Question 1

The ____ strategy is analogous to pruning flowers.
A)growth
B)stability
C)retrenchment/recovery
D)portfolio
E)repositioning

Accepted Answer

Pruning flowers involves cutting back or removing unnecessary or underperforming parts of the plant in order to promote new growth and better overall health. Similarly, a retrenchment/recovery strategy involves cutting back on certain aspects of a business in order to focus on core strengths and improve overall profitability and growth.

Question 2

The ____ is a portfolio strategy that managers use to categorize their corporation's businesses by growth rate and relative market share. This strategy helps them to decide how to invest corporate funds.
A)investment matrix
B)SWOT matrix
C)BCG matrix
D)portfolio management matrix
E)Maslow grid

Accepted Answer

The BCG matrix, developed by the Boston Consulting Group, is a popular tool used by managers to categorize their corporation's businesses based on growth rate and relative market share. The matrix is divided into four categories: stars, cash cows, question marks, and dogs. These categories help managers decide how to allocate corporate funds and prioritize investments based on the potential for growth and profitability.

Question 3

Starbucks, the operator of Starbucks coffeehouses, also markets a line of compilation CDs and other non-coffee items. The making and marketing of the CDs and other non-coffee products would be an example of ____.
A)related differentiation
B)related diversification
C)an integrated acquisition
D)competency acquisition
E)unrelated diversification

Accepted Answer

Coffee and music are completely unrelated businesses.

Question 4

When Coca-Cola acquired a water-treatment and bottling plant so it could produce and market Dasani brand bottled water, it was an example of ____.
A)a repositioning strategy
B)external growth
C)niche marketing
D)a retrenchment strategy
E)internal growth

Accepted Answer

Coca-Cola acquiring a water-treatment and bottling plant to produce and market Dasani brand bottled water is an example of external growth, which refers to a company expanding its operations through means such as mergers, acquisitions, or partnerships with other businesses.

Question 5

Companies that are following a ____ strategy would be most likely to try to improve the way in which they sell the same goods or services to the same customers.
A)growth
B)pioneering
C)retrenchment/recovery
D)portfolio
E)stability

Accepted Answer

A stability strategy is focused on maintaining the current level of operations and improving efficiency. Therefore, companies following this strategy are most likely to focus on improving the way they sell the same goods or services to the same customers rather than expanding into new markets or products (growth strategy) or pioneering new markets or technologies (pioneering strategy). Retrenchment/recovery and portfolio strategies are focused on restructuring or divesting existing businesses, so they are also less likely to focus on improving sales of existing products or services.

Question 6

When Clorox Corporation, a manufacturer of bleach and bleach-based cleaning products, acquired Kingsford Charcoal and Prime Choice brand steak sauce; it was an example of ____.
A)related differentiation
B)related diversification
C)an integrated acquisition
D)competency acquisition
E)unrelated diversification

Accepted Answer

Clorox is diversifying away from its bleach-product core into cooking supply and food businesses.

Question 7

A ____ strategy is a broad corporate-level strategic plan used to achieve strategic goals and guide the strategic alternatives that managers of individual businesses or subunits may use.
A)grand
B)growth
C)stability
D)retrenchment/recovery
E)repositioning.

Accepted Answer

A grand strategy is a high-level approach taken by the organization as a whole to achieve its overall goals and vision. It provides guidance and direction for individual business units or subunits to develop their own strategies that align with the overall strategy of the organization. The other options (growth, stability, retrenchment/recovery, repositioning) are more specific strategies that are often part of a grand strategy, rather than the overarching plan itself.

Question 8

Specialized Bicycle Components, Inc. introduced the first major production mountain bike in 1980. Two-thirds of its profits come from the sale of mountain bikes. Specialized bikes have a large share of a fast-growing market. According to the BCG matrix, specialized mountain bikes would be classified as ____.
A)problem children
B)cash cows
C)exclamation points
D)stars
E)question marks

Accepted Answer

According to the BCG matrix, stars have a high market share in a fast-growing market. Given that Specialized bikes have a large share of a fast-growing market, its mountain bike line would be classified as a star.

Question 9

Companies can achieve growth mainly by ____.
A)shrinking the scope of their business
B)growing internally through direct expansion or creating new businesses
C)deleting all cash cows from their portfolios
D)only maintaining stars in their portfolios
E)doing all of these

Accepted Answer

Companies can achieve growth mainly by growing internally through direct expansion or creating new businesses. The other options (shrinking the scope of their business, deleting all cash cows from their portfolios, and only maintaining stars in their portfolios) may help a company focus its resources and efforts, but they do not necessarily lead to growth.

Question 10

McDonald's uses a ____ strategy (a kind of grand strategy)as it increases its profits in France by offering uniquely French products such as Croque McDo, the McDonald's version of a popular French grilled sandwich.
A)growth
B)decline
C)retrenchment/recovery
D)repositioning
E)pioneering

Accepted Answer

A growth strategy is defined as a strategy that focuses on increasing profits, revenues, market share, or the number of places in which the company does business. Here, McDonald's is attempting to increase profits.

Question 11

The research on diversification in portfolio management indicates that the best approach is probably ____.
A)related differentiation
B)related diversification
C)unrelated diversification
D)repositioning
E)no diversification

Accepted Answer

Related diversification is the best approach in portfolio management as it involves investing in businesses or industries that are related to the current ones in terms of technology, distribution channels, or customer base. This can lead to synergies and cost savings, as well as reducing risk by spreading investments across different but related areas. Unrelated diversification, on the other hand, may dilute a company's core competencies and end up being inefficient.

Question 12

When Clorox Corporation, the manufacturer of bleach and bleach-based cleaning products, acquired Kingsford Charcoal and Prime Choice brand steak sauce; it was an example of ____.
A)internal growth
B)a stability strategy
C)a pioneering strategy
D)external growth
E)a repositioning strategy

Accepted Answer

External growth refers to the growth of a firm by means of mergers, acquisitions, joint ventures, or strategic alliances with other firms. Clorox Corporation's acquisition of Kingsford Charcoal and Prime Choice brand steak sauce falls under this category.

Question 13

The two major approaches to corporate-level strategy are ____.
A)portfolio strategies and secondary strategies
B)grand strategies and temporal strategies
C)grand strategies and the portfolio strategy
D)the Boston matrix strategy and the Maslow strategy
E)major strategies and minor strategies

Accepted Answer

The two major approaches to corporate-level strategy are grand strategies and portfolio strategies. The portfolio strategy involves managing a company's portfolio of businesses to maximize overall performance, while grand strategies involve a comprehensive approach to achieving a company's goals through specific actions and initiatives.

Question 14

In an attempt to stop declining profitability, ICI, a British chemical company, deleted petrochemical products from its production and concentrated on specialty chemicals, a less capital-intensive, less cyclical business. What type of a grand strategy was ICI using?
A)retrenchment
B)stability
C)growth
D)maturity
E)cutback

Accepted Answer

ICI is using a retrenchment grand strategy by cutting back on a specific product line (petrochemicals) in order to focus on a more profitable and less risky area of specialty chemicals.

Question 15

Which of the following statements is true about how the portfolio strategy can be used to help managers acquire companies that fit well with the rest of their corporate portfolio?
A)The fewer businesses in which a corporation competes, the smaller its overall chances of failing.
B)Risk can be reduced through related diversification (creating or acquiring companies in related businesses).
C)Invest the profits and cash from mature, slow-growth businesses into newer, faster growing businesses.
D)The most significant advantage of the portfolio strategy is the ability to categorize businesses as stars, exclamation points, question marks, and dogs.
E)All of these statements about how the portfolio strategy can be used to help managers acquire companies that fit well with the rest of their corporate portfolio are true.

Accepted Answer

The statement that is true about how the portfolio strategy can be used to help managers acquire companies that fit well with the rest of their corporate portfolio is that risk can be reduced through related diversification (creating or acquiring companies in related businesses). This is because related diversification helps to achieve synergy by sharing resources, capabilities, and activities among the different businesses in the portfolio, which can help to reduce overall risk. The other statements are not specifically related to how the portfolio strategy can be used for acquisitions that fit well with the corporate portfolio.

Question 16

The purpose of a ____ strategy is to turn around very poor company performance by shrinking the size or scope of the business.
A)growth
B)stability
C)retrenchment
D)maturity
E)repositioning

Accepted Answer

The given description matches with the retrenchment strategy which involves reducing the size or scope of the business in order to improve performance. A growth strategy aims to increase the size or scope of the business, a stability strategy aims to maintain the current size or scope of the business, a maturity strategy involves optimizing the current operations of the business, and a repositioning strategy involves changing the focus or target market of the business.

Question 17

Which of the following statements about portfolio strategy is true?
A)The evidence supports the usefulness of acquiring unrelated businesses.
B)Dysfunctional consequences can occur when companies are categorized.
C)The strategy may weaken the strongest performer in the corporate portfolio, the problem child.
D)Labeling a top performer as a cash cow will strengthen employee morale.
E)Maslow's hierarchy can be used to determine the level of motivation needed to acquire and make a success of portfolio strategy.

Accepted Answer

Categorizing companies can create artificial boundaries and hinder understanding of underlying relationships and synergies. This can lead to dysfunctional consequences, such as ignoring potentially valuable opportunities or misallocating resources. The other statements are not supported by evidence or are inaccurate.

Question 18

Deutsche Bank became the world's largest bank through mergers with Bankers Trust, a transatlantic banking operation. Since both banking companies had similar core capabilities, this would be classified as an example of ____.
A)related differentiation
B)related diversification
C)an integrated acquisition
D)competency acquisition
E)unrelated diversification

Accepted Answer

Since both banks had similar core capabilities, the merger would be classified as related diversification.

Question 19

Which of the following is an example of a common approach to corporate-level strategy?
A)positioning strategies
B)adaptive strategies
C)ROI strategies
D)grand strategies
E)attacking strategies

Accepted Answer

Grand strategies are a common approach to corporate-level strategy, encompassing broad, long-term plans such as growth, stability, and retrenchment.

Question 20

Companies often choose a ____ strategy when their external environment doesn't change much or after they have struggled with periods of explosive growth.
A)stability
B)growth
C)pioneering
D)portfolio
E)retrenchment

Accepted Answer

A stability strategy is often chosen by companies when their external environment doesn't change much or after they have struggled with periods of explosive growth. This strategy involves maintaining the current level of operations and focusing on improving efficiency and profitability through incremental improvements. It is a low-risk strategy that allows the company to consolidate its position in the market and reap the benefits of economies of scale. It is also a useful strategy for companies that have reached a mature stage in their lifecycle and are looking to maintain their market share while avoiding unnecessary risks.

Quiz 5: Organizational Strategy

The ____ strategy is analogous to pruning flowers.

The ____ is a portfolio strategy that managers use to categorize their corporation's businesses by growth rate and relative market share. This strategy helps them to decide how to invest corporate funds.

Starbucks, the operator of Starbucks coffeehouses, also markets a line of compilation CDs and other non-coffee items. The making and marketing of the CDs and other non-coffee products would be an example of ____.

When Coca-Cola acquired a water-treatment and bottling plant so it could produce and market Dasani brand bottled water, it was an example of ____.

Companies that are following a ____ strategy would be most likely to try to improve the way in which they sell the same goods or services to the same customers.

When Clorox Corporation, a manufacturer of bleach and bleach-based cleaning products, acquired Kingsford Charcoal and Prime Choice brand steak sauce; it was an example of ____.

A ____ strategy is a broad corporate-level strategic plan used to achieve strategic goals and guide the strategic alternatives that managers of individual businesses or subunits may use.

Companies can achieve growth mainly by ____.

McDonald's uses a ____ strategy (a kind of grand strategy) as it increases its profits in France by offering uniquely French products such as Croque McDo, the McDonald's version of a popular French grilled sandwich.

The research on diversification in portfolio management indicates that the best approach is probably ____.

When Clorox Corporation, the manufacturer of bleach and bleach-based cleaning products, acquired Kingsford Charcoal and Prime Choice brand steak sauce; it was an example of ____.

The two major approaches to corporate-level strategy are ____.

In an attempt to stop declining profitability, ICI, a British chemical company, deleted petrochemical products from its production and concentrated on specialty chemicals, a less capital-intensive, less cyclical business. What type of a grand strategy was ICI using?

Which of the following statements is true about how the portfolio strategy can be used to help managers acquire companies that fit well with the rest of their corporate portfolio?

The purpose of a ____ strategy is to turn around very poor company performance by shrinking the size or scope of the business.

Which of the following statements about portfolio strategy is true?

Deutsche Bank became the world's largest bank through mergers with Bankers Trust, a transatlantic banking operation. Since both banking companies had similar core capabilities, this would be classified as an example of ____.

Which of the following is an example of a common approach to corporate-level strategy?

Companies often choose a ____ strategy when their external environment doesn't change much or after they have struggled with periods of explosive growth.