Question 1

If an organization has an SBU that it believes has the potential to be a star (and is probably a problem child at present),building would be an appropriate goal.

Accepted Answer

Building is an appropriate goal for a problem child SBU with potential to become a star, as it involves investing resources to increase market share and growth.

Question 2

According to the General Electric model for strategic alternatives,market conditions that have low overall attractiveness are the best candidates for investment.

Accepted Answer

The General Electric model suggests investing in markets with high attractiveness and strong competitive positions, not in those with low attractiveness.

Question 3

For a star,the best marketing tactic is to protect existing market share by reinvesting earnings in product improvement,better distribution,more promotion,and production efficiency.

Accepted Answer

Stars are high-growth, high-market-share products that require investment to maintain their position and capitalize on their potential, making reinvestment in these areas a sound strategy.

Question 4

In the context of the portfolio matrix,which statement is generally true of SBUs considered to be dogs?

Accepted Answer

Dogs are SBUs with low market share in low-growth markets, and typical strategies include harvesting or divesting due to their limited potential for growth or profitability.

Question 5

In the portfolio matrix,a business unit that has low growth potential and a small market share is called a:

Accepted Answer

A business unit with low growth potential and a small market share is considered a "dog" in the portfolio matrix.

Question 6

A diversification strategy is free of risk when a firm is entering unfamiliar markets.

Accepted Answer

Diversification into unfamiliar markets involves risks such as lack of market knowledge, cultural differences, and potential misalignment with the firm's existing capabilities.

Question 7

Which of the following defines the key goal of an SBU that is a very successful cash cow?

Accepted Answer

The answer of Which of the following defines the key...

Question 8

Market penetration refers to attracting new customers to existing products.Ideally,new uses for old products stimulate additional sales among existing customers while also bringing in new buyers.

Accepted Answer

Market penetration refers to increasing sales of existing products to existing customers, not attracting new customers. The strategy focuses on increasing market share within the current market.

Question 9

According to Ansoff's strategic opportunity matrix,both product development and diversification entail the creation of new products.

Accepted Answer

Ansoff's matrix defines product development as creating new products for existing markets, and diversification as creating new products for new markets.

Question 10

Adjacent innovation involves decisions that result in brand-new markets,products,and often new businesses by acquiring new assets to develop the type of breakthrough decisions that fall in this category.

Accepted Answer

Adjacent innovation typically involves leveraging existing capabilities and assets to enter new markets or create new products, rather than creating entirely new markets or businesses.

Question 11

The basic goal of ________ is to increase the short-term cash return without too much concern for the long-run impact.

Accepted Answer

Harvesting is a strategy aimed at maximizing short-term cash flow from a product or business, often at the expense of long-term growth or sustainability.

Question 12

Which of the following statements is true about a marketing plan?

Accepted Answer

A marketing plan typically includes the definition of the business mission and objectives, outlining the goals and strategies for marketing efforts.

Question 13

In the case of SBUs that are cash cows,problem children,or dogs,the basic goal of _______________ is to increase short-term cash return without increased concern for long-run impact.

Accepted Answer

Harvesting is a strategy aimed at maximizing short-term cash flow from SBUs with low growth potential, such as cash cows, problem children, or dogs, without focusing on long-term sustainability.

Question 14

The strategy in which an SBU preserves market share so that it can take advantage of a very positive cash flow is called ______________.

Accepted Answer

The "holding" strategy is used to maintain the current market share of a Strategic Business Unit (SBU) to benefit from positive cash flow.

Question 15

__________ is the process of anticipating future events and determining strategies to achieve organizational objectives in the future.

Accepted Answer

Planning is the process of anticipating future events and determining strategies to achieve organizational objectives in the future.

Question 16

RegiSure is a strategic business unit that shows low growth but has a dominant market share.Because of its market share,it should receive additional financing despite its low growth.

Accepted Answer

A strategic business unit with low growth and high market share is typically considered a "cash cow" in the BCG matrix, which means it generates more cash than it needs and should not necessarily receive additional financing.

Question 17

If an organization has an SBU that it believes has the potential to be a star,the best allocation of future resources would be to _________ that SBU.

Accepted Answer

If an SBU has the potential to be a star, it means it has high growth prospects. The best strategy is to "build" by investing resources to increase its market share and capitalize on its growth potential.

Question 18

With reference to the General Electric model for selecting strategic alternatives,which of the following refers to how well placed in a market an organization needs to be to take advantage of opportunities?

Accepted Answer

The General Electric model uses "Business position" to assess how well an organization is placed in the market to take advantage of opportunities. It evaluates the company's strengths and competitive position within the industry.

Question 19

When an SBU has become a _____________,it is essential to either invest in it heavily to gain better market share,acquire competitors to get the necessary market share,reposition its products,or drop it.

Accepted Answer

A "problem child" or "question mark" is an SBU with low market share in a high-growth market. It requires significant investment to improve its position, or it may need to be divested if it cannot become a leader.

Question 20

In the context of the Boston Consulting Group's (BCG's)portfolio matrix,which of the following is true of SBUs considered to be question marks?

Accepted Answer

Question marks operate in a high-growth industry but have a low market share, requiring significant investment to increase market share or decide if they should be divested.

Quiz 2: Strategic Planning and Competitive Advantage