Deck 9: Strategic Management

Question 1

A retrenchment strategy is a short-run renewal strategy that helps an organization stabilize operations,revitalize organizational resources and capabilities,and prepare to compete once again.

Answer 1

True

Question 2

A trucking company that grows by purchasing a chain of gasoline stations is engaged in horizontal integration.

Answer 2

False

Question 3

Activities that an organization does well or resources that it has available are called capabilities.

Answer 3

False

Question 4

A business model describes how a company is going to make money.

Question 5

A turnaround strategy is a type of renewal strategy used when an organization is in serious trouble.

Question 6

Within an organization,the single independent businesses that formulate their own competitive strategies are known as strategic business units.

Question 7

The final step in the strategic management process is implementing the objectives.

Question 8

Stars,one of the four business groups in the BCG matrix,are characterized by low growth and low market share.

Question 9

If Burger King were to buy out Mom and Pop's Burgers,Burger King would be growing by vertical integration.

Question 10

Diversification is an example of a corporate retrenchment strategy.

Question 11

Managers using the strategic management process always achieve positive outcomes.

Question 12

Exceptional or unique organizational resources are known as core capabilities.

Question 13

The BCG matrix evaluates an organization's various businesses to identify which ones offer high potential and which ones drain organizational resources.

Question 14

A company that competes by offering unique products that are widely valued by customers is following a differentiation strategy.

Question 15

Corporate strategies determine what business a company is in or wants to be in,and what it wants to do with those businesses.

Question 16

When conducting a SWOT analysis,threats are activities the organization doesn't do well or resources it needs but doesn't possess.

Question 17

The first step in the strategic management process is analyzing the external environment.

Question 18

A stability strategy is an organizational strategy in which an organization maintains the status quo.

Question 19

Evaluating an organization's intangible assets is part of conducting an internal analysis in the strategic management process.

Question 20

A SWOT analysis includes an analysis of an organization's environmental opportunities and threats.

Question 21

A ________ strategy determines what businesses a company is in or wants to be in,and what it wants to do with those businesses.

A)competitive
B)functional
C)focus
D)corporate

Question 22

A study of the external environment allows a manager to understand the ________ and ________ for the organization.

A)threats; weaknesses
B)strengths; weaknesses
C)strengths; opportunities
D)opportunities; threats

Question 23

The major value-creating capabilities of the organization are known as its ________.

A)strengths
B)opportunities
C)core competencies
D)resources

Question 24

Lower-level managers are responsible for ________ strategies.

A)functional
B)stability
C)corporate
D)growth

Question 25

Helen,the owner of Crazy Cupcakes,is conducting a SWOT analysis of her company to find out where she can improve her business and to identify possibilities for expansion.Which of the following represents an opportunity for expansion?

A)There has been a trend toward personalized cupcakes for a variety of occasions.
B)The production process was found to be highly efficient and wastage was kept to a minimum.
C)In a taste test,Crazy Cupcakes products ranked higher than competitors in the taste and texture segments.
D)Crazy Cupcakes decorators are among the best in their field and design plays a major role in the popularity of the products.

Question 26

Managers do an external analysis so that they know about ________.

A)the firm's basic beliefs and ethical priorities
B)what the competition is doing
C)resources the firm does not possess
D)their organization's core competencies

Question 27

What are the three main types of corporate strategies?

A)stability,focus,and turnaround
B)growth,stability,and renewal
C)growth,cost leadership,and differentiation
D)stability,differentiation,and focus

Question 28

Top-level managers are responsible for ________ strategies.

A)differentiation
B)corporate
C)competitive
D)functional

Question 29

________ are positive trends in the external environment.

A)Strengths
B)Threats
C)Weaknesses
D)Opportunities

Question 30

The final step in the strategic management process allows an organization to understand the ________.

A)effectiveness of the strategies used
B)implementation of the strategies
C)formulation of the strategies
D)resources and capabilities it possesses

Question 31

The first four steps of the strategic management process describe the strategic ________ that must take place in an organization.

A)evaluation
B)controlling
C)planning
D)implementation

Question 32

The third step in strategic management process is related to the analysis of the ________.

A)external environment
B)internal environment
C)threats and opportunities
D)competitive strategy

Question 33

Computer peripherals provider Ascent plans to enter a new market in another country.Which of the following represents a threat for Ascent?

A)Ascent's profit margin in the previous year was its lowest on record and it will require long-term planning to improve margins.
B)Ascent lacks the resources to enter the market on its own and has to find a partner in the new market.
C)Ascent will have to plan its entry carefully as the laws in the country do not favor foreign businesses.
D)Ascent needs to improve its service capabilities in the new country as this is an important source of revenue.

Question 34

When an organization is analyzing its labor supply,it is studying its ________.

A)organizational culture
B)internal environment
C)external environment
D)organizational mission

Question 35

Bella Vista Clothing targets teenage girls with a range of affordable ready-to-wear clothing.The company is opening two new outlets,as sales have been excellent.Which of the following represents a strength for the company?

A)The company's in-house designers have a knack for identifying and popularizing fashion trends.
B)Disposable income is rising and consumers will have more money to spend on clothes.
C)Overseas customers have shown an interest in buying Bella Vista clothes through the company's online store.
D)A long-time competitor recently went out of business and Bella Vista can cut down on its advertising budget.

Question 36

A ________ describes the rationale of how a company is going to make money.

A)functional strategy
B)business model
C)SWOT analysis
D)core competency

Question 37

The combined external and internal analyses are called ________.

A)competitor analysis
B)industry analysis
C)market analysis
D)SWOT analysis

Question 38

If a bank estimates the capabilities of its employees who provide customer service prior to implementing a new training program designed to change their method of providing customer service,it is ________.

A)conducting an external analysis
B)formulating its competitive strategies
C)doing an internal analysis
D)formulating its corporate strategies

Question 39

An organization's financial,physical,human,and intangible assets are known as its ________.

A)resources
B)capabilities
C)opportunities
D)core competencies

Question 40

Defining the organizational mission forces managers to identify ________.

A)what the labor supply is like in the locations where the organization operates
B)what the organization is in business to do
C)what the competitor is doing
D)what pending legislation will affect the organization

Question 41

An organization that is diversifying its product line is exhibiting what type of corporate strategy?

A)turnaround strategy
B)retrenchment strategy
C)growth strategy
D)stability strategy

Question 42

In the Boston Consulting Group (BCG)matrix,a business unit that has a low anticipated growth rate but a high market share is known as a ________.

A)cash cow
B)star
C)dog
D)question mark

Question 43

Organizations grow by using strategies of ________.

A)concentration,integration,or diversification
B)concentration,integration,or stabilization
C)integration,diversification,or differentiation
D)integration,diversification,or functionalization

Question 44

Florance is a chain of flower shops in the Chicago area.The company recently acquired Knick-knacks,which owns three gift shops.Which of the following is most similar to this acquisition?

A)Construction firm Donaldson acquired Fabrica Textiles as it seemed like a good investment.
B)Faced with mounting raw material costs,I&A Products took over its supplier,BR Corporation.
C)Dallas Shoes buys out RunTime Shoes and expands its distribution channels through RunTime outlets.
D)Toy World acquired Unicorn Children's Books and now retails both toys and books from co-branded outlets.

Question 45

In the BCG matrix,a ________ enjoys a high anticipated growth rate and a high market share.

A)question mark
B)star
C)cash cow
D)dog

Question 46

In ________,the organization gains control of its outputs by becoming its own distributor.

A)diversified integration
B)concentrated integration
C)backward vertical integration
D)forward vertical integration

Question 47

Ronald's has been in the fast food business for five years.After struggling for two years,it finally broke even,and the french fries it offers are its most popular product.However,during the past year,its business has suffered because the farm that used to supply it with potatoes has increased its prices drastically.What should Ronald's do to control its production costs?

A)Ronald's should reorganize its organizational hierarchy to increase efficiency.
B)Ronald's should buy out the farm and become its own supplier.
C)Ronald's should open more distribution outlets.
D)Ronald's should broaden its product range by introducing potato nuggets on its menu.

Question 48

Which of the following provides a framework for understanding diverse businesses and helps managers establish priorities for allocating resources?

A)a differentiation strategy
B)vertical integration
C)a corporate portfolio matrix
D)a strategic business unit

Question 49

When a company combines with firms in different and dissimilar industries,it indulges in ________.

A)unrelated diversification
B)horizontal integration
C)vertical integration
D)stabilized diversification

Question 50

In ________,the organization becomes its own supplier so it can control its inputs.

A)concentrated integration
B)backward vertical integration
C)forward vertical integration
D)horizontal integration

Question 51

________ strategies address declining performance through retrenchment and turnaround strategies.

A)Renewal
B)Stability
C)Growth
D)Functional

Question 52

In ________,a company grows by combining with competitors.

A)concentrated integration
B)horizontal integration
C)vertical integration
D)diversified integration

Question 53

A ________ strategy is used to deal with minor performance problems.It helps an organization stabilize operations,revitalize organizational resources and capabilities,and prepare to compete once again.

A)turnaround
B)stability
C)growth
D)retrenchment

Question 54

An organization that grows using ________ focuses on its primary line of business and increases the number of products offered or markets served in this primary business.

A)concentration
B)horizontal integration
C)vertical integration
D)diversification

Question 55

In the BCG matrix,a ________ has a low anticipated growth rate and a low market share.

A)question mark
B)cash cow
C)dog
D)star

Question 56

A ________ strategy is when an organization expands the number of markets served or the products offered.

A)growth
B)renewal
C)stability
D)retrenchment

Question 57

When an organization continues serving the same clients by offering the same product or service,maintaining market share,and sustaining the organization's current business operations,it is following a ________ strategy.

A)renewal
B)stability
C)retrenchment
D)turnaround

Question 58

When L'Oreal acquired The Body Shop,it carried out ________.

A)horizontal integration
B)forward horizontal integration
C)backward horizontal integration
D)diversified integration

Question 59

In the BCG matrix,a business unit that has a high anticipated growth rate but a low market share is known as a ________.

A)star
B)dog
C)cash cow
D)question mark

Question 60

________ takes place when a company combines with other companies in different,but associated,industries.

A)Stabilized diversification
B)Horizontal integration
C)Vertical integration
D)Related diversification

Question 61

________ is the ability to anticipate,envision,maintain flexibility,think strategically,and work with others in the organization to initiate changes that will create a viable and valuable future for the organization.

A)Strategic leadership
B)Scientific management
C)Strategic competence
D)Strategic flexibility

Question 62

How can an organization develop strategic flexibility?

A)It should commit resources only after thorough planning.
B)It should monitor and evaluate its past strategies.
C)It should depend on tried and tested perspectives from senior employees.
D)It should have multiple alternatives when making strategic decisions.

Question 63

Which of the following strategies involves a cost advantage or a differentiation advantage in a narrow segment?

A)flexibility strategy
B)focus strategy
C)functional strategy
D)leadership strategy

Question 64

An organization that initially brings a product innovation to the market is known as the ________.

A)first mover
B)free rider
C)cash cow
D)question mark

Question 65

Kiva Systems,manufacturer of robots used in flexible automation systems,demonstrates the power of ________ by "teaching" its robots to dispose of used cardboard and to assist in gift wrapping for e-commerce warehouse fulfillment.

A)design thinking
B)competitive advantage
C)strategic flexibility
D)e-business strategies

Question 66

________ should be sold off or liquidated as they have low market share and low growth potential.

A)Cash cows
B)Stars
C)Question marks
D)Dogs

Question 67

How can a cost leader use e-business to reduce costs?

A)It could automate purchasing and payment systems so that customers have detailed status reports.
B)It could provide rapid online responses to service requests.
C)It could use Internet-based knowledge systems to shorten customer response times.
D)It could use Web-based inventory control systems that reduce storage costs.

Question 68

Which of the following is an advantage of being a first mover?

A)certainty over the direction of technology and market
B)low development costs
C)no financial or strategic risks
D)opportunity to begin building customer relationships

Question 69

Which of the following is a competitive force under the five forces model?

A)past rivalry with competitors
B)predictable changes in the market
C)vertical integration
D)threat of substitutes

Question 70

A cost leadership strategy requires a firm to ________.

A)maintain the lowest cost structure
B)be unique in its product offering
C)aim at a cost advantage in a niche market
D)match its competition in terms of costs

Question 71

A firm that is "stuck in the middle" cannot develop ________.

A)a cost or differentiation advantage
B)a functional strategy
C)a leadership strategy
D)a flexible strategy

Question 72

Who targets a narrow market segment with customized products?

A)a differentiator
B)an integrator
C)a focuser
D)a first mover

Question 73

In an organization,the single independent businesses which formulate their own competitive strategies are known as ________.

A)strategic growth units
B)strategic business units
C)focus units
D)service units

Question 74

Heavy investment in ________ will help take advantage of the market's growth and help maintain high market share.

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

Question 75

A company that competes by offering unique products that are widely valued by customers is following a ________.

A)leadership strategy
B)differentiation strategy
C)focus strategy
D)functional strategy

Question 76

An Internet-based knowledge management system that shortens customer response times would be an e-business technique that contributes to the competitive advantage of a ________.

A)cost leader
B)differentiator
C)focuser
D)brick

Question 77

A ________ firm uses both online and traditional stand-alone locations.

A)first mover
B)clicks-and-bricks
C)focuser
D)brick-and-mortar

Question 78

Functional-level strategy directly supports the ________.

A)corporate strategy
B)competitive strategy
C)growth strategy
D)concentration strategy

Question 79

________ is the ability to recognize major external changes,to quickly commit resources,and to recognize when a strategic decision is not working.

A)Strategic apprenticeship
B)Strategic flexibility
C)Strategic leadership
D)Strategic acceptability

Question 80

Managers should "milk" cash cows for as much as they can,limit any new investment in them,and use the large amounts of cash generated to invest in ________ and ________.

A)dogs; stars
B)cash cows; dogs
C)stars; question marks
D)question marks; dogs