Deck 6: Strategy Analysis and Choice

Question 1

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

Answer 1

False

Question 2

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).

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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

Question 5

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

Question 6

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

Question 7

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

Question 8

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

Question 9

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 10

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

Question 11

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

Question 12

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

Question 13

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

Question 14

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

Question 15

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

Question 16

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

Question 17

The SWOT matrix is widely used as an organizational tool and, if used appropriately, does not have any limitations.

Question 18

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

Question 19

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

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

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

Question 23

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

Question 24

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 25

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

Question 26

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

Question 27

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

Question 28

Both IE and BCG Matrices are called portfolio matrices.

Question 29

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

Question 30

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

Question 31

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 32

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 33

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 34

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

Question 35

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

Question 36

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

Question 37

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

Question 38

On the x-axis of the IE Matrix, an internal factor evaluation score of 2.5 represents a weak internal position.

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

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

Question 41

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

Question 42

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

Question 43

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

Question 44

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 45

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 46

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

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

Question 47

The tactic of focusing on higher-order issues involves recognizing that it is often possible to achieve similar results using different means or paths.

Question 48

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 49

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 50

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 51

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 52

Which stage of the strategy-formulation framework contains the Internal-Factor Evaluation Matrix?

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

Question 53

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

Question 54

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

Question 55

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 56

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 57

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

Question 58

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

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

Question 59

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

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

Question 60

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

Question 61

Forward integration would be an appropriate strategy for which of the following types of divisions in the BCG Matrix?

A) Dogs
B) Failures
C) Question Marks
D) Cat
E) Star

Question 62

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 63

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 64

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 65

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 66

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 67

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 68

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 69

In the BCG Matrix, a division that has a low relative market share position and competes in a slow-growth industry is referred to as a

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

Question 70

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

Question 71

How many cells are in a SWOT Matrix?

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

Question 72

All of the following are limitations of the BCG Matrix EXCEPT

A) Viewing every business as a star, cash cow, dog or question mark can be an oversimplification.
B) The Matrix requires at least three years worth of data.
C) The Matrix does not reflect divisional or industry growth over time.
D) The Matrix does not allow a company to be classified as somewhere in between two categories.
E) Variables such as size of market and competitive advantages are not considered in the Matrix.

Question 73

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 74

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 75

Which of these is NOT a SPACE Matrix quadrant?

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

Question 76

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 77

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 78

What type of strategy would divestiture be classified as?

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

Question 79

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 80

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.