Deck 6: Planning, Strategy, and Competitive Advantage

Question 1

A broad declaration of the organization's overriding purpose, which is intended to identify the organization's products and customer base, as well as to differentiate the organization from its competitors, is known as a ________ statement.

A) functional-level
B) mission
C) formulated strategy
D) positioning

Answer 1

B
Explanation: A mission statement is a broad declaration of an organization's overriding purpose, what it is seeking to achieve from its activities; this statement is also intended to identify what is unique or important about its products to its employees and customers as well as to distinguish or differentiate the organization in some ways from its competitors.

Question 2

The cluster of decisions that managers make to assist an organization to achieve its goals is known as ________.

A) strategy
B) scenario planning
C) organizing
D) needs assessment

Answer 2

A
Explanation: A strategy is a cluster of related managerial decisions and actions to help an organization attain one of its goals.

Question 3

According to Michael Porter's theory, it is possible for managers to pursue both a low-cost strategy and a differentiation strategy at the same time.

Answer 3

False
Explanation: According to Porter's theory, managers cannot simultaneously pursue both a low-cost strategy and a differentiation strategy.

Question 4

Managers of Matrix Ltd. attempted to give the organization a competitive advantage by driving the production costs to as low a level as possible. We can say that the organization is pursuing a differentiation strategy.

Question 5

A good plan specifies not only which goals and strategies an organization is committed to but is also accountable for putting the strategies into action to attain the goals.

Question 6

The plan for implementing a new strategy requires the development of new functional strategies.

Question 7

A strategic alliance can take the form of a written contract between two or more companies to exchange resources, or it can result in the creation of a new organization.

Question 8

An intermediate-term plan has a time horizon between five and ten years.

Question 9

Strategy formulation begins with managers systematically analyzing the factors inside an organization and outside in the global environment that affect the organization's ability to meet its goals now and in the future.

Question 10

With a multidomestic strategy, managers decide to sell the same product with the same marketing approach in all of the countries in which the product is sold.

Question 11

An organization's level of involvement abroad decreases in a joint venture because the alliance rarely involves capital investment to produce goods or services outside the home country.

Question 12

The corporate-level plan outlines the specific methods a division, a business unit, or an organization will use to compete effectively against its rivals in an industry.

Question 13

An ongoing process in which managers build and refine previous plans and continually modify plans at all levels, corporate, business, and functional, so that they fit together into one broad framework, is known as ________.

A) continuity
B) flexibility
C) accuracy
D) unity

Question 14

A written set of instructions that describes the series of actions that a manager should take in a specific situation is called an SOP of an organization.

Question 15

Managers pursuing a focused differentiation strategy serve just one or a few segments of the market and aim to make their organization the most differentiated company serving that segment.

Question 16

Managers should attempt to collect and use all available information in the organization's planning process. This emphasizes the _______ aspect of planning.

A) unity
B) flexibility
C) continuity
D) accuracy

Question 17

When only one central, guiding plan is put into operation to achieve an organizational goal, the organization is experiencing ________.

A) accuracy
B) flexibility
C) unity
D) continuity

Question 18

When a company is successful in pursuing the strategy of concentration on a single industry, it uses its divisional skills to develop new products or expand its locations.

Question 19

Synergy is obtained by apportioning financial resources among divisions to increase financial returns or spread risks among different businesses.

Question 20

Scenario planning is often used to strengthen SWOT analysis.

Question 21

The strategy that explains the methods that a division or an organization will use to compete against its rivals in the industry is a _______-level strategy.

A) functional
B) departmental
C) corporate
D) business

Question 22

To determine an organization's mission, managers must first define its ________.

A) vision
B) strategy
C) tactics
D) business

Question 23

Managers at Ferwn Pvt., Ltd., which is number two in market share in the local sports equipment manufacturing industry, develop strategies to take over the number-one spot. This is an example of a _______-level strategy.

A) corporate
B) top-management
C) functional
D) business

Question 24

The level of an organization that contains the organization's marketing department, R&D department, and human resources department is the ________ level.

A) functional
B) first-line
C) corporate
D) business

Question 25

A company has a requirement that any manager who receives a gift from any of the company's customers worth more than $25 must report this gift to the company's human resources department. This is an example of a ________.

A) tactical plan
B) rolling plan
C) policy
D) rule

Question 26

DE, Ltd., sets a goal that every product line of the company should be either first or second in its industry in market share. This would be an example of a ______________-level strategy.

A) corporate
B) divisional
C) functional
D) business

Question 27

The organizational strategy that specifies the activities of managers at the departmental level of the organization is a _____________-level strategy.

A) functional
B) business
C) corporate
D) divisional

Question 28

A general guide to action for the managers of an organization is known as a ________.

A) rolling plan
B) rule
C) policy
D) standard operating procedure

Question 29

A group of managers at Power Explosives analyzes both the internal strengths and weaknesses of their organization as well as the opportunities and threats of the external environment. Which of the following planning exercises does this indicate?

A) Mission analysis
B) SWOT analysis
C) Functional analysis
D) Diversification

Question 30

Frame Corporation updates its five-year plan annually to take into account changing conditions within the organization and in the organization's external environment. Which of the following best explains this plan implemented by Frame Corporation?

A) Standing plan
B) Short-term plan
C) Rolling plan
D) Single-use plan

Question 31

Another name for the business level of the organization is the _______ level.

A) functional
B) department
C) corporate
D) divisional

Question 32

The tool that is used in situations when programmed decision making is appropriate is a ________ plan.

A) standing
B) scenario
C) rolling
D) single-use

Question 33

The industries and national markets an organization intends to compete in and the reasons why are specified in a company's _______-level strategy.

A) divisional
B) departmental
C) functional
D) corporate

Question 34

Managers at Dimensions, Inc., analyze the current situation of their organization and then develop plans to help their organization accomplish its mission and achieve its goals. This is known as ________.

A) synergy planning
B) strategy formulation
C) functional planning
D) SWOT analysis

Question 35

A formal, written guide to action for employees in an organization is known as a ________.

A) policy
B) rule
C) standard operating procedure
D) rolling plan

Question 36

The plan of an organization that contains top management's decisions about the organization's mission, goals, strategy, and structure is an example of a ________-level plan.

A) corporate
B) divisional
C) functional
D) business

Question 37

A written set of instructions which describes the series of actions that a manager should take in a specific situation is known as a ________.

A) policy
B) standing operating procedure
C) scenario plan
D) rolling plan

Question 38

SynVens, a major retail chain in Hungary, is planning to diversify. It plans to enter the textiles industry and aims to be first or second in market share in this industry in five years. This is an example of a ________-level plan strategy.

A) business
B) corporate
C) functional
D) divisional

Question 39

The ability of the CEO and top managers to convey to their subordinates a compelling vision of what they want the organization to achieve is known as ________ leadership.

A) qualitative
B) strategic
C) autocratic
D) tactical

Question 40

A plan that is updated and changed every year to take into consideration how the organization's external and internal environments have changed is known as a ______________ plan.

A) standing
B) short-term
C) rolling
D) single-use

Question 41

When Gallo purchased a company that makes wine bottles, it was involved in ________.

A) horizontal integration
B) backward vertical integration
C) forward vertical integration
D) upward integration

Question 42

Coca-Cola spends an enormous amount of money on advertising to distinguish, and create a unique image for, their products. Coca-Cola is pursuing a ________ strategy.

A) diversification
B) focused low-cost
C) differentiation
D) low-cost

Question 43

An advantage of the differentiation strategy is ________.

A) less expensive new products
B) higher level of employee skills
C) reduced turnover of employees
D) greater barriers to entry

Question 44

Ace Real Estate conducted a SWOT analysis, and their managers believe that this year's local market growth will be slower than in the past. The predicted slow market growth is a(n) ________.

A) strength
B) weakness
C) opportunity
D) threat

Question 45

BIC, makers of ballpoint pens and razors, concentrates on making its products less expensive than its rivals. BIC is pursuing a _______ strategy.

A) focused differentiation
B) diversification
C) differentiation
D) low-cost

Question 46

When TechnoSol Ltd. designed a corporate-level strategy, which includes expanding its operations into a new type of business for the organization, TechnoSol was pursuing a(n) _______ strategy.

A) concentration on a single business
B) international expansion
C) vertical integration
D) diversification

Question 47

Concentration on a single industry, vertical integration, diversification, and international expansion are principal strategies of a ________ level of an organization.

A) functional
B) department
C) corporate
D) business

Question 48

When PepsiCo purchased Frito-Lay and expanded its operations into the snack-food business, it was pursuing a ________ strategy.

A) vertical integration
B) market penetration
C) diversification
D) market development

Question 49

PepsiCo purchased KFC so that it could replace Coke products with Pepsi products in KFC restaurants. This is an example of a _________ strategy.

A) horizontal integration
B) vertical integration
C) low-cost
D) global

Question 50

The Stonehedge Bayonet Company aims at a market of hunters, and they try to keep prices lower than competition. Stonehedge is pursuing a ________ strategy.

A) low-cost
B) differentiation
C) focused low-cost
D) focused differentiation

Question 51

While managers at ABC Manufacturing were conducting a SWOT analysis, they concluded that their product line is obsolete and narrow. Their product line would be categorized as a(n) ________.

A) strength
B) weakness
C) opportunity
D) threat

Question 52

Two divisions of a company decide to use the same manufacturing facilities to capitalize on the organization's excess capacity and to reduce the fixed costs assigned by corporate headquarters. This is an example of ________.

A) concentration on a single business
B) international expansion
C) focused differentiation strategy
D) synergy

Question 53

Arrow Corp. attempts to gain a competitive advantage by driving down its production costs per unit below those of its competitors. Arrow is pursuing a(n) _______ strategy.

A) focused differentiation
B) low-cost
C) related diversification
D) unrelated diversification

Question 54

When General Electric Company expanded its operations by acquiring NBC television, this was an illustration of ________.

A) vertical integration
B) diversification
C) market penetration
D) a low-cost strategy

Question 55

An organization attempts to succeed by distinguishing its products from those of the competition; this is a(n) _______ strategy.

A) differentiation
B) low-cost
C) related diversification
D) unrelated diversification

Question 56

Firestone Tire and Rubber Company set up a chain of Firestone retail stores to sell its tires to American consumers. This is an example of ________.

A) forward vertical integration
B) global strategy
C) focused differentiation strategy
D) multidomestic strategy

Question 57

The corporate-level strategy that becomes appropriate when managers see the need to reduce the size of their organizations to increase performance is ________.

A) vertical integration
B) international expansion
C) market development
D) concentration on a single industry

Question 58

BMW produces cars exclusively for high-income customers. BMW is pursuing a ________ strategy.

A) focused differentiation
B) focused low-cost
C) diversification
D) low-cost

Question 59

Firestone Tire and Rubber Company purchases rubber plantations in Africa so that it will have a source of supply for its tire manufacturing plants in Akron, Ohio. This is an example of a _______ strategy.

A) forward vertical integration
B) global
C) diversification
D) backward vertical integration

Question 60

An organization purchases one of its suppliers in order to obtain access to the raw materials it needs for its production. The organization is using a(n) _______ corporate-level strategy.

A) international expansion
B) vertical integration
C) diversification
D) market development

Question 61

Medien Corporation decides to enter a new type of business in order to create a competitive advantage in one of its existing businesses. Medien is engaging in ________.

A) concentration on a single business
B) related diversification
C) vertical integration
D) international expansion

Question 62

Procter & Gamble uses a joint sales force to sell both its laundry detergent products and its bath soap products to the same supermarket chains. This is an example of ________.

A) a focused differentiation strategy
B) a low-cost strategy
C) a differentiation strategy
D) synergy

Question 63

What happens when there are only a few large customers in the market?

A) They keep changing their tastes, fads, and fashions.
B) They drive down the price of the output through bargaining.
C) They tend to be referred to as "stuck in the middle."
D) They start concentrating on a single industry.

Question 64

Which of the following qualities of an effective plan allows for alterations if the situation changes?

A) Continuity
B) Unity
C) Flexibility
D) Accuracy

Question 65

Why is planning considered an important process for managers?

A) It gives a sense of direction and purpose.
B) It ensures only top-level managers make decisions.
C) It creates a time horizon for different planning levels.
D) It identifies which markets to enter or avoid.

Question 66

Which of the following is most likely to require a short-term plan?

A) Corporate mission
B) Business strategies
C) Functional goals
D) Divisional structure

Question 67

When an organization enters a new type of industry, which is not similar in any way to the current businesses of the organization, it is engaged in ________.

A) concentration on a single business
B) unrelated diversification
C) international expansion
D) related diversification

Question 68

The planning and strategy making necessary to increase the efficiency and effectiveness of a particular function are the responsibility of a ________.

A) divisional manager
B) CEO
C) corporate office
D) functional manager

Question 69

Jespher, Inc., allows Hertonz, a foreign organization, to take charge of both manufacturing and distributing one or more of its products in Thailand in return for a negotiated fee. This is an example of ________.

A) exporting
B) licensing
C) a strategic alliance
D) a joint venture

Question 70

The form of international expansion which gives an organization high potential return because the organization does not have to share its profits with a foreign organization, and it reduces the level of risk because the organization's managers have full control over all aspects of their foreign company's operations, is ________.

A) a joint venture
B) franchising
C) exporting
D) a wholly owned foreign subsidiary

Question 71

The least complex global operation is _______.

A) a joint venture
B) exporting
C) licensing
D) franchising

Question 72

When Electrix, Ltd., sells its TVs and DVD players using the same basic marketing approach in various countries, it is pursuing ________.

A) a multidomestic strategy
B) a focused low-cost strategy
C) a global strategy
D) vertical integration

Question 73

When Procter & Gamble uses the same distribution system to deliver its oral care products and its hair care products to drugstore chains, this is an example of ________.

A) synergy
B) focused differentiation strategy
C) diversification strategy
D) unrelated diversification strategy

Question 74

What is the plan of action for a business-level strategy based on SWOT analysis?

A) To maximize an organization's ability to create value
B) To take advantage of favorable opportunities
C) To choose industries and countries to invest in
D) To improve task-specific activities within the organization

Question 75

Unilever sells different products using a different marketing approach in England than it uses when marketing these products in the United States. This is an example of a ________ strategy.

A) vertical integration
B) focused low-cost
C) global
D) multidomestic

Question 76

The decision of a company to invest in state-of-the-art European production facilities is an example of a ________-level strategy.

A) division
B) business
C) corporate
D) functional

Question 77

Madison Hotels sold a foreign organization the right to use its brand name and operating know-how in return for a lump-sum payment and a share of the profits. This is an example of ________.

A) franchising
B) licensing
C) a strategic alliance
D) a joint venture

Question 78

A company that is serving only a few market segments has most likely adopted a ________ strategy.

A) focused differentiation
B) low cost
C) risk taking
D) portfolio

Question 79

When managers pool or share their organization's resources and know-how with those of a foreign company, and the two organizations share the rewards or risks of starting a new venture in a foreign country, the two organizations are involved in ________.

A) a joint venture
B) a strategic alliance
C) differentiation
D) licensing

Question 80

Industries that are characterized by permanent, ongoing, intense competition brought about by advancing technology or changing customer tastes, fads, and fashions are an example of ________.

A) a joint venture
B) differentiation
C) focused competition
D) hypercompetition