Question 1

Maria's Mart is a small store located along a major interstate highway that sells gas and diesel,food,souvenirs,DVD movies,and a wide variety of other items.There is even a café inside the store.Maria's Mart is an example of a diversification strategy.

Accepted Answer

Diversification is operating several businesses in order to spread the risk.You see this at the small retailer level when you drive past a store that sells gas and food and souvenirs and rents DVD movies.

Question 2

Humberto,the owner of a small floral shop,is worried because he recently heard that a popular local grocery store,just two blocks away,is adding a floral department soon.Humberto is concerned because new competitors can take away customers from existing organizations.

Accepted Answer

New competitors can take away customers from existing organizations,which is called the threat of new entrants in the model.Example: Kraft Macaroni & Cheese is a venerable,well-known brand but is threatened from the low end by store brands,such as Walmart's brand,and from the high end by Annie's Organic & Natural Mac and Cheese.

Question 3

Because all work ultimately entails some human interaction,effort,or involvement,Bossidy and Charan stated that focusing on organization synergy is the most important process in strategy execution.

Accepted Answer

Because all work ultimately entails some human interaction,effort,or involvement,Bossidy and Charan stated that the people process is the most important.A company's overall ability to execute is a function of effectively executing according to three processes: people,strategy,and operations.

Question 4

Sandra displays and sells paintings and local art in her gallery,and in the evenings she teaches art classes in the back of her studio,a business named Sandra's Art School.This is an example of related diversification.

Accepted Answer

An example of related diversification is an organization under one ownership that operates separate businesses related to one another.

Question 5

In general,the BCG matrix suggests that an organization will do better in fast-growing markets in which it has a high market share rather in slow-growing markets in which it has a low market share.

Accepted Answer

The BCG matrix is a means of evaluating strategic business units on the basis of (1)their business growth rates and (2)their share of the market.In general,the BCG matrix suggests that an organization will do better in fast-growing markets in which it has a high market share rather in slow-growing markets in which it has a low market share.

Question 6

Bossidy and Charan suggested that making realism a priority begins with leaders first being cautious and then being realistic only if the situation allows this.

Accepted Answer

Bossidy and Charan proposed that there are seven essential types of leader behaviors that are needed to fuel the engine of execution.Insisting on realism is among them.Many people want to avoid or shade reality,hiding mistakes or avoiding confrontations.Making realism a priority begins with the leaders being realistic themselves,and making sure realism is the goal of all dialogues in the organization.

Question 7

The basic assumption with a trend analysis is that the picture of the present can be projected into the future.This is a bad assumption,because even if you have enough historical data,it is unproductive to assume.

Accepted Answer

A trend analysis is a hypothetical extension of a past series of events into the future.The basic assumption is that the picture of the present can be projected into the future.This is not a bad assumption,if you have enough historical data,but it is always subject to surprises.

Question 8

Brilliante Pens,a 125-year-old pen manufacturer,has continued to market very high-quality pens,many over $1,000,to executives globally,always maintaining its reputation of superior value.Brilliante is an example of an organization utilizing a cost-focus 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.Some luxury cars,like the Rolls-Royce,Ferrari,and Lamborghini,are so expensive that only a few car buyers can afford them.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 9

According to the BCG matrix,organizations that have high growth and high market share are stars and should be kept.

Accepted Answer

According to the BCG matrix,organizations that have high growth and high market share are stars and should be kept.

Question 10

For over 20 years,ABC Manufacturing produced only one product,a car part for Moraine Assembly,the Moraine,Ohio,General Motors truck factory.So when GM closed the Moraine Assembly facility,ABC was an example of a vulnerable company.

Accepted Answer

In a single-product strategy,a company makes and sells only one product within its market.This allows you to focus your manufacturing and marketing efforts just on that product.The risk,of course,is that you are vulnerable if a rival gets the jump on you,or if an act of God intervenes,and your entire business may go under.

Question 11

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

Accepted Answer

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

Question 12

In a single-product strategy,a company makes and sells only one product within its market,such as a farmer who grows and sells only corn.

Accepted Answer

In a single-product strategy,a company makes and sells only one product within its market.

Question 13

In the Porter's model for industry analysis,business-level strategies originate in the three primary competitive forces of the firm's environment: threats of new entrants,bargaining power of suppliers,and threats of substitute products.

Accepted Answer

Strategic-management expert Michael Porter suggested in his Porter's 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 14

In the retail industry,time-series forecasts,a type of trend analysis,are used to predict long-term trends such as seasonal variations,as in Christmas sales versus summer sales.

Accepted Answer

An example of trend analysis is a time-series forecast,a hypothetical extension of a past series of events into the future.The basic assumption is that the picture of the present can be projected into the future.An example of trend analysis is a time-series forecast,which predicts future data based on patterns of historical data.Time-series forecasts are used to predict long-term trends,cyclic patterns (as in the up-and-down nature of the business cycle),and seasonal variations (as in Christmas sales versus summer sales).

Question 15

Nick,the R&D department manager of Precise,a manufacturer of high-quality watches for over 125 years,was told in a management meeting that the company's biggest competitor,Accurate Watches,is introducing a low-cost,yet attractive line of watches that will be sold in Walmart stores.As a result,the top management of Precise is pressuring Nick to lower the production costs on existing products and also to develop a line of watches that can be manufactured inexpensively to be marketed to a wider variety of customers at a much lower price.This is an example of a quality-leadership 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 16

Contingency planning is also known as time management and compartmentalization.

Accepted Answer

Contingency planning is also known as scenario planning and scenario analysis.

Question 17

The concept that the economic value of separate,related businesses under one ownership and management is greater together than the businesses are worth separately is known as reduced risk.

Accepted Answer

The concept of synergy is that the economic value of separate,related businesses under one ownership and management is greater together than the businesses are worth separately.

Question 18

The Johnsons have owned a farm,Johnson Family Holdings Incorporated,for over 150 years.Al Johnson,president of Johnson Family Holdings,purchased a trucking company,shipping products for other farmers and businesses in their area.Later he opened a small store that carries a variety of products,and he even operates a small used auto dealership near the farm.This is an example of unrelated diversification.

Accepted Answer

Unrelated diversification means operating several businesses under one ownership that are not related to one another.GE,which began by making lighting products,diversified into such unrelated areas as plastics,broadcasting,and financial services.

Question 19

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

Accepted Answer

Contingency planning,also known as scenario planning and scenario analysis,is the creation of alternative hypothetical but equally likely future conditions.Benchmarking is a process by which a company compares its performance with that of high-performing organizations.

Question 20

Execution consists of questioning and putting issues on the back burner for a period of time to achieve results promised.

Accepted Answer

Execution consists of using questioning,analysis,and follow-through to mesh strategy with reality,align people with goals,and achieve results promised.

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

Maria's Mart is a small store located along a major interstate highway that sells gas and diesel,food,souvenirs,DVD movies,and a wide variety of other items.There is even a café inside the store.Maria's Mart is an example of a diversification strategy.

Humberto,the owner of a small floral shop,is worried because he recently heard that a popular local grocery store,just two blocks away,is adding a floral department soon.Humberto is concerned because new competitors can take away customers from existing organizations.

Because all work ultimately entails some human interaction,effort,or involvement,Bossidy and Charan stated that focusing on organization synergy is the most important process in strategy execution.

Sandra displays and sells paintings and local art in her gallery,and in the evenings she teaches art classes in the back of her studio,a business named Sandra's Art School.This is an example of related diversification.

In general,the BCG matrix suggests that an organization will do better in fast-growing markets in which it has a high market share rather in slow-growing markets in which it has a low market share.

Bossidy and Charan suggested that making realism a priority begins with leaders first being cautious and then being realistic only if the situation allows this.

The basic assumption with a trend analysis is that the picture of the present can be projected into the future.This is a bad assumption,because even if you have enough historical data,it is unproductive to assume.

Brilliante Pens,a 125-year-old pen manufacturer,has continued to market very high-quality pens,many over $1,000,to executives globally,always maintaining its reputation of superior value.Brilliante is an example of an organization utilizing a cost-focus strategy.

According to the BCG matrix,organizations that have high growth and high market share are stars and should be kept.

For over 20 years,ABC Manufacturing produced only one product,a car part for Moraine Assembly,the Moraine,Ohio,General Motors truck factory.So when GM closed the Moraine Assembly facility,ABC was an example of a vulnerable company.

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

In a single-product strategy,a company makes and sells only one product within its market,such as a farmer who grows and sells only corn.

In the Porter's model for industry analysis,business-level strategies originate in the three primary competitive forces of the firm's environment: threats of new entrants,bargaining power of suppliers,and threats of substitute products.

In the retail industry,time-series forecasts,a type of trend analysis,are used to predict long-term trends such as seasonal variations,as in Christmas sales versus summer sales.

Contingency planning is also known as time management and compartmentalization.

The concept that the economic value of separate,related businesses under one ownership and management is greater together than the businesses are worth separately is known as reduced risk.

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

Execution consists of questioning and putting issues on the back burner for a period of time to achieve results promised.