Question 1

Which type of diversification involves moving into businesses that are related to the company's original core business?

Accepted Answer

Concentric diversification involves expanding into businesses that are related to the company's original core business, which allows the company to leverage its existing capabilities and resources. This type of diversification is often seen as less risky than conglomerate diversification, which involves moving into unrelated businesses. Vertical diversification involves moving into businesses that are related to the company's supply chain, while functional diversification involves expanding into businesses that are related to the company's internal functions. Horizontal diversification involves moving into businesses that are unrelated to the company's current business.

Question 2

A strategy used to add new businesses that produce unrelated products or are involved in unrelated markets and activities is called a ________ strategy.

Accepted Answer

Conglomerate diversification involves adding new businesses that have no relationship to the existing ones. This is different from concentric diversification, which involves adding related products or services, and vertical integration, which involves adding businesses within the same supply chain. Conglomerate diversification is often used to spread risk across different industries and markets.

Question 3

"Karen, we must use others' technologies-even our competitors' technologies-if they are better suited to our needs than our own technologies," said her manager, Krystal Lowe. "I know that we are hesitant to use technologies from elsewhere, when we have invested so much internally to develop our own technologies." Krystal is advising that Karen not succumb to

Accepted Answer

Krystal is advising Karen to avoid NIH (not invented here) syndrome, which refers to the tendency of organizations to reject external ideas or solutions in favor of their own internal ones. Krystal is advocating for a more open-minded approach to technology adoption, which may involve utilizing solutions developed by competitors or other external sources if they are better suited to the organization's needs.

Question 4

Joe Snyder is owner and general manager of Joe's Seafood, a regional seafood restaurant chain. Joe told his store managers in their annual planning retreat, "We know seafood. We've been a prosperous business for 20 years. Growth projections for our industry are rosy, and I'd like to take advantage of our expertise and positioning. Beginning next year, we will introduce a broader range of seafood to our menu, to appeal to those diners with luxury tastes." Based on the given information, Joe is proposing a(n)

Accepted Answer

The answer of Joe Snyder is owner and general manager...

Question 5

How would a firm's highly regarded brand be listed in a typical SWOT analysis?

Accepted Answer

A highly regarded brand is a valuable asset for a firm and can give it a competitive advantage, which makes it a strength in a SWOT analysis. The brand recognition can also increase customer loyalty and help the firm charge premium prices.

Question 6

Raja, the CEO of Perfect Paper Products, Inc., wants to perform an assessment of the company and research ways to improve profitability. First, Raja determines that while Perfect Paper Products has skilled, dedicated workers and ample space in their production facility, the company's manufacturing equipment is inefficient and prone to breaking down. What is another step Raj might take if his focus is on the first two letters of a SWOT analysis?

Accepted Answer

Raja's focus on the first two letters of a SWOT analysis relates to strengths and weaknesses of the company. Given that he has already identified one weakness - the inefficient manufacturing equipment - he should take the step of assessing the company's procedures in order to increase efficiency and decrease manufacturing costs. Therefore, choice D is the best option.

Question 7

Which of the following corporate strategies is being employed when a large grocery store purchases a dairy farm to supply all of the store-brand milk, yogurt, butter, and cheese?

Accepted Answer

The grocery store is implementing vertical integration, which involves owning and controlling multiple stages of the supply chain to increase efficiency and reduce costs. In this case, the grocery store is acquiring a dairy farm to ensure a reliable supply of dairy products for its store-brand items.

Question 8

Cyd viewed her staff as a competitive advantage. They had the necessary academic degrees, the necessary experience, and competitive salaries. Miranda, her division manager, said, "Cyd, 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

The sentence "Your staff are too easy to imitate by your competitors" best fits the context of Miranda's statement. This means that the skills and qualifications of Cyd's staff can be easily replicated by their competitors, which takes away from their value as a competitive advantage.

Question 9

A ________ strategy focuses on a single business competing in a single industry.

Accepted Answer

A concentration strategy focuses on a single business competing in a single industry. This strategy involves dedicating resources and efforts towards one area of expertise, allowing the company to become highly specialized and competitive in that particular industry.

Question 10

Resources are viewed as a company's core capabilities when they are

Accepted Answer

Resources are viewed as a company's core capabilities when they are rare, meaning they are not easily available to competitors. This gives the company a competitive advantage in the market. The other choices, such as tangible or intangible, only refer to the physical nature of the resources, which may or may not contribute to their value as a core capability. The same goes for common and imitable resources- these do not necessarily make them core capabilities, unless they are also rare.

Question 11

For the past two decades, Nonna Luciana's has focused only on producing various pasta sauces in jars. The company is now considering entering the market for jarred pickles and olives as well. If Nonna Luciana's decides to enter this arena, it would be using a ________ strategy.

Accepted Answer

Concentric diversification occurs when a company enters a new market that is related to its current products or services. In this case, Nonna Luciana's already produces jarred foods, and pickles and olives would be a related product. Therefore, entering the market for jarred pickles and olives would be an example of concentric diversification.

Question 12

An example of a tangible asset is

Accepted Answer

Real estate is a physical asset that can be seen and touched, which makes it a tangible asset. Company reputation, goodwill, technical knowledge, and company culture are intangible assets as they cannot be physically touched or seen.

Question 13

An example of an intangible asset is

Accepted Answer

An intangible asset is something that does not have a physical presence but still has value, such as a company's reputation or brand name. Real estate, production facilities, raw materials, and inventory are all tangible assets because they can be seen and touched.

Question 14

Farah's Falafels, a chain of Middle Eastern restaurants, periodically compares its quality and service levels to other successful restaurants in order to continually improve its own performance. This practice is known as

Accepted Answer

The practice of comparing one's performance with that of other successful organizations or businesses is known as benchmarking. This helps businesses to identify their own weaknesses and strengths and improve their overall performance. Therefore, option C is the correct answer. Options A, B, D, and E are not relevant to the concept of benchmarking.

Question 15

A technique for assessing an organization's internal and external environments in order to formulate strategy is called a

Accepted Answer

SWOT analysis is a technique used to analyze an organization's internal and external environments by identifying its Strengths, Weaknesses, Opportunities, and Threats. This analysis helps in developing a strategy that can maximize strengths, minimize weaknesses, capitalize on opportunities, and mitigate threats. The other options listed are not specifically focused on analyzing internal and external environments for strategy formulation.

Question 16

In a SWOT analysis, an example of an organization's strength would be

Accepted Answer

Skilled management is an example of an organization's strength, as it enables the organization to make effective decisions, manage resources, and lead employees towards achieving the organization's goals.

Question 17

The process of assessing how well one company's basic functions and skills compare to those of another company or set of companies is known as

Accepted Answer

The term described in the question is benchmarking. Benchmarking is the process of comparing one's business processes and performance metrics to industry bests and best practices from other businesses.

Question 18

Jake is owner/CEO of a local car wash business; he operates several outlets in the area. To grow his portfolio of business and to take advantage of his expertise, he decides to open a boat detailing business and a window washing business. Based on the given information, Jake is adopting a(n)

Accepted Answer

Jake is adopting a concentric diversification strategy because he is expanding into new but related business areas, leveraging his expertise in washing and detailing services.

Question 19

On-Time Delivery has a unique software program that tracks packages in real time and maps every step of their journey. Such a technology, which gives the company an edge over competitors, would be called a

Accepted Answer

The unique software program that tracks packages in real time and maps every step of their journey is a core capability, as it gives On-Time Delivery an advantage over competitors by allowing them to provide superior tracking and delivery services.

Question 20

________ are inputs to production that can be accumulated over time to enhance the performance of a firm.

Accepted Answer

Resources such as technology, equipment, human capital, and financial capital can be accumulated over time and contribute to enhancing the performance of the firm. Strategies, core capabilities, benchmarks, and patents are not necessarily accumulated over time and may not always enhance the performance of the firm.

Quiz 4: Planning and Strategic Management