Deck 6: Strategy Analysis and Choice

Question 1

A SWOT Matrix is composed of four cells for the four types of strategies it creates.

Answer 1

False

Question 2

The first stage of the strategy-formulation framework is the input stage, and it is directly followed by the decision stage.

Answer 2

False

Question 3

Good intuitive judgment is always needed to determine appropriate weights and ratings in the input stage matrices.

Answer 3

True

Question 4

It is vital that strategists always consider all feasible alternatives that could benefit the firm.

Question 5

Alternative strategies don't come out of the blue; they are derived from the firm's vision, mission, and objectives.

Question 6

Conservative strategies in a SPACE Matrix most often include product development, market development, market penetration, and related diversification.

Question 7

A firm should pursue defensive strategies if the coordinates of a SPACE directional vector are (+2, +3).

Question 8

Market penetration can be classified as either a conservative, aggressive, or competitive strategy.

Question 9

An organization's present strategies, objectives and mission, coupled with the external and internal audit information, provide a basis for generating and evaluating feasible alternative strategies.

Question 10

The Strengths-Weaknesses-Opportunities-Threats (SWOT)Matrix, the Strategic Position and Action Evaluation (SPACE)Matrix, the Boston Consulting Group (BCG)Matrix, the Internal-External (IE)Matrix, and the Grand Strategy Matrix are included in stage two of the strategy-formulation framework.

Question 11

The most important determinants of an organization's overall strategic position are considered to be the two internal dimensions, financial position (FP)and competitive position (CP), and the two external dimensions, industry position (IP)and stability position (SP).

Question 12

The purpose of matching key factors is to generate feasible alternative strategies.

Question 13

The firm should pursue conservative strategies if the coordinates of a SPACE directional vector are (-1, +4).

Question 14

When completing the matching stage of the strategy-formulation framework, the SWOT Matrix needs to be completed before the SPACE Matrix.

Question 15

One of the steps of the SWOT Matrix is to list the firm's key external opportunities.

Question 16

Strengths-opportunities strategies are based on using a firm's internal strengths to take advantage of external opportunities.

Question 17

The SP and CP dimension variables in a SPACE Matrix are assigned a numerical value ranging from -1 (best)to -7 (worst).

Question 18

The SWOT matrix, if used appropriately, does not have any limitations.

Question 19

The four strategies of the SPACE Matrix are aggressive, conservative, offensive and defensive.

Question 20

Stage 2 in the strategy-formulation framework involves the Quantitative Strategic Planning Matrix.

Question 21

Having no temporal qualities, the BCG Matrix is a snapshot of an organization at a given point in time.

Question 22

To objectively evaluate feasible alternative strategies identified in Stage 2, the QSPM uses input information derived from Stage 1.

Question 23

Stars, Question Marks, Cash Cows, and Dogs are the four quadrants exhibited by the BCG Matrix.

Question 24

The midpoint on the x-axis of a BCG Matrix is typically set at 0.05.

Question 25

Step 1 of a QSPM assigns weights to each key external and internal factor.

Question 26

According to the Grand Strategy Matrix, Quadrant III organizations compete in rapid-growth industries and have strong competitive positions.

Question 27

The IE Matrix can be divided into three major regions that have different strategy implications: grow and build, hold and maintain, and harvest or divest.

Question 28

The major benefit of the BCG Matrix is that it draws attention to the cash flow, investment characteristics, and needs of an organization's various divisions.

Question 29

On the x-axis of the IE Matrix, an IFE total weighted score of 2.5 represents a weak internal position.

Question 30

In a BCG Matrix the pie slice indicates the proportion of corporate profits generated by that division.

Question 31

The firm should pursue aggressive strategies if the coordinates of a SPACE directional vector are (+5, +4).

Question 32

Relative market share position is given on the x-axis of the BCG Matrix.

Question 33

The BCG Matrix requires more information about the divisions than the IE Matrix.

Question 34

Both IE and BCG Matrices are called portfolio matrices.

Question 35

Cash Cows represent the organization's best long-run opportunities for growth and profitability.

Question 36

According to the Grand Strategy Matrix, when a Quadrant I firm is too heavily committed to a single product, then related diversification may reduce the risks associated with a narrow product line.

Question 37

Viewing every business as either a Star, Cash Cow, Dog, or Question Mark is an oversimplification.

Question 38

The Grand Strategy Matrix is based on two evaluative dimensions, market share and market growth.

Question 39

The size of the circle in a BCG Matrix corresponds to the proportion of corporate revenue generated by that business unit.

Question 40

The BCG Matrix does not reflect whether or not various divisions or their industries are growing over time.

Question 41

Which stage of the strategy-formulation framework involves the Quantitative Strategic Planning Matrix?

A) Stage 1
B) Stage 2
C) Stage 3
D) Stage 4
E) Stage 5

Question 42

Strategy changes may be highly effective and productive if a supportive culture does not exist.

Question 43

Which stage of the strategy-formulation framework contains the IFE Matrix?

A) Input stage
B) Analysis stage
C) Matching stage
D) Decision stage
E) Output stage

Question 44

Shifting focus from specific issues to more general ones may increase strategists' options for gaining organizational commitment.

Question 45

A positive feature of QSPM is that sets of strategies can be examined sequentially or simultaneously.

Question 46

Trying to achieve optimal results with an unpopular strategy is always better than achieving satisfactory results with a popular strategy.

Question 47

Total attractiveness scores are defined as the sum of the attractiveness scores in a given column of the QSPM and are computed in the second step of the QSPM.

Question 48

Culture includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes, and heroines that describe a firm.

Question 49

Successful strategists minimize their own political exposure on issues that are highly controversial and in circumstances where opposition from major power centers is likely.

Question 50

Which stage of the strategy-formulation framework includes an IFE Matrix and a Competitive Profile Matrix?

A) Input
B) Matching
C) Decision
D) Penetration
E) Research

Question 51

Each of the nine techniques included in the strategy formulation framework rely on the use of

A) strictly factual data.
B) luck.
C) financial formulas and statistics.
D) intuition and analysis.
E) synergy.

Question 52

Which strategy-formulation technique reveals the relative attractiveness of alternative strategies and thus provides an objective basis for selecting specific strategies?

A) SWOT
B) SPACE
C) QSPM
D) IFE
E) CPM

Question 53

Strategy analysis and choice largely involves making ________ decisions based on ________ information.

A) long-term; short-term
B) subjective; objective
C) short-term; long-term
D) subjective; short-term
E) objective; subjective

Question 54

Whenever two firms merge, it becomes especially important to evaluate and consider culture-strategies linkages.

Question 55

The trend in the U.S. is toward larger boards, with an average of 18 members being the norm.

Question 56

Today boards of directors are composed mostly of outsiders who are becoming more involved in an organization's strategic management.

Question 57

The Sarbanes-Oxley Act put an end to the "country-club" atmosphere of most boards and has shifted power from CEOs to directors.

Question 58

One positive feature of QSPM is that it does not require intuitive judgments and educated assumptions.

Question 59

Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies?

A) Input
B) Output
C) Decision
D) Throughput
E) Matching

Question 60

The match an organization makes between its internal resources and skills and the opportunities and risks created by its external factors can be defined as

A) input.
B) concept formulation.
C) strategy.
D) SWOT.
E) weakness.

Question 61

Which strategies aim at improving internal weaknesses by taking advantage of external opportunities?

A) SO
B) WO
C) SW
D) ST
E) WT

Question 62

In the BCG Matrix, which element represents the industry growth rate in sales, measured in percentage terms?

A) x-axis
B) y-axis
C) first quadrant
D) second quadrant
E) third quadrant

Question 63

In the BCG Matrix, which strategy would be most appropriate for a division classified as a Dog?

A) Market penetration
B) Market development
C) Product development
D) Retrenchment
E) Forward integration

Question 64

The two positive-rated dimensions on the SPACE Matrix are

A) FP and CP.
B) CP and SP.
C) FP and IP.
D) IP and SP.
E) FP and SP.

Question 65

Which strategies use a firm's strengths to avoid or reduce the impact of external threats?

A) SO
B) WO
C) SW
D) ST
E) WT

Question 66

Which of the following is NOT one of the steps involved in constructing a SWOT Matrix?

A) List the firm's key external threats.
B) Match internal strengths with external opportunities, and record the resultant SO strategies in the appropriate cell.
C) Match internal weaknesses with external threats, and record the resultant WT strategies.
D) List the firm's external weaknesses.
E) List the firm's external opportunities.

Question 67

Which of the following is a limitation associated with a SWOT Matrix?

A) Viewing every business as a Star, Cash Cow, Dog, or Question Mark is an oversimplification.
B) Many businesses fall right in the middle of the matrix.
C) It is a static assessment in time.
D) Other variables besides relative market share position and industry growth rate in sales need to be considered.
E) The matrix does not reflect whether or not various divisions or their industry are growing over time.

Question 68

In the BCG Matrix, how would a division with a low relative market share position in a high growth industry be described?

A) Question Mark
B) Cash Cow
C) Star
D) Stuck-in-the-middle
E) Dog

Question 69

What type of strategy would divestiture be classified as?

A) Aggressive
B) Defensive
C) Competitive
D) Offensive
E) Conservative

Question 70

What are the two external dimensions of the SPACE Matrix?

A) Stability position and industry position
B) Stability position and competitive position
C) Industry position and competitive position
D) Competitive position and financial position
E) Financial position and industry position

Question 71

Which of these is NOT a SPACE Matrix quadrant?

A) Aggressive
B) Defensive
C) Competitive
D) Offensive
E) Conservative

Question 72

In the BCG Matrix, a division with a high relative market share position in a low-growth industry can be described as a

A) Star.
B) Cash Cow.
C) Question Mark.
D) Dog.
E) Failure.

Question 73

Which strategies are defensive tactics directed at reducing internal weaknesses and avoiding external threats?

A) SO
B) WO
C) SW
D) ST
E) WT

Question 74

What type of strategies would you recommend when a firm's SPACE Matrix directional vector has the coordinates (-2, +3)?

A) Aggressive
B) Conservative
C) Competitive
D) Defensive
E) Integrative

Question 75

The BCG Matrix is designed specifically to enhance which type of firm's efforts to formulate strategies?

A) Companies with more than one division
B) Large companies
C) Companies with annual sales greater than $1 million
D) Companies with annual sales of less than $1 million
E) All companies

Question 76

The two internal dimensions represented on the axes of the SPACE Matrix are

A) stability position and industry position.
B) industry position and internationalization.
C) internationalization and competitive position.
D) competitive position and financial position.
E) financial position and stability position.

Question 77

Which section of the SWOT Matrix involves matching internal strengths with external opportunities?

A) The WT cell
B) The SW cell
C) The WO cell
D) The ST cell
E) The SO cell

Question 78

In the BCG Matrix, when a division of an organization has a high relative market share and is in a fast-growing industry, it is called a

A) Star.
B) Cash Cow.
C) Cat.
D) Question Mark.
E) Dog.

Question 79

How many cells are in a SWOT Matrix?

A) Two
B) Four
C) Six
D) Eight
E) Nine

Question 80

In the SPACE analysis, what does a (+6, +3)strategy profile portray?

A) A strong industry position
B) An unstable environment
C) A stable environment
D) A weak industry position
E) A weak financial position