MGMT Ch. 6 SmartBook
What are functional strategies used to accomplish?
-Putting strategic plans into effect
A(n) ______ strategy requires little or no change to a company's product or service.
-stability
Within a SWOT analysis, the letter "S" represents a company's ______.
-strengths
Skate/24 had only one competitor in the local market and that competitor just went out of business. In a SWOT analysis, this is an example of an organizational ______ for Skate/24.
-opportunity
What are the four activities for developing strategic thinking identified in the text?
-Decision making -Broaden task and functional knowledge -Engage in critical thinking -Understand the business
According to Bryan Barry, which of the following help a manager keep a strategic plan on track? (Choose every correct answer.)
-Keep it simple -Engage people -Keep moving -Stay focused
Why do potential employers value the skill of strategic thinking in job candidates? (Choose every correct answer.)
-Strategic thinkers are quick to recognize opportunities. -Strategic thinkers are globally-minded. -Strategic thinkers make for more informed employees.
What are the goals of attending industry conferences before or while working in a certain industry? (Choose every correct answer.)
-To make industry contacts -To learn about the specific industry
True or false: According to the text, broadening functional knowledge is one way to develop strategic thinking.
-True
Strategic thinkers should have a knowledge base shaped like the letter "T," where the top of the "T" represents breadth of knowledge and the stem of the "T" represents ______.
-depth of expertise
Porter's five competitive forces form a model for ______ analysis.
-industry
Marketing, production, and sales are all involved in the the core business process known as ______.
-operations
A system of shared beliefs and values that needs to be aligned with the goal of producing efficient, quality work is called ______ culture.
-organizational
According to Bossidy and Charan, the first core process of business is ______.
-people
Strategic positioning attempts to achieve sustainable competitive advantage by ______.
-preserving what is distinctive about a company
Refer to Figure 6.2. The "feedback loop" in the strategic-management process involves ______.
-revising actions if necessary
Before introducing a new piece of software, Star Software Inc. conducts benchmark activities to assess how popular the product would be in the marketplace. Which stage of the strategic management process is being used in this situation?
-Assess the current reality
Bethany wants to buy a pair of designer boots. To find the best price, she searches the Internet and compares prices among the eight sites that sell the boots. Which of Porter's five competitive forces is demonstrated in this scenario?
-Bargaining power of buyers
The Internet has enabled consumers to "price shop" several retailers in order to find the best price for items such as appliances, electronics, and even cars. This has increased the consumer's ability to better negotiate favorable prices with retailers, demonstrating which of Porter's five competitive forces?
-Bargaining power of buyers
A grand strategy that involves expansion of things like sales revenues, market share, or number of employees is known as a ______ strategy.
-growth
Within a SWOT analysis, the letter "T" represents a company's ______.
-threats
Jordan plans to open a computer repair business this summer. As he plans, he writes down the long-term goals of the business so he can decide where he wants to go strategically. Which stage of the strategic management process is Jordan in?
-Establish the mission, vision, and values statements
True or false: Ferrari and Lamborghini automobiles are marketed based on the cost-focus strategy.
-False
True or false: It is common practice today for most small business owners to engage in strategic planning.
-False
True or false: Since most strategic positions will fit with any company's products, a company doesn't need to be concerned about selecting the right strategy.
-False
Which of Porter's four competitive strategies involves offering products or services that are of unique and superior value compared to those of competitors and targets only a narrow market?
-Focused-differentiation strategy
What is an example of an organizational weakness based on a SWOT analysis?
-Inferior product quality
What does business growth rate refer to, as used in the BCG matrix?
-The speed of industry growth
Which of the following are accurate regarding Step 4 (Execute the Strategy) in the strategic management process? (Choose every correct answer.)
-This step poses the greatest challenge for managers. -Top managers must check on possible roadblocks and see if it will be possible to execute the plans.
You own a small deli near campus and learn that the university is exploring whether it should open a Subway sandwich franchise in the student union. Which of Porter's competitive forces does this represent for you?
-Threat of new entrants
Using statistical analysis of historical data to predict future events is called ______.
-trend analysis
Which core process of business involves analyzing and understanding how success will be accomplished?
-Strategy
What are the core processes of business identified by Bossidy and Charan? (Choose every correct answer.)
-Strategy -Operations -People
As the senior vice president of marketing, Andrew is responsible for determining how much of the budget to spend on marketing and how much to spend on product development. Which level of strategic management is Andrew responsible for?
-business-level
The ______ strategy of a company is concerned with the individual business units or production and service lines of the business.
-business-level
Pacific Specialty Bikes store gets customized parts for its high-end models from a local manufacturer, Premium Supply. When the manufacturer announced a price increase, the bike store tried to switch to other local manufacturers but learned they that they wouldn't be able to meet delivery schedules. As a result, Pacific Bike chose to pay the higher prices from Premium Supply. Which of Porter's competitive forces does this demonstrate?
-Bargaining power of suppliers
Which Porter's competitive strategies are appropriate when addressing a narrow market? (Choose every correct answer.)
-Cost-focus -Focused-differentiation
Which of Porter's four competitive strategies involves keeping the costs, and therefore prices, of a product or service below those of competitors but targets only a narrow market?
-Cost-focus strategy
Johanna has been asked by the department manager to prepare a SWOT analysis on two of the company's products. In which step of the strategic management process would a company use a SWOT analysis?
-Current reality assessment
Smartwater is a brand of bottled water that promotes health benefits and features a unique bottle design not found in competitor brands. Based on this, which of Porter's competitive strategies is the company using?
-Differentiation
What are Porter's four competitive strategies?
-Differentiation -Cost-focus -Focused-differentiation -Cost-leadership
Which of Porter's four competitive strategies is involved when a company offers products or services that are of unique or superior value compared to those of competitors and that target a wide market?
-Differentiation strategy
What strategy is American Tile Corp. using when it acquires a company that makes industrial cleaning products that American Tile does not currently offer?
-Diversification
One question within a VRIO analysis is, "Is the resource or capability costly for other companies to produce in the same manner?" Which aspect of the VRIO analysis does this represent?
-Imitability
Sanjay knows it is costly for other companies to match the quality of his company's table linens, and this provides him with a competitive advantage. Which part of a VRIO analysis is Sanjay basing his opinion on?
-Imitability
What effect has the Internet had on Porter's fifth competitive force, rivalry among competitors?
-It has intensified rivalries among organizations.
Which are characteristics of strategy formulation? (Choose every correct answer.)
-It is a time-consuming process. -It is the basis for determining long-term goals.
What does the BCG matrix evaluate? (Choose every correct answer.)
-Market share -Business growth rates
Which of these situations provides an external opportunity that the company may exploit to gain competitive advantage?
-Monica's rare book company has weak competition.
When considering SWOT analysis, what is an example of an organizational weakness?
-Obsolete technology
After completing his competitor analysis, Justin realized his company was the only one with all-natural ingredients in their pizza crust and could use this to get the pizza into more health food grocery stores. What aspect of a SWOT analysis has Justin uncovered?
-Opportunity
In addition to value, what characteristics are being addressed in a VRIO analysis? (Choose every correct answer.)
-Organization -Imitability -Rarity
Of the three core processes of business identified by Bossidy and Charan, which do they believe is the most important?
-People
One way Chip's Coffee House retains staff is by offering two-weeks paid vacation and health insurance benefits for part-time employees. Which of Bossidy and Charan's core processes is this business focusing on?
-People
What are two things a company might do when using a defensive strategy?
-Phase out product lines or services -Declare bankruptcy
At first Rohan thought it was a good idea to offer a car repair pick-up service at his auto repair shop, but then he realized that most customers called Tow-It-Now Inc. and it would be difficult to match that company's service. Which part of a VRIO analysis helped Rohan evaluate this idea?
-Rarity
Apple's iPhone competes with offerings such as Google's Pixel phone and each company continually attempts to leapfrog the others' technology. This demonstrates which of Porter's competitive forces?
-Rivalry among competitors
When Johnson & Johnson promoted its baby shampoo as a gentle cleanser suitable for adults, it did this without changing the formulation of the product. Which type of corporate strategy does this exemplify?
-Stability
In which step of the strategic-management process does an organization establish the mission and vision statements?
-Step One
Which "unwritten" skill did the Harvard Business Review consider essential to being promoted on the job?
-Strategic thinking
In which core process of business developed by Bossidy and Charan would a company ask, "Who is my competition?" and "How will my business make money on a sustainable basis?"
-Strategy
Sasha has run a small diner near the train station for the past ten years. Six months ago, a chain restaurant serving gourmet burgers and sandwiches opened up near him and he has had to rethink his menu. He added some specialty sandwiches and free fries with every burger in order to retain his customers. Which of Porter's five competitive forces has affected Sasha's business?
-Threats of new entrants
Which of the following represent competitive forces used in Porter's model for industry analysis? (Choose every correct answer.)
-Threats of new entrants -Rivalry among competitors -Bargaining power of suppliers -Threat of substitute products or services
Joan runs a drop-in play center and until recently she was the only business in town where families could find reasonably-priced entertainment for their children. Joan learned that two fast-food restaurants with play areas are being built nearby so she is coming up with ways to convince her customers that her center is preferable. Which of Porter's five competitive forces is Joan specifically worried about?
-Threats of substitute products or services
The growing popularity of reading news online has significantly reduced the sales of print copies of US newspapers. Which of Porter's five competitive forces does this demonstrate?
-Threats of substitute products or services
True or false: According to Bossidy and Charan, execution is the central part of any company's strategy.
-True
True or false: The prediction of a business cycle based upon historical data is an example of using trend analysis in business.
-True
Wisconsin Dairy Farms wants to grow revenue and feels the best way to do this is by purchasing a business that is not in the dairy industry. After a lengthy analysis, it purchases Hydro Generator Corp. which supplies energy along the Pacific coast. What type of strategy is the company using?
-Unrelated diversification
Carlos is doing a VRIO analysis for a product his company is thinking about producing. The first question he asks is, "Does this new capability allow us to minimize the threat from the main competitor gaining more market share?" He decides the answer to this question is "yes." Which aspect of the VRIO analysis does this question answer?
-Value
Netflix began as a video rental business but has expanded into producing and distributing its own programming. What type of diversification strategy is Netflix using?
-Vertical
Which strategy is a company pursuing when it expands into businesses that provide the supplies it needs to make its products or that distribute and sell its products?
-Vertical integration
Why do many executives prefer visioning to execution?
-Visioning is more exciting than execution.
When would a company use a VRIO analysis?
-When deciding whether or not a new product might work in the marketplace
Companies pursuing a cost-leadership strategy keep costs/prices ______ those of competitors and target a ______ market.
-below; wide
Juanita feels it is important for her taxi company to continually measure itself against its best competition. She keeps track of the number of rides per hour and turnaround times for all her drivers and compares it to that of other high-performing taxi companies in the area. Juanita is using the process of ______ to compare her company with others.
-benchmarking
The process by which a company compares its performance with that of other high-performing organizations is known as ______.
-benchmarking
The sources from which strategic position emerges are having ______. (Choose every correct answer.)
-broad needs and many customers. -broad needs and few customers. -few needs and many customers.
Strategic ______ involves monitoring the execution of strategy and taking corrective action when necessary.
-control
The president, chief financial officer, and chief operating officer of Jensen Mfg. meet annually to discuss the direction of the company including what products they will continue to offer and what new products they will introduce. Which level of strategic management does this represent?
-corporate-level
Which level of strategic management focuses on the organization as a whole?
-corporate-level
Computer maker Dell tries to have the lowest prices for its computers in order to attract a large consumer group. In Porter's four competitive strategies, this would be an example of the ______ strategy.
-cost-leadership
When a company freezes hiring and tightens expenses due to decreased demand for its products or services, it is involved in a(n) ______ strategy.
-defensive
The strategy of moving into new lines of business is called ______.
-diversification
Aligning people with goals, achieving promised results, and integrating strategy with reality are all part of the ______ process.
-execution
Specialty manufacturers with high-end products such as Tesla automobiles offer products that are of unique and superior value compared to those of competitors. These companies target a very narrow market and are using the ______-differentiation strategy, one of Porter's competitive strategies.
-focused
A ______ is a vision or projection of the future that is made following a SWOT analysis.
-forecast
Leonore's Luxury Leather Footwear Corp. conducts a SWOT analysis and determines that at least 57 percent of consumers demand high-end footwear, and, as a result, its sales should increase by 18 percent in the next year. This vision of what could happen is known as a ______.
-forecast
Strategy ______ is the process of choosing among different strategies and altering them to best fit the organization's needs.
-formulation
When corporate departments such as marketing, human resources, and information technology implement plans of action that support higher-level strategies, they are following a(n) ______ strategy.
-functional
A business that wants to reach more customers and hires more employees to get this done is focusing on a ______ strategy.
-growth
Select all of the true statements regarding unrelated diversification:
-it occurs when a company acquires another company in a completely unrelated business -companies may use it in an attempt to reduce risk
To be successful, strategic planning requires a company to have a ______ orientation.
-long-term
Within the core business process of ______, an organization provides a path for the company to follow and defines short-term objectives for the major activities in which the organization will engage.
-operations
When conducting a VRIO analysis, one question that must be answered is, "Is the resource or capability currently controlled by only a few firms or no other firms?" This would determine the ______ associated with the resource.
-rarity
Select all of the true statements regarding the trade-offs required in competing:
-some strategies are incompatible -companies must choose what strategy to follow -companies must choose what strategy not to follow
Having (1) few needs and many customers, (2) broad needs and few customers, and (3) broad needs and many customers are the three sources from which ______ emerges.
-strategic position
Michael Porter defined ______ as an attempt to achieve sustainable competitive advantage by preserving what is distinct about a company.
-strategic positioning
Putting strategic plans into effect is referred to as ______.
-strategy implementation
The ABC car company has a superior reputation within the industry and among car buyers. When applying SWOT analysis, this company's reputation is an example of a(n) ______.
-strength
Precise work processes and high-ranking customer service are examples of organizational ______ in a SWOT analysis.
-strengths
The skills and capabilities that give an organization special competencies and competitive advantages in executing strategies in pursuit of its mission are called organizational ______.
-strengths
When a company is readily able to switch to another company in order to get the raw materials it needs to make products, Porter would say that the bargaining power of ______ goes down.
-suppliers
When other companies cannot duplicate the value provided by a competitor, then the competitor has established a(n) ______ competitive advantage.
-sustainable
Luxury Linens Inc. produces the highest thread-count sheets available anywhere and does so at a price that none of its competitors can duplicate. It can be said that Luxury Linens has a(n) ______.
-sustainable competitive advantage
In terms of a SWOT analysis, organizational ______ are environmental factors that hinder an organization from achieving a competitive advantage.
-threats
In the large city where Cassandra lives, many people are asking for her restaurant to deliver food to their offices. Her restaurant has never delivered food before, but since so many people have requested this service Cassandra decides it is a good idea to do it. In a VRIO analysis, Cassandra has determined the ______ of this capability.
-value
Peterson Electric Inc. has outdated manufacturing facilities. In a SWOT analysis, this would be an example of an organizational ______ of the company.
-weakness
Refer to Figure 6.2. Place the steps in the strategic-management process in the correct order, with the first step listed at the top.
1. Establish the mission, vision, and values statements 2. Assess the current reality 3. Formulate corporate, business, and functional strategies 4. Execute the strategies 5. Maintain strategic control