Question 1

In the context of the BCG matrix, a star represents a company
A) with high growth and a strong competitive position in the market.
B) that requires substantial investments to improve its position in the market.
C) with low growth and a strong competitive position in the market.
D) that generates excess revenues and funds other businesses.
E) that will be divested as soon as possible.

Accepted Answer

A star in the BCG matrix represents a company with high growth and a strong competitive position in the market. This means that the company is performing well and has potential for future growth, but may require ongoing investment to maintain its position in the market.

Question 2

A _____ strategy identifies the set of businesses, markets, or industries in which the organization competes and the distribution of resources among those businesses.
A) vertical
B) differentiation
C) low-cost
D) functional
E) corporate

Accepted Answer

A corporate strategy is defined as the overall plan that identifies the set of businesses, markets, or industries in which the organization competes and the distribution of resources among those businesses. This type of strategy focuses on the organization as a whole and provides direction for its various business units or divisions. The other answer choices mentioned are specific types of competitive strategies that organizations may use within their corporate strategy.

Question 3

Functional strategies are implemented
A) only at the top levels of management.
B) by each appropriate area or unit.
C) only at the employee level.
D) at one time by the organization as a whole.
E) by the stakeholders.

Accepted Answer

Functional strategies are implemented by each appropriate area or unit. Different units or areas within an organization may have different goals and objectives, and therefore require different functional strategies. These strategies must be aligned with the overall organizational goals and objectives.

Question 4

Akins Corp. had focused only on alcoholic beverages for the last two decades. Now, the company is considering entering the soft drink market. Which of the following corporate strategies will most likely be adopted by the company?
A) vertical integration
B) related diversification
C) unrelated diversification
D) concentration
E) low-cost strategy

Accepted Answer

Akins Corp. currently operates in the alcoholic beverage market and is now considering entering the soft drink market. This suggests that the company is pursuing a related diversification strategy, as it is expanding into a market that is somewhat related to its current operations. Vertical integration would involve the company acquiring businesses that are part of its supply chain or distribution network, which is not directly relevant to Akins Corp.'s situation. Unrelated diversification would involve the company entering a market that is not related to its current operations, which is not the case here. Concentration would involve the company focusing even more on its current alcoholic beverage market, rather than expanding into a new market. Low-cost strategy is a functional-level strategy that involves reducing costs in a specific area, and is not relevant to Akins Corp.'s decision to enter a new market.

Question 5

________ is a technique that helps managers summarize relevant and important facts from the internal and external analyses of an organization in order to formulate strategy.
A) The BCG matrix
B) A SWOT analysis
C) Benchmarking
D) Diversification
E) A functional strategy

Accepted Answer

A SWOT analysis allows managers to identify strengths, weaknesses, opportunities, and threats to their organization. This information can then be used to formulate strategy based on the insights gained from the analysis.

Question 6

Resources are a source of competitive advantage except when they are
A) valuable.
B) rare.
C) organized.
D) easy to imitate.
E) instrumental.

Accepted Answer

Resources that are easy to imitate do not provide a competitive advantage as competitors can easily replicate them. The other options (valuable, rare, organized, and instrumental) are all qualities that contribute to a resource's ability to provide a competitive advantage.

Question 7

The goal of _________ is to thoroughly understand the "best practices" of other firms and to undertake actions to achieve better performance and lower costs.
A) satisficing
B) benchmarking
C) organizing
D) competition
E) SWOT analysis

Accepted Answer

Benchmarking involves studying other firms' best practices and implementing them to improve performance and reduce costs. Satisficing refers to settling for an option that fulfills the minimum requirements, organizing is the process of arranging resources to achieve a specific goal, competition refers to the rivalry between firms, and SWOT analysis is the evaluation of a company's strengths, weaknesses, opportunities, and threats.

Question 8

The _____ matrix is not a substitute for management judgment; it helps managers of businesses evaluate their strategy alternatives.
A) BCG
B) BGC
C) GBC
D) GCB
E) CGB

Accepted Answer

The blank space is referencing the BCG matrix, which is used to evaluate a company's portfolio of products. The matrix is not meant to replace management judgment, but rather serve as a tool for analysis and decision-making. The other answer choices do not make sense in the context of the question.

Question 9

Businesses using a ________ strategy try to be efficient and offer a standard, no-frills product.
A) high return
B) low-cost
C) high-cost
D) low return
E) high profit

Accepted Answer

Businesses using a low-cost strategy focus on reducing costs and delivering a basic, no-frills product to customers at a lower price compared to their competitors. This allows them to capture market share by appealing to price-sensitive customers who are looking for the lowest price possible. By keeping costs low, these businesses are able to offer products at lower prices while still achieving a reasonable profit margin.

Question 10

Gallaway Inc. recently decided to expand from its original base in real estate to several wide-ranging industries such as trucking, lawn mower manufacturing, and catering. Gallaway is using the _____ corporate strategy.
A) vertical integration
B) unrelated diversification
C) related diversification
D) concentration
E) low-cost

Accepted Answer

Gallaway Inc. is expanding into industries that are not related to its original base in real estate, such as trucking, lawn mower manufacturing, and catering. This is an example of unrelated diversification, as opposed to related diversification which would involve expanding into industries related to its original base.

Question 11

The first step in strategy implementation involves articulating in simple language what a particular business must do to create or sustain a competitive advantage. This step involves
A) assessing organizational capabilities.
B) developing an implementation agenda.
C) defining strategic tasks.
D) creating an implementation plan.
E) developing a mission statement.

Accepted Answer

The first step in strategy implementation involves defining strategic tasks or actions that a business must undertake to create or sustain a competitive advantage. This includes identifying specific goals and objectives that align with the overall strategy and determining the necessary resources, activities, and timelines required to achieve them. Assessing organizational capabilities, developing an implementation agenda or plan, and creating a mission statement are all important parts of the strategy implementation process but come after the initial step of defining strategic tasks.

Question 12

The most effective strategy that can be adopted by strategy managers is one that
A) cannot be described in detail.
B) competitors are unable to imitate.
C) is based on the principle of rigidity.
D) cannot be deconstructed.
E) can be purchased at a reasonable cost.

Accepted Answer

A competitive advantage that is difficult to imitate or replicate is the strongest and most sustainable. This allows the company to maintain its unique position in the market and prevent competitors from encroaching on its space.

Question 13

All of the following are considered stakeholders expect those groups and individuals
A) who have only a financial stake in the company.
B) who affect achievement.
C) who are buyers and suppliers.
D) who are unions and employee groups.
E) who are affected by the organization's mission.

Accepted Answer

All groups and individuals who have a financial stake in the company are not necessarily considered stakeholders. They may not have a direct impact on the achievement of the organization's mission and objectives.

Question 14

In order to reduce production costs, Seuss Inc., an automobile manufacturer, decided to buy out a glass plant and begin manufacturing the glass for the windows of cars on its own. The corporate strategy adopted by the company is known as
A) concentration.
B) vertical integration.
C) related diversification.
D) unrelated diversification.
E) differentiation.

Accepted Answer

Vertical integration involves acquiring a company that operates in a different stage of the same supply chain for the purpose of controlling costs, improving efficiency, and gaining a competitive advantage. In this case, Seuss Inc. has acquired a glass plant to bring the production of glass for its cars in-house, which is an example of vertical integration.

Question 15

Kaplan Corp. is evaluating the purchase of a small firm, Pahl Inc., which manufactures ornamental gadgets, products involving advanced technology. These products are expected to revolutionize the home construction industry. Pahl has only a minor share of this growing market, but the market is expected to grow rapidly. In which of the following categories of business in the BCG matrix would this firm be placed?
A) cash cows
B) stars
C) spinoffs
D) question marks
E) dogs

Accepted Answer

Pahl Inc. is in a rapidly growing market but currently holds only a minor market share, which places it in the "question marks" category of the BCG matrix.

Question 16

Resources are a source of competitive advantage only when they are
A) archival.
B) difficult to imitate.
C) equally available.
D) sequential.
E) expensive.

Accepted Answer

Resources can only be a source of competitive advantage if they are difficult to imitate by other competitors. This implies that the possession of these resources creates a unique selling proposition for the company and gives it an edge over other competitors who do not have that resource.

Question 17

In the context of the strategic planning process, a critical task in environmental analysis is _____ future trends.
A) reporting
B) forecasting
C) avoiding
D) justifying
E) creating

Accepted Answer

Forecasting future trends is essential in environmental analysis as it helps in anticipating changes that may affect the organization and to develop strategies to address them. Reporting on past trends may not be as useful in strategic planning as it does not consider potential changes in the future. Avoiding future trends and not creating them would also be counterproductive in environmental analysis. Justifying future trends may be necessary but it is not a critical task in the strategic planning process. Creating future trends may be a part of the strategic planning process, but it is not directly related to environmental analysis.

Question 18

If an organization's mission statement describes the organization as it currently operates then its strategic vision points to the
A) past.
B) production numbers.
C) future.
D) expectations.
E) profits.

Accepted Answer

A strategic vision points to the future, outlining what the organization hopes to achieve and what direction it wants to take. It is not concerned with past operations or current production numbers, but rather sets forth a long-term plan for growth and success. While expectations and profits may be considered in a strategic vision, they are not the primary focus.

Question 19

The corporate strategy of _______ involves expanding the domain of an organization into supply channels and to distributors.
A) concentration
B) horizontal integration
C) vertical integration
D) benchmarking
E) satisficing

Accepted Answer

Vertical integration involves expanding the domain of an organization into supply channels and to distributors, which aligns with the given definition. A) Concentration is a strategy that focuses on a single product or service line. B) Horizontal integration involves expanding the domain of an organization into similar products or services. D) Benchmarking involves comparing an organization's performance to that of its competitors. E) Satisficing is a decision-making strategy that involves accepting a solution that is "good enough" rather than seeking the optimal solution.

Question 20

Submarines Inc., a chain of sub shops, periodically compares the quality of its food and service with its competitors in order to continually improve its performance. This corporate strategy is known as
A) brainstorming.
B) diversification.
C) benchmarking.
D) vertical integration.
E) horizontal integration.

Accepted Answer

The corporate strategy described is benchmarking, which involves comparing one's own processes and performance against those of competitors in order to identify areas for improvement. Brainstorming is a creative problem-solving technique, diversification involves expanding into new markets or industries, vertical integration involves companies owning and controlling all aspects of their supply chain, and horizontal integration involves merging with or acquiring similar companies in the same industry. None of these strategies specifically involve comparing one's performance to that of competitors.

Quiz 5: Planning and Decision Making

In the context of the BCG matrix, a star represents a company

A _____ strategy identifies the set of businesses, markets, or industries in which the organization competes and the distribution of resources among those businesses.

Functional strategies are implemented

Akins Corp. had focused only on alcoholic beverages for the last two decades. Now, the company is considering entering the soft drink market. Which of the following corporate strategies will most likely be adopted by the company?

________ is a technique that helps managers summarize relevant and important facts from the internal and external analyses of an organization in order to formulate strategy.

Resources are a source of competitive advantage except when they are

The goal of _________ is to thoroughly understand the "best practices" of other firms and to undertake actions to achieve better performance and lower costs.

The _____ matrix is not a substitute for management judgment; it helps managers of businesses evaluate their strategy alternatives.

Businesses using a ________ strategy try to be efficient and offer a standard, no-frills product.

Gallaway Inc. recently decided to expand from its original base in real estate to several wide-ranging industries such as trucking, lawn mower manufacturing, and catering. Gallaway is using the _____ corporate strategy.

The first step in strategy implementation involves articulating in simple language what a particular business must do to create or sustain a competitive advantage. This step involves

The most effective strategy that can be adopted by strategy managers is one that

All of the following are considered stakeholders expect those groups and individuals

In order to reduce production costs, Seuss Inc., an automobile manufacturer, decided to buy out a glass plant and begin manufacturing the glass for the windows of cars on its own. The corporate strategy adopted by the company is known as

Resources are a source of competitive advantage only when they are

In the context of the strategic planning process, a critical task in environmental analysis is _____ future trends.

If an organization's mission statement describes the organization as it currently operates then its strategic vision points to the

The corporate strategy of _______ involves expanding the domain of an organization into supply channels and to distributors.

Submarines Inc., a chain of sub shops, periodically compares the quality of its food and service with its competitors in order to continually improve its performance. This corporate strategy is known as