Question 1

GE's strategic planning grid considers two dimensions -- industry attractiveness and business strengths -- to identify opportunities that may be growth, borderline, or no growth.

Accepted Answer

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

Question 2

A strategic business unit (SBU) within a larger firm is usually treated as a separate profit center.

Accepted Answer

A strategic business unit (SBU) is an organizational unit (within a larger company) which is treated as a separate profit center.

Question 3

According to the text, which of the following is NOT a basic guideline for setting a firm's objectives?
A) Engaging in specific activities that will perform an economically useful function.
B) Identifying its current and prospective competitors.
C) Earning enough profit to survive.
D) Developing an organization to carry on the business and implement its strategies.
E) Ensuring that the firm's activities are socially useful.

Accepted Answer

The three objectives which provide a useful starting point for setting a firm's objectives are: a business should, engage in specific activities that will perform a socially and economically useful function; develop an organization to carry on the business and implement its strategies; and earn enough profit to survive.

Question 4

The profit potentials of alternative strategic plans can be evaluated at the same time only if the plans are very similar.

Accepted Answer

The profit potentials of alternative strategic plans can be evaluated at the same time even when the plans are very different.

Question 5

The direct market environment
A) includes customers, the company, and competitors.
B) consists of variables that can be controlled.
C) is broader in scope than the external environment.
D) includes economic and technological environments.
E) is made up of the political, legal, and social environments.

Accepted Answer

The direct market environment includes customers, the company, and competitors.

Question 6

The "continuum of environmental sensitivity" suggests that industrial products are more sensitive to the cultural environments in which they are placed than high-style consumer products.

Accepted Answer

The "continuum of environmental sensitivity" suggests that industrial products are more insensitive to the cultural environments in which they are placed than high-style consumer products.

Question 7

Marketing managers should remember that there are many variables in the ____________ that affect strategy planning.
A) economic and technological environments
B) competitive environment
C) cultural and social environment
D) political and legal environments
E) all of these environments have variables that affect strategy planning

Accepted Answer

Variables in the economic, technological, competitive, cultural, social, political and legal environments affect strategy planning.

Question 8

Using the General Electric strategic planning grid, an opportunity rated "medium" in terms of both industry attractiveness and business strengths is an opportunity that the firm should always avoid.

Accepted Answer

Yellow businesses are borderline cases, where opportunities are rated "medium" in terms of both industry attractiveness and business strengths. GE may continue to support an existing yellow business but will probably reject a proposal for a new one.

Question 9

All of the following are part of the direct market environment EXCEPT:
A) customers.
B) competitors.
C) the company itself.
D) the technological environment.

Accepted Answer

The direct market environment includes customers, the company, and competitors.

Question 10

Most industrial products tend to be near the "insensitive" end of the continuum of environmental sensitivity.

Accepted Answer

Most industrial products are near the insensitive end of the continuum of environmental sensitivity.

Question 11

In the total profit approach, management forecasts potential sales and costs during the life of the plan to estimate likely profitability.

Accepted Answer

The total profit approach can help evaluate possible plans by looking at the potential sales and costs during the life of the plan.

Question 12

In the short run, a marketing manager usually cannot control:
A) the competitive environment.
B) the cultural environment.
C) the legal environment.
D) the economic environment.
E) Any of these environments are uncontrollable in the short run.

Accepted Answer

Variables in the economic, competitive, cultural and legal environments affect strategy planning and since managers can't alter these variables, they are considered uncontrollable.

Question 13

SBUs are small businesses that try to compete with major divisions of larger multiproduct companies.

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 14

The General Electric "strategic planning grid" forces company managers to make three-part judgments (high, medium, and low) about the business strengths and industry attractiveness of all proposed or existing product-market plans.

Accepted Answer

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

Question 15

The General Electric "strategic planning grid" relies on subjective judgments about business strengths and industry attractiveness.

Accepted Answer

GE's evaluation method is a subjective, multiple-factor approach.

Question 16

The GE "stop-light" evaluation method is a very objective approach because GE feels there are too many possible errors if it tries to use subjective criteria for judging "attractiveness" or "strength."

Accepted Answer

GE's "stoplight" evaluation method is a subjective, multiple-factor approach.

Question 17

Sustainability, as a screening criteria, supports the idea of focusing completely on the company's present needs.

Accepted Answer

Sustainability supports the idea that it's important to meet present needs without compromising the ability of future generations to meet their own needs.

Question 18

If the risks of getting into international marketing are difficult to evaluate, it usually is best to start with a joint venture.

Accepted Answer

If the risks of an international opportunity are hard to judge, it is wise to look first for opportunities that involve exporting.

Question 19

Opportunities which fall into the red boxes in the General Electric "strategic planning grid" are growth opportunities.

Accepted Answer

Opportunities which fall the red boxes in the lower right-hand corner of the grid suggest a no-growth policy.

Question 20

Forecasts of the probable results of implementing whole strategic plans are needed to apply quantitative screening criteria.

Accepted Answer

Forecasts of the probable results of implementing a marketing strategy to apply the quantitative part of the screening criteria is needed because only implemented plans generate sales, profits, and return on investment.

Quiz 3: Evaluating Opportunities in the Changing Marketing Environment