Question 1

A company,such as Church & Dwight,follows the market development strategy of developing new uses and/or markets for current products such as for its successful product: Arm & Hammer brand baking soda.

Accepted Answer

Church & Dwight has followed the market development strategy by developing new uses and markets for its Arm & Hammer baking soda product.

Question 2

In a leveraged buyout,the acquired company,in effect,pays for its own acquisition.

Accepted Answer

In a leveraged buyout, the acquiring company uses a large amount of debt to finance the acquisition of the target company. The debt is typically paid off using the cash flows and assets of the acquired company, meaning that the acquired company is essentially paying for its own acquisition.

Question 3

An example of the use of the leader R&D functional strategy to achieve a differentiation competitive advantage is Nike Inc.

Accepted Answer

Nike Inc. has focused on innovation and technological advancements in its R&D functional strategy, which has helped the company achieve a differentiation competitive advantage by offering unique and superior products to its customers. This has allowed Nike to stay ahead of its competitors and maintain its position as one of the top players in the athletic footwear and apparel industry.

Question 4

Two suppliers are the sole suppliers of two different parts,but they are also backup suppliers for each other's parts in parallel sourcing.

Accepted Answer

This scenario describes parallel sourcing, where two suppliers provide both their own parts and act as backup suppliers for each other's parts. Therefore, the statement is true.

Question 5

A financial strategy examines the financial implications of corporate and business-level strategic options and identifies the best financial course of action.

Accepted Answer

A financial strategy is an integral part of overall corporate and business-level strategic planning, as it considers the financial implications of various options and determines the best financial course of action for achieving strategic objectives.

Question 6

An operations strategy determines how and where a product or service is to be manufactured,the level of vertical integration in the production process,the deployment of physical resources,and relationships with suppliers.

Accepted Answer

An operations strategy plays a crucial role in determining various aspects of the production process, including manufacturing location, level of vertical integration, physical resource deployment, and supplier relationships. Therefore, the given statement is true.

Question 7

Penetration pricing attempts to hasten market development and offers the pioneer the opportunity to use the experience curve to gain market share with a low price and dominate the industry.

Accepted Answer

Penetration pricing is a marketing strategy in which a product is offered at a low price in order to gain market share quickly. This can help to speed up market development and allow the company to use the experience curve to improve their efficiency and lower their costs over time. By dominating the market with a low price, the company can potentially create barriers to entry for competitors and establish a strong position in the industry.

Question 8

Research indicates that the use of work teams leads to decreased quality and productivity as well as lower employee satisfaction and commitment as a result of less accountability.

Accepted Answer

This statement is not entirely accurate. Research shows that the use of work teams can lead to both positive and negative outcomes, depending on various factors such as the type of task, team composition, and leadership style. While some studies have found that work teams can lead to decreased quality and productivity, others have shown that they can improve performance and satisfaction. It is not necessarily true that work teams always result in less accountability. Effective teams often have checks and balances in place to ensure members are accountable for their actions and contribute to the team's goals.

Question 9

The use of the Internet to market goods directly to the customer allows a company to use dynamic pricing.

Accepted Answer

The use of the Internet and other digital platforms allows companies to change their prices in real-time based on supply and demand, customer behavior, and other factors. This is known as dynamic pricing, and it can be easily implemented in online retail environments.

Question 10

The continuous improvement system was developed by Deming.

Accepted Answer

Deming is credited with developing the concept of continuous improvement, also known as the Deming cycle or PDCA cycle.

Question 11

Logistics strategy deals with the flow of products into and out of the manufacturing process.

Accepted Answer

Logistics strategy involves planning, implementing, and controlling the movement of goods and services from the point of origin to the point of consumption. This includes the flow of raw materials and finished products in and out of the manufacturing process.

Question 12

W.Edwards Deming,a well-known management consultant,strongly recommended sole sourcing as the only manageable way to obtain high supplier quality.

Accepted Answer

W.Edwards Deming believed that sole sourcing was the only way to have a strong relationship with a supplier and to achieve high supplier quality. He argued that by reducing the number of suppliers, a company could focus on developing a long-term relationship with a single supplier that would be committed to meeting the company's quality standards. This approach would also enable the company to work closely with the supplier to improve quality over time. Therefore, the statement that Deming strongly recommended sole sourcing as the only manageable way to obtain high supplier quality is true.

Question 13

When Colgate-Palmolive and Unilever take a successful product that they marketed in one part of the world and market it elsewhere,they are following a market development strategy.

Accepted Answer

Market development strategy involves taking an existing product and introducing it to new markets, which is exactly what Colgate-Palmolive and Unilever are doing in this scenario.

Question 14

A product development strategy deals with pricing,selling,and distributing a product.

Accepted Answer

A product development strategy focuses on the process of creating and bringing a new product to market, including research, design, manufacturing, and testing. Pricing, selling, and distributing the product are part of the marketing strategy.

Question 15

When the Kellogg Company changed to a push strategy,they spent more money on consumer advertising designed to build brand awareness so that shoppers will ask for the products.

Accepted Answer

A push strategy involves focusing marketing efforts on the next party in the distribution channel (e.g., retailers or distributors), not on consumer advertising. Consumer advertising to build brand awareness is a characteristic of a pull strategy, where the goal is to create demand among consumers so they request the product from retailers.

Question 16

The orientation of the functional strategy is dictated by its parent business unit's strategy.

Accepted Answer

The functional strategy is developed to support and align with the overall strategy of the parent business unit. Therefore, the orientation of the functional strategy is dictated by the parent business unit's strategy.

Question 17

Equity financing is preferred for unrelated diversification while debt financing is preferred for related diversification.

Accepted Answer

This statement is incorrect. There is no specific preference for equity or debt financing based on whether the diversification is related or unrelated. The choice between equity and debt financing is subjective and based on various factors such as the firm's financial goals, risk appetite, creditworthiness, cost of capital, and so on. Both equity and debt financing can be used for related or unrelated diversification strategies depending on the firm's circumstances.

Question 18

Each business unit has its own set of departments,each with its own functional strategy.

Accepted Answer

Each department within a business unit has its own set of objectives and functional strategies that align with the overall goals and objectives of the business unit. This helps to ensure that each department is working towards the same end goal, while also allowing for specialization and focus within each area of the business.

Question 19

The automobile industry is currently experimenting with the strategy of mass customization in which pre-assembled sub-assemblies are delivered as they are needed to a company's assembly line workers.

Accepted Answer

The answer of The automobile industry is currently experimenting with...

Question 20

Using a market development strategy,a company can capture a larger share of an existing market for current products or develop new markets for current products.

Accepted Answer

This statement is true. Market development strategy involves expanding the reach of existing products or entering new markets with existing products. It is one of the four growth strategies identified by Ansoff's Matrix.

Quiz 8: Strategy Formulation: Functional Strategy and Strategic Choice