Question 1

According to the BCG matrix, a strategic business unit (SBU) with a low market share in an industry with a high growth rate is classified as a:

Accepted Answer

In the BCG matrix, an SBU with a low market share in a high-growth industry is classified as a "question mark" because it has potential for growth but requires significant investment to increase market share.

Question 2

After Roto-Rooter, Inc., acquired Chemed Corporation, it tried to expand that division into residential plumbing repair work. So far, Roto-Rooter only has about 1 percent of what could be a very lucrative market. According to the BCG matrix, since the company has not achieved a strong foothold in an expanding but highly competitive market, the residential plumbing SBU can be classified as a(n):

Accepted Answer

The BCG matrix classifies a business unit with a small market share in a fast-growing market as a "question mark," indicating uncertainty about its future potential and the need for further investment to increase market share.

Question 3

Through a joint venture, Wal-Mart has established East China Wal-Mart Stores The strategic move for the U.S. retailer failed to win a foothold in the large and rapidly growing coastal Chinese retail market. According to the BCG matrix, Wal-Mart would classify its East China Wal-Mart stores as:

Accepted Answer

The answer of Through a joint venture, Wal-Mart has established...

Question 4

At one time Procter & Gamble marketed both Charmin and White Cloud toilet paper with premium prices. The toilet paper industry has a low growth rate. Combined, the two brands gave P&G a relatively large share of the market for toilet paper. According to the BCG matrix, toilet paper would be an example of a(n) ______ for P&G.

Accepted Answer

The BCG matrix classifies products into four categories based on market growth and market share. A product with a low growth rate but a high market share, like P&G's toilet paper brands, is considered a "cash cow," meaning it generates steady cash flow without the need for significant investment.

Question 5

According to the BCG matrix, a strategic business unit (SBU) with a low market share in an industry with a low growth rate is classified as a(n):

Accepted Answer

In the BCG matrix, an SBU with a low market share in a low-growth industry is classified as a "dog." These are considered to not generate much cash for the company and might even require more cash to maintain than they generate.

Question 6

The GE business screen classifies SBUs based on business position and:

Accepted Answer

The GE business screen, an extension of the BCG matrix, classifies Strategic Business Units (SBUs) based on business position and market attractiveness, which encompasses factors like industry growth, profitability, competitive intensity, and market entry barriers.

Question 7

The GE business screen classifies SBUs based on market attractiveness and:

Accepted Answer

The GE business screen, also known as the GE/McKinsey Matrix, classifies Strategic Business Units (SBUs) based on two dimensions: market attractiveness and business position (or competitive strength). This model helps organizations decide where to invest, develop, or divest.

Question 8

Novartis, a Swiss pharmaceutical company sold its small food and beverage unit, which included Ovaltine brand malt drink, to Associated British Foods. Associated British Foods plans to rejuvenate the business in the rapidly growing food and beverage industry. Associated British Food will more than likely use a _____ strategy with its newly acquired food and beverage unit.

Accepted Answer

Associated British Foods plans to rejuvenate the business, indicating they will likely invest in the newly acquired unit to grow and expand its presence in the food and beverage industry.

Question 9

All of the following strategies are typically used with the GE business screen EXCEPT:

Accepted Answer

The GE business screen is a method used to evaluate business portfolios and make strategic decisions based on market attractiveness and business unit strength. Strategies like divesting, harvesting, investing, and protecting are commonly associated with it. Diversifying, however, is more about expanding into new markets or products rather than a direct strategy derived from the GE business screen analysis.

Question 10

Coca-Cola still markets Tab to a group of extremely loyal fans of the diet soda. Coca-Cola doe not promote the product, but it does continue making the product available to keep its customers happy. Coke takes what little profit Tab earns and uses that money in more attractive markets. Coca-Cola is using a _____ strategy with Tab.

Accepted Answer

Coca-Cola is using a harvest strategy with Tab by continuing to sell the product without actively promoting it, aiming to generate and use the remaining profits in more lucrative areas.

Question 11

Novartis, a Swiss pharmaceutical company, sold its small food and beverage unit, which included Ovaltine brand malt drink, to Associated British Foods. Novartis used a _____ strategy with its food and beverage unit.

Accepted Answer

Novartis used a divest strategy by selling its small food and beverage unit, including the Ovaltine brand, to focus more on its core pharmaceutical business.

Question 12

In order to achieve its goal of being market leader in the fields in which it competes, General Electric used a _____ strategy to rid itself of over 200 product lines in which it was not the leading company.

Accepted Answer

General Electric used a divest strategy to sell off or get rid of business units or product lines that were not leading in their markets, allowing the company to focus on areas where it could be the market leader.

Question 13

Southwire is one of the world's largest cable and wire manufacturers. In 1999 it sold its copper recycling plant so it could concentrate on expanding its wire and cable manufacturing capabilities. Since the price of recycled metals had declined, it was not profitable for Southwire to continue this operation. According to the GE business screen, Southwire engaged in which of the following strategies?

Accepted Answer

Southwire's decision to sell its copper recycling plant to focus on expanding its wire and cable manufacturing capabilities is an example of a divestiture strategy. This move was made because the operation was no longer profitable, indicating a strategic decision to divest from a non-core, underperforming asset.

Question 14

Which of the following strategies from the GE business screen is most likely to be used with an SBU that is classified as a dog according to the BCG matrix?

Accepted Answer

Dogs in the BCG matrix typically represent business units with low market share in a low-growth market. The most common strategy for these units is to divest, which means selling off or shutting down these units to reallocate resources more effectively.

Question 15

The primary weakness inherent in all planning models is:

Accepted Answer

Planning models often simplify complex realities to make them manageable, but this simplification can overlook important nuances and lead to flawed strategies.

Question 16

Which of the following is described by the text as a strength inherent in all of the four planning models?

Accepted Answer

The text describes that all four planning models encourage consistent assessment of opportunities, allocation of resources, and formulation of strategies as a strength inherent in them. This suggests that these models are designed to facilitate strategic planning by providing a structured approach to evaluating opportunities and making resource allocation decisions.

Question 17

According to the _____ framework, a firm must increase the value offered to its customers by choosing and effectively implementing one of the following three: operational excellence, product leadership, or customer intimacy.

Accepted Answer

The correct framework is the "value disciplines" model, which posits that companies can outperform rivals by excelling in one of three areas: operational excellence, product leadership, or customer intimacy.

Question 18

Clorox bleach has 60 percent of its market. According to the value discipline framework, Clorox bleach has:

Accepted Answer

Clorox bleach has a large market share, which indicates that it has a strong brand and a loyal customer base. This suggests that Clorox bleach has a product leadership strategy, which focuses on providing customers with high-quality products that meet their needs.

Question 19

There are five major players in the orthopedics industry, and many smaller ones. Zimmer/Centerpulse, the largest of the orthopedic company, has 30 percent of the world market. According to the value discipline frame, Zimmer/Centerpulse has:

Accepted Answer

Product leadership is indicated by Zimmer/Centerpulse's position as the largest orthopedic company with a significant market share, suggesting they lead through innovation, quality, and brand reputation in their industry.

Question 20

Andersen Windows maintains no finished product inventory. After an order is placed and reviewed for engineering safety, manufacturing begins. In 2002, Andersen made over 200,000 different styles of windows to meet the needs of a wide variety of customers. According to the _____, Andersen Windows has strong customer intimacy.

Accepted Answer

The "value disciplines" model, proposed by Treacy and Wiersema, outlines three areas businesses can focus on to outperform competitors: operational excellence, product leadership, and customer intimacy. Andersen Windows' approach of not maintaining finished product inventory and manufacturing over 200,000 different styles of windows to meet specific customer needs is a clear example of focusing on customer intimacy. This strategy emphasizes tailoring products and services to fit the unique needs of individual customers.

Quiz 20: Strategic Marketing Planning