mgmt exam 2

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The Global Capsule in Chapter 5 says perhaps the best variable to monitor and to use to decide where to begin doing business is what​ factor?

Gross Domestic Product

What strategy seeks to increase market share for present products or services in present markets through greater marketing​ efforts?

Market penetration

What are the four types of strategies generated by a SWOT​ analysis?

SO, WO, ST, WT

In developing a SPACE​ Matrix, what term​ (axis) refers to the volatility of profits and revenues for firms in a given​ industry?

SP

Which statement is a limitation of the​ SWOT?

SWOT does not show how to achieve a competitive​ advantage, so it must not be an end in itself.

What is a major limitation of the BCG​ Matrix?

The BCG Matrix does not reflect whether various divisions or their industries are growing over time.

What strategy may be best under the following​ conditions? The organization competes in a highly competitive or a​ no-growth industry, as indicated by low industry profit margins and returns. The​ organization's present channels of distribution can be used to market new products to current customers. New products have countercyclical sales patterns compared with an​ organization's present products. The​ organization's basic industry is experiencing declining annual sales and profits.

Unrelated diversification

Which of the following statements is​ FALSE?

Value chain analysis and benchmarking are opposite ways to address the management of resources.

What is​ Rudin's Law?

When a crisis forces choosing among​ alternatives, most people choose the worst​ possible one.

The two general types of diversification strategies are related diversification and unrelated diversification. When are businesses said to be​ related?

When their value chains possess competitively valuable​ cross-business strategic fits

Which statement below is​ FALSE? Question content area bottom Part 1 A. QSPM analysis should be performed after​ EPS/EBIT analysis. This is the correct answer. B. If you have more than one strategy in the​ QSPM, then let the AS scores range from 1 to​ "the number of strategies being​ compared." Your answer is not correct. C. In a​ QSPM, never assign duplicate AS scores across a row. D. In a​ QSPM, if you assign an AS score to one​ strategy, then assign an AS​ score(s) to the​ other; in other​ words, if one strategy receives a​ dash, then all others must receive a dash in a given row. E. In a​ QSPM, an AS value of 4 is 33 percent more important than a 3.

a

If a company has high customer loyalty​ (like Harley-Davidson​ does), what rating would be appropriate for that factor in a SPACE​ Matrix?

-1 on CP axis

What would be an appropriate SP axis number for Apple​ Inc.?

-6

An industry can be stable or unstable on​ SP, yet high or low on IP. The smartphone​ industry, for​ instance, would be unstable​ (_____) on SP yet​ high-growth on​ IP, whereas the canned food industry would be stable​ (_____) on SP yet​ low-growth on IP.

-6,-2

Four companies—​A, ​B, C, and D—have revenues of​ 1, 2,​ 3, and​ 4, respectively. Company C develops a BCG Matrix. What would the RMSP be for company C if all four firms have the same net​ income?

.75

VCA is the process whereby a firm determines the value​ (price minus​ cost) of each and all activities​ ______.

that went into producing and marketing a product

The firm should pursue conservative strategies if the coordinates of a SPACE directional vector are​ (-1, +4).

true

A pasta​ manufacturer's purchase of some pet food brands is an example of

unrelated diversification

What kind of strategy is​ retrenchment?

A turnaround strategy

The time frame for​ long-term objectives and strategies should be​ consistent, usually from​ ______ to​ ______ years.

2-5

The​ strategy-formulation analytical framework consists of how many stages and how many​ matrices?

3 & 9

If a​ corporation's profits are​ $120, and its three divisions have​ $30, $80, and​ $10 of profits​ respectively, and equal​ revenues, what percent is the pie slice in Division​ 3?

33.3

Any industry whose annual growth in sales exceeds​ ______ percent could be considered to have rapid growth.

5

Secondary buyouts occur when what​ happens?

A private equity firm buys a firm from another private equity firm

Hobby Lobby CEO David Green​ says, "The secret to being a great manager is to manage by the​ book." To what book is he​ referring?

BIBLE

If an​ organization's present suppliers are especially​ expensive, unreliable, or incapable of meeting the​ firm's needs for​ parts, components,​ assemblies, or raw​ materials, what strategy is​ best?

Backward integration

What are two major types of​ bankruptcy?

Chapters 7 and 11

According to Michael​ Porter, strategies allow organizations to gain competitive advantage from two different bases. What are the​ bases?

Cost leadership and differentiation

According to​ Porter, strategies allow organizations to gain competitive advantage from two different bases. What are the​ bases?

Cost leadership and differentiation

When a core competence evolves into a major competitive​ advantage, what is it​ called?

Distinctive competence

The largest​ consumer-products company in the​ world, Procter​ & Gamble​ (P&G), is in the process of selling more than half of its brands​ (nearly 100) in order to focus on its core brands​ (about 80). What is this strategy​ called?

Divestiture

Which statement below is​ FALSE? Question content area bottom Part 1 A. Successful strategists let weakly supported ideas and proposals die through inaction. B. Successful strategists establish additional hurdles or tests for strongly supported ideas considered unacceptable but not openly opposed. C. Successful strategists keep a low political profile on unacceptable proposals and strive to let most negative decisions come from subordinates or a group consensus. D. Successful strategists commonly have the title chief executive officer or president. Your answer is not correct. E. Successful strategists are generally iridescent.

E

The two​ positive-rated dimensions on the SPACE Matrix are

FP and IP

If Gap opens five stores for the first time in​ China, this is an example of which type of​ strategy?

Market development

Nonprofit organizations are basically just like​ for-profit companies except for two major differences. What is one of the​ differences?

Nonprofits do not pay taxes or have shareholders.

What is the name of the strategy that involves selling off land and buildings to raise needed​ cash, pruning product​ lines, closing marginal​ businesses, closing obsolete​ factories, automating​ processes, reducing the number of​ employees, and instituting expense control​ systems?

Retrenchment

Which statement below is​ FALSE? Question content area bottom Part 1 A. Successful strategists do a lot of chatting and informal questioning to stay abreast of how things are progressing and to know when to intervene. B. Successful strategists lead strategy but do not dictate it. They give few​ orders, announce few​ decisions, depend heavily on informal​ questioning, and probe and clarify until a consensus emerges. C. Successful strategists ensure that all major power bases within an organization are represented​ in, or have access​ to, top management. D. Successful strategists are commonly difficult to get along with in social settings. Your answer is correct. E. Successful strategists may be small business owners or college presidents.

Successful strategists are commonly difficult to get along with in social settings.

There are four important differences between the BCG Matrix and the IE Matrix. Which statement below is NOT a difference between the two​ matrices?

The sizes of the circles and pie slices can vary.

What type of strategy aims to target a new market where competition is not yet present instead of going where many firms are already competing on price and the gains of one firm are often at the expense of​ another?

blue ocean

First mover advantages refers to the benefits a firm may achieve by entering a new market or developing a new product or service prior to rival firms. An advantage of being a first mover is​ ______.

carving out market share and a position that is easy to defend and costly for rival firms to overtake

In a BCG​ Matrix, divisions in Quadrant III​ (lower left) have a high relative market share position but compete in a​ low-growth industry. They are called​ ______.

cash cows

Under which strategy would you offer products or services to a wide range of customers at the lowest price available on the​ market?

cost leadership - low cost

​______ is the unique way an organization does business. It is the human dimension that creates solidarity and​ meaning, and it inspires commitment and productivity in an organization when strategy changes are made.

culture

When an organization splits into two or more​ parts, this type of strategy is a​ _____.

divestiture

Which term refers to selling a division or part of an​ organization?

divestiture

Which level of strategy is most likely NOT present in small​ firms?

divisional

Gaining ownership or increased control over distributors or retailers is called​ _____.

forward integration

The chapter lists six reasons why many mergers and acquisitions​ fail, including which of the​ following?

inability to achieve synergy

​______ is a popular strategy that occurs when two or more companies form a temporary partnership or consortium for the purpose of capitalizing on some opportunity.

joint venture

When an organization has pursued both a retrenchment strategy and a divestiture strategy and neither has been​ successful, then perhaps the best strategy is​ ______.

liquidation

Which of the following is NOT one of the steps involved in constructing a SWOT​ Matrix?

list the firm's external weaknesses

The old​ adage, "If it​ ain't broke,​ don't fix​ it" pertains to which of the​ following?

managing by extrapolation

According to the Grand Strategy​ Matrix, which strategy is recommended for a firm with rapid market growth and a strong competitive​ position?

market penetration

When two organizations of about equal size unite to form one​ enterprise, which of these​ occurs?

merger

Which statement below is​ FALSE?

n a​ QSPM, the range for Total Attractiveness Scores is 1=​not attractive, 2=somewhat ​attractive, 3=reasonably ​attractive, and 4=highly attractive.

The​ ______ Matrix determines the relative attractiveness of various strategies based on the extent that key external and internal factors are capitalized on or improved.

qspm

In a BCG​ Matrix, ______ is defined as the ratio of a​ division's own market share​ (or revenues) in a particular industry to the market share​ (or revenues) held by the largest rival firm in that industry.

relative market share position

Forward integration and backward integration are sometimes collectively referred to as

vertical integration

In the Boston Consulting Group​ (BCG) Matrix, which element represents the industry growth rate in​ sales, measured in percentage​ terms?

y axis

In a QSPM​ analysis, would it ever be appropriate or useful for a company not to include a weight column at​ all, but rather total the AS columns to determine the relative attractiveness of six​ strategies?

yes

Going clockwise beginning with the top​ axis, what are the four axes of a SPACE​ Matrix?

​FP, IP,​ SP, and CP

Objectives should include which of the following​ characteristics?

​Measurable, challenging, and hierarchical

In both the BCG and IE​ Matrices, the size of each circle represents the percentage of​ _______ contribution of each​ division, and pie slices reveal the percentage of​ _____ contributed of each division to the company.

​revenues; operating profits


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