Deck 5: Strategies in Action

Question 1

Strategic objectives include larger market share,quicker on-time delivery than rivals,quicker design-to-market times than rivals,lower costs than rivals,and wider geographic coverage than rivals.

Answer 1

True

Question 2

Strategic objectives include those associated with growth in revenues,growth in earnings,higher dividends,larger profit margins and improved cash flow.

Answer 2

False

Question 3

"If it ain't broke,don't fix it" refers to managing by crisis.

Answer 3

False

Question 4

A strategy of seeking ownership or increased control of a firm's suppliers is backward integration.

Question 5

McDonalds currently owns more than 50 percent of its restaurants.

Question 6

Since a combination strategy bears no risk,many organizations pursue a combination of two or more strategies simultaneously.

Question 7

Market penetration,market development,and product development are intensive strategies.

Question 8

Divestiture is selling all of a company's assets,in parts,for their tangible worth.

Question 9

A growing trend is for franchisers to buy out their part of the business from their franchisees.

Question 10

The overall aim of the Balanced Scorecard is to balance financial objectives with strategic objectives.

Question 11

Objectives provide direction and allow for organizational synergy.

Question 12

Horizontal integration is seeking ownership or increased control over competitors.

Question 13

If a firm's present suppliers are expensive and unreliable in meeting the firm's needs for parts,components and/or raw materials,the firm should pursue a horizontal integration strategy.

Question 14

Long-term objectives represent the results expected from pursuing certain strategies.

Question 15

Horizontal integration is an appropriate strategy when the competitors of an organization are doing poorly.

Question 16

A chief executive officer is located in the divisional level of a large firm.

Question 17

Franchising is an effective means of implementing forward integration.

Question 18

Forward integration strategy is especially effective when the availability of quality distributors is so limited as to offer a competitive advantage to those firms that integrate forward.

Question 19

Gaining ownership or increased control over distributors or retailers is called forward integration strategy.

Question 20

When the correlation between dollar sales and dollar marketing expenditures has historically been low,market penetration is an appropriate strategy.

Question 21

Personal bankruptcy filings in the U.S.exceeded 1 million for the first time ever in 2008.

Question 22

Retrenchment and turnaround are the same strategy.

Question 23

Product development is an appropriate strategy when an organization has successful products that are in the maturity stage of the product life cycle.

Question 24

Unrelated diversification is an appropriate strategy when an organization's present channels of distribution can be used to market the new products to current customers.

Question 25

Chapter 9 bankruptcy applies to municipalities.

Question 26

Divestiture has become a popular strategy for firms to focus on their core business and become more diversified.

Question 27

An appropriate strategy when an organization has excess production capacity is market development.

Question 28

Most companies favor related diversification strategies in order to exploit common use of a well-known brand name.

Question 29

IBM's entrance into the water management business is an example of related diversification.

Question 30

Chapter 7 bankruptcy is a liquidation procedure used only when a firm sees no hope of being able to operate successfully or to obtain necessary creditor agreement.

Question 31

Chapter 13 bankruptcy is similar to Chapter 11,but available only to large corporations.

Question 32

Diversification strategies are becoming more popular as organizations are finding it easier to manage diverse business activities.

Question 33

Although bankruptcy can be an effective type of retrenchment strategy,it does not allow firms to avoid major debt obligations and to void union contracts.

Question 34

J.M.Smuckers Co.'s acquisition of Procter & Gamble's Folger's coffee business is an example of related diversification.

Question 35

Market development includes introducing present products into new geographic areas.

Question 36

Divestiture is the selling of all of a company's assets.

Question 37

There are four basic types of diversification: concentric,conglomerate,forward and backward.

Question 38

Unrelated diversification may be an especially effective strategy when an organization's basic industry is experiencing increasing annual sales and profits.

Question 39

Pepsi has 41 percent of the potato chip market in China.

Question 40

Product development is a strategy that seeks increased sales by improving or modifying present products or services.

Question 41

Divestiture would be an appropriate strategy when a need exists to introduce a new technology quickly.

Question 42

A low-cost focus strategy offers products or services to a small range of customers at the lowest price available on the market.

Question 43

Joint ventures tend to fail when managers who must collaborate daily in operating the venture are not involved in forming or shaping the venture.

Question 44

Differentiation guarantees competitive advantage.

Question 45

White knight is a term that refers to a firm that agrees to acquire another firm when the other firm is facing a hostile takeover by some company.

Question 46

When an acquisition or merger is not desired by both parties,it is called a takeover or hostile takeover.

Question 47

Liquidation is often appropriate when retrenchment and divestiture have failed.

Question 48

In a turbulent,high-velocity market,a lead-change strategy is best whenever the firm has the resources to pursue this approach.

Question 49

Cooperative arrangements and joint ventures between competitors are becoming increasingly popular.

Question 50

A cost leadership strategy can be especially effective when most buyers use the product in the same way.

Question 51

A low cost focus strategy can be especially attractive when the target market niche is small.

Question 52

Jiffy Lube International would be a good example of a firm seeking the best-value focus strategy.

Question 53

For all of 2008,global merger and acquisition volume increased 12 percent,putting it on par with the volume in 2005.

Question 54

The most effective differentiation bases are those that are hard or expensive for rivals to duplicate.

Question 55

A differentiation strategy can only be achieved with a large target market.

Question 56

For consumers who are price sensitive,cost leadership emphasizes producing standardized products at very low per-unit cost.

Question 57

A differentiation strategy can be especially attractive when the industry has many different niches and segments,thereby allowing a focuser to pick a competitively attractive niche suited to its own resources.

Question 58

A best-value strategy offers products or services to a wide range of customers at the best price-value available on the market.

Question 59

According to Porter,strategies allow organizations to gain competitive advantage from three different bases: cost leadership,differentiation and integration.

Question 60

An acquisition occurs when a large organization purchases a smaller one or vice versa.

Question 61

All sizes and types of organizations can utilize and benefit from strategic-management concepts and techniques.

Question 62

Which level of strategy is most likely not present in small firms?

A)Corporate/company
B) Functional
C) Divisional
D) Operational
E) All of the above are present in small firms.

Question 63

Public enterprises generally cannot diversify into unrelated businesses or merge with other firms.

Question 64

What principle is built on the idea that there is no general plan for which way to go and what to do?

A) Managing by crisis
B) Managing by extrapolation
C) Managing by objectives
D) Managing by hope
E) Managing by subjectives

Question 65

Financial objectives involve all of the following except:

A) growth in revenues.
B) larger market share.
C) higher dividends.
D) greater return on investment.
E) a rising stock price.

Question 66

What principle is based on the belief that the true measure of a really good strategist is the ability to solve problems?

A) Managing by crisis
B) Managing by objectives
C) Managing by extrapolation
D) Managing by exception
E) Managing by hope

Question 67

Strategists in governmental organizations operate with far more strategic autonomy than their counterparts in private firms.

Question 68

Long-term objectives are needed at which level(s)in an organization?

A) Corporate
B) Divisional
C) Functional
D) All of the above
E) None of the above

Question 69

All of the following are listed among the "softer" factors in the Balanced Scorecard except:

A) customer service.
B) employee morale.
C) product quality.
D) business ethics.
E) stockholder equity.

Question 70

While outsourcing manufacturing,tech support,and back-office work is quite common,it is still unheard of for companies to outsource any of their research and development activities.

Question 71

Burger King opening its first restaurant in Japan is an example of which type of strategy?

A) Forward integration
B) Backward integration
C) Horizontal integration
D) Market development
E) Product development

Question 72

Companies are avoiding outsourcing more and more because it is more expensive than traditional methods and it does not allow a firm to concentrate on core competencies.

Question 73

First mover advantage refers to the benefits a firm may achieve by entering a new market or developing a new product or service prior to rival firms.

Question 74

Microsoft opening its own retail stores is an example of which type of strategy?

A) Forward integration
B) Backward integration
C) Horizontal integration
D) Related diversification
E) Unrelated diversification

Question 75

Research shows strategic management in small firms is more formal than in large firms,but large firms that engage in strategic management outperform those that do not.

Question 76

The nonprofit sector is America's largest employer.

Question 77

Cadbury PLC selling its Australian drinks business to Asahi Breweries Ltd.of Japan is an example of which type of strategy?

A) Related diversification
B) Unrelated diversification
C) Retrenchment
D) Divestiture
E) Liquidation

Question 78

Integration strategies are sometimes collectively referred to as which of the following categories of strategies?

A) Horizontal integration
B) Diversification
C) Vertical integration
D) Stuck-in-the-middle
E) Hierarchical integration

Question 79

A leveraged buyout occurs when a firm's management and other private investors use borrowed funds to buy out the firm's shareholders.

Question 80

Which of the following is most likely not included in the functional level of a small company?

A) Finance
B) Marketing
C) R&D
D) Department managers
E) Human resource managers