Deck 15: Strategic Thinking for Small Business

Question 1

While large firms are affected by a strategy, small businesses do not need a good strategy

Answer 1

False

Question 2

Small businesses that implement good strategy tend to have higher levels of performance and success

Answer 2

True

Question 3

In small firms, strategy involves only the consideration of how to achieve firm's profit

Answer 3

False

Question 4

In small firms, preparation of strategic plans is typically a single person's responsibility

Question 5

There are pros and cons of having a single person responsible for formulating and implementing a strategy in a small firm

Question 6

Operational decisions involve issues that need strategic-level thinking

Question 7

The decision to change the ownership of the firm involves strategic thinking

Question 8

The SWOT analysis is a diagnostic tool that considers a firm's strengths and weaknesses along with the opportunities it faces

Question 9

While conducting a SWOT analysis, threats are events or trends that may improve a firm's competitiveness or performance

Question 10

In SWOT analysis, opportunities are events or trends that may undermine a firm's competitiveness or performance

Question 11

In SWOT analysis, strengths and weaknesses are the external factors that occur outside organizational boundaries

Question 12

In SWOT analysis, high employee turnover rate and lack of capital are threats to a firm

Question 13

In a PESTLE analysis, growth rate, interest rate, and rate of employment are all elements included in the ecological segment

Question 14

In a PESTLE framework, population size and cultural preferences are elements of a social segment

Question 15

In strategic planning, PESTLE technique is about examining internal factors

Question 16

PESTLE is also referred to as STEEP

Question 17

Indirect competitors are rivals who provide the same product or service to the same target market

Question 18

Tangible resources are those assets with physical presence whereas intangible resources do not have physical presence

Question 19

Distinctive Capabilities are those capabilities that do not distinguish a firm from its rivals

Question 20

The purpose of the SWOT is to understand how the firm's strengths and weaknesses align with the opportunities and threats in its environment.

Question 21

ABC Ltd. attempts to gain a competitive advantage by keeping its inventory costs as low as possible. We can say that ABC Ltd. is a differentiated player

Question 22

Owners of XYZ Ltd. attempt to gain a competitive advantage by offering unique products to customers. We can say that ABC Ltd. is focusing on differentiated strategic orientation

Question 23

A differentiated player offers products aimed at the average customer

Question 24

A low-cost player offers products aimed at the average customer

Question 25

A mass-market player caters to a specific market segment in its industry

Question 26

The following are all characteristics of a bad strategy except

A) High on fluff
B) Full of ambition
C) Emphasizes desire and ambition over anything else
D) Focus on what needs to be done to achieve goals

Question 27

The decision to enter a new business is an example of

A) Operational decisions
B) Strategic decisions
C) Human resource planning
D) Development program

Question 28

Which of the following is NOT part of the acronym SWOT?

A) Strengths
B) Technical
C) Weaknesses
D) Threat

Question 29

Resources that a company lacks and that put it at a disadvantage in the marketplace, are known as

A) Strengths
B) Threats
C) Opportunities
D) Weaknesses

Question 30

In SWOT analysis, experienced management is _________to the firm, while government (de)regulation is _________to the firm

A) External; internal
B) Internal; external
C) Strength; weakness
D) None of the above

Question 31

What does the acronym PESTLE represent:

A) Position, economy, supplier, threat, litigation, employee
B) Position, economy, social, threat, law, and ecological
C) Political, economic, social, technological, legal, and ecological
D) Political, errors, supplier, threat, legal, and environment

Question 32

In PESTLE analysis, elements such as stability of governments, change in trade restrictions and tariffs, and tax policies, are included in _______segment

A) Economic
B) Social
C) Technological
D) Political

Question 33

In PESTLE analysis, factors such as pollution levels, weather patterns, and natural disasters, are included in ________segment

A) Ecological
B) Social
C) Economic
D) Political

Question 34

In PESTLE analysis, factors such as internet usage growth, progress in mobile computing, and development of new-age construction materials, are included in ________segment

A) Ecological
B) Social
C) Economic
D) Technological

Question 35

Which of the following industry factors influence the profits earned by firms

A) Value of the product to customers
B) Intensity of competition
C) Power of suppliers
D) All of the above

Question 36

Capabilities that sets a firm apart from competitors are __________

A) Core competencies
B) Portfolio competencies
C) Distinctive capabilities
D) None of the above

Question 37

Factors such as copyrights, patents, and brands are _______resources for a firm

A) Intangible
B) Financial
C) Tangible
D) Physical

Question 38

George, owner of a small firm, examines strengths and weaknesses in the internal environment as well as the opportunities and threats in the external environment. George is conducting the __________ analysis.

A) Internal
B) SWOT
C) PESTLE
D) Industry

Question 39

While George at Radio Shack store was conducting a SWOT analysis, he concluded that their recent increase in sales can be attributed to a superior product quality. This information is an example of:

A) Weakness
B) Leverage
C) Strength
D) Opportunity

Question 40

While George at Radio Shack store was conducting a SWOT analysis, he concluded that the recent decrease in sales can be attributed to low customer service. This information would be categorized as a:

A) Weakness
B) Leverage
C) Threat
D) Opportunity

Question 41

In SWOT analysis, which of the following is an example of Threats

A) Narrow product line
B) Weak management
C) Unfavorable government policies
D) Weak balance sheet

Question 42

__________is a combination of a matching internal strength and an opportunity in the external environment of the firm

A) Vulnerability
B) Constraint
C) Peril
D) Leverage

Question 43

________focuses on internal weaknesses that can exacerbate the impact of external threats

A) Vulnerability
B) Constraint
C) Peril
D) Leverage

Question 44

Which of the following strategies help a firm to obtain competitive advantage by offering unique products to customers?

A) Low-cost strategy
B) Differentiation strategy
C) Stuck-in-the-middle strategy
D) Broad strategy

Question 45

John, owner of a shoe store, attempts to gain a competitive advantage by selling shoes at a price below those of its competitors. John is pursuing a _________strategy.

A) Low-cost strategy
B) Diversification
C) Broad-based approach
D) Differentiation

Question 46

When a firm gains competitive advantage by offering unique products or services with features that buyers value and are willing to pay a premium price for, it is using a _______strategy

A) Low-cost
B) Niche
C) Differentiation
D) Broad

Question 47

_________is a competitive strategy based on low overall costs and satisfying a broad market

A) Low-cost
B) Niche
C) Differentiation
D) Broad low-cost

Question 48

When a firm does not offer unique features that convince customers to buy its products or its costs are too high to gain competitive advantage, it is said to be

A) Stuck-in-the-middle
B) Using a best-cost strategy
C) Emphasizing a focus strategy
D) Pursuing a niche strategy

Question 49

When a firm can incorporate points of differentiation into its product offerings at a lower cost than competitors, then it may have a

A) Stuck-in-the-middle
B) Best-cost strategy
C) Focus strategy
D) Niche strategy