Question 1

Which of the following will most likely be an opportunity according to an organization's SWOT analysis?
A)The company can take over one of its bankrupt competitors.
B)The sales of the organization's products are the highest in the industry.
C)The organization is growing with a strong product line.
D)Consumers are familiar with the organization's logo and its strong reputation.
E)The organization faces increased competition in its market.

Accepted Answer

In Table 8.1 Questions for SWOT Analysis, "Reduce rivalry among competitors" is listed as a potential opportunity."Strong product lines" and "Brand-name reputation" are listed as potential strengths."Increase in domestic competition" is listed as a potential threat.

Question 2

In a first of its kind, a multinational tire manufacturer introduces a new range of premium tires that can handle extreme temperatures better at a higher price.The tires are designed keeping in mind the climatic conditions in the Middle East and products are marketed only in the Middle East.The manufacturer is pursuing
A)a focused differentiation strategy.
B)a focused low-cost strategy.
C)a general differentiation strategy.
D)a general low-cost strategy.
E)both a low-cost and a differentiation strategy.

Accepted Answer

Serving only one segment of the overall market and trying to be the most differentiated organization serving that segment is called focused differentiation strategy.

Question 3

Another name for contingency planning is ________ planning.
A)single-use
B)ad-hoc
C)business
D)divisional-level
E)scenario

Accepted Answer

Scenario planning (also known as contingency planning) is the generation of multiple forecasts of future conditions followed by an analysis of how to respond effectively to each of those conditions.

Question 4

Which of the following statements about simultaneously pursuing both a low-cost strategy and a differentiation strategy is true?
A)Organizations stuck in the middle tend to have higher levels of performance than those that pursue a low-cost or a differentiation strategy.
B)Focusing on the differentiation of a product will result in reduced costs for a company.
C)Extremely well managed companies may be able to keep low costs and differentiate their products.
D)Managers try to gain a competitive advantage by focusing only on driving the company's costs down below the costs of industry rivals.
E)Managers try to gain a competitive advantage by focusing only on distinguishing an organization's products from the products of competitors on dimensions such as product design, quality, or after-sales service.

Accepted Answer

According to Porter's theory, managers cannot simultaneously pursue both a low-cost strategy and a differentiation strategy.Although Porter's ideas may be valid in most cases, very well-managed companies may pursue both low costs and differentiated products.

Question 5

Which of the following can be defined as a threat according to the five forces model?
A)The level of rivalry among organizations in an industry is low.
B)Brand loyalty is very high.
C)There are a large number of suppliers.
D)Only a few large customers are available to buy an industry's output.
E)Products are unique and cannot be substituted.

Accepted Answer

The power of large customers: If only a few large customers are available to buy an industry's output, they can bargain to drive down the price of that output.As a result, industry producers make lower profits.

Question 6

To determine an organization's missions and goals, managers must first
A)perform a SWOT analysis.
B)apply the five forces model.
C)define its business.
D)develop a long-term plan.
E)develop a short-term plan.

Accepted Answer

To determine an organization's mission, managers must first define its business so they can identify what kind of value customers are receiving.

Question 7

There is constant, fierce competition between telecommunication companies due to the continuous advances in mobile technology and a wide range of customer tastes.This is called
A)ultracompetition.
B)hypocompetition.
C)supercompetition.
D)hypercompetition.
E)extracompetition.

Accepted Answer

Hypercompetition is permanent, ongoing, intense competition brought about by advancing technology or changing customer tastes and fads and fashions.

Question 8

In performing a SWOT analysis, a furniture company realized that the number of competing firms in its industry was increasing.The company would classify this as a(n)
A)strength.
B)weakness.
C)opportunity.
D)threat.
E)advantage.

Accepted Answer

In Table 8.1 Questions for SWOT Analysis, "Increase in industry rivalry" is listed as a potential threat.

Question 9

In performing a SWOT analysis, a firm realized that the manufacturing costs for its new division were rising.The firm would classify this as a potential
A)strength.
B)weakness.
C)opportunity.
D)threat.
E)advantage.

Accepted Answer

In Table 8.1 Questions for SWOT Analysis, "Rising manufacturing costs" is listed as a potential strength.

Question 10

In the five forces model, the _____ that companies compete against one another for customers, the _____ the level of profits is likely to be for that industry.
A)more; lower
B)more; higher
C)less; lower
D)less; equal
E)more; equal

Accepted Answer

The more that companies compete against one another for customers, the lower is the level of industry profits.

Question 11

According to an organization's SWOT analysis, which of the following would be a potential strength?
A)The organization has the potential to overcome the barriers of entry to a new market.
B)The organization has the ability to manage strategic change.
C)Demographic factors reshape the target market.
D)The organization's customer preferences are changing.
E)The organization can expand vertically integrate forward.

Accepted Answer

In Table 8.1 Questions for SWOT Analysis, "Ability to manage strategic change" as a potential strength."Vertically integrate forward" and "Overcome barriers to entry" are listed as potential opportunities."Change in demographic factors" and "Changes in consumer tastes" are listed as potential threats.

Question 12

A toy manufacturing company which previously sold its products through a popular toy and juvenile-product retailer decides to enter the retail industry, quickly establishing several retail outlets exclusively for its products.The toy manufacturing company is engaging in
A)forward horizontal integration.
B)backward vertical integration.
C)forward vertical integration.
D)backward horizontal integration.
E)unrelated diversification.

Accepted Answer

Forward vertical integration is a corporate-level strategy in which a company expands its business operations forward into a new industry that uses, distributes, or sells the company's products.

Question 13

A group of managers analyze both the internal strengths and weaknesses of their organization as well as the opportunities and threats of the external environment.What type of analysis is this?
A)mission analysis
B)SWOT analysis
C)functional analysis
D)diversification analysis
E)competition analysis

Accepted Answer

SWOT analysis is a planning exercise in which managers identify internal organizational strengths (S) and weaknesses (W) and external environmental opportunities (O) and threats (T).

Question 14

The pharmaceutical industry is extremely dynamic.A company that releases a product to the general public with the intention of keeping prices high may see quick competition arising from other products made from different compounds that perform the same functions as the company's product.According to the five forces model, this type of threat is called
A)the level of rivalry among organizations in an industry.
B)the potential for entry into an industry.
C)the power of large suppliers.
D)the power of large customers.
E)the threat of substitute products.

Accepted Answer

The threat of substitute products: When a substitute for a product exists, companies cannot demand high prices for it or customers will switch to the substitute, and this constraint keeps their profits low.

Question 15

Employees tend to be motivated and perform better if they are taken in by the vision of the top managers of their organizations.It therefore becomes essential for top managers to develop a strong sense of
A)goal orientation.
B)strategic leadership.
C)strategy formulation.
D)business planning.
E)organizational affluence.

Accepted Answer

Strategic leadership is the ability of the CEO and top managers to convey a compelling vision of what they want the organization to achieve to their subordinates.

Question 16

A furniture company is trying to keep the costs of the company low by switching its suppliers and ordering materials in larger quantities to reduce overall costs.The company is employing a
A)focused differentiation strategy.
B)low-cost strategy.
C)high-cost strategy.
D)unifying strategy.
E)hypercompetition strategy.

Accepted Answer

With a low-cost strategy, managers try to gain a competitive advantage by focusing the energy of all the organization's departments or functions on driving the company's costs down below the costs of its industry rivals.

Question 17

_____ is a corporate-level strategy in which a company expands its business operations into a new industry that produces inputs for the company's products.
A)Forward vertical integration
B)Forward horizontal integration
C)Unrelated diversification
D)Backward horizontal integration
E)Backward vertical integration

Accepted Answer

Backward vertical integration is a corporate-level strategy in which a company expands its business operations into a new industry that produces inputs for the company's products.

Question 18

_____ is a corporate-level strategy that emphasizes reinvesting a company's profits in strengthening its competitive position in its current industry.
A)Concentration on a single industry
B)Forward vertical integration
C)Diversification
D)Backward vertical integration
E)International expansion

Accepted Answer

Growing companies reinvest their profits to strengthen their competitive position in the industry in which they are currently operating; in doing so, they pursue the corporate-level strategy of concentration on a single industry.

Question 19

As a part of its yearly planning activities, PDQ Financial Services generates a list of possible future scenarios and creates a plan to respond to each of these forecasts.PDQ Financial Services is practicing
A)single-use planning.
B)ad-hoc planning.
C)divisional-level planning.
D)contingency planning.
E)functional planning.

Accepted Answer

Scenario planning (also known as contingency planning) is the generation of multiple forecasts of future conditions followed by an analysis of how to respond effectively to each of those conditions.

Question 20

An organization attempting to succeed by distinguishing its products from those of the competition is most likely to use a(n)
A)differentiation strategy.
B)low-cost strategy.
C)diversification strategy.
D)stuck-in-the-middle strategy.
E)association strategy.

Accepted Answer

With a differentiation strategy, managers try to gain a competitive advantage by focusing all the energies of the organization's departments or functions on distinguishing the organization's products from those of competitors on one or more important dimensions, such as product design, quality, or after-sales service and support.

Quiz 8: The Manager As a Planner and a Strategist

Which of the following will most likely be an opportunity according to an organization's SWOT analysis?

Another name for contingency planning is ________ planning.

Which of the following statements about simultaneously pursuing both a low-cost strategy and a differentiation strategy is true?

Which of the following can be defined as a threat according to the five forces model?

To determine an organization's missions and goals, managers must first

There is constant, fierce competition between telecommunication companies due to the continuous advances in mobile technology and a wide range of customer tastes.This is called

In performing a SWOT analysis, a furniture company realized that the number of competing firms in its industry was increasing.The company would classify this as a(n)

In performing a SWOT analysis, a firm realized that the manufacturing costs for its new division were rising.The firm would classify this as a potential

In the five forces model, the _ that companies compete against one another for customers, the _ the level of profits is likely to be for that industry.

According to an organization's SWOT analysis, which of the following would be a potential strength?

A toy manufacturing company which previously sold its products through a popular toy and juvenile-product retailer decides to enter the retail industry, quickly establishing several retail outlets exclusively for its products.The toy manufacturing company is engaging in

A group of managers analyze both the internal strengths and weaknesses of their organization as well as the opportunities and threats of the external environment.What type of analysis is this?

Employees tend to be motivated and perform better if they are taken in by the vision of the top managers of their organizations.It therefore becomes essential for top managers to develop a strong sense of

A furniture company is trying to keep the costs of the company low by switching its suppliers and ordering materials in larger quantities to reduce overall costs.The company is employing a

_____ is a corporate-level strategy in which a company expands its business operations into a new industry that produces inputs for the company's products.

_____ is a corporate-level strategy that emphasizes reinvesting a company's profits in strengthening its competitive position in its current industry.

As a part of its yearly planning activities, PDQ Financial Services generates a list of possible future scenarios and creates a plan to respond to each of these forecasts.PDQ Financial Services is practicing

An organization attempting to succeed by distinguishing its products from those of the competition is most likely to use a(n)