Question 1

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 suggests that some products are more adaptable to international markets than others.

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

General Electric's (GE) strategic planning grid forces company managers to make three-part judgments about the business strengths and industry attractiveness of all proposed or existing product-market plans.

Question 3

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

GE feels opportunities that fall into the green boxes of the grid are its best growth opportunities.

Question 4

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

General Electric's (GE) strategic planning grid forces company managers to make three-part judgments about the business strengths and industry attractiveness of all proposed or existing product-market plans. It uses quantitative data but is basically a qualitative approach that uses multiple factors.

Question 5

A marketing manager in a large corporation wrote the company's president a memo in which she said: "The performance of our SBU has improved." An "SBU" is a:
A) struggling business unit.
B) small business unit.
C) selective branding unit.
D) strategic business unit.
E) secondary bidding unit.

Accepted Answer

A strategic business unit (SBU) is an organizational unit (within a larger company) that focuses on some product-markets and is treated as a separate profit center.

Question 6

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

In a General Electric's "strategic planning grid," yellow businesses are borderline cases wherein opportunities are rated "medium".

Question 7

Organizational units within a larger company which focus their efforts on selected product-markets and are treated as separate profit centers are called:
A) portfolios.
B) strategic business units.
C) BTUs.
D) functional departments.
E) basing points.

Accepted Answer

A strategic business unit (SBU) is an organizational unit (within a larger company) that focuses on some product-markets and is treated as a separate profit center.

Question 8

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

General Electric's (GE) strategic planning grid forces company managers to make three-part judgments about the business strengths and industry attractiveness.

Question 9

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

GE's planning grid approach could be adapted by another firm which might modify the evaluation to emphasize other screening criteria depending on its objectives and the type of product-market plans it is considering.

Question 10

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 helps managers answer the question: Does this product-market plan look like a good idea?

Question 11

Organizational units (within a larger company) which focus their efforts on selected product-markets and are treated as separate profit centers are called:
A) marketing departments.
B) SPMs.
C) functional departments.
D) strategic business units.
E) BTUs.

Accepted Answer

A strategic business unit (SBU) is an organizational unit (within a larger company) that focuses on some product-markets and is treated as a separate profit center.

Question 12

Which of the following statements concerning strategic business units (SBUs) is NOT TRUE?
A) SBUs are organizational units within a larger company.
B) SBUs are treated as separate profit centers.
C) SBUs focus on some product-markets.
D) By forming SBUs, a company acknowledges its similar business lines.
E) SBUs that produce only average profits should be allowed to generate profits to support SBUs with better growth prospects.

Accepted Answer

By forming SBUs, a company formally acknowledges its very different activities.

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 evaluation method is a subjective, multiple-factor approach.

Question 14

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 focuses on the ability of the company to pursue a product-market plan effectively.

Question 15

Strategic business units:
A) Are not treated as separate profit centers.
B) Are organizational units within a larger company.
C) Should receive an equal amount of attention and resources.
D) Should never be dropped or sold.

Accepted Answer

A strategic business unit (SBU) is an organizational unit within a larger company.

Question 16

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 (GE) strategic planning grid forces company managers to make three-part judgments about the business strengths and industry attractiveness and focuses on the ability of the company to pursue a product-market plan effectively. It is a subjective, multiple-factor approach.

Question 17

Identify the incorrect statement pertaining to multiproduct firms.
A) They have a more difficult strategic planning job than firms with only a few products or product lines.
B) They have to develop strategic plans for very different businesses.
C) They have to balance plans and resources so the whole company reaches its objectives.
D) They have to get needed resources without milking some businesses and eliminating others.
E) They may form strategic business units.

Accepted Answer

Multiproduct firms must approve plans that make sense for the whole company, even if it means getting needed resources by milking some businesses and eliminating others.

Question 18

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

When an opportunity is low on the business strengths dimension but high on the industry attractiveness, GE may continue to support an existing business but will probably reject a proposal for a new one.

Question 19

The Tennis Products Group is an organizational unit within Sporting Goods for America Company (SGA) that focuses on the design, production, marketing, and sales of tennis balls, tennis racquets, and other tennis-related products. Tennis Products Group is a ____ for SGA.
A) functional unit
B) strategic alliance partner
C) portfolio group
D) franchise unit
E) strategic business unit

Accepted Answer

A strategic business unit (SBU) is an organizational unit (within a larger company) that focuses on some product-markets and is treated as a separate profit center.

Question 20

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

General Electric's strategic planning grid shows that a business that is the strongest in its industry is usually a good prospect especially if its industry has at least medium attractiveness.

Quiz 3: Evaluating Opportunities in the Changing Marketing Environment

The "continuum of environmental sensitivity" suggests that:

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

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:

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

A marketing manager in a large corporation wrote the company's president a memo in which she said: "The performance of our SBU has improved." An "SBU" is a:

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:

Organizational units within a larger company which focus their efforts on selected product-markets and are treated as separate profit centers are called:

With General Electric's strategic planning grid:

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?

Organizational units (within a larger company) which focus their efforts on selected product-markets and are treated as separate profit centers are called:

Which of the following statements concerning strategic business units (SBUs) is NOT TRUE?

General Electric's "strategic planning grid":

The business strengths dimension of the GE grid focuses on:

Strategic business units:

General Electric's "strategic planning grid":

Identify the incorrect statement pertaining to multiproduct firms.

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:

The Tennis Products Group is an organizational unit within Sporting Goods for America Company (SGA) that focuses on the design, production, marketing, and sales of tennis balls, tennis racquets, and other tennis-related products. Tennis Products Group is a ____ for SGA.

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