Deck 8: Implementing Strategies: Marketing, Financeaccounting, RD, and MIS Issues

Question 1

After segmenting markets so a firm can target particular customer groups, the next step is to find out what customer groups want and expect.

Answer 1

True

Question 2

A reason for concern over the dilution of company stock is a possible hostile takeover.

Answer 2

True

Question 3

Segmenting industrial markets is generally simpler and easier than segmenting consumer markets.

Answer 3

False

Question 4

Return on assets is the most widely used technique for determining whether debt, stock, or a combination of debt and stock is the best alternative for raising capital to implement strategies.

Question 5

The most common bases for segmenting markets are geographic and demographic.

Question 6

Additional capital is often required for successful strategy implementation.

Question 7

There are five component variables in the marketing mix: product, place, promotion, price, and people.

Question 8

The most dramatic new market-segmentation strategy is the targeting of regional tastes.

Question 9

In low earning periods, too much debt in the capital structure of an organization can endanger stockholders' returns and jeopardize company survival.

Question 10

A firm can usually serve two or more market segments with the same strategy.

Question 11

Editorial content and advertising content are increasingly being mixed on blogs.

Question 12

An EPS/EBIT chart can be constructed to determine the break-even point, where one financing alternative becomes more attractive than another.

Question 13

Besides net profit from operations and the sale of assets, two basic sources of funds for an ongoing enterprise are debt and equity.

Question 14

Market penetration can be defined as the subdividing of a market into distinct subsets of customers according to needs and buying habits.

Question 15

It is okay for firms to create expectations that exceed the service the firm can or will offer if it will attract customers.

Question 16

Multidimensional scaling involves examining three or more criteria simultaneously in a product-positioning analysis.

Question 17

Segmentation often reveals that large, random fluctuations in demand actually consist of several small, predictable, and manageable patterns.

Question 18

In general, the Internet makes market segmentation easier.

Question 19

With market segmentation, a firm can better operate with limited resources.

Question 20

When additional stock is issued to finance implementation of strategy, ownership and control of the enterprise are strengthened.

Question 21

The only reasons businesses have for determining their worth is preparing to be sold or to buy other companies.

Question 22

A limitation of financial budgets is that they can hide inefficiencies if based solely on precedent rather than on periodic evaluation of circumstances and standards.

Question 23

Limiting an organization's expenditures is the primary purpose of financial budgets.

Question 24

A financial budget is a document that details how funds will be obtained and spent for a specified period of time.

Question 25

All the methods for determining a business' worth can be grouped into three basic approaches: what a firm earns, what a firm spends, and what a firm will bring in the market.

Question 26

The Sarbanes-Oxley Act of 2002 has eliminated the problem of firms inflating their financial projections, so stakeholders need not worry about the financial projections of different companies.

Question 27

To determine the price-earnings ratio, divide the market price of the firm's annual earnings per share by the common stock and multiply this number by the firm's average net income for the past 10 years.

Question 28

One of the four recommended approaches for determining a firm's worth is to base the analysis on the selling price of a similar company.

Question 29

Although cash budgets can be a useful financial tool, publicly held companies are not required to complete them.

Question 30

When performing projected financial analysis, the balance sheet should be prepared before the income statement.

Question 31

The only costs involved in going public are the initial costs.

Question 32

A projected financial analysis can be used to forecast the impact of various implementation decisions.

Question 33

The most common type of financial budget is the capital budget.

Question 34

The cash account is used as the plug figure in projected balance sheets.

Question 35

As a balance sheet entry, goodwill represents the favor a business has acquired through its environmentally conscious and socially responsible actions.

Question 36

Buying off the outstanding shares of your company from the open market to make the company private is what going public means.

Question 37

The percentage-of-sales method should be used for projecting the cost of goods sold and the expense items in the income statements.

Question 38

In times of depressed stock prices, stock issuances often prove to be the most suitable alternative for obtaining capital.

Question 39

A conservative rule of thumb for measuring the value of a firm is to establish a business' worth to be 10 times the firm's most current annual profit.

Question 40

It is generally not recommended for companies with less than $10 million in sales to go public.

Question 41

Which of the following variables are NOT directly affected by market segmentation?

A) Product
B) Place
C) Process
D) Promotion
E) Price

Question 42

According to research, the most successful new product companies use a research and development strategy that ties internal strengths to external opportunities and is linked with objectives.

Question 43

All of the following are examples of marketing decisions that may require policies EXCEPT

A) to be a market leader or follower
B) how to make advertisements more interactive to be more effective
C) to offer a complete or limited warranty
D) to use heavy, light, or no TV advertising
E) to use exclusive dealerships or multiple channels of distribution

Question 44

Why is market segmentation an important variable in strategy implementation?

A) It allows a small firm to compete successfully with a large firm.
B) It allows a firm to operate with limited resources.
C) Mass production, mass distribution, and mass advertising are not always required.
D) Market segmentation decisions directly affect marketing mix variables.
E) All of the above

Question 45

Subdividing a market into distinct subsets of customers according to their needs and buying habits is known as

A) market penetration.
B) product diversification.
C) market segregation.
D) market segmentation.
E) positioning.

Question 46

Which variable would be considered part of the "product" element of the marketing mix?

A) Advertising
B) Packaging
C) Payment terms
D) Inventory levels and location
E) Publicity

Question 47

With information technology, in some cases it is possible to do away with the workplace by allowing employees to work at home or anywhere, anytime.

Question 48

The process of strategic management is facilitated immensely in firms that have an effective information system.

Question 49

Which two variables rank as marketing's most important contributions to strategic management?

A) Diversification and budgeting.
B) Marketing penetration and competition.
C) Competition and collaboration.
D) Product development and market development.
E) Market segmentation and product positioning.

Question 50

Matching which factors would allow factories to produce desirable levels without extra shifts, overtime, or subcontracting?

A) markets and competitors
B) competition and positioning
C) customer behavior and positioning
D) supply and demand
E) segments and competitors

Question 51

What level of management is directly affected by strategy implementation?

A) Plant managers
B) Sales managers
C) Project managers
D) Division managers
E) All of the above

Question 52

Why is market segmentation an important variable in the strategy-implementation process?

A) Company strategies do not require increased sales through new markets and products.
B) It allows a firm to operate with no resources.
C) It directly affects marketing mix variables.
D) It allows a firm to minimize per-unit profits and per-segment sales.
E) All of the above

Question 53

R&D policies can enhance strategy implementation efforts to emphasize product or process improvements.

Question 54

If the rate of market growth and technical progress is rapid and there are few barriers to possible new entrants, then in-house R&D is the preferred solution.

Question 55

What percent of strategies formulated are successfully implemented?

A) Less than 10 percent
B) About 30 percent
C) Between 40 and 60 percent
D) Approximately 66 percent
E) More than 80 percent

Question 56

One R&D strategy is to be an innovative imitator of successful products.

Question 57

A major effort in R&D may be very risky if technology is changing rapidly and the market is growing slowly.

Question 58

A current trend in R&D management involves the lifting of the veil of secrecy whereby firms, even major competitors, are joining forces to develop new products.

Question 59

Perhaps the most dramatic new market segmentation strategy is the

A) targeting of regional tastes.
B) focusing on universal product.
C) preference of international over domestic sales.
D) treatment of industrial markets.
E) none of the above

Question 60

Increased costs are a disadvantage of a good information system.

Question 61

Which element in the projected income statement CANNOT be forecasted using the percentage-of-sales method?

A) Cost of goods sold
B) Selling expense
C) Administrative expense
D) Interest expense
E) All of these items can be forecasted using the percentage-of-sales method.

Question 62

Multidimensional scaling is used to determine

A) the size of a new building.
B) the size of a new department.
C) the amount of high-tech equipment a firm needs.
D) product positioning.
E) market segmentation.

Question 63

Which variable would be considered part of the "place" element of the marketing mix?

A) Product line
B) Service level
C) Personal selling
D) Sales territory
E) Discounts and allowances

Question 64

Which of these is NOT a rule of thumb when using product positioning as a strategy-implementation tool?

A) "The best opportunity might be an unserved segment."
B) "Look for the hole or vacant niche."
C) "Try to serve more than one segment with the same strategy."
D) "Don't position yourself in the middle of the map."
E) All of these are valid rules of thumb.

Question 65

Looking for a vacant niche helps a company determine

A) its advertising budget.
B) the size of the marketing department.
C) the best place to position a product.
D) the best place to locate a new facility.
E) its projected R&D expenditures.

Question 66

Which is NOT a required step in product positioning?

A) Select key criteria that effectively differentiate products or services in the industry.
B) Serve two segments with the same strategy.
C) Plot major competitors' products or services in the resultant matrix.
D) Identify areas in the positioning map where the company's products or services could be most competitive in the given target market.
E) Develop a marketing plan to position the company's products and services appropriately.

Question 67

In preparing projected statements, to project cost of goods sold and the expense items in the income statement, which of these methods is recommended?

A) Determining the net worth method
B) What a firm earns method
C) Percentage-of-sales method
D) Price-earnings ratio method
E) Outstanding shares method

Question 68

What entails developing schematic representations that reflect how your products or services compare to competitors' on dimensions most important to success in the industry?

A) Positioning
B) Segmentation
C) Penetration
D) Diversification
E) Budgeting

Question 69

Which of the following is true about two different market segments?

A) They can usually be served with the same marketing strategy.
B) They usually require different marketing strategies.
C) They are always in different geographic locations.
D) They are usually interchangeable.
E) All of the above

Question 70

Projected financial analysis is an important strategy-implementation technique because

A) it is an exact measurement of financial costs in the future.
B) it is an exact measurement of future company profits.
C) it allows an organization to examine the expected results of various actions and approaches.
D) insurance needs can be computed.
E) none of the above

Question 71

What is the most widely used technique for determining the best combination of debt and stock?

A) Debt-to-stock ratio
B) Earnings per share/earnings before interest and tax analysis
C) Gross profit analysis
D) Capital asset pricing model
E) Present value analysis

Question 72

Which of the following is NOT true regarding stock issuances?

A) They are always better than debt for raising capital.
B) Their effect on stock price is a concern.
C) They can require a company to share future earnings with all new shareholders.
D) Dilution of ownership is a special concern.
E) All of the above statements are true.

Question 73

What becomes a more attractive financing technique when cost of capital is high?

A) Stock issuance
B) Debt
C) Cost cutting
D) Borrowing
E) Staying privately owned

Question 74

Which of the following is NOT given as an example of a decision that may require finance/accounting policies?

A) To extend the time of accounts receivable
B) To establish a certain percentage discount on accounts within a specified period of time
C) To lease or buy fixed assets
D) To use LIFO, FIFO, or a market-value accounting approach
E) To determine the amount of product diversification

Question 75

After completing an EPS/EBIT analysis, what conclusions would you make if the debt line is above the stock line throughout the range of EBIT on the graph?

A) Debt appears to be the best financing alternative.
B) Stock would be the best financing alternative.
C) A combination of debt and stock is probably the best financial alternative.
D) Dividends must be considered before conclusions can be made.
E) The company should be privately owned.

Question 76

What is a drawback of using only equity to raise capital?

A) The cost
B) Fluctuations in the stock market
C) Dilution of the control of the company
D) That it will cause EPS to roller coaster
E) That it doesn't raise as much capital as debt financing

Question 77

The first step in performing projected financial analysis is to

A) prepare the projected balance sheet.
B) take an inventory of goods.
C) estimate increases in debt.
D) prepare the projected income statement.
E) calculate the projected net income.

Question 78

A benefit of using projected balance sheets and income statements is that

A) an organization can compute projected financial ratios under various scenarios.
B) money can be put aside to pay future income taxes.
C) insurance needs can be computed.
D) it is useful in analyzing past performance.
E) all of the above

Question 79

In the low earnings period, too much ________ in the capital structure of an organization can endanger stockholders' return and jeopardize company survival.

A) debt
B) liquidity
C) equity
D) cash
E) tax liability

Question 80

What is a central strategy-implementation technique that allows an organization to examine the expected results of various actions and approaches?

A) EPS/EBIT
B) Financial budgeting
C) TOWS analysis
D) Projected financial statement analysis
E) External analysis