Chapter 6 - Management 201

_____ are companies that have a small share of a slow-growing market.

Dogs

_____ are companies that do not follow a consistent adaptive strategy but instead respond to changes in the external environment after they occur.

Reactors

_____ are the firms in a strategic group that follow strategies related to but somewhat different from those of the core firms.

Secondary firms

In the context of BCG matrix, _____ are companies that have a large share of a fast-growing market.

Stars

_____ is a discrepancy between a company's intended strategy and the strategic actions managers take when actually implementing that strategy.

Strategic dissonance

A focus strategy entails using either a cost leadership or a differentiation approach to producing a good or service.

True

Strategic dissonance is a discrepancy between management's intended strategy and the strategy actually implemented by the managers.

True

The threat of substitute products or services is a measure of the ease with which customers can find substitutes for an industry's goods or services.

True

There are four conditions that must be met if a firm's resources are to be used to achieve a sustainable competitive advantage. The resources must be valuable, rare, imperfectly imitable, and nonsubstitutable.

True

When companies are performing above or better than their strategic reference points, top management is more likely to choose a daring, risk-taking strategy.

False

The purpose of a _____ strategy is to increase profits, revenues, market share, or the number of places (stores, offices, locations) in which the company does business.

growth

Significant cost reductions, layoffs of employees, closing of poorly performing stores, offices, or manufacturing plants, or closing or selling entire lines of products or services would be characteristic of a _____ strategy.

retrenchment

In the context of the strategic reference point theory, the _____ strategy aims to protect an existing competitive advantage.

risk-avoiding

A _____ is an assessment of the strengths and weaknesses in an organization's internal environment and the opportunities and threats in its external environment.

situational analysis

The strategy-making process begins with:

the assessment of the need for strategic change.

The term _____ refers to the overall organizational strategy that addresses the question "What business or businesses are we in or should we be in?"

corporate-level strategy

A(n) _____ strategy is a corporate strategy that addresses the question "How should we compete in this line of business?"

industry-level

Resource similarity and _____ are factors that determine the extent to which firms will be in direct competition with each other.

market commonality

A company that is seeking to grow by taking risks and looking for innovations is best characterized as a(n) _____.

prospector

Companies that are following a _____ strategy would be most likely to try to improve the way in which they sell the same goods or services to the same customers.

stability

AlphaWheels Inc. sell a range high-end bikes. Two-thirds of its profits come from the sale of these bikes. The bikes have a large share of a fast-growing market. According to the BCG matrix, the range of high-end bikes would be classified as a(n) _____.

star

_____ means producing a product or service of acceptable quality at consistently lower production charges than competitors so that the firm can offer the product or service at the lowest price in the industry.

Cost leadership

Which of the following is NOT one of the five industry forces that determine an industry's overall attractiveness and potential for long-term profitability?

Organizational synergy

Among companies who use the adaptive strategies, analyzers blend the strategies used by _____.

defenders and prospectors

The _____ is a measure of the degree to which barriers to entry make it easy or difficult for new companies to get started in an industry.

threat of new entrants