Deck 7: Strategic Planning: Strategies, Tactics, and Competitive Dynamics

Question 1

A management guideline that advises managers to commit funds for planning only if in the foreseeable future they can anticipate a return on planning expenses as a result of the long-range planning analysis is known as the ________.

A) strategic planning
B) the commitment principle
C) organizational planning
D) tactical planning
E) the principle of the objective

Answer 1

B

Question 2

The set of forces and factors that positively or negatively impact an organization's ability to compete within its marketplace are known as the management ________.

A) analysis
B) realm of decisions
C) environment
D) force field
E) scope

Answer 2

C

Question 3

In general, the strategic management process is thought to consist of sequential and continuing steps.

Answer 3

True

Question 4

Strategic management is the process of ensuring an organization possesses and benefits from the use of an appropriate organizational strategy.

Question 5

Axis Cars is an automobile company based out of Delaware. They need to follow an organizational strategy to regain the market share they recently lost to Toyota. Which of the following strategies will accomplish this objective?

A) They should increase people efficiency.
B) They should resize and downsize present models.
C) They should increase machine efficiency.
D) They should modernize the car batteries.
E) They should merge with another top-selling automobile brand.

Question 6

In strategic planning, managers consider the organization as a total unit and ask themselves what must be done in the long term, which is usually ________.

A) three to five years into the future
B) in the coming year
C) one to two years into the future
D) five to ten years from now
E) five to twenty years from now

Question 7

Strategy is the end result of strategic planning.

Question 8

The introduction of new cellular and other electronic technology often results in increased demand for the new products during the holiday season. Which environmental force is impacted the most in this situation?

A) Economic
B) Social
C) Political-Legal
D) Weather
E) Global

Question 9

Long-range planning that focuses on the organization as a whole is ________.

A) operational planning
B) organizational planning
C) strategic planning
D) tactical planning
E) managerial planning

Question 10

A broad and general plan developed to reach long-term organizational objectives is a(n) ________.

A) tactic
B) scenario
C) operational plan
D) organizational goal
E) strategy

Question 11

Pasta Central, a fast-food chain, has realized that if it wants to beat its leading competitor and improve market share, it must improve its productivity. Which of the following strategies is most likely to help Pasta Central to achieve this objective?

A) reassess their market
B) downsize
C) decrease machine efficiency
D) develop valuable real estate holdings
E) increase people efficiency

Question 12

The first step of strategic management is designed to ________.

A) establish an organizational direction
B) formulate strategy
C) study the organizational environment
D) advise managers to commit funds for planning
E) control the environment

Question 13

Briefly discuss the strategic management process.

Question 14

Which of the following is true about strategy?

A) Strategy is a general plan developed to reach short-term goals without any planning.
B) Organizational strategy focuses only on the marketing and financial aspects of a business.
C) Smaller organizations are more precise than large organizations in developing organizational strategy in order to meet their goals sooner.
D) Strategy is actually the end result of strategic planning.
E) Research and development are not a part of an organization's strategy.

Question 15

The last step in the strategic management process is ________.

A) establishment of an organizational direction
B) environmental analysis
C) strategy formulation
D) strategy implementation
E) strategic control

Question 16

The level of an organization's external environment that contains components having broad long-term implications for managing the organization is the ________.

A) general environment
B) financial environment
C) demographic environment
D) internal environment
E) operating environment

Question 17

The ________ component is that part of the general environment that indicates how resources are being distributed and used within the environment.

A) social
B) economic
C) political
D) international
E) legal

Question 18

The relative degrees of worth that society places on the way in which it exists and functions are ________.

A) political ideologies
B) economic conditions
C) demographics
D) social values
E) environmental factors

Question 19

________ is the process of ensuring that an organization possesses and benefits from the use of an appropriate organizational strategy.

A) Strategic planning
B) Strategy visualization
C) Decision making
D) Strategic management
E) Integrated business planning

Question 20

Which of the following is true about social values?

A) Social values are the statistical characteristics of a population.
B) It includes changes in numbers of people among various population segments.
C) Changes in social values can influence the reception of goods and services within the organization's environment.
D) Social values are helpful for developing a strategy aimed at recruiting new employees to fill positions within an organization.
E) The relative degrees of worth that society places on the ways in which it functions can change dramatically over time.

Question 21

________ is the purpose for which - and the reason why - an organization exists.

A) Organizational objective
B) Organizational strategy
C) Organizational mission
D) Organizational policy
E) Organizational rule

Question 22

Which level of the organization's environment exists inside the organization and normally has immediate and specific implications for managing the organization?

A) the general environment
B) the internal environment
C) the operating environment
D) the external environment
E) the political environment

Question 23

Bristol Jones is the owner of a women's shoe store in Wainscot, PA. Her store has been extremely successful selling high-end shoes to the adult market in Wainscot. Management is looking to grow revenues and is considering offering men's shoes as well. What is your advice to Ms. Jones that she consider before taking on this new product line?

Question 24

"In what kind of environment does the organization now exist?" is one of the four basic questions required for critical question analysis.

Question 25

George's Quick Stop is planning to compete using a cost-leadership strategy. Doing this means George's will have what kind of products in their convenience stores?

A) basic, no frills product offerings
B) highly unique product offerings
C) specialty shopping bags
D) high-end products
E) live music on the weekends

Question 26

The level of an organization's external environment that contains components normally having relatively specific and immediate implications for managing the organization is the ________.

A) demographic environment
B) general environment
C) industry environment
D) international environment
E) internal environment

Question 27

Which of the following statements accurately reflects the relationship between the mission and the objectives?

A) The mission statement reflects and flows naturally from the objectives.
B) The objectives reflect and flow naturally from the mission.
C) There is no direct relationship between the mission and the objectives.
D) The mission statement stands alone and has no influence on the objectives.
E) The mission and the objectives influence each other.

Question 28

The general environment of an organization's external environment contains international, labor, customer, competitor, and supplier components.

Question 29

The answer to which of the following critical questions indicates whether the organization is progressing satisfactorily or not?

A) What are the purposes and objectives of the organization?
B) Where is the organization presently going?
C) In what kind of environment does the organization now exist?
D) What can be done to better achieve organizational goals in the future?
E) What does our SWOT analysis show?

Question 30

Managers only perform environmental analysis to help them understand what is happening outside their organization.

Question 31

Jewel Delight is planning to compete using a differentiation strategy. Doing this means they will have what kind of products in their jewelry stores?

A) basic, no frills jewelry offerings
B) highly unique jewelry offerings
C) one line of jewelry
D) comparable jewelry their competitors offer
E) easily imitable jewelry offerings

Question 32

According to Porter, ________ refers to the power that customers have over the firms operating in an industry.

A) the threat of new entrants
B) buyer power
C) supplier power
D) the threat of substitute products
E) intensity of rivalry

Question 33

________ is the process of determining appropriate courses of action for achieving organizational objectives and thereby accomplishing organizational purpose.

A) Establishment of organizational direction
B) Strategy implementation
C) Strategy control
D) Strategy formulation
E) Environmental analysis

Question 34

Discuss the value of management conducting an Environmental Analysis.

Question 35

Which of the following components includes new approaches to producing goods and services?

A) the technology component
B) the political component
C) the labor component
D) the legal component
E) the productive component

Question 36

The document that is written by management and describes and explains what the purpose for which the organization exists is the ________.

A) mission statement
B) strategic plan
C) operating plan
D) annual budget
E) vision statement

Question 37

Porter's model emphasizes ________.

A) strengths, weaknesses, opportunities, and threats
B) stars, dogs, cash cows, and question marks
C) competitive forces in an industry
D) business strength and industry attractiveness
E) environmental analysis

Question 38

According to Porter, threat of new entrants refers to ________.

A) the power that customers have over the firms
B) the power that suppliers have over the firms
C) the extent to which customers may use services from another industry instead of the focal industry
D) the ability of new firms to enter an industry
E) the intensity of the rules of an organization

Question 39

Lobbying efforts by interest groups and progress on the passage of laws are examples of the ________ component of the general environment.

A) social
B) political
C) legal
D) technological
E) international

Question 40

A summer storm just passed through the town of Chester Oaks and caused much roofing and siding damage to homes. This storm offers a/an ________ to roofing and siding contractors.

A) strength
B) weakness
C) opportunity
D) threat
E) force fulfillment

Question 41

In an attempt to offer better deals to customers and thereby increase its market share, Dun's Burgers integrates backward to buy out its main supplier of beef. Dun's Burgers is using which of the following strategies to attract customers?

A) focus
B) technology enhancement
C) differentiation
D) cost leadership
E) focused differentiation

Question 42

An SBU with a large market share of a low-growth market is a ________.

A) star
B) dog
C) cash cow
D) question mark
E) low-cost leader

Question 43

________ is a strategy adopted by management to increase the amount of business that an SBU is currently generating.

A) Differentiation
B) Divestiture
C) Retrenchment
D) Growth
E) Focus

Question 44

Which of the following is true about the GE Multifactor Portfolio Matrix?

A) Businesses falling in the cells that form a diagonal from lower left to upper right in the matrix are strong businesses that should be invested in regularly.
B) Businesses in the cells below and to the right of the diagonal are medium-strength businesses that should be invested in only selectively.
C) The GE Multifactor Portfolio Matrix does not consider factors such as various types of risk associated with product development.
D) In the matrix, businesses above and to the left of the diagonal are the weakest and serious candidates for divesture.
E) This tool helps managers develop organizational strategy that is based primarily on market attractiveness and business strengths.

Question 45

Which strategy is an organization following when it focuses on making an organization more competitive by developing a product or products that customers perceive as being different from products offered by competitors?

A) cost leadership
B) differentiation
C) focus
D) stability
E) divestiture

Question 46

A business strategy that is generally applied to star or question mark SBUs is ________.

A) stability
B) focus
C) retrenchment
D) growth
E) divestiture

Question 47

GenEx Group manufactures a variety of products for different markets. One of its SBUs, GenEx Textiles, is one of its leading revenue generators. GenEx Textiles is the leading player in the market for textiles. However, the parent company has realized that growth prospects in the textile industry is limited. The company has already exploited the market to the fullest and sustained growth in the future is unlikely. In fact, a substantial amount of the revenue generated from this textile business is used to fund other SBUs of the parent company. GenEx Textiles is an example of a ________ for the GenEx Group.

A) star
B) dog
C) cash cow
D) question mark
E) cost-leader

Question 48

Dun's Burgers has decided to open takeaway counters across the city that will be open until 11 p.m. to cater to people who return late from work. This turns out to be an excellent strategy as Dun's becomes a hot favorite with the people who work late shifts. This is an example of ________.

A) differentiation strategy
B) technology enhancement strategy
C) cost leadership strategy
D) divestiture strategy
E) focus strategy

Question 49

Which of the following strategy formulation tools outlines the primary forces that determine competitiveness within an industry and illustrates how those forces are related?

A) Porter's Model for Industry Analysis
B) the BCG Growth-Share Matrix
C) SWOT analysis
D) the GE Multifactor Portfolio Matrix
E) the Delphi technique

Question 50

When an organization focuses on making itself more competitive by producing products more cheaply than competitors can, it is following a ________.

A) stability strategy
B) differentiation strategy
C) focus strategy
D) cost leadership strategy
E) divestiture strategy

Question 51

An SBU with a relatively small market share of a low-growth market is a ________.

A) star
B) dog
C) cash cow
D) question mark
E) low-cost leader

Question 52

Kreme Industries has an SBU Kreme Makeups, Inc., that offers a wide variety of makeup products and accessories for women. Although market growth rate is high, the SBU's current market share is low and it needs substantial investment. The parent company is trying to decide if Kreme Makeups has long-term sustainability before investing any more cash in it. In the context of the BCG matrix, this SBU of Kreme Industries would be classified as a ________.

A) question mark
B) cash cow
C) dog
D) star
E) low-cost leader

Question 53

An SBU with a small market share of a high-growth market is a ________.

A) star
B) dog
C) cash cow
D) question mark
E) low-cost leader

Question 54

The Razzmatazz Group of companies plans to launch a new flavor of crackers that is distinct and unusual. Which of the following strategies is the company following to become more competitive?

A) stability
B) cost leadership
C) divestiture
D) focus
E) differentiation

Question 55

With the GE Multifactor Portfolio Matrix, the businesses falling in the cells that form a diagonal from lower left to upper right are ________.

A) the strongest and the ones the company should invest in and help grow
B) the strongest and the ones the company should sell
C) medium-strength and should be invested in only selectively
D) the lowest in strength and serious candidates for divestiture
E) the lowest in strength and serious candidates for retrenchment

Question 56

An SBU of FlexiTech Inc. manufactures CD drives. Although it has a large share in the market and the product makes significant profits for the company, market growth potential is limited. Under which quadrant of the BCG Growth-Share Matrix does the CD manufacturing unit fall?

A) dog
B) question-mark
C) star
D) cash cow
E) low-cost leader

Question 57

Which of the following strategy formulation tools was specifically developed to expand on the BCG Growth-Share Matrix?

A) Porter's Model for Industry Analysis
B) the critical questions analysis
C) SWOT analysis
D) the GE Multifactor Portfolio Matrix
E) environmental analysis

Question 58

________ is a strategy that emphasizes making an organization more competitive by targeting a particular customer.

A) Differentiation
B) Cost leadership
C) Stability
D) Focus
E) Divestiture

Question 59

Which of the following is true about a cash cow?

A) Cash cows can barely support themselves; in some cases, they actually drain off cash resources generated by other SBUs.
B) An SBU that is a cash cow has a small share of a high-growth market.
C) An SBU that is a cash cow has a large share of a market that is growing only slightly.
D) An SBU that is a cash cow has a high share of a high-growth market and typically needs large amounts of cash to support rapid and significant growth.
E) Cash cows generate large amounts of cash for the organization and are usually segments in which management can make additional investments and earn attractive returns.

Question 60

Which of the following is true about a star SBU?

A) Star SBUs may barely support themselves; in some cases, they actually drain off cash resources generated by other SBUs.
B) Star SBUs provide the organization with large amounts of cash because their market is not growing significantly.
C) An SBU that is a star has a small share of a high-growth market.
D) An SBU that is a star has a high share of a high-growth market and typically needs large amounts of cash to support rapid and significant growth.
E) Because the market of star SBUs is not growing significantly, the cash is generally used to meet the financial demands of the organization in other areas.

Question 61

________, the fourth step of the strategic management process, is putting formulated strategies into action.

A) Strategy implementation
B) Environmental analysis
C) Strategic control
D) Strategy formulation
E) Strategic feedback

Question 62

________ is usually applied to SBUs that are dogs or question marks that have failed to increase market share but still require significant amounts of cash.

A) Focus
B) Divestiture
C) Growth
D) Stability
E) Retrenchment

Question 63

________ is a strategy adopted by management to maintain or slightly improve the amount of business that an SBU is generating.

A) Focus
B) Stability
C) Retrenchment
D) Growth
E) Divestiture

Question 64

According to the GE Multifactor Portfolio Matrix, businesses falling in cells that form a diagonal from lower left to upper right are the strongest and the ones the company should invest in and help to grow.

Question 65

What is the BCG Growth-Share Matrix? Explain what stars, question marks, cash cows, and dogs are. According to the BCG Growth-Share Matrix, what should managers do with each of these?

Question 66

The Forrester Group of companies has many products, including a fertilizer manufacturing unit. While this unit has never been a source of high revenues in the past, the SBU has increasingly become an area of concern. For the last few years, this SBU has not generated enough business for the Forrester Group and the parent company does not see things changing in the future without substantial investment. In a market with low growth potential, its already low market share has declined further. Which of the following strategies is the Forrester Group likely to choose for this SBU?

A) stability
B) focus
C) retrenchment
D) growth
E) divestiture

Question 67

One of the SBUs under the Retro Group of companies is not generating a satisfactory amount of business. Extensive analysis shows that the company is losing its market share because its competitors have more sustainable processes. Analysts also feel that the growth prospects in this industry are extremely limited. Which of the following organizational strategies should the company adopt?

A) focus
B) stability
C) retrenchment
D) growth
E) divestiture

Question 68

Briefly differentiate Michael Porter's three generic strategies.

Question 69

________ is the strategy through which management attempts to strengthen or protect the amount of business an SBU is generating.

A) Differentiation
B) Divestiture
C) Retrenchment
D) Growth
E) Focus

Question 70

Which business strategy is generally applied to cash cows?

A) divestiture
B) stability
C) growth
D) retrenchment
E) focus

Question 71

________ strategy is generally applied to cash cows or stars that are beginning to lose market share.

A) Focus
B) Retrenchment
C) Stability
D) Divestiture
E) Growth

Question 72

What are the main strategy formulation tools of strategic management?

Question 73

________ is the ability to create throughout the organization a network of people who can help solve implementation problems as they occur.

A) Organizing skill
B) Interacting skill
C) Monitoring skill
D) Allocating skill
E) Tactical skill

Question 74

Strategic implementation is the last step of the strategic management process.

Question 75

What is a SWOT analysis and what benefit does conducting this analysis offer to managers?

Question 76

________ is a strategy adopted to eliminate an SBU that is not generating a satisfactory amount of business and that has little hope of doing so in the near future.

A) Growth
B) Divestiture
C) Retrenchment
D) Stability
E) Focus

Question 77

Which of the following is the ability to use information to determine whether a problem has arisen that is blocking implementation?

A) allocating skill
B) interacting skill
C) monitoring skill
D) organizing skill
E) tactical skill

Question 78

In a retrenchment strategy, managers attempt to ________.

A) eliminate an SBU
B) increase the amount of business of a "star"
C) maintain or slightly improve the amount of business an SBU is generating
D) develop new products that are perceived by customers as different
E) strengthen or protect the amount of business an SBU is generating

Question 79

Jim Autry is a plant supervisor at Ogden Metals. As Jim prepares to participate in the organization's upcoming strategic management planning process for the year, he has asked for your input on understanding the Critical Question Analysis process and the value it offers him as management looks into the future of Ogden's ability to compete in its marketplace. What will you tell him the value is of this analysis?

Question 80

Which of the following is the ability to manage people during implementation?

A) allocating skill
B) interacting skill
C) monitoring skill
D) organizing skill
E) tactical skill