Deck 7: Strategic Management

Question 1

The norms, values, and preferences of a society are analyzed in which component of the external environment?

A) Demographic trends
B) Political/legal forces
C) Economic trends
D) Socio-cultural trends

Answer 1

D

Question 2

Which of the following is not a component of the external environment analysis?

A) Benchmarking
B) Scanning
C) Monitoring
D) Forecasting

Answer 2

A

Question 3

When the Justice Department sued Microsoft for a high-tech monopoly, which component of the external environment was being addressed?

A) Demographic trends
B) Political/legal forces
C) Economic trends
D) Socio-cultural conditions

Answer 3

B

Question 4

Which of the following statements is true of globalization?

A) Firms are becoming less dependent on foreign markets for raw materials.
B) It is difficult to define what is "domestic" and what is "foreign."
C) Borderless strategic alliances are less common with more fierce international competition today.
D) Firms are becoming less dependent on foreign markets for the sale of products and services.

Question 5

According to Michael Porter's framework, which of the following is not one of the five forces within an industry?

A) The threat of new entrants
B) Technology
C) Intensity of rivalry
D) Customers

Question 6

Which of the following is not included in the strategic management process?

A) Analysis of the internal and external environment of the firm
B) Formulation of the firm's code of ethics
C) Definition of the firm's mission
D) Implementation of strategies to create a competitive advantage

Question 7

Which of the following is a segment of the general environment?

A) Demographic trends
B) Economic conditions
C) Globalization
D) all of the above

Question 8

By 2020, it is estimated that what percent of the population will be 50 and older?

A) 15
B) 35
C) 50
D) 70

Question 9

Observing environmental changes on a continuous basis to determine whether a clear trend is emerging is

A) assessing.
B) scanning.
C) monitoring.
D) forecasting.

Question 10

The changes that Mattel made in Barbie after the 1960s were in response to which component of the external environment?

A) Demographic trends
B) Political/legal forces
C) Economic trends
D) Socio-cultural trends

Question 11

Which level of environmental analysis is the broadest?

A) The general environment
B) The industry
C) The strategic group
D) Direct competitors

Question 12

A group of firms with products that can substitute for one another is referred to as

A) a strategic group.
B) an external environment.
C) a supplier.
D) an industry.

Question 13

The SWOT analysis is used in which step of the strategic management process?

A) Formulating strategy
B) Implementing strategy
C) Evaluating strategy
D) Analyzing the internal and external environments

Question 14

When Best Buy and Circuit City evaluated the impact of Walmart's move to offer product warranties at half the price, they were engaging in which component of external analysis?

A) Assessing
B) Scanning
C) Monitoring
D) Forecasting

Question 15

Which of the following is not true of the SWOT analysis?

A) SWOT stands for strengths, weaknesses, opportunities, and threats.
B) Strengths and weaknesses are found in the internal analysis of the firm.
C) The SWOT analysis tells the firm what strategies to pursue.
D) The objective is to analyze factors from both inside and outside the organization that may influence success.

Question 16

When e-commerce companies recognized there were more women using the Internet than men, there were significant business implications since women do most of the household shopping. Which segment of the general environment does this represent?

A) Demographic trends
B) Economic conditions
C) Globalization
D) Socio-cultural trends

Question 17

When Visa and MasterCard began to differentiate their cards based on prestige, American Express learned which lesson about strategic management?

A) A firm must remain inflexible with its plan.
B) A firm must plan long-term.
C) When competitors learn how to copy the strategy, a firm has to reformulate to stay ahead.
D) all of the above

Question 18

McDonald's was able to make progress in the French market by adapting its menu and the look of its restaurants after carefully analyzing which component of the external environment?

A) Demographic trends
B) Political/legal forces
C) Economic trends
D) Socio-cultural trends

Question 19

When the Acme Company delayed its investment in new information technology based on predictions of what was likely to happen in the future, the intensity of the anticipated event, its importance to the firm, and the time frame in which it was expected to occur, the firm was engaged in which component of the external environment?

A) Assessing
B) Scanning
C) Monitoring
D) Forecasting

Question 20

Which of the following is considered a barrier to entry?

A) Strong brand identification already exists in the industry.
B) Intellectual property that is legally protected may keep firms out of the industry.
C) Capital requirements are so high that few firms have the resources to enter.
D) all of the above

Question 21

A firm's strategic plan to create and manage a mix of businesses owned by the firm is a

A) BCG Matrix.
B) diversification strategy.
C) business-unit strategy.
D) functional-unit strategy.

Question 22

The strategic management approach that establishes organizational capabilities for each of the major areas of the business is

A) competitor analysis.
B) resource-based view.
C) functional analysis.
D) value-chain analysis.

Question 23

The strategic management viewpoint that bases business strategy on what the firm is capable of doing, providing a more sustainable competitive advantage than basing it on external opportunities, is the

A) competitor analysis.
B) resource-based view.
C) functional analysis.
D) value-chain analysis.

Question 24

How can human capital provide a core competence?

A) Knowledge that resides in the minds of people is unique to the firm's employees.
B) Employees are willing to collaboratively use their talents to support the firm's mission.
C) The company's culture plays a key role in how well people work together to achieve the firm's objectives.
D) all of the above

Question 25

Which of the following factors causes an increase in competitive rivalry?

A) Fast industry growth
B) Undifferentiated services
C) Low exit barriers
D) Fewer number of competitors

Question 26

3M's ability to leverage its knowledge of adhesive and thin-film technology is an example of which strategic management viewpoint?

A) Competitor analysis
B) Resource-based view
C) Functional analysis
D) Value-chain analysis

Question 27

The firm's overall plan concerning the number of businesses it holds, the variety of markets or industries it serves, and the distribution of resources among those businesses is referred to as the

A) diversification strategy.
B) functional strategy.
C) corporate-level strategy.
D) business-level strategy.

Question 28

A firm's strategic mission

A) is internally focused.
B) flows from the firm's strategic intent.
C) indicates how the firm will use its resources.
D) is crafted without regard for the opportunities in the external environment.

Question 29

Porter's value-chain analysis attempts to identify

A) primary activities of the firm.
B) the competitive advantage of the firm.
C) support activities of the firm.
D) the value-added of each activity.

Question 30

Which of the following is not true of strategic intent?

A) Strategic intent indicates how the firm will use its resources.
B) Strategic intent flows from the firm's mission.
C) Strategic intent is internally focused.
D) all of the above

Question 31

Which of the following is not an intangible resource of a firm?

A) Human capital
B) Capital
C) Technology
D) Reputation

Question 32

The erosion of CD sales and the increase in music downloads reflects which of Porter's five forces in the industry?

A) Suppliers
B) Threat of new entrants
C) Threat of substitutes
D) Intensity of rivalry

Question 33

The Widget Company has a dependence on a supplier, the Acme Company. This dependence increases if

A) the Widget Company has few other sources of supply.
B) the Acme Company has many other buyers.
C) the cost for the Widget Company to suppliers is high.
D) all of the above

Question 34

The extent to which the value created by a particular activity is greater than the cost incurred to create that value is referred to as

A) margin.
B) competitive advantage.
C) the value chain.
D) human capital.

Question 35

Which strategic management approach is being used when Sears assesses its customer service capabilities by comparing its activities with those of Disney and Nordstrom's?

A) Value-chain analysis
B) Functional analysis
C) Benchmarking
D) Five forces analysis

Question 36

Strategic intent and mission

A) can restrict how managers view the environment.
B) can easily be changed in search of new opportunities in the environment.
C) seldom become incongruent with the firm's environment.
D) are the result of the SWOT analysis.

Question 37

Which of the following is not an approach for organizations to examine their capabilities?

A) Functional analysis
B) Benchmarking
C) Five forces analysis
D) Value-chain analysis

Question 38

The threat of new entrants ________ as barriers to entry ________.

A) decreases; decrease
B) increases; decrease
C) decreases; increase
D) increases; increase

Question 39

Which of the following represents a strategic group in the automobile industry?

A) Mercedes, BMW, and Ford
B) Chevrolet, Toyota, and Ford
C) Rolls Royce, Chevrolet, and Toyota
D) BMW, Rolls Royce, and Toyota

Question 40

Which of the following is an example of a firm's tangible resources?

A) Reputation
B) Equipment
C) Human capital
D) The ability to create new technology faster than competitors

Question 41

Which type of diversification strategy tends to be less profitable as a result of corporate executives lacking sufficient knowledge to effectively manage disparate business units?

A) Concentration strategy
B) Vertical integration strategy
C) Concentric diversification strategy
D) Conglomerate diversification strategy

Question 42

When Procter and Gamble partnered with General Electric to develop a jet engine for Boeing's new jumbo jet, they engaged in which strategy?

A) concentric diversification strategy
B) cooperative strategy
C) diversification strategy
D) portfolio strategy

Question 43

When companies decide how to compete in a market segment, they are formulating

A) corporate strategy.
B) business-level strategy.
C) diversification strategy.
D) functional-level strategy.

Question 44

Strategic outcomes refer to the intended results of the strategic plan.

Question 45

Polaroid erected a barrier to entry that kept Kodak from entering the industry with their patent.

Question 46

The ultimate criterion when studying strategic outcomes should be the firm's

A) long-term success.
B) profits.
C) growth of market share.
D) growth of company assets.

Question 47

Partners in strategic alliances can

A) learn from each other.
B) pool resources for risky projects.
C) speed up entry into new markets.
D) all of the above

Question 48

The final step of the strategic management process is

A) formulation of the strategy.
B) implementation of the strategy.
C) analysis of the strategic outcomes.
D) formulation of the firm's strategic intent and mission.

Question 49

Innovation contributes to a sustainable competitive advantage if

A) it is difficult or costly for competitors to imitate.
B) customers can see a value in the innovation.
C) the firm is capable of commercializing the innovation.
D) all of the above

Question 50

Maytag's focus on product reliability suggests the firm has chosen a

A) low cost strategy.
B) portfolio strategy.
C) corporate-level strategy.
D) differentiation strategy.

Question 51

Which of the following plays a role in strategy implementation?

A) Strategic leadership
B) Human resource strategies
C) Organizational structure and controls
D) all of the above

Question 52

For a strategy to be successful, a firm must be flexible and make changes to the plan based on experience. Strategic management requires adaptation to changing conditions.

Question 53

What is the recommendation by the BCG Matrix for a star?

A) It should be divested as soon as possible.
B) It should be "milked" as much as possible with only limited additional resources devoted to it.
C) The firm should greatly invest in it to fuel additional growth.
D) Additional analysis is necessary to decide whether or not additional resources should be channeled its way.

Question 54

The role of boards of directors in monitoring the actions and decisions of top executives changed with the passage of

A) the Sarbanes-Oxley Act.
B) NAFTA.
C) the Foreign Corrupt Practices Act.
D) the ADA.

Question 55

According to the BCG Matrix, a business unit that is both low in market share and low in market growth is a

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

Question 56

Which diversification strategy focuses on a single business operating in a single industry segment?

A) Concentration strategy
B) Vertical integration strategy
C) Concentric diversification strategy
D) Conglomerate diversification strategy

Question 57

The ups and downs in one economic sector seldom have a ripple effect on other sectors.

Question 58

Rubbermaid failed to consider that the cost of a raw material, resin, could not be passed along to their customers through increased costs. Sterlite, a major competitor, did not pass along the increase to their customers. As a result, Walmart replaced Rubbermaid's products with Sterlite's. This was an example of a failure to accurately assess the environmental data.

Question 59

In the strategic implementation phase of the strategic management process, top executives are responsible for

A) charting general implementation plans.
B) making key resource allocation decisions.
C) delegating day-to-day operations.
D) all of the above

Question 60

The McKinsey-General Electric Portfolio Analysis Matrix and the Boston Consulting Group's Growth-Share Matrix are techniques of

A) portfolio analysis.
B) five-forces analysis.
C) business-level strategy.
D) value-chain analysis.

Question 61

Strategic competitiveness can be attained only when the firm's selected structure is congruent with its formulated strategy.

Question 62

When Wrigley decided to focus almost exclusively on the chewing gum market and Seagram decided to enter the beverage market while also competing in the entertainment industry, both firm's were deciding their diversification strategies.

Question 63

What is the difference between the firm's strategic intent and strategic mission. How are they related?

Question 64

What is the SWOT analysis?

Question 65

Discuss the four components of an external environmental analysis.

Question 66

What is a cooperative strategy? What purposes do they serve?

Question 67

Describe the recommendations of the Boston Consulting Group's Growth-Share Matrix.

Question 68

What is conglomerate diversification? What are its advantages and disadvantages?

Question 69

What are the four types of diversification?

Question 70

In examining the firm's capabilities, company leaders may choose functional analysis, value-chain analysis, or five forces analysis.

Question 71

What are the components of the strategic management process?

Question 72

What is portfolio analysis?

Question 73

Describe Porter's Five Forces model.

Question 74

What is the difference between tangible and intangible resources? Give an example of each.

Question 75

What are some of the standard measures of strategic success evaluated in the final stage of the strategic management process?

Question 76

What are the segments of the general environment? How are they related?

Question 77

What are the two basic choices when selecting a business-level strategy? Provide examples of each.

Question 78

It is essential that the executive team assess the short-range outcomes as part of the strategic management process. The long-term outcomes need not be assessed since they are constantly changing and the plan adapts to them.

Question 79

The firm's internally focused definition of what it plans to produce and market is the strategic mission while the firm's externally focused definition of how the firm intends to use its resources is the strategic intent.

Question 80

What is benchmarking?