Question 1

When a company enters the businesses of its customers in order to get closer to their ultimate (end user) customers, this is known as backward integration.

Accepted Answer

This is known as forward integration. Backward integration refers to a company entering the businesses of its suppliers.

Question 2

Common corporate-level growth strategies include forward integration, backward integration, horizontal integration, related diversification, and conglomerate diversification.

Accepted Answer

These strategies are indeed common corporate-level growth strategies aimed at expanding a company's operations or market reach. Forward integration involves moving closer to the end user in the supply chain, backward integration involves acquiring upstream suppliers, horizontal integration involves acquiring or merging with competitors, related diversification involves entering a new but related market, and conglomerate diversification involves entering entirely new, unrelated markets.

Question 3

Related diversification is an alternative to traditional forms of backward, forward, and horizontal integration.

Accepted Answer

The answer of Related diversification is an alternative to traditional...

Question 4

Conglomerate diversification is the act of adding unrelated goods or services to a firm's line of businesses.

Accepted Answer

Conglomerate diversification involves a company expanding into areas of business that are unrelated to its current operations, often to reduce risks associated with being in a single market or to leverage existing strengths in new areas.

Question 5

A stock option is a contractual right granted by a company to the employee to purchase a defined number of shares of the company's stock at a fixed price within a specified period of time.

Accepted Answer

Stock options are indeed contractual rights given to employees (and sometimes other parties) allowing them to buy the company's stock at a predetermined price for a certain period, often used as a part of compensation packages to incentivize performance and align the interests of employees with those of shareholders.

Question 6

When Sherron Watkins of Enron asked Ken Lay to investigate discrepancies with Enron's finances, Watkins requested that the law firm of Vinson & Elkins be used to conduct the investigation.

Accepted Answer

The answer of When Sherron Watkins of Enron asked Ken...

Question 7

Raptors, also known as special purpose entities, were intended to shield Enron from market losses in its growing equity business.

Accepted Answer

Raptors were special purpose entities created by Enron to hedge investment risks and keep losses off its financial statements, thereby shielding Enron from market losses in its equity business.

Question 8

The business-level strategy refers to the resources allocated and actions taken to achieve desired goals in serving a specific market with a highly interrelated set of goods and/or services.

Accepted Answer

Business-level strategy focuses on how a company competes in a particular market. It involves decisions about the products or services a company offers, the customers it targets, and the ways it can achieve a competitive advantage, often through the coordination of resources and actions to deliver a specific set of goods or services to a particular group of customers.

Question 9

The vertical integration strategy refers to the interrelated actions and resource commitments established for operations, marketing, human resources, finance, legal services, accounting, and the organization's other functional areas.

Accepted Answer

Vertical integration strategy refers to a company's control over multiple levels of its supply chain, from production to distribution, rather than the coordination of various functional areas within the company.

Question 10

In practice, managers and teams involved in business-level planning often jump back and forth between the eight tasks in the planning process.

Accepted Answer

The planning process is iterative, and managers often cycle through the tasks as they refine their plans, adapting to new information and changing circumstances.

Question 11

Task 1 of the planning process involves developing the vision, mission(s), and goals.

Accepted Answer

Task 1 of the planning process typically involves establishing the foundational elements of an organization, which include developing its vision (a long-term, aspirational view of what it wants to achieve), mission(s) (the core purpose and function of the organization, explaining why it exists), and goals (specific objectives that the organization aims to achieve to fulfill its mission and move towards its vision).

Question 12

The situations that tend to make suppliers more powerful are similar to those that make customers more powerful.

Accepted Answer

Both suppliers and customers gain power under similar conditions, such as when there are few alternatives available, making them more critical to the business and giving them leverage in negotiations.

Question 13

A company's core competencies are the strengths that make it distinctive and more competitive by providing goods or services that have unique value to customers.

Accepted Answer

Core competencies are the unique strengths or strategic advantages of a business, encompassing knowledge, skills, and capabilities that enable the company to stand out from competitors by delivering unique value to customers.

Question 14

A market penetration strategy involves seeking growth in current markets with current products or services.

Accepted Answer

A market penetration strategy indeed focuses on increasing market share in existing markets using the current product or service lineup, typically by increasing marketing efforts, adjusting pricing, or improving product quality to attract more customers from the current market base.

Question 15

Tactical plans are intended to help implement operational plans.

Accepted Answer

Tactical plans are intended to help implement strategic plans, not operational plans. Tactical plans translate broad strategies into specific, actionable steps and objectives for the short term, typically focusing on how to achieve parts of the strategic plan.

Question 16

Employee engagement forms one of Bombardier's three business priorities.

Accepted Answer

Bombardier has identified employee engagement as one of its key business priorities, alongside customer satisfaction and operational excellence.

Question 17

To help leaders and managers at Bombardier cascade business-critical information, the strategy function provides a series of tools.

Accepted Answer

The answer of To help leaders and managers at Bombardier...

Question 18

The differentiation strategy is dominant in much of the auto industry.

Accepted Answer

Many auto manufacturers focus on differentiating their products from competitors through design, technology, performance, luxury features, and branding to appeal to specific market segments and create a competitive advantage.

Question 19

A framework that describes strategies that all types of organizations can use is a generic competitive strategy.

Accepted Answer

The answer of A framework that describes strategies that all...

Question 20

Astin-Martin Hardware seeks to offer its customers lower prices than any other hardware store in town. Astin-Martin is following the differentiation strategy.

Accepted Answer

Astin-Martin Hardware is following a cost leadership strategy by seeking to offer lower prices than competitors, not a differentiation strategy which focuses on offering unique products or services.

Quiz 7: Planning and Control