Question 1

The goal of ________ is to thoroughly understand the "best practices" of other firms and to undertake actions to achieve better performance and lower costs.

Accepted Answer

Benchmarking involves studying and analyzing the best practices of other firms and implementing them in order to improve performance and reduce costs. Satisficing is a decision-making strategy that involves choosing a satisfactory option rather than trying to maximize the outcome. Organizing refers to arranging resources in order to achieve a specific goal. Competition is a force that drives firms to improve their performance but does not necessarily involve studying the practices of other firms. SWOT analysis is a strategic planning tool used to identify a firm's strengths, weaknesses, opportunities, and threats. None of the other options involve this type of analysis.

Question 2

The most effective strategy that can be adopted by strategy managers is one that

Accepted Answer

The most effective strategy that can be adopted by strategy managers is one that competitors are unable to imitate. This ensures that the company has a sustainable competitive advantage which is difficult for competitors to replicate, giving the company a unique position in the market.

Question 3

Management decisions typically

Accepted Answer

The answer of Management decisions typically
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Question 4

In order to reduce production costs, Tryon Inc., an automobile manufacturer, decided to buy out a glass plant and begin manufacturing the glass for the windows of cars on its own. The corporate strategy adopted by the company is known as

Accepted Answer

Vertical integration involves a company taking control of its supply chain by owning or controlling its suppliers or distributors. In this scenario, Tryon Inc. is vertically integrating by owning a glass plant to manufacture the windows for their cars, thus reducing production costs.

Question 5

Karina viewed her staff as a competitive advantage. They had the necessary academic degrees, the necessary experience, and competitive salaries. Jean, her division manager, said, "Karina, until you have staff with rare and valuable academic research experience and corresponding degrees, and with talents that are world-class and in extremely high demand by your clients, such that they are willing to pay top dollar for that talent, your staff do not represent a competitive advantage. Your staff are too ________ by your competitors."

Accepted Answer

Jean is pointing out that Karina's staff are not unique or difficult for competitors to imitate. This nullifies their value as a competitive advantage.

Question 6

In the BCG matrix, a star represents a company

Accepted Answer

A star in the BCG matrix represents a company with high growth and a strong competitive position in the market. Stars typically require significant investments to sustain their growth, but if managed correctly, they may become cash cows in the future.

Question 7

The ________ matrix is not a substitute for management judgment; it helps managers of businesses evaluate their strategy alternatives.

Accepted Answer

The blank space in the question is referring to the acronym for the Boston Consulting Group matrix, which is commonly known as the BCG matrix. It is a tool used for portfolio analysis and helps businesses identify which products or business units are generating the most revenue or profits. However, the BCG matrix should not be the sole basis for decision-making, as it does not take into account other important factors such as market trends and competition. Therefore, it can be a helpful tool for managers to evaluate their strategy alternatives, but it should be used in conjunction with their own judgment and other data analysis.

Question 8

The corporate strategy of ________ involves expanding the domain of an organization into supply channels and to distributors.

Accepted Answer

Vertical integration involves a company expanding its domain into supply chains and distributors, allowing for greater control and coordination of business activities. Concentration focuses on a single product or market, horizontal integration involves merging with or acquiring competitors, benchmarking involves comparing performance to industry leaders, and satisficing refers to accepting a satisfactory solution rather than the optimal one.

Question 9

Businesses using a ________ strategy try to be efficient and offer a standard, no-frills product.

Accepted Answer

Businesses using a low-cost strategy aim to keep their costs low in order to offer a no-frills product at a lower price point than their competitors. This allows them to attract price-sensitive customers and can lead to a larger market share.

Question 10

All of the following are considered stakeholders EXCEPT those groups and individuals who

Accepted Answer

Individuals or groups with only a financial stake in the company are generally considered investors or shareholders, rather than stakeholders. The term stakeholder usually encompasses a broader range of parties who are impacted by or have an interest in the organization beyond just financial gain.

Question 11

Rothan Corp. is evaluating the purchase of a small firm, Lemm Inc., which manufactures products involving advanced technology. These products are expected to revolutionize the home construction industry. Lemm has only a minor share of this growing market, but the market is expected to grow rapidly. Substantial investment will be required. In the BCG matrix, Lemm Inc. would be placed in the ________ category.

Accepted Answer

Lemm Inc. is a small firm with a minor share of a growing market, which requires substantial investment. Therefore, it would be placed in the "question marks" category of the BCG matrix. This category represents businesses with a low market share in a high-growth market, requiring significant investment to grow and potentially become stars or cash cows in the future.

Question 12

At Susan's retirement party, she reflected upon her long career in starting up successful companies. She said, "I salute my long-time mentor, Milton, who counseled me early in my career about risk. He told me, 'Susan, when you are confronted with risk when making management decisions, you should

Accepted Answer

Anticipating, minimizing, and controlling risk is the most effective way to manage it. This involves identifying potential risks, analyzing the likelihood and consequences of each risk, and implementing measures to reduce or mitigate the impact of those risks. Avoiding risk altogether may limit opportunities for growth and success, while eliminating all risk may not be feasible or practical. Having liability insurance is important, but it is not the only or most comprehensive solution to managing risk in a business.

Question 13

Functional strategies are implemented

Accepted Answer

Functional strategies are implemented by each appropriate area or unit. This means that each department or unit within the organization is responsible for implementing their own functional strategies based on their specific goals and objectives. This allows for a more targeted and effective approach to achieving overall organizational objectives.

Question 14

Sip Well Corp. had focused only on alcoholic beverages for the last two decades. Now, as part of a(n) ________ strategy, the company is considering entering the soft drink market.

Accepted Answer

Related diversification involves entering a new market that is related to the company's existing business. Since Sip Well Corp. has been focused on beverages, entering the soft drink market is related to their established industry expertise.

Question 15

The first step in strategy implementation involves articulating in simple language what a particular business must do to create or sustain a competitive advantage. This step involves

Accepted Answer

Articulating what the business must do to create or sustain a competitive advantage involves defining strategic tasks. Assessing organizational capabilities, developing an implementation agenda, and creating an implementation plan come later in the strategy implementation process. Developing a mission statement is part of the strategy formulation phase.

Question 16

If an organization's mission statement describes the organization as it currently operates then its strategic vision points to the

Accepted Answer

A strategic vision should provide the organization with future direction and goals, not simply describe its current operations or focus on past achievements.

Question 17

When a problem is frequent, repetitive, and routine, with much certainty regarding cause-and-effect relationships, a ________ decision may be taken.

Accepted Answer

Programmed decisions are made in response to routine, recurring problems that are characterized by certainty and have standard solutions.

Question 18

Larner Corp., an American company, is trying to decide whether to open its first international branch in Europe or Asia. The managers of the company are operating under a condition of

Accepted Answer

The managers of Larner Corp. are facing uncertainty in deciding whether to open their first international branch in Europe or Asia. This is because they are unsure of the outcome and risks associated with either option. Therefore, the best choice is to carefully evaluate the potential benefits and drawbacks of each option and make an informed decision based on available information.

Question 19

Pettigrew Inc. recently decided to expand from its original base in real estate to several wide-ranging industries such as trucking, lawn mower manufacturing, and catering. Pettigrew is using the ________ corporate strategy.

Accepted Answer

Pettigrew Inc. is entering into unrelated industries, indicating that it is using the unrelated diversification corporate strategy. This strategy involves expanding into multiple industries that are not related to the company's original industry or each other.

Question 20

In the context of the strategic planning process, a critical task in environmental analysis is ________ future trends.

Accepted Answer

Forecasting future trends is a critical task in environmental analysis as it helps in identifying potential opportunities and threats for the organization, which can be used in the strategic planning process. Reporting past trends or justifying decisions is not as important in this context. Avoiding or creating trends is not within the scope of environmental analysis.

Quiz 5: Planning and Decision Making