Deck 10: Strategy and Strategic Management

Question 1

In a large conglomerate, while the enterprise on a whole will have a corporate strategy, each SBU will have its own business strategy.

Answer 1

True

Question 2

Functional strategy, business strategy, and corporate strategy should be integrated in a means-end fashion to accomplish objectives and create sustainable competitive advantage.

Answer 2

True

Question 3

The purpose of corporate strategy is to guide activities within one specific area of operations.

Answer 3

False

Question 4

As part of the strategic management process, strategy formulation involves identifying and analyzing the existing mission, objectives, and strategies; analyzing the industry and external environment as well as organizational resources and capabilities; and revising the mission and objectives and selecting new strategies.

Question 5

In single-product enterprises, business strategies are distinct from corporate strategies.

Question 6

A good mission statement should describe the organization's underlying philosophy and should clearly identify the domain in which the organization intends to operate.

Question 7

In the process of strategic management, strategic implementation is typically followed by strategic analysis.

Question 8

Core values are broad beliefs about what is or is not appropriate behaviour.

Question 9

The essence of strategic management is looking ahead, understanding the environment and the organization, effectively positioning the organization for competitive advantage in changing times, and then achieving it.

Question 10

Corporate strategy answers the question: "How can we best utilize resources to implement our business strategy?"

Question 11

Functional strategy addresses the question: "How are we going to compete for customers within this industry and market?"

Question 12

Typical sources of competitive advantage include cost and quality, knowledge and speed, barriers to entry, and financial resources.

Question 13

Competitive advantage is the ability to do something so well that one outperforms competitors.

Question 14

Strategic intent refers to an organization focusing its energies on a unifying and compelling target.

Question 15

Stakeholders are individuals and groups unaffected by the organization and its strategic accomplishments.

Question 16

Corporate strategy focuses on the strategic question: "In what industries and markets should we compete?"

Question 17

Operating objectives are shorter-term targets against which actual performance results can be measured as indicators of progress and continuous improvement.

Question 18

A business can use a strategic SWOT analysis to assess its sustainability, wealth, operations, and technology.

Question 19

The strategic management process begins with analysis of mission, values, and objectives.

Question 20

The presence of strong core values helps build a clear organizational identity.

Question 21

The less attractive the industry structure, the harder it will be to make good strategic choices.

Question 22

Diversification brings the difficulties of complexity and the need to manage and integrate very dissimilar operations.

Question 23

A diversification strategy involves growth through expansion within the same business area.

Question 24

A "Cash Cow" on the BCG Matrix is a high market share business in a low-growth market.

Question 25

A SWOT analysis involves an assessment of organizational strengths and weaknesses as well as environmental opportunities and threats.

Question 26

In the context of vertical integration, when a business acquires suppliers, it is referred to as forward vertical integration.

Question 27

In a hypercompetition situation, a firm faces only a few competitors.

Question 28

Emergence of new competitors and resource scarcities are environmental threats.

Question 29

From the perspective of Porter's five forces model, an attractive industry is one in which intense rivalry already exists among competitors, there are substantial threats in terms of new competitors and substitute products, and suppliers and buyers are very powerful in bargaining over prices and quality.

Question 30

A "Dog" on the BCG Matrix is a high market share business in a high-growth market.

Question 31

From the perspective of Porter's five forces model, an unattractive industry is one with less intense competition, few threats from new entrants or substitutes, and low bargaining power among suppliers and buyers.

Question 32

A "Question Mark" on the BCG Matrix is a low market share business in a high-growth market.

Question 33

An unattractive industry is one in which there are high barriers to entry.

Question 34

A stability strategy maintains current operations without substantial change.

Question 35

A "Star" on the BCG Matrix is a low market share business in a low-growth market.

Question 36

Portfolio planning seeks the best mix of investments among alternative business opportunities, in addition to helping allocate scare resources among competing uses.

Question 37

In conducting a SWOT analysis, a company's opportunities should be assessed in terms of new competitors, possible resource shortages, changing market tastes, substitute products, and new regulations.

Question 38

Terms such as "acquisition," "merger," "diversification," and "global expansion" signal an underlying growth strategy.

Question 39

A growth strategy involves expansion of an organization's current operations.

Question 40

In an attractive industry, there are many competitors.

Question 41

It is advisable to combine a cost leadership strategy with a differentiation strategy to get better results.

Question 42

The major opportunities for developing competitive advantage have traditionally included cost, quality, knowledge, timing, barriers to entry, and financial resources.

Question 43

A strategic alliance that involves the development of preferred supplier relationships to guarantee a smooth and timely flow of quality materials among partners is known as an outsourcing alliance.

Question 44

A globalization strategy seeks balance among efficiencies in global operations and responsiveness to local markets.

Question 45

The strategic objective of the differentiation strategy is to attract customers who stay loyal to the firm's products and lose interest in those of its competitors.

Question 46

Restructuring by turnaround often occurs along with a change in top management.

Question 47

A multidomestic strategy reflects a geocentric view that respects diversity and values talents around the world.

Question 48

The transnational strategy focuses on working with rivals on projects of mutual benefit.

Question 49

Related diversification involves growth by acquiring new businesses or entering business areas that are related to what the organization already does.

Question 50

A multidomestic strategy tries to customize products and their advertising as much as possible to fit the local needs of different countries or regions.

Question 51

A transnational strategy reflects a polycentric view that that shows respect for both market diversity and the capabilities of locals to best interpret their strategic implications.

Question 52

A globalization strategy adopts standardized products and advertising for use worldwide.

Question 53

Bankruptcy under Canadian law protects a firm from creditors while management reorganizes to restore solvency.

Question 54

Restructuring by divestiture is mostly followed by organizations that are focused and not complex.

Question 55

Unrelated diversification involves growth by acquiring new businesses or entering business areas that are different from what the organization already does.

Question 56

A strategic alliance that involves firms joining together for sales and distribution of products or services is known as a distribution alliance.

Question 57

In a supplier alliance, firms join together to sell and distribute products or services.

Question 58

A restructuring strategy is used where changes in the scale and/or mix of operations are implemented in order to gain both short-term efficiencies and time to prepare new strategies for improving future performance.

Question 59

Co-opetition is the strategy of working with competitors on mutually beneficial projects.

Question 60

In Michael Porter's generic strategies model, market scope measures the breadth or narrowness of the target market, and source of competitive advantage that reflects whether the advantage is sought through lower price or product uniqueness.

Question 61

A strategic leader needs to reduce the sense of urgency so as to achieve the best results.

Question 62

"You can compete on price, or you can compete on product, but you can't compete on both," is a marketer's statement that Porter believes is generally true.

Question 63

The strategic planning pitfall known as "failures of process" occurs when inadequate attention is paid to the analysis of mission and purpose, core values and corporate culture, organizational strengths and weaknesses, and environmental opportunities and threats.

Question 64

Failures of substance in strategic management show up in poor analysis and bad strategy selection.

Question 65

Which of the following best defines the term "sustainable competitive advantage"?

A) It is the ability to outperform rivals in ways that are difficult or costly to imitate.
B) It is the ability to formulate technology to gain market exposure.
C) It is the ability to focus organizational energies on a unifying and compelling goal.
D) It is the ability to formulate strategies efficiently to accomplish long-term goals.
E) It is the ability to identify the setbacks in the organizational procedure and work toward correcting them.

Question 66

According to the text, the major opportunities for developing competitive advantage have traditionally included all of the following except

A) cost and quality.
B) knowledge and timing.
C) barriers to entry.
D) financial resources.
E) social progress.

Question 67

Which of the following situational descriptions does not describe one of the four major opportunities for developing sustainable competitive advantage that are identified in the text?

A) Sustainable competitive advantage occurs where strategy drives an emphasis on operating and/or product or service quality.
B) Sustainable competitive advantage occurs where strategy drives an emphasis on innovation and speed of delivery to market for new ideas.
C) Sustainable competitive advantage occurs where strategy drives an emphasis on securing high quality human resources.
D) Sustainable competitive advantage occurs where strategy drives an emphasis on creating a market stronghold that is protected from entry by others.
E) Sustainable competitive advantage occurs where strategy drives an emphasis on investments and/or loss sustainment that competitors can't match.

Question 68

Inside directors are chosen from the ranks of middle managers.

Question 69

Effective strategic leadership can occur without the leader being a teacher of the strategy or being a great communicator to ensure that everyone understands the strategy.

Question 70

Which of the following best describes a strategy?

A) It is a comprehensive plan guiding resource allocation to achieve long-term organization goals.
B) It is the same as the mission of the organization.
C) It is the document expressing the organization's reason for existence in society.
D) It is the predominant value system of the organization as a whole.
E) It is a special strength that gives an organization a competitive advantage.

Question 71

Because the challenges faced by contemporary organizations are so complex, strategic management must be viewed as a leadership responsibility held solely by the company CEO.

Question 72

Board members are increasingly expected to exercise control and take active roles in ensuring that strategic management of an enterprise is successful; and top management probably feels more performance accountability to boards of directors and other stakeholders.

Question 73

Organizations pursuing a cost leadership strategy seek a competitive advantage by directing the organization's resources and attention toward minimizing costs to operate more efficiently than the competition.

Question 74

Goal replacement is the tendency to get so bogged down in details that the planning process becomes an end in itself instead of a means to an end.

Question 75

Organizations pursuing a focused differentiation strategy seek a competitive advantage by concentrating on one special market segment and trying to be the lowest cost provider in that segment.

Question 76

Corporate governance refers to the system of control and performance monitoring of line management that is maintained by boards of directors and other major stakeholder representatives.

Question 77

Organizations pursuing a focused cost leadership strategy seek a competitive advantage by concentrating on one special market segment and trying to offer customers in that segment a unique product.

Question 78

When strategic control fails at the level of top management, it is supposed to kick in at the level of middle management.

Question 79

The objective of the focus strategy is to target organizational resources and expertise toward a particular customer group, geographical region, or product or service line.

Question 80

The critical tasks of strategic leadership include: (a) being a guardian of trade-offs by ensuring that the organization's resources are allocated in ways consistent with the strategy, and (b) creating a sense of urgency by not allowing the organization and its members to grow slow and complacent.