Deck 6: Strategy Analysis and Choice

Question 1

A sustainability report provides information on firm's social-responsibility practices.

Answer 1

True

Question 2

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

Answer 2

False

Question 3

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

Answer 3

True

Question 4

An organization's present strategies, objectives and mission provide a basis for generating and evaluating feasible alternative strategies, coupled with the external and internal audit information.

Question 5

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

Question 6

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

Question 7

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

Question 8

Sustainability is the idea that a business can meet its financial goals without hurting customers.

Question 9

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

Question 10

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

Question 11

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

Question 12

Stage 2 in the strategy-formulation framework involves the Quantitative Strategic Planning Matrix.

Question 13

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

Question 14

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

Question 15

The most important determinants of an organization's overall strategic position are considered to be the two internal dimensions, financial strength (FS) and competitive advantage (CA), and the two external dimensions, industry strength (IS) and environmental stability (ES).

Question 16

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 17

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

Question 18

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

Question 19

The ES and CA dimension variables in a SPACE Matrix are assigned a numerical value ranging from -1 (best) to -6 (worst).

Question 20

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

Question 21

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

Question 22

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 23

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

Question 24

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

Question 25

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

Question 26

The major overall 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 27

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

Question 28

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

Question 29

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

Question 30

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

Question 31

Both IE and BCG Matrices are called portfolio matrices.

Question 32

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

Question 33

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

Question 34

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

Question 35

Having no temporal qualities, the BCG Matrix is a snapshot of an organization at a given point in time.

Question 36

According to the Grand Strategy Matrix, when a Quadrant I firm is too heavily committed to a single product, then concentric diversification may reduce the risks associated with a narrow product line.

Question 37

Star, question mark, cash cow and dogs are the four quadrants exhibited by the SPACE Matrix.

Question 38

Viewing businesses as star, cash cow, dog or question mark is an oversimplification.

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

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

Question 41

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

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

Question 42

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

Question 43

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) An opportunity

Question 44

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 45

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

Question 46

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

Question 47

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 48

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

Question 49

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

Question 50

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 51

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 52

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

Question 53

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 54

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

Question 55

Now averaging 18 members the trend in America is toward larger boards of directors.

Question 56

Successful strategists minimize their own political exposure on issues that are highly controversial and in circumstances where opposition from major power centers was likely.

Question 57

Focusing on Higher-Order Issues means it is often possible to achieve similar results using different means or paths.

Question 58

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 59

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

Question 60

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 61

Which strategy would be most appropriate for a company classified as a Dog?

A) market penetration
B) market development
C) product development
D) retrenchment
E) forward integration

Question 62

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 63

In the SPACE analysis, what does a (+6, +3) strategy profile portray?

A) A strong industry
B) An unstable environment
C) A stable environment
D) A weak industry
E) A weak financial position

Question 64

For what type of company is the BCG Matrix ideal for analyzing?

A) Companies with more than one division
B) All companies
C) Companies with annual sales greater than $1 million
D) Companies with annual sales of less than $1 million
E) Large companies

Question 65

The two internal dimensions represented on the axes of the SPACE Matrix are

A) environmental stability and industry strength.
B) industry strength and internationalization.
C) internationalization and competitive advantage.
D) competitive advantage and financial strength.
E) financial strength and environmental stability

Question 66

How many cells are in a SWOT Matrix?

A) two
B) four
C) six
D) eight
E) nine

Question 67

Which strategies are defensive tactics directed at reducing internal weaknesses and avoiding environmental threats.

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

Question 68

Which strategies use a firm's strengths to avoid or reduce the impact of external threats?

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

Question 69

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 70

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 71

What are two external dimensions of the SPACE Matrix?

A) Environmental stability and industry strength
B) Environmental stability and competitive advantage
C) Industry strength and competitive advantage
D) Competitive advantage and financial strength
E) Financial strength and industry strength

Question 72

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 73

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

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 75

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

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

Question 76

What is a weakness 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) The matrix has no temporal qualities
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 77

What type of strategy would divestiture be classified as?

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

Question 78

Which of these is not a SPACE Matrix quadrant?

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

Question 79

Which of the following is not a step of a SWOT Matrix?

A) List the firm's key external threats.
B) Match 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 80

The two positive-rated dimensions on SPACE Matrix are

A) FS and CA.
B) CA and ES.
C) FS and IS.
D) IS and ES.
E) FS and ES