is true about operational objectives?

A)They set forth an organization's purpose.
B)They direct activities toward key performance areas.
C)They represent what the strategy or underlying business model is trying to accomplish.
D)They guide the behavior of organization members in ways consistent with mission and core values.
E)They set standards for accomplishing the mission statement.

Question 42

Which of the following is true about oligopoly?

A)There are several direct competitors.
B)It ensures that there is no competition for resources.
C)There are only a few competitors.
D)It is seen most often in the fast foods industry.
E)There are many substitute products.

Question 43

An)________ expresses the organization's reason for existence in society.

A)statement of purpose
B)mission statement
C)cash flow statement
D)net worth statement
E)operating objective

Question 44

Which of the following is a defining characteristic of a SWOT analysis?

A)It examines the diversity at the work place and increases cohesiveness.
B)It is based on the statistical principle of multivariate.
C)It identifies things that inhibit performance.
D)It determines the level of sales needed in order to breakeven.
E)It is based on a year-to-year comparison of a firm's ratios.

Question 45

Any special strength that gives an organization a competitive advantage is referred to as its ________.

A)core competency
B)productivity
C)co-opetition ability
D)emotional intelligence
E)monopolistic power

Question 46

The entire process of formulating and implementing strategies to accomplish long-term goals and sustain competitive advantage is referred to as:

A)strategic analysis.
B)strategy formulation.
C)strategy implementation.
D)strategic management.
E)strategic outsourcing.

Question 47

________ decreases the attractiveness of the market.

A)Few competitors
B)High barriers to entry
C)Few substitute products
D)High power of customers
E)Low power of suppliers

Question 48

Karen Inc.changes its business strategy from a focused differentiation strategy to a focused cost leadership one.Which of the following steps in the process of strategic management ideally includes this action?

A)Strategy analysis
B)Strategy formulation
C)Strategy assessment
D)Strategy identification
E)Strategy outsourcing

Question 49

Which of the following is the first step in the process of strategic management?

A)Strategic analysis
B)Strategy formulation
C)Strategy implementation
D)Strategic marketing
E)Strategic outsourcing

Question 50

According to Porter,which of the following is one of the five forces that affect industry competition?

A)Bargaining power of intermediaries
B)Market share
C)Market growth rate
D)Substitute products
E)Workplace diversity

Question 51

________ is the process of crafting strategies to guide the allocation of resources.

A)Strategic analysis
B)Strategy formulation
C)Strategy implementation
D)Strategic crafting
E)Strategic outsourcing

Question 52

The difference between a corporate strategy and a functional strategy is that:

A)the former focuses on how a strategic business unit will compete in its product domain and the latter sets long-term direction for the total enterprise.
B)the former sets long-term direction for the total enterprise and the latter guides activities within one specific area of operations.
C)the former is concerned with formulating and implementing strategies while the latter is involved in crafting strategies to guide the allocation of resources.
D)the former adopts standardized products and advertising for use worldwide and the latter seeks efficiencies of global operations with attention to local markets.
E)the former adopts standardized products and advertising for use worldwide and the latter customizes products and advertising to best fit local needs.

Question 53

Which of the following is the last step in the process of strategic management?

A)Strategic analysis
B)Strategy formulation
C)Strategy implementation
D)Strategic marketing
E)Strategic outsourcing

Question 54

________ are broad beliefs about what is or is not appropriate behavior.

A)Corporate subcultures
B)Marketing values
C)Core values
D)Diversified values
E)Functional values

Question 55

If there are many competitors and the barriers to entry are low,the:

A)industry is attractive.
B)industry is unattractive.
C)customers have low bargaining power.
D)industry is mature.
E)industry is not mature.

Question 56

Aquamarine Inc.is the market leader of car batteries primarily because of its unique distribution system.The distribution system that has given the company an advantage over its competitors is an example of the company's ________.

A)co-opetition strategy
B)core competency
C)technical skill
D)emotional intelligence
E)monopolistic power

Question 57

Strategic analysis typically refers to the process of:

A)crafting strategies to guide the allocation of resources.
B)revising objectives and selecting new strategies.
C)formulating and implementing strategies.
D)directing the total enterprise.
E)analyzing the organization's competitive position.

Question 58

Which of the following increases the attractiveness of a market?

A)Low barriers to entry
B)Many competitors
C)Many substitute products
D)High power of suppliers
E)Few substitute products

Question 59

________ is the predominant value system for the enterprise as a whole.

A)Organizational culture
B)Corporate subculture
C)Managerial value system
D)Functional culture
E)Leadership value system

Question 60

A ________ begins with a systematic evaluation of the organization's resources and capabilities and focuses on identifying the organization's core competencies.

A)functional strategy
B)mission statement
C)flanking strategy
D)branding analysis
E)SWOT analysis

Question 61

The preferred strategy for stars is:

A)stability or modest growth.
B)targeting only the most promising of the stars.
C)retrenchment of some of the stars.
D)decrease of current operations.
E)growth and further resource investments.

Question 62

________ is where a business closes and sells its assets to pay creditors.

A)Concentration
B)Diversification
C)Vertical integration
D)Liquidation
E)Strategic alliance

Question 63

Businesses or products with low-market shares in low-growth markets are referred to as ________ in the BCG Matrix.

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

Question 64

Businesses or products with low-market shares in high-growth markets are referred to as ________ in the BCG Matrix.

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

Question 65

The preferred strategy for dogs is retrenchment because:

A)they produce large profits and a strong cash flow,and the upside potential is there.
B)they may not generate much profit at the moment,but the upside potential is there.
C)the markets offer great growth opportunity given that they are new to the market.
D)they are not only high performers in the present,but they offer similar potential for the future.
E)they produce little if any profit,and they have low potential for future improvement.

Question 66

The preferred strategy for question marks is:

A)stability or modest growth.
B)retrenchment of all question marks.
C)decrease of current operations.
D)growth and retrenchment of the question marks.
E)growth and heavy resource investments.

Question 67

Businesses or products with high-market-shares in high-growth markets are referred to as ________ in the BCG Matrix.

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

Question 68

The preferred strategy for cash cows is:

A)stability or modest growth.
B)targeting only the most promising of the cash cows.
C)retrenchment of some of the cash cows.
D)decrease of current operations.
E)growth and further resource investments.

Question 69

The stars in a BCG matrix typically:

A)produce large profits through substantial penetration of expanding markets.
B)produce large profits and a strong cash flow,but with little upside potential.
C)may not generate much profit at the moment,but have upside potential to do so.
D)produce little if any profit,and have low potential for future improvement.
E)generate high profit for a short span of time and then become inactive.

Question 70

Tulips Inc.,a successful designer brand,has several outlets in the U.S.To push sales growth,Tulips has decided to focus more on its primary business and open up its branches in ten different countries.This approach taken by Tulips is an example of growth through ________.

A)strategic alliance
B)vertical integration
C)liquidation
D)diversification
E)concentration

Question 71

The preferred strategy for dogs is:

A)stability or modest growth.
B)retrenchment of all dogs.
C)decrease of current operations.
D)to grow or retrench the dogs.
E)growth and heavy resource investments.

Question 72

The preferred strategy for cash cows is stability or modest growth because:

A)they produce large profits and a strong cash flow,but have little upside potential.
B)they may not generate much profit at the moment,but have upside potential.
C)the markets offer great growth opportunity given that they are new to the market.
D)they are not only high performers in the present,but they offer similar potential for the future.
E)they produce little if any profit,and must be supported so that they perform better.

Question 73

Businesses or products with high-market shares in low-growth markets are referred to as ________ in the BCG Matrix.

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

Question 74

The preferred strategy for question marks is to grow or retrench because:

A)they produce large profits and a strong cash flow,but have little upside potential.
B)they may not generate much profit at the moment,the upside potential is there.
C)the markets offer great growth opportunity given that they are new to the market.
D)they are not only high performers in the present,but they offer similar potential for the future.
E)they produce little if any profit,and must be supported so that they perform better.

Question 75

When one hears terms like "acquisition," "merger," and "global expansion," the underlying master strategy is most likely to be one of ________.

A)growth
B)retrenchment
C)downsizing
D)turnaround
E)restructuring

Question 76

________ analyzes business opportunities according to market growth rate and market share.

A)Flanking strategy
B)BCG matrix
C)Five Forces analysis
D)Strategy formulation
E)Logistics plan

Question 77

One of the differences between stars and cash cows is that:

A)cash cows produce high profits.
B)the strategy for cash cows is retrenchment.
C)cash cows have little upside potential.
D)cash cows can easily penetrate expanding markets.
E)the strategy for cash cows is growth.

Question 78

Growth through ________ typically occurs by acquiring suppliers or distributors.

A)strategic alliance
B)vertical integration
C)liquidation
D)divestiture
E)concentration

Question 79

The preferred strategy for stars is growth because they:

A)produce large profits and a strong cash flow,but have little upside potential.
B)may not generate much profit at the moment,but have upside potential.
C)produce large profits and a strong cash flow for only a short span of time and must be nurtured.
D)are not only high performers in the present,but they offer similar potential for the future.
E)produce little if any profit,and must be supported so that they perform better.

Question 80

Which of the following is a defining characteristic of growth through diversification?

A)It involves extending business within the same business area.
B)It involves acquisition of or investment in new and different business areas.
C)It involves decreasing the size of operations.
D)It involves selling company assets to pay creditors.
E)It involves fixing specific performance problems.