Question 1

Using General Electric's "strategic planning grid," an opportunity rated "medium" in terms of industry attractiveness and "medium" in terms of business strengths would be evaluated as:
A) yellow-borderline.
B) red-for no growth.
C) green-for growth.
D) could be yellow, red, or green-because the grid really doesn't deal with "medium" ratings.

Accepted Answer

According to General Electric's strategic planning grid, an opportunity rated "medium" in both industry attractiveness and business strengths falls in the yellow-borderline category. This indicates that the opportunity requires careful consideration before investing resources, as it may not be as promising as those opportunities in green-for-growth category, but may still have some potential for growth and profitability.

Question 2

General Electric's "strategic planning grid" is an approach for:
A) evaluating possible marketing objectives.
B) selecting target markets.
C) evaluating existing and possible plans.
D) developing new products.
E) developing marketing mixes.

Accepted Answer

The "strategic planning grid" is a tool for evaluating existing and potential business plans by analyzing positions on two dimensions: market attractiveness and business strength. This helps a company to identify which plans should be pursued, which should be reconsidered, and which should be abandoned. It is not specifically designed for selecting target markets or developing marketing mixes, although it can inform those decisions. It is also not focused solely on new product development.

Question 3

The business strengths dimension of the GE grid focuses on:
A) market diversity.
B) the question: Does this product-market plan look like a good idea?
C) the ability of the company to pursue a product-market plan effectively.
D) industry profitability.
E) the social and legal environment.

Accepted Answer

The business strengths dimension of the GE grid is concerned with the ability of the company to pursue a product-market plan effectively. This involves assessing the company's resources, capabilities, and competitive position in the market. Options A, B, D, and E are not directly related to this dimension.

Question 4

General Electric's "strategic planning grid":
A) focuses on market share and market growth rate.
B) ignores some important issues-such as competitive structure and the environmental impact of a plan.
C) requires that all opportunities be judged either "High" or "Low."
D) substitutes quantitative estimates for management judgment.
E) None of these is true.

Accepted Answer

General Electric's strategic planning grid is a sophisticated tool that considers various dimensions beyond just market share and growth rate. It does not ignore important issues like competitive structure or environmental impact. Instead, it incorporates a wide range of factors to provide a comprehensive analysis. The grid does not merely categorize opportunities as "High" or "Low"; it allows for more nuanced assessments. Additionally, it does not substitute quantitative estimates for management judgment but rather complements managerial judgment with quantitative data.

Question 5

With General Electric's strategic planning grid:
A) the industry attractiveness dimension focuses on the ability of the company to pursue a product-market plan effectively.
B) managers must follow an objective, single-factor approach.
C) the business strengths dimension focuses on whether this product-market plan looks like a good idea.
D) managers make three-part judgments about the business strengths and industry attractiveness of all proposed or existing product-market plans.
E) opportunities that fall into the red boxes are the firm's best growth opportunities.

Accepted Answer

The General Electric strategic planning grid requires managers to make three-part judgments about both the business strengths and industry attractiveness of proposed or existing product-market plans. This means that both dimensions are important and evaluated together, and the approach is not a single-factor one. The grid does not categorize opportunities into red boxes but rather places them on a 9-cell matrix based on their scores on the two dimensions. Therefore, choices A, B, and E are incorrect. Choice C is also inaccurate because the business strengths dimension focuses on the internal capabilities of the company rather than the viability of a specific product-market plan.

Question 6

When selecting among possible product-market strategic plans,
A) the total profit approach tends to support plans that will be profitable in the short term even if longer term profits would be higher with another plan.
B) the total profit approach requires estimates of sales, costs, and profits.
C) the total profit approach compares plans that require the same investment.
D) None of these statements is true.

Accepted Answer

The total profit approach requires estimates of sales, costs, and profits, as it aims to compare and select among possible product-market strategic plans based on the long-term profitability potential, not just short-term gains. The approach considers the net present value of cash flows, including the initial investment and future earnings, and seeks to maximize the total profit over the planning horizon. Choice A is incorrect because the total profit approach looks beyond short-term profitability, while choice C is incorrect because it compares plans based on their overall profitability potential, regardless of the investment required.

Question 7

GE's planning grid approach
A) doesn't work because different managers usually come to different conclusions given the subjective evaluations involved.
B) is really the same thing as the total profit approach.
C) overemphasizes short term profitability.
D) is superficial because it considers only size and expected market share, and ignores other possibly important factors.
E) could be adapted easily by another firm with different objectives.

Accepted Answer

The GE planning grid is a flexible tool that can be adapted by different firms to align with their specific objectives and strategic priorities.

Question 8

The _____ dimension of the GE grid helps managers answer the question: Does this product-market plan look like a good idea?
A) business strengths
B) quantitative criteria
C) industry attractiveness
D) relative positioning
E) qualitative criteria

Accepted Answer

The industry attractiveness dimension of the GE grid focuses on evaluating the attractiveness of the market, such as market size and growth potential. It helps managers determine whether a product-market plan is a good idea or not. The other dimensions focus on evaluating the company's strengths and its position in the market, which are important but do not address the question of whether a product-market plan is a good idea.

Question 9

According to the "continuum of environmental sensitivity," which of the following types of products would be most sensitive to environmental changes?
A) Consumer products that are basically a commodity-like gasoline
B) Industrial products
C) Consumer products that are tied to cultural differences-like diet colas
D) Manufacturing products
E) Engineering products

Accepted Answer

Consumer products that are tied to cultural differences, like diet colas, are the most sensitive to environmental changes according to the continuum of environmental sensitivity. This is because these products are tied to specific cultural preferences and behaviors, and any changes in the environment or availability of resources can have a significant impact on their production and availability. Other types of products, such as commodity products like gasoline or industrial products, are less sensitive to environmental changes because they are more driven by market demand and less tied to cultural preferences or behavior.

Question 10

According to the General Electric strategic planning grid, a business that is the strongest in its industry:
A) should still be considered as a "no-growth" prospect unless the industry attractiveness is high.
B) is a good prospect, provided the industry has at least medium attractiveness.
C) should automatically receive a large investment.
D) All of these alternatives about GE's strategic planning grid are true.

Accepted Answer

The General Electric strategic planning grid suggests that even if a business is the strongest in its industry, it should be considered a good prospect only if the industry has at least medium attractiveness. Therefore, option B is the best choice. Options A and C are incorrect as the grid does not mention automatic large investments, and it considers a business's growth potential in relation to the attractiveness of the industry. Option D is incorrect as option A is not entirely true because the grid does not rule out the growth potential of a business in a low attractiveness industry.

Question 11

The "continuum of environmental sensitivity" suggests that:
A) some products are more adaptable to international markets than others.
B) it is extremely risky to sell basic commodities in international markets.
C) industrial products need to be adapted more than consumer products for international markets.
D) All of these statements about the continuum of environmental sensitivity are true.

Accepted Answer

The "continuum of environmental sensitivity" implies that certain products or services are more easily adapted to various international markets than others, reflecting differences in cultural, legal, economic, or physical environments.

Question 12

GE's Planning Grid approach to evaluating proposed and existing plans and businesses:
A) considers how profitable opportunities are likely to be.
B) reflects the corporation's objectives.
C) helps managers see why some ideas are supported and others are not.
D) can use quantitative data but it is basically a qualitative approach.
E) All of these alternatives about GE's Planning Grid are true.

Accepted Answer

All of the alternatives about GE's Planning Grid are true. The Planning Grid approach considers profitability, reflects objectives, helps managers understand decision-making, and can use both quantitative and qualitative data.

Question 13

General Electric's "strategic planning grid":
A) focuses on market share and market growth rate.
B) requires subjective judgments about business strengths and industry attractiveness.
C) requires that all opportunities be judged either "High" or "Low."
D) substitutes quantitative estimates for management judgment.
E) All of these alternatives about GE's strategic planning grid are true.

Accepted Answer

GE's strategic planning grid is based on subjective judgments about business strengths and industry attractiveness. It is a tool used for portfolio analysis, where different business units are evaluated based on their relative market share and market growth rate. The grid divides businesses into four categories: "Stars" (high market share and high market growth rate), "Cash Cows" (high market share and low market growth rate), "Question Marks" (low market share and high market growth rate), and "Dogs" (low market share and low market growth rate). This allows GE to make informed decisions about which businesses to invest in or divest from. However, this process relies heavily on subjective judgment and may not provide accurate quantitative estimates.

Question 14

Using General Electric's "strategic planning grid," an opportunity rated "medium" in terms of industry attractiveness and "high" in terms of business strengths would be evaluated as:
A) yellow-borderline.
B) red-for no growth.
C) green-for growth.
D) could be yellow, red, or green-because the grid suggests that opportunities with medium ratings need more analysis.

Accepted Answer

According to General Electric's strategic planning grid, an opportunity rated as "medium" in terms of industry attractiveness and "high" in terms of business strengths would be evaluated as green-for growth. This suggests that the company should invest in such opportunities and allocate resources to capitalize on them due to their high business strengths and medium industry attractiveness.

Question 15

According to the General Electric strategic planning grid, an opportunity which is low on the "business strengths" dimension but high on the "industry attractiveness" should be:
A) called a strategic business unit.
B) supported if it is an existing business, but probably not supported if it is a new opportunity.
C) immediately supported with large investment.
D) sold off or discontinued.
E) viewed as a "green" (high growth) opportunity.

Accepted Answer

According to the General Electric strategic planning grid, an opportunity which is low on the "business strengths" dimension but high on the "industry attractiveness" is considered a "question mark." This means that it is a new or existing business with potential but has not yet proven its ability to succeed in the market. Therefore, it should be supported if it is an existing business to see if it can become a star, but probably not supported if it is a new opportunity.

Question 16

Which of the following types of products is LEAST sensitive to environmental changes, according to the "continuum of environmental sensitivity"?
A) Industrial products.
B) Commodity-type consumer products.
C) Consumer products linked to cultural variables.
D) "Me-too" products.
E) Fad products.

Accepted Answer

Industrial products are the least sensitive to environmental changes as they are typically used in business-to-business transactions and are less impacted by changes in consumer preferences or cultural variables.

Question 17

According to the "continuum of environmental sensitivity," which of the following types of products are less sensitive to environmental changes?
A) "Faddy" type consumer products
B) Industrial products
C) Basic commodity-type consumer products
D) Consumer products that are linked to cultural variables
E) All of these types of products are equally sensitive to environmental changes.

Accepted Answer

Industrial products are generally less sensitive to environmental changes as they are not directly linked to consumer demand and are produced on a larger scale for industrial use. Basic commodity-type consumer products may also be less sensitive as they are considered essential products for daily living and have a consistent demand. "Faddy" type consumer products and consumer products linked to cultural variables are generally more sensitive to environmental changes as they tend to reflect current trends and preferences.

Question 18

The "total profit" approach to evaluating possible product-market strategic plans:
A) is the best approach to use.
B) cannot be used to compare possible plans unless they are very similar.
C) may support a plan that is not the most profitable in the short run.
D) requires only sales forecasts for the life of possible plans.

Accepted Answer

The total profit approach considers not only short-term profitability but also long-term profitability, taking into account factors such as market growth and competition. Therefore, it may support a plan that is not necessarily the most profitable in the short run but is more sustainable in the long run.

Quiz 3: Evaluating Opportunities in the Changing Marketing Environment

Using General Electric's "strategic planning grid," an opportunity rated "medium" in terms of industry attractiveness and "medium" in terms of business strengths would be evaluated as:

General Electric's "strategic planning grid" is an approach for:

The business strengths dimension of the GE grid focuses on:

General Electric's "strategic planning grid":

With General Electric's strategic planning grid:

When selecting among possible product-market strategic plans,

GE's planning grid approach

The _____ dimension of the GE grid helps managers answer the question: Does this product-market plan look like a good idea?

According to the "continuum of environmental sensitivity," which of the following types of products would be most sensitive to environmental changes?

According to the General Electric strategic planning grid, a business that is the strongest in its industry:

The "continuum of environmental sensitivity" suggests that:

GE's Planning Grid approach to evaluating proposed and existing plans and businesses:

General Electric's "strategic planning grid":

Using General Electric's "strategic planning grid," an opportunity rated "medium" in terms of industry attractiveness and "high" in terms of business strengths would be evaluated as:

According to the General Electric strategic planning grid, an opportunity which is low on the "business strengths" dimension but high on the "industry attractiveness" should be:

Which of the following types of products is LEAST sensitive to environmental changes, according to the "continuum of environmental sensitivity"?

According to the "continuum of environmental sensitivity," which of the following types of products are less sensitive to environmental changes?

The "total profit" approach to evaluating possible product-market strategic plans: