Question 1

The culture at Southwest Airlines is part of its competitive advantage.

Accepted Answer

Southwest Airlines is renowned for its unique corporate culture that emphasizes customer service, employee satisfaction, and a fun atmosphere, which has been a key factor in its success and differentiation in the competitive airline industry.

Question 2

Grand strategies, which can be applied at both the corporate and business levels, fall into three broad categories: stability, growth, and cost leadership.

Accepted Answer

Grand strategies include more categories such as stability, growth, retrenchment, and combination strategies. Cost leadership is a type of competitive strategy, not a category of grand strategy.

Question 3

Strategic goals define the overall purpose of an organization and describe the attributes that distinguish one organization from another.

Accepted Answer

Strategic goals outline an organization's long-term objectives and the actions needed to achieve them, rather than defining its overall purpose or distinguishing attributes.

Question 4

Strategic goals are very narrow statements of the results that an organization wishes to achieve in the long run.

Accepted Answer

Strategic goals are broad statements that set the direction for an organization and define its overarching objectives, aiming to guide it towards its long-term vision rather than detailing narrow, specific outcomes.

Question 5

It is important that strategic goals be specific, measurable, time linked, realistic but challenging, and focused on the outcome.

Accepted Answer

These characteristics ensure that strategic goals are clear, achievable within a specific timeframe, provide a challenge that motivates progress, and are oriented towards achieving specific outcomes, making them effective for guiding organizational or personal strategy.

Question 6

A grand strategy is a comprehensive, general approach for achieving the strategic goals of an organization.

Accepted Answer

A grand strategy outlines the overarching, long-term approach an organization plans to take to achieve its major objectives and fulfill its mission, encompassing various aspects such as growth, stability, and defense mechanisms.

Question 7

Stability strategies are intended to ensure continuity in the operations and performance of an organization.

Accepted Answer

Stability strategies are designed to maintain the current status of an organization, focusing on sustaining operations, performance levels, and market share without necessarily pursuing growth or expansion.

Question 8

Stability strategies focus on streamlining the operations of an organization by reducing costs and assets.

Accepted Answer

Stability strategies primarily aim at maintaining the current status of an organization, focusing on sustaining operations, market position, and revenue levels rather than specifically targeting cost reduction and asset minimization.

Question 9

The purpose of retrenchment strategies are to reverse negative sales and profitability trends through expansion and diversification.

Accepted Answer

Retrenchment strategies aim to reduce the scale or scope of a corporation's businesses to cut costs and improve financial performance, not to expand or diversify.

Question 10

Stability strategies are designed to increase the sales and profits of the organization through diversification of the product line.

Accepted Answer

Stability strategies typically focus on maintaining the current status of the organization, aiming for steady growth or sustaining current levels of sales and profits rather than diversifying the product line. Diversification strategies, not stability strategies, are designed to increase sales and profits through diversification.

Question 11

Generic strategies reflect the primary ways in which an organization competes in its markets. They are commonly referred to as cost leadership, differentiation, and focus.

Accepted Answer

These strategies, identified by Michael Porter, describe how a company can gain a competitive advantage by either being the lowest cost producer (cost leadership), offering unique products or services that command a premium price (differentiation), or targeting a specific, narrow market (focus).

Question 12

A focus strategy occurs when an organization targets a specific, narrow segment of the market and directly engages the industry leader and others in that market.

Accepted Answer

A focus strategy involves targeting a specific, narrow segment of the market, but it does not necessarily involve directly engaging the industry leader and others in that market. Instead, it focuses on serving the unique needs of that segment better than competitors.

Question 13

The distinctive characteristics of an organization that pursues a cost leadership strategy may include exceptional customer service, quality, dependability, availability, innovation, or image.

Accepted Answer

A cost leadership strategy primarily focuses on becoming the lowest cost producer in the industry, rather than on features like exceptional customer service, quality, dependability, availability, innovation, or image, which are more aligned with differentiation strategies.

Question 14

Organizations that pursue a differentiation strategy compete by offering products or services that are differentiated from those of their competitors in some way.

Accepted Answer

A differentiation strategy involves creating products or services that are perceived as unique or superior in some aspect compared to the competition, allowing the organization to compete on factors other than price.

Question 15

A focus strategy occurs when an organization targets a specific, narrow segment of the market and thereby avoids competing with those organizations that target a broader segment of the market.

Accepted Answer

A focus strategy involves concentrating on a narrow market segment and tailoring the business's offerings to the needs of that specific group, thus avoiding direct competition with firms targeting the broader market.

Question 16

Competitive scope refers to offering customers superior value either through a lower price or superior service.

Accepted Answer

Competitive scope actually refers to the breadth of a company's target market, indicating whether the company is focusing on a broad market or targeting a specific niche. Offering customers superior value through lower prices or superior service relates to competitive advantage, not competitive scope.

Question 17

Feedforward controls compare the actual performance of the organization to its planned performance.

Accepted Answer

Feedforward controls are proactive measures taken before a process begins to ensure it meets standards, unlike comparing actual performance to planned performance, which is a characteristic of feedback controls.

Question 18

Feedback controls are designed to identify changes in the external environment or the internal operations of the organization that may affect its ability to fulfill its mission and meet its strategic goals.

Accepted Answer

Feedback controls are primarily focused on evaluating the organization's past performance and ensuring that it meets its previously set standards or goals, rather than identifying changes in the external environment or internal operations.

Question 19

The process by which an organization makes plans and decisions which are focused on its long-run performance is referred to as
A) operational planning.
B) tactical planning.
C) strategic planning.
D) functional planning.
E) contingency planning.

Accepted Answer

Strategic planning involves making long-term decisions and plans that focus on the overall direction and performance of an organization.

Question 20

The CEO of Southwest Airlines, engages in a process that helps him take actions that affects the long-term performance of his company. This process is referred to as
A) operational planning.
B) tactical planning.
C) contingency planning.
D) functional planning.
E) strategic planning.

Accepted Answer

Strategic planning is the process of defining a company's direction and making decisions on allocating its resources to pursue this direction. It involves setting long-term goals and determining the best approach to achieve those goals, which is what a CEO would be engaged in to affect the long-term performance of the company.

Quiz 4: Strategic Management and Planning in a Global Environment