Question 1

_____ level strategy pertains to the major functional departments within the business unit.

Accepted Answer

Functional level strategy focuses on the major functional areas within a business unit such as marketing, human resources, finance, operations, etc. It involves developing plans and strategies to ensure that each department contributes to the overall success of the organization. Operational strategy pertains to the day-to-day activities, Corporate strategy pertains to the overall direction of the entire company, National strategy pertains to how a company competes in a particular country or region, and Business strategy pertains to how a company competes in a particular industry or market segment.

Question 2

When Coca-Cola introduced Surge, a new citrus soft-drink, what type of strategy was being pursued?

Accepted Answer

Coca-Cola's introduction of Surge represents a business-level strategy, which focuses on competing within a specific market segment. By introducing a new citrus soft-drink, Coca-Cola was attempting to compete with other companies in the carbonated beverage market and attract customers who prefer citrus flavors.

Question 3

Ford's decision to completely redesign its Ford Taurus can be classified as a:

Accepted Answer

Redesigning the Ford Taurus is a decision related to a specific product line and market segment, which corresponds to a business level strategy. Corporate level strategy refers to decisions related to the organization's overall portfolio of businesses and markets, while functional level strategy pertains to decisions related to specific functional areas, such as marketing, human resources, or operations. Retrenchment strategy involves focusing on fewer services or products or reducing assets, while stability strategy pertains to maintaining the current business without significant changes.

Question 4

When Philip-Morris, the tobacco giant, bought Kraft, Inc., it was pursuing a _____.

Accepted Answer

Philip-Morris acquiring Kraft, Inc. is an example of a corporate-level strategy, where a company expands its business portfolio by acquiring or merging with other companies.

Question 5

When properly managed, _____ can create additional value with existing resources, providing a big boost to the bottom line.

Accepted Answer

Synergy refers to the increased effectiveness or cooperation resulting from the combined action of two or more resources. Proper management of synergy can help companies maximize the use of existing resources and generate additional value, which can ultimately lead to increased profits.

Question 6

In order to protect an organization's mission, the human resource functions are removed from strategic goals.

Accepted Answer

This statement is false. Human resource functions are an important part of achieving strategic goals and protecting an organization's mission. HR can help to ensure that the organization has the right talent, culture, and policies in place to support the mission and reach its objectives.

Question 7

Sears' decision to sell off much of its financial services division is an example of a:

Accepted Answer

Sears' decision to sell off its financial services division is a decision that affects the entire corporation, rather than just one specific business unit or function. This is an example of a corporate-level strategy, which involves decisions about the overall direction of the company, including portfolio management and diversification.

Question 8

In strategy implementation, leadership is the ability to influence people to adopt the new behaviors needed.

Accepted Answer

Leadership plays a crucial role in strategy implementation as it requires the ability to influence and motivate people to change their behavior and embrace new ways of doing things. Without leadership, strategy implementation can face significant challenges and resistance from employees.

Question 9

After Sunshine Systems merged with RTD Enterprises, company executives noticed that due to increased employee collaboration between the two units, costs were down and revenues increased within both areas. This is an example of what business phenomenon?

Accepted Answer

This is an example of synergy, which occurs when the combination of two entities produces a greater outcome than the sum of their individual efforts. The increased collaboration between Sunshine Systems and RTD Enterprises resulted in both units benefiting from cost reductions and revenue increases.

Question 10

For successful execution, alignment of everyone in the organization must occur.

Accepted Answer

For successful execution of strategies, goals, and initiatives, everyone in the organization needs to be aligned in terms of their understanding of the goals, the actions required to achieve them, and their individual accountability towards the success of the organization. Without alignment, there is a risk of confusion, miscommunication, and a lack of collaboration, which can impede progress and hinder success.

Question 11

The plan of action that prescribes resource allocation and other activities for dealing with the environment and helping the organization attain its goals is known as a(n) _____.

Accepted Answer

The description in the question matches the definition of a strategy, which is a plan of action to achieve a specific goal or objective. Options A and B refer to specific targets within the strategy, while option C is a statement of the organization's purpose, and option D is a statement of the desired future state.

Question 12

Which of the following pertains to the organization as a whole?

Accepted Answer

Corporate-level strategy pertains to the organization as a whole, including decisions about diversification, acquisitions, and allocating resources among different business units. Business-level strategy pertains to individual business units, functional-level strategy focuses on specific functional areas (e.g. marketing, operations), operational-level strategy deals with day-to-day tactics, and competitive-level strategy focuses on specific competitors in the marketplace.

Question 13

To remain competitive, companies should develop strategies that focus on core competencies, providing synergy, and creating value for _____.

Accepted Answer

The main focus of any company's strategy should be to provide value and meet the needs of its customers. While the other stakeholders such as suppliers, stockholders, employees, and board members are important, customers are the ones who ultimately decide the success of a business.

Question 14

_____ can be defined as the combination of benefits received and costs paid by the customer.

Accepted Answer

Value is the combination of benefits received and costs paid by the customer. It is the perceived worth of a product or service in the eyes of the customer. Organizational benefits, cost-benefit diversity, synergy, and core competence are not the exact definition of value.

Question 15

When AT&T decided to buy Media One, a cable company, it was pursuing a(n) _____ strategy.

Accepted Answer

The decision to acquire Media One is an example of a corporate-level strategy, as this involves the expansion of a company's business portfolio through mergers, acquisitions, or divestitures.

Question 16

Which of the following is a business activity that an organization does especially well relative to its competition?

Accepted Answer

Core competence refers to a business activity that an organization does exceptionally well relative to its competition. It is a unique strength or capability that gives an organization a competitive advantage in the marketplace.

Question 17

The set of decisions and actions used to formulate and implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals is known as:

Accepted Answer

Strategic management is the set of decisions and actions used to formulate and implement strategies to achieve organizational goals while considering the organization's environment, resources, and capabilities. Strategy formulation is the process of developing strategies, whereas strategic planning is the process of developing plans to implement those strategies. Strategy implementation is the process of carrying out the strategies, and strategy evaluation is the process of assessing their effectiveness. Therefore, the best answer is C, which encompasses all of these processes.

Question 18

A corporate-level strategy is concerned with the question:

Accepted Answer

A corporate-level strategy is concerned with defining the company's overall purpose and direction. This includes identifying what business the company is in and how it will allocate resources to different business units or product lines to achieve its goals.

Question 19

Communication is one of the most important methods for effective strategy execution.

Accepted Answer

Communication plays a crucial role in executing strategies effectively. It helps in ensuring that everyone involved in implementing the strategy understands their roles and responsibilities, monitors progress, identifies and resolves issues, and ultimately achieves the desired outcome. Without effective communication, strategies can fail due to misunderstandings or lack of clarity, leading to wasted resources and lost opportunities.

Question 20

The condition that exists when the organization's parts interact to produce a joint effect that is greater than the sum of the parts acting alone is known as:

Accepted Answer

Synergy refers to the interaction of different parts of an organization to produce a joint effect that is greater than the sum of the parts acting alone. This can be achieved through collaboration and cooperation among different departments, teams, or individuals within the organization. Synergy can create efficiencies, improve productivity, and enhance organizational effectiveness. Core competence refers to the unique capabilities and skills that a company possesses and can leverage to gain a competitive advantage. Value creation refers to the process of adding value to a company's products or services through innovation, quality, or other means. Business-level strategy and multidomestic strategy are both broader concepts related to a company's overall approach to competition and market positioning.

Quiz 8: Strategy Formulation and Execution