Deck 6: Strategic Management: How Exceptional Managers Realize a Grand Design

Question 1

Strategic planning is appropriate for large companies, but does not help the performance of small companies.

Answer 1

False
Explanation: One analysis of several studies found that strategic planning was appropriate not just for large firms.Companies with fewer than 100 employees could benefit as well, although the improvement in financial performance was small.

Question 2

Strategic positioning can be achieved by performing similar activities to rivals, but in different ways.

Answer 2

True
Explanation: Strategic positioning means performing different activities from rivals, or performing similar activities in different ways.

Question 3

An organization should adopt strategic management and strategic planning to encourage new ideas.

Answer 3

True
Explanation: An organization should adopt strategic management and strategic planning for three reasons: They can (1) provide direction and momentum, (2) encourage new ideas, and above all (3) develop a sustainable competitive advantage.

Question 4

Organizations may turn to the strategic-management process after a crisis.

Question 5

Strategic conservation attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company.

Question 6

Management of a small company in an industry that is not very competitive should not engage in strategic planning because the small gains in performance may not be worth the effort.

Question 7

Ford's Sync in-dash communications platform, despite its high level of technology, has been unable to provide the company with a distinct competitive advantage.

Question 8

A sustainable competitive advantage is the ability of an organization to produce goods or services more effectively than its competitors and outperform them.

Question 9

In a world of rapid and discontinuous change, the ability to please nonmanagerial employees has been called the golden trait among managers.

Question 10

Harvard Business School professor Michael Porter is a leading authority on competitive strategy.

Question 11

Bad planning is usually a result of top managers' inability to gather enough information.

Question 12

A business plan is a document with the purpose of outlining a proposed firm's profit and loss statements for its first operating cycle.

Question 13

Planning is usually a straightjacket for new ideas, since it effectively blocks peripheral vision in favor of a predetermined course.

Question 14

Formal business plans can be dangerous to the survival of new businesses; many who try them fail because of the resources required to write and agree upon the plan.

Question 15

Strategic management is the process of involving nonmanagerial employees in the formulation and implementation of strategies and strategic goals.

Question 16

The first step of the strategic-management process is to establish the grand strategy.

Question 17

A strategic position may be based on serving the few needs of a few customers.

Question 18

A strategy is a large-scale action plan that sets direction for an organization.

Question 19

Managers must be willing to make large, painful decisions to suddenly alter strategy.

Question 20

Good strategy allows a company to be everything to everyone.

Question 21

One of the ways to keep a strategic plan on track is to make it very comprehensive, covering as many scenarios for the future as you can.

Question 22

A continuity strategy is the common grand strategy that involves little or no significant change.

Question 23

Strategy formulation is the process of choosing among different strategies and altering them to best fit the organization's needs.

Question 24

SWOT analysis helps management to develop a realistic understanding of the organization in relation to internal and external environments.

Question 25

A good vision statement should describe a company's major strengths and competitive advantage in its industry.

Question 26

A vision will be demoralizing to employees if it describes a future state that appears beyond the reach of the organization.

Question 27

A defensive strategy is sometimes called a retrenchment strategy.

Question 28

After the assessment of current organizational performance, the subsequent explanation of how its mission is to be accomplished is called a comprehensive strategy.

Question 29

A grand strategy can be established using tools like SWOT analysis and forecasting.

Question 30

The primary purpose of competitive intelligence is to challenge the thinking of employees to make them better equipped to produce novel ideas for business.

Question 31

Strategy actualization is the term for putting strategic plans into effect.

Question 32

The strategic-management process has five steps and a feedback loop.

Question 33

The starting point in establishing a grand strategy is usually an analysis of Porter's competitive forces.

Question 34

A common challenge to strategy implementation is resistance by people within the organization.

Question 35

According to Burt Nanus, good vision statements are useful because they help people to consider all interesting elements in their environments.

Question 36

A mission statement should be ambitious.

Question 37

Obsolete technology and outdated facilities are examples of organizational threats.

Question 38

Alaska Airline was profitable in 2011, prompting is to decide to remain a "smallish, specialized, regional airline in a world of global giants," which is an example of a stability strategy.

Question 39

A development strategy is the common grand strategy that involves expansion.

Question 40

Many good mission statements include descriptions of an organization's customers, as well as its major products or services.

Question 41

Too little or unreliable historical data may result in erroneous trend analyses.

Question 42

General Electric sells lighting products and is also involved in plastics, broadcasting, and financial services.GE uses a related diversification strategy.

Question 43

Two types of forecasting are trend analysis and competitive intelligence.

Question 44

In Porter's model for industry analysis, there are three primary competitive forces in a firm's environment.

Question 45

A small florist most likely follows a diversification strategy.

Question 46

Execution is tactical in nature, rather than part of a company's strategy.

Question 47

Kraft Macaroni & Cheese is now challenged by new competitors such as Annie's and other store brands, which Porter's model for industry analysis calls the threat of new entrants.

Question 48

A single-product strategy can be described as focused but vulnerable.

Question 49

Burberry makes outerwear, accessories like umbrellas, and children's clothing, which is called a related diversification strategy.

Question 50

Luxury carmaker Rolls-Royce has a focused-differentiation strategy.

Question 51

In a cost-leadership strategy, an organization targets a wide market and offers products or services of unique and superior value compared to competitors.

Question 52

Contingency planning is a hypothetical extension of a past series of events into the future.

Question 53

Contingency planning can also be called scenario analysis.

Question 54

Organizational threats are the environmental factors that hinder an organization's ability to achieve a competitive advantage.

Question 55

Guthrie Community College has done a SWOT analysis and discovered that the number of college-bound high-school juniors in its state has grown by nearly 20% in the past few years.This is a strength for Guthrie.

Question 56

Synergy is one of the benefits of a single-product strategy.

Question 57

The BCG matrix is a means of evaluating strategic business units on the basis of both their business growth rates and their profitability.

Question 58

Cash cows in the BCG matrix have slow growth but high market share.

Question 59

The use of hedging to manage the cost of aviation fuel is an example of trend analysis.

Question 60

Forecasting is a strategic-planning tool used to make long-term strategy.

Question 61

Which of the following steps of the strategic-management process is the source of its feedback loop?

A)Carry out the strategic plan.
B)Maintain strategic control.
C)Establish the grand strategy.
D)Establish the mission and vision.
E)Formulate the strategic plans.

Question 62

Milo owns and manages a small bike repair store.In order to determine if strategic planning will be likely to help his business, Milo should primarily assess

A)how many competitors he has.
B)foot traffic by his location.
C)his profitability in the prior six months.
D)industry trends.
E)how much he intends to grow in the next five years.

Question 63

Which of the following would be considered a reason for adopting strategic management and strategic planning?

A)To enhance employee loyalty.
B)To keep corporate taxes at a minimum.
C)To develop independent work from the staff.
D)To provide develop a sustainable competitive advantage.
E)To increase market dominance with repeat purchase.

Question 64

A company must be able to execute three core processes of business including people, products, and administration.

Question 65

Which of the following best represents a currently popular strategy among big companies like Apple, Google, and Amazon?

A)Become involved in the community.
B)Seek niches where there is less competition.
C)Get consumers tightly connected to the company's ecosystem.
D)Offer personal or emotional connections to customers.
E)Discourage price comparisons.

Question 66

A ______ represents an "educated guess" about what must be done in the long term for survival or the prosperity of the organization or its principal parts.

A)trend analysis
B)mission
C)strategy
D)forecast
E)contingency plan

Question 67

Managers who execute well insist on constant optimism.

Question 68

"Find out what customers want, then provide it to them as cheaply and quickly as possible" is Walmart's

A)growth plan.
B)technical plan.
C)synergy.
D)strategy.
E)forecast.

Question 69

Which of the following is not a typical cause of bad planning?

A)Information overload.
B)Inadequate planning budgets.
C)Ineffective group dynamics.
D)Poor assessment of an organization's capabilities.
E)Faulty assumptions about the future.

Question 70

Effective strategic management involves

A)only top management.
B)only top and middle management.
C)only middle and lower management levels.
D)only lower management level.
E)managers from all parts of the organization.

Question 71

Which of the following statements about strategy and strategic positioning is false?

A)Many customers with broad needs can be a source of strategic position.
B)A company has to choose not only what strategy to follow but what strategy not to follow.
C)Few customers with broad needs can be a source of strategic position.
D)Strategy involves creating a "fit" among activities.
E)Few customers with narrow needs can be a source of strategic position.

Question 72

Consumers can use a national company called Service Magic to receive bids from quality providers of a variety of services, including home remodel, landscaping, plumbing, and housecleaning.Service Magic charges service providers for the leads it provides to them monthly.Which of the following is the source of Service Magic's strategic position?

A)Low-profit margin and many customers.
B)Broad needs and few customers.
C)Broad needs and many customers.
D)High-profit margin and many customers.
E)High-profit margin and few customers.

Question 73

Which of the following is not an area in which a company needs to get and stay ahead in order to sustain a competitive advantage?

A)Talented employees
B)Quality
C)Effectiveness
D)Being responsive to customers
E)Innovating

Question 74

A small firm is likely to benefit significantly from strategic planning

A)regardless of the nature of its industry or market.
B)when it is in a very competitive industry.
C)when it is in a very new industry.
D)when it is in a very stable industry.
E)when it has a very small market.

Question 75

Insisting on realism is among the leader behaviors that help a manager successfully execute a strategy.

Question 76

__________ means performing different activities from rivals or performing similar ones in different ways.

A)Competitive planning
B)Distinctive positioning
C)Collaborative planning
D)Strategic segmentation
E)Strategic positioning

Question 77

Which of the following is not a stage in the strategic-management process?

A)Conduct a trend analysis.
B)Maintain strategic control.
C)Establish the grand strategy.
D)Establish the mission and vision.
E)Carry out the strategic plans.

Question 78

Which of the following should be included in a good vision statement?

A)Firm's attitude toward its employees.
B)Geographical areas in which the firm will compete.
C)Firm's basic technology.
D)Firm's standards of excellence and high ideals.
E)Firm's major products or services.

Question 79

Anne runs a small bakery on the main street of a resort town.Though hers was the only bakery around, the business had been suffering during the economic slowdown, and she was contemplating whether she should attempt strategic planning.Anne should be aware of what research finding regarding strategic planning?

A)Only large firms show performance gains from strategic planning.
B)Only small firms show performance gains from strategic planning.
C)Performance gains from strategic planning are equal among small and large firms.
D)Both small and large firms benefit from strategic planning, but small firms get a larger boost in performance.
E)Both small and large firms benefit from strategic planning, but the small improvement in performance may not be worth the effort for small firms.

Question 80

Which of the following statements about strategic planning and strategic management is true?

A)Strategic planning is rarely used in the current environment of fast change because it does not allow for flexibility.
B)Strategic management is a process completed by top managers.
C)Both should be implemented because they can provide direction and momentum.
D)Middle managers need not understand strategies; they simply follow them.
E)Strategic planning is used to accomplish tactical goals.