Question 1

When organizations endeavor (1) to keep their costs (and hence the prices of their products or services) below those of competitors and (2) to target a wide market, they are utilizing a ________ strategy.

Accepted Answer

The cost-leadership strategy is to keep the costs, and hence prices, of a product or service below those of competitors and to target a wide market.

Question 2

Contingency planning is also known as

Accepted Answer

Contingency planning, also known as scenario planning and scenario analysis, is the creation of alternative hypothetical but equally likely future conditions.

Question 3

________ is the process by which a company compares its performance with that of high-performing organizations.

Accepted Answer

Benchmarking is a process by which a company compares its performance with that of high-performing organizations.

Question 4

A forecast is a(n)

Accepted Answer

A forecast is a vision or projection of the future.

Question 5

Delux Technologies makes and sells only one product, a high-quality processor for mainframe computers. Delux was recently approached by Imagination Station, a large computer manufacturer, about purchasing their company. Imagination Station is engaging in

Accepted Answer

In vertical integration, a firm expands into businesses that provide the supplies it needs to make its products or that distribute and sell its products.

Question 6

Value Products is an organization that operates several companies that market food products, restaurant equipment, and paper and plastic products, and it even has a division that counsels restaurant owners, helping them launch new restaurants successfully. Value Products is pursuing a ________ strategy.

Accepted Answer

Diversification strategy means operating several businesses to spread the risk.

Question 7

Michael Porter proposed that business-level strategies originate with the primary competitive forces in the firm's environment; these forces are the

Accepted Answer

Strategic-management expert Michael Porter suggested in his model for industry analysis that business-level strategies originate in five primary competitive forces in the firm's environment: (1) threats of new entrants, (2) bargaining power of suppliers, (3) bargaining power of buyers, (4) threats of substitute products or services, and (5) rivalry among competitors.

Question 8

Porter's competitive strategies of cost leadership and differentiation focus on ________ markets, while the cost-focus and focused-differentiation strategies focus on ________ markets.

Accepted Answer

Porter's four competitive strategies (also called four generic strategies) are (1) cost-leadership (wide markets), (2) differentiation (wide markets), (3) cost-focus (narrow markets), and (4) focused-differentiation (narrow markets).

Question 9

Tito knows that one of the reasons people do not return to his electronics store is because of the slow service. How would a SWOT analysis classify the slow service at Tito's electronic store?

Accepted Answer

Weaknesses are internal matters. They are the drawbacks that hinder an organization in executing strategies in pursuit of its vision. Weaknesses could be in the same categories as strengths: work processes, organization, culture, staff, product quality, production capacity, image, financial resources and requirements, service levels, and other internal matters. At Tito's electronics store, the slow service is a weakness.

Question 10

In a SWOT analysis, organizational strengths are

Accepted Answer

Organizational strengths are the skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its mission.

Question 11

Many customers shop at All Natural because of the employees' extensive product knowledge. In a SWOT analysis, the employees' high levels of product knowledge are an example of the company's

Accepted Answer

Strengths are inside matters; they are the skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its vision. Strengths could be work processes, organization, culture, staff, product quality, production capacity, image, financial resources and requirements, service levels, and other internal matters.

Question 12

Chris and his family have developed a successful business selling a liquid spray fertilizer to farmers. The fertilizer consists of rich, organic, composted material. Recently, Organic Seed, a national seed company, has been marketing a powdered chemical fertilizer to its customers; Organic's fertilizer is less expensive than Chris's product. Organic's efforts are an example of the ________ in Porter's model for industry analysis.

Accepted Answer

There is wild competition among retailers for similar products marketed in different ways or formats. In this example, it is the liquid fertilizer versus the powdered fertilizer.

Question 13

Sales this year at Stars and Stripes Consignment have been high, and based on several factors, Stars and Stripes projects next year's sales to also be good. However, even with a forecast of continued strong sales, Starts and Stripes Consignment needs to develop a plan in case sales drop unexpectedly. ________ is the type of planning for alternative future conditions.

Accepted Answer

Contingency planning, also known as scenario planning and scenario analysis, is the creation of alternative hypothetical but equally likely future conditions.

Question 14

True Taste's Restaurant and Catering serves delicious vegetarian and vegan dishes. So, when the local community became interested in eating a healthier diet, True Taste's benefited. In a SWOT analysis, the changing community attitudes are an example of a(n) ________ for True Taste's Restaurant.

Accepted Answer

Opportunities are outside matters. They are environmental factors that the organization may exploit for competitive advantage. Opportunities could be market segment analysis, industry and competition analysis, impact of technology on organization, product analysis, governmental impacts, and other external matters.

Question 15

The basic assumption that the picture of the present can be projected into the future is the basis of a

Accepted Answer

A trend analysis is a hypothetical extension of a past series of events into the future.

Question 16

Ski Safety sells emergency safety and rescue products to ski patrols and rescue workers at prices that are below those of its competitors, which offer a larger line of more expensive products and focus on broader markets. Ski Safety is pursuing a ________ strategy.

Accepted Answer

The cost-focus strategy is to keep the costs, and hence prices, of a product or service below those of competitors and to target a narrow market.

Question 17

World Grocer sells high-quality products and grocery items that are unique to its highly populated area; in addition, it offers delivery for customers who are unable to leave their home and a number of regular workshops regarding healthy eating. By offering these types of products and services, World Grocer is pursuing a ________ strategy.

Accepted Answer

The differentiation strategy is to offer products or services that are of unique and superior value compared to those of competitors but to target a wide market.

Question 18

The owners of Everything Outdoors, a family-owned garden center in a rural community, are concerned over the news that a large retailer with a garden center is building a new store on the other side of town. According to a SWOT analysis, this new retailer is a(n) ________ to Everything Outdoors.

Accepted Answer

Threats are outside matters. They are environmental factors that hinder an organization's achieving a competitive advantage. Threats could be in the same categories as opportunities: market segment analysis, industry and competition analysis, impact of technology on an organization, product analysis, governmental impacts, and other external matters. The new retail store poses a threat to Everything Outdoors.

Question 19

Organizational opportunities in a SWOT analysis are

Accepted Answer

Organizational opportunities are environmental factors that the organization may exploit for competitive advantage.

Question 20

The Platinum Platform, in Dubuque, Iowa, sells high-quality, unique bedding that is a real value to upscale homes in the area. No other company in its local area markets bedding of such quality and value. By offering this type of product, The Platinum Platform is utilizing a ________ strategy.

Accepted Answer

The focused-differentiation strategy is to offer products or services that are of unique and superior value compared to those of competitors and to target a narrow market.

Quiz 6: Strategic Management: How Exceptional Managers Realize a Grand Design