Deck 8: Strategy Formulation and Execution

Question 1

 Competitive advantage refers to the set of decisions and actions used to formulate and execute strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals.

Answer 1

False

Question 2

 One key to effective strategy execution is entrenchment, which means there is a deep understanding and acceptance of organizational direction and purpose throughout the organization.

Answer 2

False

Question 3

 The combination of benefits received and costs paid by the customer refers to value.

Answer 3

True

Question 4

 The biggest factor that contributes to failed strategy execution is an inadequate budget or resources.

Question 5

 For the social networking site Facebook, technological know-how and an aggressive and innovative culture are significant strengths to include in its SWOT analysis.

Question 6

 The administration and implementation of the strategic plan is strategy execution.

Question 7

 The three levels of strategy are business, corporate, and global.

Question 8

 Core competence is the plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining the organization's goals.

Question 9

 Threats are characteristics of the internal environment that may prevent the organization from achieving its strategic goals.

Question 10

 Executives acquire information about external opportunities and strengths from a variety of reports, including budgets, financial ratios, profit and loss statements, and surveys of employee attitudes and satisfaction.

Question 11

 Research has shown that strategic thinking and planning positively affect a firm's performance and financial success.

Question 12

 In for-profit firms, strategic planning pertains to events in the external environment.

Question 13

 The essence of formulating strategy is choosing how the organization will be different.

Question 14

 Strategic thinking is more important in for-profit businesses than for nonprofit organizations.

Question 15

 Strategy implementation includes the planning and decision making that lead to the establishment of the firm's goals.

Question 16

 The strategic management process begins when executives scan the organization's internal and external environments and identify strategic issues that might require change.

Question 17

 The interaction of the Production and Sales departments working together to produce profit greater than the total of both working separately is an example of synergy.

Question 18

 Corporate-level strategy pertains to the organization as a whole and the combination of business units and product lines that makes up the corporate entity.

Question 19

 "How do we compete?" is a question asked when managers are considering functional-level strategy.

Question 20

 Factors that alter a company's ability to achieve its goals are called strategic issues.

Question 21

 Opportunities are characteristics of the internal environment that have the potential to help the organization achieve or exceed its strategic goals.

Question 22

 Vertical integration means the company expands into businesses that either produce the supplies needed to make products and services or that distribute and sell those products and services to customers.

Question 23

 A glocalization strategy seeks to achieve both global standardization and national responsiveness.

Question 24

 Unrelated diversification occurs when an organization expands into a totally new line of business.

Question 25

 The BCG (Boston Consulting Group) matrix evaluates SBUs with respect to their business growth rate and geographical location.

Question 26

 Diversification is a strategy of moving into new lines of business.

Question 27

 The question mark exists in a new, rapidly growing industry, but has only a small market share, according to the BCG matrix.

Question 28

 Differentiation, cost leadership, and focus are three of Porter's competitive strategies.

Question 29

 According to the BCG matrix, the cash cow has a large market share in a rapidly growing industry.

Question 30

 A director of finance would most likely be interested in executing a functional-level strategy.

Question 31

 Many strategy experts agree that formulation is the most important, yet the most difficult, part of strategic management.

Question 32

 A globalization strategy is based on the assumption that a single global market exists for many consumer and industrial products.

Question 33

 An SBU stands for "star business unit."

Question 34

 Cost leadership is a type of competitive strategy with which the organization seeks to distinguish its products or services from others in the industry.

Question 35

 The dog, according to the BCG matrix, is a poor performer.

Question 36

 A globalization strategy handles markets independently for each country.

Question 37

 Business-level strategies include all of the major functions, including finance, research and development, marketing, and manufacturing.

Question 38

 Portfolio strategy pertains to the mix of business units and product lines that fit together in a logical way to provide synergy and competitive advantage for the corporation.

Question 39

 When an organization is domestically focused, with only a few exports, managers have little need to pay attention to issues of either local responsiveness or global standardization.

Question 40

 Organizations with a focus strategy concentrate on a specific regional market or buyer group.

Question 41

 The set of decisions and actions used to formulate and execute strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals is known as:

A) competitive advantage.
B) strategic planning.
C) strategic management.
D) a SWOT analysis.
E) a strategy.

Question 42

 __________-level strategy pertains to the major functional departments within the business unit.

A) Operational
B) Corporate
C) National
D) Business
E) Functional

Question 43

 To achieve competitive advantage, companies should develop strategies that:

A) target specific customers.
B) sprovide synergy.
C) focus on core competencies.
D) create value.
E) all of these.

Question 44

 Ford's decision to completely redesign its Ford Taurus can be classified as a __________ strategy.

A) corporate-level
B) business-level
C) functional-level
D) retrenchment
E) portfolio

Question 45

 For successful execution, alignment of everyone in the organization must occur.

Question 46

 When Coca-Cola introduced Surge, a new citrus soft drink, what type of strategy was being pursued?

A) Functional-level
B) Multidomestic
C) Corporate-level
D) Glocalization
E) Business-level

Question 47

 A business-level strategy is concerned with which of the following questions?

A) What business are we in?
B) How do we compete?
C) How do we support the functional-level strategy?
D) Where do we market our products?
E) Should we promote from within?

Question 48

 Sarah owns a clothing boutique. Her focus on operational efficiency enables her to keep costs low compared to other clothing stores in her area. Sarah's expertise on operational efficiency is an example of which element of competitive advantage?

A) Targeting customers
B) Building synergy
C) Delivering value
D) Exploiting core competencies
E) All of these

Question 49

 Managers help their companies create value by devising strategies that __________ and __________.

A) attain synergy; target customers
B) target customers; exploit core competencies
C) exploit core competencies; attain synergy
D) attain synergy; expose external opportunities and threats
E) expose internal strengths and weaknesses; target customers

Question 50

 __________ can be defined as the combination of benefits received and costs paid by the customer.

A) Organizational benefits
B) Value
C) Competitive advantage
D) Synergy
E) Core competence

Question 51

 The plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining the organization's goals is known as a(n):

A) goal.
B) objective.
C) mission.
D) vision.
E) strategy.

Question 52

 Which of the following pertains to the organization as a whole and the combination of business units and product lines that makes up the corporate entity?

A) Business-level strategy
B) Functional-level strategy
C) Corporate-level strategy
D) Operational-level strategy
E) Competitive-level strategy

Question 53

 In strategy execution, leadership is the ability to influence people to adopt the new behaviors needed for putting the strategy into action.

Question 54

 When Philip Morris, the tobacco giant, bought Kraft Foods Group, Inc., it was pursuing a __________ strategy.

A) corporate-level
B) business-level
C) functional-level
D) multidomestic
E) glocalization 

Question 55

 The condition that exists when organizational parts interact to produce a joint effect that is greater than the sum of the parts acting alone is known as:

A) a core competence.
B) synergy.
C) value.
D) a business-level strategy.
E) competitive advantage.

Question 56

 Sears' decision to sell off much of its financial services division is an example of a __________ strategy.

A) corporate-level
B) business-level
C) functional-level
D) glocalization
E) stability

Question 57

 When AT&T decided to buy MediaOne, a cable company, it was pursuing a(n) __________ strategy.

A) functional-level
B) internal growth
C) multidomestic
D) corporate-level
E) business-level

Question 58

 The Internet and information technology has made it easier for many companies to find ways to distinguish themselves from their competitors.

Question 59

 After Sunshine Systems merged with RTD Enterprises, company executives noticed that due to increased employee collaboration between the two units, costs were down and revenues increased within both areas. This is an example of which element of competitive advantage?

A) Identifying internal strengths and weaknesses
B) Targeting customers
C) Exploiting core competencies
D) Building synergy
E) Delivering value

Question 60

 Candid communication is one of the primary tools that managers must use for effective strategy execution.

Question 61

 Classy Clay has extremely creative employees who, in the opinion of the organization, keep the company ahead of the competition. The creativity of these employees would be classified as a(n):

A) internal weakness.
B) external opportunity.
C) external strength.
D) internal strength.
E) neutral factor.

Question 62

 Which of the following portfolio categories is made up of poor performers who command only a small share of a slow-growth market?

A) Star
B) Cash cow
C) Question mark
D) Dog
E) Cat

Question 63

 The star has a __________ market share in a __________ industry.

A) large; rapidly growing
B) large; slow-growth
C) small; rapidly growing
D) small; slow-growth
E) moderate; slow-growth

Question 64

 Gatekeep Utilities is a subsidiary of GW Enterprises. Gatekeep has a mission and product line that is unique from GW. Gatekeep's competitors are also very different from those of its parent, and the subsidiary markets to a very different group of customers. As such, Gatekeep can be described as:

A) a product unit.
B) a functional unit.
C) an operational unit.
D) a strategic business unit.
E) none of these.

Question 65

 Fred has been assigned to conduct a SWOT analysis for his organization, Acme, Inc. As part of this assignment, Fred will:

A) conduct an external wage survey.
B) assess the strengths, weaknesses, opportunities, and threats that impact his firm.
C) choose a grand strategy for his firm.
D) do a cost-benefit analysis.
E) develop a mission.

Question 66

 Double Click, Inc. has a number of strategic business units. Their handheld computer unit has a large market share in this rapidly growing industry. According to the BCG matrix, their handheld computer business would be classified as:

A) a dog.
B) a star.
C) a question mark.
D) a cash cow.
E) stuck in the middle.

Question 67

 Janessa is the CEO of a privately-held software company. In defining corporate-level strategies, which of the following questions would she most likely be concerned with?

A) How do we compete?
B) What business are we in?
C) How does marketing support the business?
D) How can we maximize profits?
E) How can we make manufacturing processes more efficient?

Question 68

 Which of the following statements about the Internet's effect on the competitive forces that exist in a company's environment is true?

A) The Internet increases barriers to entry.
B) Overall, the Internet tends to decrease the bargaining power of suppliers.
C) The Internet blurs differences among competitors.
D) The Internet creates fewer substitution threats.
E) All of these

Question 69

 Which of the following includes the planning and decision making that lead to the establishment of the firm's goals and of a specific strategic plan?

A) Strategy formulation
B) Strategy implementation
C) Strategy coordination
D) Strategy execution
E) SWOT analysis

Question 70

 Which of the following questions is central to a functional-level strategy?

A) What business are we in?
B) How do we compete?
C) How do we support the business-level strategy?
D) What business do we buy?
E) Where should we market our products?

Question 71

 The BCG matrix organizes businesses along which of the following dimensions?

A) Market share and profit
B) Sales and market share
C) Business growth rate and market share
D) Business growth rate and profit
E) Sales and profit

Question 72

 Which of the following is not a technique used to monitor external environments?

A) Contracting with scanning organizations
B) Hiring competitive intelligence professionals
C) Government reports
D) Professional journals
E) Surveys of employee attitudes and satisfaction

Question 73

 The mix of business units and product lines that fit together in a logical way to provide synergy and competitive advantage for the corporation is the essence of __________ strategy.

A) business-level
B) portfolio
C) competitive
D) diversification
E) functional-level

Question 74

 __________ is the use of managerial and organizational tools to direct resources toward accomplishing strategic results.

A) Strategy formulation
B) Strategy coordination
C) Strategy execution
D) A SWOT analysis
E) Strategy planning

Question 75

 The cash cow:

A) generates tremendous profits in a rapidly growing industry.
B) has a small market share in a rapidly growing industry.
C) has a small market share in a slow-growth industry.
D) has a large market share in a slow-growth industry.
E) is generally a dead business that should be divested.

Question 76

 Portfolio strategy, the Boston Consulting Group (BCG) matrix, and diversification are three approaches to understanding __________ strategy.

A) globalization
B) functional-level
C) corporate-level
D) business-level
E) multidomestic

Question 77

 Paramount, Inc. is particularly concerned about pending legislation in Congress that would further regulate their organization. This legislation would be classified as a(n):

A) external opportunity.
B) internal strength.
C) external threat.
D) external weakness.
E) external strength.

Question 78

 Which of the following would be considered a threat to an organization?

A) Employees' resistance to change
B) Flexible work culture
C) Competitive job market for critical resources
D) Strategic alliance with another organization
E) All of these

Question 79

 Which of the following lists the strategic management process in proper order?

A) Formulate strategy; Evaluate strategy; Perform SWOT analysis; Define new mission/goals; Execute strategy; Control strategy
B) Perform SWOT analysis; Evaluate current mission/goals; Formulate strategy; Execute strategy; Define new mission/goals
C) Evaluate current mission/goals; Define new mission/goals; Formulate strategy; Execute strategy; Perform SWOT analysis 
D) Evaluate current mission/goals; Perform SWOT analysis; Define new mission/goals; Formulate strategy; Execute strategy
E) Define new mission/goals; Execute strategy; Formulate strategy; Evaluate new mission/goals; Perform SWOT analysis

Question 80

 Decisions regarding the proper amount of advertising for a particular good or service are related to __________ strategy.

A) corporate-level
B) functional-level
C) tactical-level
D) business-level
E) multidomestic