Question 1

A__________is the positioning strategy of using cost leadership or differentiation to produce a specialized product or service for a limited, specially targeted group of customers in a particular geographic region or market segment.

Accepted Answer

The described positioning strategy is commonly known as the focus strategy, which involves targeting a narrow segment of the market with a specialized product or service. The focus strategy can be based on either cost leadership or differentiation, but the key aspect is the narrow market focus. The retrenchment strategy involves a company scaling back or restructuring its operations, the growth strategy involves expanding a company's operations, and the portfolio strategy involves managing a company's portfolio of businesses or products.

Question 2

Keplem has a business unit in the insurance sector. The insurance sector is a slow-growing industry, and Keplem does not have a large market share in the industry. In the context of the BCG matrix, which of the following categories of SBUs best describes Keplem's business unit?

Accepted Answer

The insurance sector is a slow-growing industry, and Keplem does not have a large market share in the industry. This indicates that the business unit is not a star or cash cow. Additionally, the lack of market share suggests that the business unit is not a question mark, as question marks have the potential for growth and market share. Therefore, the best category to describe Keplem's business unit is dogs, which are SBUs with a low market share in a low-growth industry.

Question 3

A(n) _____ is a countermove, prompted by a rival's attack, that is designed to defend or improve a company's market share or profit.

Accepted Answer

A response is the best choice as it directly relates to a countermove that is prompted by a rival's attack. Option B (attack) is incorrect as it does not align with the question prompt, and options C (recovery) and D (acquisition) may not always be the best approach to defend or improve a company's market share or profit.

Question 4

Which of the following statements is true of analyzers?

Accepted Answer

Analyzers are a blend of defender and prospector strategies, which means they have a stable core business with limited innovation, yet they also seek to expand and diversify by exploring new markets and products. They balance between avoiding risks associated with the defender strategy and being able to adapt to changes in the external environment like the prospector strategy.

Question 5

Which of the following is the last step of a strategy-making process?

Accepted Answer

The answer of Which of the following is the last...

Question 6

Brenden Industries has five strategic business units (SBUs)-petroleum extraction, groceries, jewelry, telecommunication, and oil clothing. The petroleum extraction unit is costing the company a huge amount of money. It has not earned any profit so far nor will it earn any profit in the future as the oil fields are diminishing and the company has a small share in this market. In the context of the BCG matrix, which of the following categories of SBUs best describes the petroleum extraction unit?

Accepted Answer

The petroleum extraction unit is not generating any profit for the company and has little potential for growth in the future, making it a "dog" SBU in the BCG matrix, which is a unit with low market share and low market growth.

Question 7

Spade and Marcher Corp. manufactures and sells toy guns. These toy guns are a perfect imitation of real weapons. Inspired by Spade and Marcher's success, Hudy & Sons, an arms manufacturer in Korowlla, starts to manufacture toy guns too. Which of the following adaptive strategies is used by Hudy & Sons?

Accepted Answer

The answer of Spade and Marcher Corp. manufactures and sells...

Question 8

Bob's Assembly is a hardware manufacturer. It specializes in builders' hardware for doors, cabinets, windows, and bathrooms. Bob's Assembly products are economical and more durable than 95% of its competitors' products. This scenario illustrates the concept of _____.

Accepted Answer

Bob's Assembly has a distinctive competence in manufacturing builders' hardware that is more durable than 95% of its competitors' products, which sets it apart from its competitors.

Question 9

Maymart Inc. sells its products at the lowest prices in the industry, and it believes that this is the best way to stay ahead of its competition. It has also not compromised on the quality of its products as Maymart's suppliers and vendors sell best quality raw materials at the lowest prices. In the context of Porter's positioning strategies, which of the following strategies has been adopted by Maymart?

Accepted Answer

Maymart has adopted the cost leadership strategy by offering its products at the lowest prices in the industry while maintaining the quality of its products. This helps the company stay ahead of its competition and attract price-sensitive customers.

Question 10

In the context of Porter's five industry forces, the threat of new entrants can be defined as

Accepted Answer

The threat of new entrants refers to the degree to which barriers to entry exist in an industry, and how easy or difficult it is for new companies to enter and compete in that industry. Factors that can impact this threat include economies of scale, brand recognition, access to distribution channels, regulatory barriers, and others.

Question 11

SweetCream is an ice cream manufacturer. It sells Guilt-Free, a zero-calorie ice cream, which competes with FlavorBell's MooSweet, a low-calorie ice cream. FlavorBell reduces MooSweet's prices to match Guilt-Free's prices. Identify the strategic move that is most likely being implemented by FlavorBell in this scenario.

Accepted Answer

By reducing the prices of MooSweet to match Guilt-Free, FlavorBell is implementing an attack strategy. This is because they are directly targeting SweetCream's product with the aim of gaining an advantage in the market.

Question 12

BoundStar and ClipKlik are two of the biggest companies in the smartphone industry. When BoundStar launched a new ultra-slim smart phone, ClipKlik also shortly launched a super-sleek smartphone. Phones launched by both the companies are similar in quality and build. ClipKlik will be able to remain competitive in the market though BoundStar launched its phone before ClipKlik. Which of the following strategies was used by ClipKlik to defend its market share?

Accepted Answer

ClipKlik used a response strategy by launching a similar ultra-sleek smartphone after BoundStar had launched theirs. This allowed them to remain competitive in the market and defend their market share.

Question 13

Ziff Corp. was a leading electronics firm for about three decades. As new competitors entered the industry, Ziff Corp's market share dropped. The managers at Ziff Corp. refuse to change any of their strategies, as they believe that their existing strategies will get them back to becoming the market leaders as they did in the past. This scenario is an example of _____.

Accepted Answer

This scenario exemplifies competitive inertia, which is when a company fails to adapt and continues with their existing strategies despite changes in the industry or market. The managers at Ziff Corp. are refusing to change their strategies despite losing market share, which demonstrates a lack of adaptability and a resistance to change.

Question 14

Serrano, a clothing and apparel company, suffered major losses when one of its warehouses was destroyed in a fire mishap. In an attempt to make up for these losses, it had to sell one of its product lines to a rival company. Which of the following grand strategies was used by Serrano in this scenario?

Accepted Answer

Serrano used the retrenchment strategy, which involves cutting back on a company's operations or product lines in order to improve its overall performance and profitability. By selling one of its product lines to a rival company, Serrano was able to reduce its losses and focus on its core business operations. A growth strategy involves expanding a company's operations or product lines, an acquisition strategy involves buying out other companies, and a stability strategy involves maintaining the status quo and not making significant changes to a company's operations or product offerings.

Question 15

Tots County manufactures clothing and apparel exclusively for children in the age group of one to six years. In this scenario, the company is most likely using a(n) _____.

Accepted Answer

Tots County is using a focus strategy by concentrating on a specific market segment (children between one to six years old).

Question 16

PeoplePapers, a greeting cards manufacturing company, has retail stores in most parts of the country. It hires its employees from the best universities around the world and uses the best equipment in its manufacturing processes. In this scenario, the organization's processes, its employees, and its equipment are examples of its:

Accepted Answer

Resources refer to the inputs used by an organization to create and deliver its products or services. In this scenario, PeoplePapers' employees and equipment are resources used in its manufacturing processes.

Question 17

Jameson&Dawson has four strategic business units (SBUs)-agriculture, auto, advertising, and accommodations. The agriculture industry is a rapidly growing industry, and Jameson&Dawson's SBU holds majority of the market share in the industry. Hence, the company earns large profits from its agriculture unit and invests majority of its funds in it. In the context of the BCG matrix, which of the following categories of SBUs best describes the agriculture unit?

Accepted Answer

The agriculture unit is described as having a high market share in a rapidly growing industry, which fits the definition of a "Star" in the BCG matrix.

Question 18

Which of the following best defines cash cows in the BCG matrix?

Accepted Answer

Cash cows are companies that have a large market share in a slow-growing market. They generate high profits and cash flow, but have limited opportunities for growth and innovation. The BCG matrix categorizes businesses into four quadrants based on their market growth rate and relative market share, with cash cows being in the quadrant of high relative market share and low market growth rate.

Question 19

__________refers to the strategic actions taken after retrenchment to return to a growth strategy.

Accepted Answer

The term "recovery" specifically refers to the strategic actions taken after a period of retrenchment or decline with the goal of returning to a growth strategy. Option A, acquisition, refers to the process of one company purchasing another, which may or may not lead to growth. Option B, stability, is a strategy that focuses on maintaining the current level of operations and avoiding any major changes, which is not necessarily aimed at growth. Option D, normalization, is not a commonly used term in strategic management and does not specifically refer to an action after retrenchment.

Question 20

Which of the following best defines cost leadership?

Accepted Answer

Cost leadership is a positioning strategy where a company produces a product or service with an acceptable level of quality at lower production costs than competitors so that the firm can offer the product or service at the lowest price in the industry. This strategy aims to appeal to price-sensitive customers who prioritize low prices above other product features.

Quiz 6: Organizational Strategy