Deck 6: Organizational Strategy

Question 1

NTL,the largest cable company in the United Kingdom,recently declared bankruptcy.It needs to engage in restructuring to gain more flexibility and to allow it to raise capital.It has identified the need for strategic change.What is the next step NTL should take in this strategy-making process?

A) finding the optimal strategic solution
B) brainstorming
C) assessing the need for strategic change
D) conducting a situational analysis

Answer 1

D

Question 2

According to the text,valuable,rare,imperfectly imitable resources can produce a sustainable competitive advantage.What kind of resources must they also be to do so?

A) nonsubstitutable resources
B) substitutable resources
C) reliable resources
D) expensive resources

Answer 2

A
For a firm's resources to provide a sustainable competitive advantage they must be valuable,rare,imperfectly imi,and nonsubstitu.

Question 3

A sustainable competitive advantage exists for an organization when other companies have tried unsuccessfully to duplicate the advantage and when which of the following happens?

A) the other companies have been prohibited from duplicating the advantage by federal law
B) the other companies have, for the moment, stopped trying to duplicate the advantage
C) the organization is able to implement exclusive distribution
D) the organization operates in the international marketplace

Answer 3

B
Definition of sustainable competitive advantage.

Question 4

Top-Flite manufactures Strata golf balls and prices these balls at about three times what ordinary golf balls cost.The Strata ball is selling exceptionally well because customers recognize the ball's patented three-layer construction improves handling and increases distance.What does the company have from the patent on these golf balls?

A) sustainable competitive advantage
B) aggregate marketing strategy
C) reliable differentiation
D) strategic stance

Question 5

The highly fragmented chemical industry in Europe has experienced decreasing profits partly due to industry reluctance to change the way it conducts business-especially in how it competes against lower-priced U.S.imports.What is this an example of?

A) competitive apathy
B) strategic apathy
C) competitive inertia
D) strategic inertia

Question 6

What does an organization experience when it is reluctant to change strategies or competitive practices that have been successful in the past?

A) strategic dissonance
B) strategic inertia
C) competitive dissonance
D) competitive inertia

Question 7

Companies in the chemical industry are struggling to attract the most talented college and university graduates.One big challenge facing these companies is attracting new talent to organizations with an old economy image.In a situational analysis,what term would be associated with this challenge?

A) internal threat
B) external opportunity
C) internal weakness
D) internal opportunity

Question 8

What is an organization said to be experiencing when there is a discrepancy between upper management's intended strategy and the strategy implemented by the lower levels of management?

A) horizontal conflict
B) character of the rivalry
C) strategic dissonance
D) competitive inertia

Question 9

What is the first step in the strategy-making process?

A) assess the need for strategic change
B) conduct a situational analysis
C) choose strategic alternatives
D) evaluate the impact of changes on the internal environment

Question 10

Which of the following is intangible?

A) core capabilities
B) competitive advantages
C) strengths and weaknesses
D) distinctive competencies

Question 11

Deutsche Bank is the largest bank in the world.Would this position give it a sustainable competitive advantage,and why?

A) Yes, because size would make its operations synergistic.
B) No, because size is not a criterion for sustainable competitive advantage.
C) Yes, because large institutions make more effective use of resources.
D) No, because large organizations are always targeted for anti-trust activities.

Question 12

Which condition must be met if a firm's resources are to be used to achieve a sustainable competitive advantage?

A) differentiation
B) imperfectly imitable resources
C) related diversification
D) unrelated diversification

Question 13

Which type of resource is NOT controlled or possessed by many competing firms?

A) rare resources
B) imperfectly imitable resources
C) nonsubstitutable resources
D) strategically dissonant resources

Question 14

Which of the following is a problem strongly associated with top managers?

A) competitive dissonance
B) differentiation discrepancy
C) strategic inertia
D) competitive inertia

Question 15

What is another term for SWOT analysis?

A) market audit analysis
B) firm-level strategy analysis
C) competitive advantage analysis
D) situational analysis

Question 16

To differentiate its products from other similar brands,Aveda beauty products focuses on educating its customers on general skin and hair care.Its salespeople are trained to answer questions and help customers find solutions.What has Aveda achieved with customer education and employee training?

A) synergy through relationship marketing
B) prevention of product duplication
C) efficient use of imitative resources
D) a competitive advantage

Question 17

What is an organization said to have if it has the assets,capabilities,processes,information,and knowledge used to improve its effectiveness and efficiency,to create and sustain competitive advantage,and to fulfill a need or solve a problem?

A) grand strategies
B) distinctive competencies
C) competitive advantages
D) resources

Question 18

When making travel plans,many tourists select Thomas Cook because they perceive the tour company as being superior to all others.No other tour service can duplicate the customer service and satisfaction that Thomas Cook has provided over its years of operation.What type of resources has Thomas Cook apparently used to create a sustainable competitive advantage?

A) synergistic
B) valuable
C) tangible
D) nonsubstitutable

Question 19

Civet coffee beans are the world's most coveted and expensive coffee bean that comes from Sumatra.Civets eat the coffee berries and excrete the beans.The digestive process creates a rich flavourful coffee bean.What kind of resource is this coffee bean?

A) rare resource
B) imperfectly imitable resource
C) nonsubstitutable resource
D) strategically dissonant resource

Question 20

Specialized Bicycle Components introduced the first major-production mountain bike in 1980.Two-thirds of its profits come from the sale of mountain bikes.It is recognized worldwide for its ability to design and produce superior mountain bikes.Which of the following terms best defines this ability?

A) customer sustainability
B) organizational advantage
C) relative competence
D) distinctive competence

Question 21

Specialized Bicycle Components introduced the first major-production mountain bike in 1980.Since then,the company has maintained a technological leadership in the production of bikes and bike accessories and an organizational culture that encourages innovation.Which one of the following refers to the company's technological leadership and its organizational culture?

A) customer sustainabilities
B) organizational advantages
C) relative competencies
D) core capabilities

Question 22

Imagine Dow Chemical is conducting a situational analysis.According to its sales,Dow is the second-largest chemical company in the world.BASF is the largest.Both companies use a similar strategy.Within Dow's situational analysis,what would BASF be classified as?

A) as a cash cow
B) as a primary firm
C) as an unrelated firm
D) as a core firm

Question 23

According to strategic reference point theory,what are the two basic strategic alternatives that managers have?

A) following strategy and pioneering strategy
B) risk-maintenance strategy and conflict-avoidance strategy
C) risk-avoiding strategy and risk-seeking strategy
D) frontal attack strategy and guerilla strategy

Question 24

What mechanism is used to examine external threats and opportunities facing a firm as well as its internal strengths and weaknesses?

A) organizational scanning
B) internal marketing
C) corporate strategy
D) a situational analysis

Question 25

Francis has to decide between two financiers.The first financier wants quick growth while the second prefers slow and steady growth.Francis likes the idea of growing quickly but is unsure if she is willing to take on the additional risks.Which theory describes what Francis is contemplating?

A) strategic reference point theory
B) situational analysis theory
C) core competency theory
D) risk-seeking theory

Question 26

Besides selling coffee,Starbucks markets a line of compilation CDs under the brand name Hear Music.Which term best describes this making and marketing of CDs?

A) related differentiation
B) related diversification
C) integrated acquisition
D) unrelated diversification

Question 27

What is the term for a portfolio strategy that managers use to categorize their corporation's businesses by growth rate and relative market share to help them decide how to invest corporate funds?

A) investment matrix
B) SWOT matrix
C) BCG matrix
D) portfolio management matrix

Question 28

Some companies' main products will not be seen by consumers,and their skills lie in productivity anonymity.For example,a chemical company could set an objective that 30 percent of its customers would recognize its brand name two years after the introduction of the branding strategy.Which of the following is defined by developing a brand image to create a distinctive competence?

A) a strategic reference point
B) a tactical benchmark
C) a strategic mission
D) a core advantage

Question 29

What is the term for the less visible,internal decision-making routines,problem-solving processes,and organizational cultures that determine how efficiently inputs can be turned into outputs in any organization?

A) imperfectly imitable resources
B) valuable resources
C) distinctive competencies
D) core capabilities

Question 30

Clorox Corporation,the manufacturer of bleach and bleach-based cleaning products,acquired Kingsford Charcoal and Prime Choice brand steak sauce.What is this action an example of?

A) related differentiation
B) related diversification
C) integrated acquisition
D) unrelated diversification

Question 31

Which of the following is an example of a common approach to corporate-level strategy?

A) positioning strategies
B) adaptive strategies
C) ROI strategies
D) grand strategies

Question 32

What types of firms use strategies that are related to,but somewhat different from,those of core firms when doing an analysis of strategic groups to assess external environmental threats and opportunities?

A) strategic firms
B) secondary firms
C) transient firms
D) pioneering firms

Question 33

Which term refers to the overall organizational strategy that addresses the question "What business or businesses are we in or should we be in?"

A) firm-level strategy
B) corporate-level strategy
C) industry-level strategy
D) portfolio strategy

Question 34

How can the portfolio strategy be used to help managers acquire companies that fit well with the rest of their corporate portfolio?

A) The fewer businesses in which a corporation competes, the smaller its overall chances of failing.
B) Risk can be reduced through related diversification-creating or acquiring companies with related core capabilities.
C) Invest the profits and cash from mature, slow-growth businesses into newer, faster growing businesses.
D) The most significant advantage of the portfolio strategy is the ability to categorize businesses as stars, exclamation points, question marks, and dogs.

Question 35

What strategic group do top managers choose for comparing,evaluating,and benchmarking their company's strategic threats and opportunities in a situational analysis?

A) non-industry-specific companies
B) expert managers
C) trade journals and other relevant periodicals
D) other firms within an industry

Question 36

Deutsche Bank became the world's largest bank through mergers with Bankers Trust,a transatlantic banking operation.Considering both banking companies had similar core capabilities,what is this an example of?

A) related differentiation
B) related diversification
C) integrated acquisition
D) competency acquisition

Question 37

Which of the following might an internal situational analysis for a pet food manufacturer reveal?

A) a growing dog and cat population in the United States
B) an indication that dogs need less calcium in their diet
C) a less expensive, more nutritious imported brand of pet food
D) a need for management that understands the trends in pet care

Question 38

Specialized Bicycle Components introduced the first major-production mountain bike in 1980.Specialized bikes have a large share of a fast-growing market.According to the BCG matrix,what would the company Specialized Bicycle Components be classified as?

A) as problem children
B) as cash cows
C) as exclamation points
D) as stars

Question 39

What are the two major approaches to corporate-level strategy?

A) portfolio strategy and secondary strategy
B) grand strategy and temporal strategy
C) grand strategy and portfolio strategy
D) temporal strategy and secondary strategy

Question 40

Which targets do managers use to measure whether their firm has developed the core competencies it needs to achieve a sustainable competitive advantage?

A) strategic reference points
B) strategic focus points
C) differentiation targets
D) imperfectly imitable resources

Question 41

Clorox Corporation,the manufacturer of bleach and bleach-based cleaning products,acquired Kingsford Charcoal and Prime Choice brand steak sauce.What is this action an example of?

A) internal growth
B) a stability strategy
C) a pioneering strategy
D) external growth

Question 42

What strategy is characterized by significant cost reductions,the layoffs of employees,the closing of poorly performing stores,offices,or manufacturing plants,or the closing or selling of entire lines of products or services?

A) portfolio
B) retrenchment
C) stability
D) firm-level

Question 43

What strategy is used to turn around very poor company performance by shrinking the size or scope of the business?

A) growth strategy
B) stability strategy
C) retrenchment strategy
D) repositioning strategy

Question 44

What term could be used to describe Coca-Cola's acquisition of a water-treatment and bottling plant so it could produce and market Dasani brand bottled water?

A) a repositioning strategy
B) growth
C) niche marketing
D) a retrenchment strategy

Question 45

Which of the following is probably the best approach to diversification in portfolio management?

A) related differentiation
B) related diversification
C) unrelated diversification
D) unrelated differentiation

Question 46

Which of the following is one of the five forces Michael Porter identified as being the ones to determine an industry's overall attractiveness and potential for long-term profitability?

A) existence of complementary products
B) organizational structure
C) existing benchmarks
D) bargaining power of suppliers

Question 47

Apple and Samsung lead the cellphone industry and usually one or the other company leads the industry in phone sales.Which of Porter's five industry forces is this an example of?

A) character of culture
B) competitive barrier
C) character of the rivalry
D) benchmarked rivalries

Question 48

Which type of strategy do companies often choose when their external environment doesn't change much or when they have struggled with periods of explosive growth?

A) stability
B) growth
C) pioneering
D) portfolio

Question 49

In an attempt to stop declining profitability,ICI,a British chemical company,deleted petrochemical products from its production and concentrated on specialty chemicals,a less capital intensive,less cyclical business.Which type of grand strategy was ICI using?

A) retrenchment
B) stability
C) growth
D) maturity

Question 50

Which strategy,if successful,is often followed by a growth strategy?

A) retrenchment
B) portfolio
C) focus
D) differentiation

Question 51

Which of the following is one of the five industry forces that determine an industry's overall attractiveness and potential for long-term profitability?

A) character of management
B) existing complementary products
C) level of government subsidies
D) threat of substitute products

Question 52

Hector wanted to grow his business beyond the food industry and started investing in clothing,toys,and travel companies.Hector's vice president did not agree with these investments and predicted a decline in profit.Predicting this decline in profit is contrary to which strategy?

A) BCG strategy
B) portfolio strategy
C) related diversification strategy
D) acquisition strategy

Question 53

What type of grand strategy is McDonald's using when it increases its profits in France by offering uniquely French products,such as Croque McDo,the McDonald's version of a popular French grilled sandwich?

A) growth
B) decline
C) retrenchment/recovery
D) repositioning

Question 54

In an attempt to stop declining profitability,ICI,a British chemical company,deleted petrochemical products from its production and concentrated on specialty chemicals,a less capital intensive,less cyclical business.Which type of strategy will ICI more than likely implement if it is successful in making the needed changes?

A) harvesting
B) revitalization
C) revival
D) recovery

Question 55

Which of the following strategies is analogous to pruning roses?

A) growth strategy
B) stability strategy
C) retrenchment/recovery strategy
D) portfolio strategy

Question 56

Which of the following is determined by Michael Porter's five industry forces?

A) potential for long-term change
B) potential for short-term profitability
C) potential for short-term change
D) potential for long-term profitability

Question 57

Which type of strategy,manifested in three ways,is a broad corporate-level strategic plan used to achieve strategic goals and guide the strategic alternatives that managers of individual businesses or subunits may use?

A) grand strategy
B) growth strategy
C) stability strategy
D) retrenchment/recovery strategy

Question 58

Which corporate strategy addresses the question "How should we compete in this industry?"

A) corporate-level
B) industry-level
C) firm-level
D) niche-specific

Question 59

What type of strategy are companies most likely following when they are trying to improve the way in which they sell the same goods or services to the same customers?

A) growth
B) pioneering
C) retrenchment/recovery
D) stability

Question 60

By which of the following actions can companies achieve growth?

A) by shrinking the scope of their business
B) through direct expansion of its operations
C) by deleting all cash cows from their portfolios
D) by maintaining only stars in their portfolios

Question 61

What is it called when the strategic actions that your company takes can probably be matched by your direct competitors,from a competitive standpoint?

A) market commonality
B) resource similarity
C) character of the rivalry
D) competitive inertia

Question 62

Infinity Inc.makes a paperweight with real flowers preserved within a solid clear crystal polymer.Independent gift stores sell Infinity's paperweights to collectors of nature related keepsakes.The larger gift companies find this market too niche for them.What kind of strategy has Infinity adopted?

A) focus
B) differentiation
C) cost leadership
D) diversification

Question 63

Under which of the following conditions is a competitive attack by the stronger of two rivals more likely to produce sustained competitive advantage for that rival?

A) high market commonality
B) high competitive autonomy
C) high resource similarity
D) low resource similarity

Question 64

Hohner is a company that manufactures and markets harmonicas,a product with a steady demand rate.It is so successful at what it does that the company controls 85 percent of the world's harmonica industry.In terms of adaptive strategies,what is Hohner most likely categorized as?

A) as a reactor
B) as a diversifier
C) as an analyzer
D) as a defender

Question 65

When The Home Depot opened stores in Canada,it ran a series of ads featuring an animated hammer that was busily reducing prices to show the U.S.-based home improvement store had the lowest prices.According to Michael Porter's ideas,which positioning strategy did The Home Depot adopt to deal with existing Canadian stores that sold similar products?

A) cost leadership
B) diversification
C) focus
D) differentiation

Question 66

Peter owns an independent residential realtor agency.Rather than creating his own promotions,he waits to see what the larger realtors offer potential home owners and then offers the same with some added perks.What type of adaptive strategist is Peter?

A) defender
B) pioneer
C) analyzer
D) reactor

Question 67

Glassmaker AFG Industries positions itself as the primary supplier of glass used in microwave doors,shower doors,and patio tables.Which type of positioning strategy does AFG use?

A) adaptive
B) growth
C) diversification
D) focus

Question 68

Clorox Corporation controls 60 percent of the bleach market.Imagine you are an entrepreneur who is considering developing and marketing a new brand of bleach.Which one of Michael Porter's five industry forces should you be most concerned about?

A) bargaining power of buyers
B) threat of substitute products or services
C) threat of new entrants
D) character of the rivalry

Question 69

Which type of strategy has the purpose of choosing an industry-level strategy that is best suited to changes in the organization's external environment?

A) positioning
B) differentiation
C) growth
D) adaptive

Question 70

Cost leadership,differentiation,and focus are discussed in the text.Which of the following defines these three types of strategies?

A) grand
B) niche
C) positioning
D) restructuring

Question 71

Which statement best describes the status of Tim Hortons and Coffee Time as direct competitors?

A) They have a low degree of resource variability.
B) They have a high degree of market commonality.
C) They have a low degree of competitive inertia.
D) They have a low degree of market commonality.

Question 72

Sales of Arm & Hammer baking soda had flattened when its manufacturer started promoting new,innovative uses for its product.Which adaptive strategy stance did the manufacturer of Arm & Hammer use by searching for new market opportunities?

A) defender
B) cost leader
C) analyzer
D) prospector

Question 73

Which of the following employ adaptive strategies that tend to result in the poorest performance?

A) defenders
B) analyzers
C) prospectors
D) reactors

Question 74

Which of the following organizations are most directly in competition with each other?

A) Kmart and Gap
B) a local flower shop and Kroger's
C) FedEx and UPS
D) an independent bookstore and a library

Question 75

The ad for ASKO washers reads,"Since our humble Swedish beginnings back in 1950,ASKO has been dedicated to building machines with superior cleaning power,reliability,and style.Which type of positioning strategy is ASKO more than likely using?

A) differentiation
B) retrenchment
C) diversification
D) focus

Question 76

Narrative 6-1
The Rolling Stones are the most successful act in the music industry largely because they run the band as a business-Rolling Stones Inc. Since 1989, the band has generated more than $1.5 billion in gross revenues. That total includes sales of records, song rights, merchandising, sponsorship money, and touring. Unlike some other groups, the Stones carry no antibusiness baggage. The company licenses over 50 products from underwear to formalwear. Its record earnings from one tour came from the Voodoo Lounge tour in 1994, which grossed $121.2 million. Over the past decade, the group's songwriting has made about $56 million. The next time you see Mick Jagger, think of him as the highly successful CEO of a mid-sized corporation. The goal of the corporation is to continue providing products that differ from its competitors' offerings so that fans will continue to pay a premium price for what it sells.
Refer to the Narrative 6-1.Which of the following can the Rolling Stones be said to have,since other music groups cannot duplicate the value the band is providing to customers?

A) contingency management style
B) sustainable competitive advantage
C) resource diversity
D) resource munificence

Question 77

What are the positioning strategies identified by Michael Porter?

A) entrepreneurial, growth, and stability
B) diversification, acquisition, and divestment
C) defender strategy, diversification, and cost leadership
D) focus, cost leadership, and differentiation

Question 78

Among the adaptive strategies,analyzing is a blend of which strategies?

A) analyzing and reacting
B) defending and reacting
C) prospecting and analyzing
D) defending and prospecting

Question 79

Which of the following will most likely be characteristic of companies when the bargaining power of suppliers and buyers is high?

A) Companies will find it more difficult to be profitable.
B) Companies will most likely use a growth strategy.
C) Companies will divest themselves of all of their cash cows.
D) Companies will engage in organizational restructuring.

Question 80

Resource similarity determines the extent to which firms will be in direct competition with one another.What other factor does the same?

A) market commonality
B) resource quality
C) related diversification
D) product differentiation