Question 1

White Leo Autos manufactures and markets four different cars: Leo Sport,Leo Prestige,Leo Spark,and Leo Ease.These four product variants are operated as individual business units.While the product leaders of Leo Sport,Leo Prestige,and Leo Spark have adopted a differentiation strategy to attract the niche market: the product leader of Leo Ease follows a cost-leadership strategy to suit the mass market.This decision of the product leader of Leo Ease can be ideally categorized as a _____ strategy.

Accepted Answer

This decision of the product leader of Leo Ease can be ideally categorized as a business strategy. General managers in strategic business units must answer business strategy questions relating to how to compete in order to achieve superior performance. Within the guidelines received from corporate headquarters, they formulate an appropriate generic business strategy (cost-leadership, differentiation, or integration) in their quest for competitive advantage.

Question 2

Which of the following strategies best illustrates a functional strategy?

Accepted Answer

The production manager at the apparel division of a large conglomerate deciding that the department will hire contract workers for three months to meet the temporary demand best illustrates a functional strategy. Within each strategic business unit are various business functions: accounting, finance, human resources, product development, operations, manufacturing, marketing, and customer service. Each functional manager is responsible for decisions and actions within a single functional area.

Question 3

The production department at Coral Cements that is a subsidiary of the large conglomerate Five East Corp.has decided to adopt the FIFO (first in,first out)method of inventory to dispatch its cement bags.Which of the following strategies does this scenario best illustrate?

Accepted Answer

The production department of Coral Cements has decided to implement a functional strategy. Within each strategic business unit are various business functions: accounting, finance, human resources, product development, operations, manufacturing, marketing, and customer service. Each functional manager is responsible for decisions and actions within a single functional area.

Question 4

Green Rabbit Products Inc.(GRP)is a large conglomerate.The human resources department of its telecom division has decided to reduce its employee turnover by encouraging internal promotions.Which of the following strategies does this scenario best illustrate?

Accepted Answer

The human resource department of Green Rabbit Products telecom division has decided to implement a functional strategy. Within each strategic business unit are various business functions: accounting, finance, human resources, product development, operations, manufacturing, marketing, and customer service. Each functional manager is responsible for decisions and actions within a single functional area.

Question 5

In the top-down strategic planning approach,all strategic intelligence and decision-making responsibilities rest primarily on the

Accepted Answer

Top-down strategic planning is a rational, top-down process through which executives attempt to program future success. In this approach, all strategic intelligence and decision-making responsibilities are concentrated in the office of the CEO.

Question 6

Strategies developed at the departmental level,such as the accounting,human resources,production,and marketing departments,within a strategic business unit are referred to as _____ strategies.

Accepted Answer

Within each strategic business unit are various business functions: accounting, finance, human resources, product development, operations, manufacturing, marketing, and customer service. Each functional manager is responsible for decisions and actions within a single functional area.

Question 7

Which of the following strategies best illustrates a generic business strategy?

Accepted Answer

A decision to niche market the jewelry sold by a company while the apparel division under the same company sells its products through mass marketing is an example of a generic business strategy. Business strategy occurs within strategic business units, or SBUs, the stand-alone divisions of a larger conglomerate, each with its own profit-and-loss responsibility. Within the guidelines received from corporate headquarters, they formulate an appropriate generic business strategy (cost-leadership, differentiation, or integration) in their quest for competitive advantage.

Question 8

Who among the following is responsible for making business strategies in a large conglomerate?

Accepted Answer

General managers in strategic business units (SBUs) must answer business strategy questions relating to how to compete in order to achieve superior performance.

Question 9

_____ are primarily responsible for decisions and actions within their respective departments like finance,human resources,marketing,and production in a strategic business unit.

Accepted Answer

Within each strategic business unit are various business functions: accounting, finance, human resources, product development, operations, manufacturing, marketing, and customer service. Each functional manager is responsible for decisions and actions within a single functional area.

Question 10

Blue Billion Inc.is a large company that sells a variety of products such as cosmetics,jewelry,frozen foods,navigation electronics,and airplanes.Apart from this,the company also has a strong presence in the service industry through its chain of dance studios,casinos,and nightclubs.Each of its product divisions operates as an individual business and is responsible for its own profits and losses.Thus,these product divisions under Blue Billion can be referred to as

Accepted Answer

These product divisions under Blue Billion can be referred to as strategic business units (SBUs). Business strategy occurs within strategic business units, the stand-alone divisions of a larger conglomerate, each with its own profit-and-loss responsibility. General managers in SBUs must answer business strategy questions relating to how to compete in order to achieve superior performance.

Question 11

_____ is best described as a rational process in which executives at a company's headquarters take primary responsibility to program future success of the company they lead.

Accepted Answer

Top-down strategic planning is a rational, top-down process through which executives attempt to program future success. In this approach, all strategic intelligence and decision-making responsibilities are concentrated in the office of the CEO.

Question 12

T & R Autos Inc.is a large conglomerate that operates in 12 different countries.The corporate executives at the headquarters have decided that the company's objective for the next two years will be to increase its customer equity.Based on this guideline received from the top management team,the product leader of the home appliances division has decided to adopt a cost-leadership strategy in all his 12 units.Thus,the decision made by the product leader best illustrates a _______ strategy.

Accepted Answer

The given decision made by the product leader best illustrates a business strategy. General managers in strategic business units must answer business strategy questions relating to how to compete in order to achieve superior performance. Within the guidelines received from corporate headquarters, they formulate an appropriate generic business strategy (cost-leadership, differentiation, or integration) in their quest for competitive advantage.

Question 13

The regional head for Creative Design Inc.in Boratania has decided to sell the company's products directly through company-owned stores because the distribution system in the market is primitive.In six other markets,however,the company will continue to operate through a franchise system.Thus,this decision made by the regional head at Boratania will be considered as a _____ strategy.

Accepted Answer

The decision made by the regional head at Boratania will be considered as a business strategy. General managers in strategic business units must answer business strategy questions relating to how to compete in order to achieve superior performance. Within the guidelines received from corporate headquarters, they formulate an appropriate generic business strategy (cost-leadership, differentiation, or integration) in their quest for competitive advantage.

Question 14

How are the two approaches,strategic planning and scenario planning,different from the strategy-as-planned-emergence approach?

Accepted Answer

Strategic planning was the first framework, before scenario planning was introduced, and strategy as a planned emergence model is the most recent addition. The first two are relatively formal, "rational" top-down planning approaches. Although the third approach also begins with a strategic plan, it is a less formal and less stylized approach to the development of strategy.

Question 15

Which of the following statements is true of top-down strategic planning?

Accepted Answer

In top-down strategic planning, the formulation of strategy is separate from implementation, and thinking about strategy is separate from doing it.

Question 16

A traditional top-down strategic planning process typically begins with

Accepted Answer

In a traditional top-down strategic planning process, strategic planners first provide careful analyses of internal and external data and apply it to all quantifiable areas: prices, costs, margins, market demand, head count, and production runs. Based on a careful analysis of these data, top managers reconfirm or adjust the company's vision, mission, and values before formulating corporate, business, and functional strategies.

Question 17

Which of the following functions do the general managers in strategic business units primarily perform?

Accepted Answer

General managers in strategic business units must answer business strategy questions relating to how to compete in order to achieve superior performance. Within the guidelines received from corporate headquarters, they formulate an appropriate generic business strategy (cost-leadership, differentiation, or integration) in their quest for competitive advantage.

Question 18

To implement specific business strategies,general managers of strategic business units rely on

Accepted Answer

To implement specific business strategies, regional and product leaders (general managers) rely on functional managers, who are responsible for a particular business function such as bottling, supply chain management, marketing, retail, or customer service.

Question 19

Which of the following happens during the analysis stage of scenario planning?

Accepted Answer

In the analysis stage, managers brainstorm to identify possible future scenarios.

Question 20

A company's strategic business unit

Accepted Answer

Business strategy occurs within strategic business units, or SBUs, the stand-alone divisions of a larger conglomerate, each with its own profit-and-loss responsibility.

Quiz 2: Strategic Leadership: Managing the Strategy Process