Question 1

An advantage of the differentiation strategy is:

Accepted Answer

Differentiation makes industry entry difficult because new companies have no brand name to help them compete and customers do not perceive other products to be close substitutes,so this also allows for premium pricing and results in high profits.

Question 2

To determine an organization's mission,managers must first define its:

Accepted Answer

To determine an organization's mission-the overriding reason it exists to provide customers with goods or services they value-managers must first define its business so that they can identify what kind of value customers are receiving.

Question 3

A company has a requirement that any manager who receives a gift from any of the company's customers worth more than $25 must report this gift to the company's human resources department.This is an example of a:

Accepted Answer

A rule is a formal,written guide to action in an organization.

Question 4

BMW produces cars exclusively for high-income customers.BMW is pursuing a ______________ strategy.

Accepted Answer

Focused differentiation strategy helps organizations serve just one or a few segments of the market and aim to make their organization the most differentiated company serving that segment.BMW,for example,pursues a focused differentiation strategy,producing cars exclusively for higher-income customers.

Question 5

The Stonehedge Bayonet Company aims at a market of hunters,and they try to keep prices lower than competition.Stonehedge is pursuing a ______________ strategy.

Accepted Answer

Companies pursuing a focused low-cost strategy serve one or a few segments of the overall market and aim to make their organization the lowest-cost company serving that segment.

Question 6

Arrow Corp.attempts to gain a competitive advantage by driving down its production costs per unit below those of its competitors.Arrow is pursuing a(n)______________ 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 7

Coca-Cola spends an enormous amount of money on advertising to distinguish,and create a unique image for,their products.Coca-Cola pursuing a ______________ 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.Coca-Cola pursues a strategy of differentiation.It spends enormous amounts of money on advertising to differentiate,and create a unique image for its products.

Question 8

The corporate-level strategy that becomes appropriate when managers see the need to reduce the size of their organizations to increase performance is ____________.

Accepted Answer

Concentration on a single industry becomes an appropriate corporate-level strategy when managers see the need to reduce the size of their organizations to increase performance.

Question 9

Managers at Dimensions,Inc. ,analyze the current situation of their organization and then develop plans to help their organization accomplish its mission and achieve its goals.This is known as:

Accepted Answer

In strategy formulation,managers work to develop the set of strategies that will allow an organization to accomplish its mission and achieve its goals.Strategy formulation begins with managers systematically analyzing the factors or forces inside an organization and outside in the global environment that affect the organization's ability to meet its goals now and in the future.

Question 10

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

Accepted Answer

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

Question 11

A group of managers at Power Explosives analyzes both the internal strengths and weaknesses of their organization as well as the opportunities and threats of the external environment.Which of the following planning exercises does this indicate?

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 12

A written set of instructions which describes the series of actions that a manager should take in a specific situation is known as a:

Accepted Answer

A standing operating procedure is a written instruction describing the exact series of actions that should be followed in a specific situation.

Question 13

A formal,written guide to action for employees in an organization is known as a:

Accepted Answer

A rule is a formal,written guide to action in an organization.

Question 14

An organization purchases one of its suppliers in order to obtain access to the raw materials it needs for its production.The organization is using a ______________ corporate-level strategy.

Accepted Answer

Vertical integration is a corporate-level strategy in which a company expands its business operations either backward into a new industry that produces inputs for the company's products (backward vertical integration)or forward into a new industry that uses,distributes,or sells the company's products (forward vertical integration).

Question 15

BIC,makers of ballpoint pens and razors,concentrates on making its products less expensive than its rivals.BIC is pursuing a ______________ 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.BIC pursues a low-cost strategy;it offers customers razor blades priced lower than Gillette's and ballpoint pens less expensive than those offered by Cross or Waterman.

Question 16

An organization attempts to succeed by distinguishing its products from those of the competition;this is a(n)______________ 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.

Question 17

Concentration on a single industry,vertical integration,diversification,and international expansion are principle strategies of a ______________-level of an organization.

Accepted Answer

The principal corporate-level strategies that managers use to help a company grow and keep it at the top of its industry,or to help it retrench and reorganize to stop its decline,are (1)concentration on a single industry, (2)vertical integration, (3)diversification,and (4)international expansion.

Question 18

While managers at ABC Manufacturing were conducting a SWOT analysis,they concluded that their product line is obsolete and narrow.Their product line would be categorized as a:

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).Based on a SWOT analysis,managers at the different levels of the organization select the corporate,business,and functional strategies to best position the organization to achieve its mission and goals.An obsolete,narrow product line is an internal,negative factor,and therefore a potential weakness.

Question 19

A general guide to action for the managers of an organization is known as a:

Accepted Answer

A policy is a general guide to action in an organization.

Question 20

Ace Real Estate conducted a SWOT analysis,and their managers believe that this year's local market growth will be slower than in the past.The predicted slow market growth is a(n):

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).Based on a SWOT analysis,managers at the different levels of the organization select the corporate,business,and functional strategies to best position the organization to achieve its mission and goals,Slower market growth is an external,negative factor,and therefore a potential threat.

Quiz 6: Planning, Strategy, and Competitive Advantage