MGT-413 Final

Mission Statement

As indicated in the Strategic Management model, a clear _________ is needed before alternative strategies can be formulated and implemented

B

Corrective action should do all of the following EXCEPT a. capitalize upon internal strengths b. avoid external opportunities c. avoid, reduce, or mitigate external threats

Strategy

Culture and ______ must work together

A

Given the environment in which organizations must function today, which of the following statements about human resource management is false? a. HRM should be left to line managers because they know their people best. b. HRM should be viewed as a means of significantly increasing productivity c. HRM should have an important place because of the complex legal environment.

increase investor scrutiny of the firm

If a firm has a bad sustainability record this will...?

B

If rivalry and buyer power on the online dating industry are going to increase in the future, which of the following statements is the most accurate? a. the competitive environment for Match.com will remain unchanged b. Online dating industry will be less attractive to potential entrants c. Online dating industry will be more attractive to potential entrants

B

If suppliers are unreliable or too costly, which of these strategies may be appropriate? a. Horizontal integration b. Backward integration c. Market penetration

Consolidated, Low

Intel and AMD supply more than 90% of the microprocessors in all PCs sold today. Therefore, the microprocessor market is ________ and bargaining power of buyer, i.e. PC manufacturers, over intel and AMD is ________

is highest

Intensity of competition ________ in lower-return industries

True

Laser eye surgery would be considered a substitute product for eyeglasses and contact lenses (T/F)

True

Porter's Five-Forces model helps determine both the nature of competition in an industry and the industry's profit potential (T/F)

Marketing

Pricing is one of the basic functions of?

False

Proponents of the resource-based view argue that external factors are more important than internal factors for a firm in achieving and sustaining competitive advantage. (T/F)

False

Regardless of the number of key opportunities and threats included in an EFE matrix, the highest possible total weighted score for an organization is 4.0, and the lowest possible total weighted score is 0.0 (T/F)

With both a firm's strategists and its managers

Responsibility for encouraging ethical decision making and ensuring ethical behavior in a firm lies...?

False

Rivalry is most intense when there are high exit barriers and high intensity growth (T/F)

A

Since ______ resources can more easily be bought and sold, _______ resources are often more important for gaining and sustaining competitive advantages. a. Tangible, Intangible b. Intangible, tangible c. internal, external

True

The IFE Matrix is an evaluation of the effectiveness of the firm's current strategies, not taking into account opportunities and threats (T/F)

getting older and less white

The United States population is

Investment

The ______ decision is the allocation and reallocation of capital and resources to projects, products, assets, and divisions of an organization

A

The aircraft industry has been long dominated by two large aircraft supplier, Boeing and Airbus. The demand for new aircrafts is low, and Boeing and Airbus aggressively compete for orders from airlines. What effect will these conditions have on the domestic airline industry? a. it will make the airline industry more attractive because of decreased supplier power b. it will make the airline industry less attractive because of decreased supplier power c. it will make the airline industry more attractive because of a new entrant

Current assets and property, Plant, and Equipment

The classified balance sheet will subsection the assets section as follows:

45%

The company A has sales of $4,500,000. It also has invested assets of $2,000,000 and operating expenses of $3,600,000. The company has established a minimum rate of return of 7%. What is Company A's rate of return on investment?

technological

The emergence of 3D printing is an example of a(n) _________ force that impacts organizations

There are many airlines in the industry, Arlines provide similar services, and switching costs are low for customers

The global airline industry has high intensity of rivalry because ________

developing a full narrow list of key internal factors

The initial step in developing an IFE Matrix is?

1

The maximum weight for a factor in the IFE Matrix is?

False

The porter's five forces model framework is a tool that is used to determine why some firms consistently outperform other firm in the same industry (T/F)

Cost Leadership - Low Cost

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

Profitability

What category of ratios includes return on total assets and return on stockholders equity?

A

Which of the following is NOT included in measuring organizational performance? a. comparing results to competitors expectations b. investigating deviations from plans c. evaluating individual performance

B

Which of the following is NOT one of the steps involved in constructing a SWOT matrix? a. match internal strengths and external threats, and record the resultant ST strategies b. List the firm's external weaknesses c. list the firm's external opportunities

B

Which of the following is the process of influencing people to accomplish specific objectives? a. Staffing b. motivating c. controlling

False

an external audit focuses on identifying and evaluating trends writing the control of management (T/F)

False

A forward integration strategy is used by firms to gain control or ownership of suppliers (T/F)

Organizational Culture

A pattern of behavior developed by an organization as it learns to cope with its problems of external adaptation and internal integration, and that has worked well enough to be considered valid and to be taught to new members as the correct way to perceive, think, and feel is called?

False

A vision statement commonly answers the question, "What is our business?" whereas a mission statement is more likely to answer the question "what do we want to become?" (T/F)

Strengths

Because of the success of the iPad and the iPhone, Apple has tremendous brand recognition. Brand recognition is one of Apple's _________

Demographics

Centrum vitamins segments its line of vitamins based on gender and age group (one of the vitamins is for men over the age of 50). This is an example of market segmentation based on variables of?

D

Companies A and B have the same sales, tax rate, interest rate on their debt, total assets, and basic earning power. Both companies have positive net incomes. Company A has a higher debt ratio and, therefore, a higher interest expense. Which of the following statements is correct? a. Company A has more net income b. Company A has a lower equity multiplier c. Company A has a higher times interest earned (TIE) ratio d. Company A pays less in taxes e. Company A has a higher ROA

Rivals and complementors

Consider the video games industry. Sony makes the "playstation 2" video game system. Sega used to make the competing "dreamcast" video game system. At the same time, Sega made games that people could buy to play on their playstation 2. This means that Sony and Sega were

Average total cost will decrease

Economies of scale imply that within some range one can increase the size of operation and:

B

Financial objectives involve all of the following EXCEPT a. growth in revenues b. larger market share c. higher dividends

True

Horizontal integration is seeking ownership or increased control over competitors (T/F)

its inability to produce in sufficient volume to match the cost advantages of established producers

If economies of scale are an industry's primary entry barrier, a new entrants major risk is?

Last in, First out (LIFO)

In a period of rising prices, which inventory valuation method would generally yield both the lowest ending inventory value and the lowest net income figure?

Cash Cow

In the BCG Matrix, a division with a high relative market share position in a low-growth industry can be described as a?

C

In which situation would horizontal integration be an especially effective strategy? a. When an organization competes in a slowing industry b. When decreased economies of scale provide major competitive advantages c. When an organization can gain monopolistic characteristics in a particular area or region without being challenged by the federal government.

are increasing; is growing

Jane, a product manager, thinks her company's product is currently in the growth stage of the product life cycle. If so, the profits for the product _______ and the number of competitors __________.

False

Once and effective strategy is designed, modifications are rarely required. (T/F)

A

One difference between a Competitive Profile Matrix (CPM) and an External Factor Evaluation (EFE) is that? a. CPM includes both internal and external issues b. CPM ratings range from 1 to 10 c. CPM is only used in small firms

False

Organizations should prepare contingency plans just for unfavorable events. (T/F)

more profitable

Organizations using strategic management are generally ________ than those that do not.

True

Porters five forces model helps determine both the nature of competition in an industry and the industry's profit potential (T/F)

internal and external factors are constantly changing

Strategy evaluation is necessary because

on a continuous basis

Strategy-evaluation activities should ideally be performed...?

create and sustain a competitive advantage

The goal of strategic managers is ________

True

The process of performing an internal audit, compared to the external audit, provides more opportunity for participants to understand how their jobs, departments, and divisions fit into the whole organization (T/F)

B

The purpose of a mission statement is to declare all of these EXCEPT a. A reason for being b. an annual financial plan c. a statement of purpose

economic

The shift to a service economy is an example of a(n) _________ force

is a continuous process

The strategic management process _________

Fragmented; low; high

Theory says that ________ industries have a _________ concentration ratio and therefore have a _________ intensity of rivalry

firms in other industries that produce products or services that satisfy the same customer need

Threat of substitutes products comes from

gather competitive intelligence and information about external trends

To perform an external audit, a company first must

C

What is NOT one of Michael Porter's five competitive forces? a. potential entry of new competitors b. rivalry among competing firms c. bargaining power of unions d. bargaining power of suppliers e. bargaining power of consumers

Adequate and timely feedback

What is the cornerstone of effective strategy evaluation?

Planning

What is the essential bridge between the present and the future that increases the likelihood of achieving desired results?

1 to 4

What is the range for a firm's total weighted score in an EFE matrix?

Market Development

When a domestic company first begins to export to India, it is an example of?

Political

When the industry relies heavily on government contracts, which forecasts can be the most important part of an external audit?

Higher

When the products being purchased are standard or undifferentiated, it results in ________ bargaining power of consumers.

C

When using External Factor Evaluation (EFE) Matrix, what is done after multiplying each factor's weight by it's rating to determine a weighted score? a. Identifying key external factors b. Summing the weighted score for each competitor c. summing the weighted scores for each variable to determine the total weighted score for the organization

product differentiation

Which barrier to entry do corporations such as P&G use to force new entrants to spend heavily to overcome existing customer loyalty?

Controlling

Which function of management includes all of those activities undertaken to ensure actual operations conform to planned operations?

Organizing

Which function of management includes areas such as job design, job specifications, job analysis, and unity of command?

B

Which of the following alternatives to specialization would require continually adding new tasks and challenges as part of the job design? a. Horizontal Job loading b. Job enrichment c. Job specialization

A

Which of the following industries is likely to be the least profitable? a. High threat of substitutes, high rivalry b. High entry barriers, little competition c. High buyer power, low supplier power

C

Which of the following is NOT a key question that can reveal internal strengths and weaknesses regarding a firm's marketing function? a. Are markets segmented effectively? b. Has the firm's market share been increasing? c. Does the firm have good liquidity?

A

Which of the following is NOT one of the perspectives from which the balanced scorecard allows firms to evaluate strategies? a. Social Responsibility b. financial performance c. customer knowledge

C

Which of the following is not an external force that just be examined in formulating strategies? a. economic b. social c. organizational d. cultural e. environmental

A

Which of the following is not descriptive of a high level of bargaining power of suppliers? a. substitutes are readily available b. the product or service is unique c. the supplier industry is dominated by a few companies, but sells too many

B

Which of the following is the last step in developing in IFE matrix? a. Summing the weighted scores for each variable b. obtain total weighted score c. identifying the organization's functions of business

B

Which of the following statements is CORRECT? a. the numerator used in the TIE ratio is earning before taxes. EBIT is used because interest is paid with post-tax dollars, so the firms ability to pay current interest is affected by taxes b. A firm that employs financial leverage with have a higher equity multiplier than an otherwise identical firm that has no debt in its capital structure. c. The use of debt financing will tend to lower the basic earning power ratio, other things held constant

C

Which statement is true? a. A company can't have a mission statement unless it has a vision statement b. A vision statement cannot be established until a company has developed its mission statement c. The vision statement should be established before the mission statement

Product Development

Which strategy generally entails large research and development expenditures?

related diversification

Which strategy is effective when new, but related, products could be offered at highly competitive prices?

market penetration

Which strategy seeks to increase market share for present products or servcies in present markets through greater marketing efforts?

First Mover

______ advantages refer to the benefits a firm may achieve by entering a new market or developing a new product or service prior to rival firms

True

significant barriers to entry are not always sufficient to keep some new firms fro entering industries with higher quality products, lower prices, and substantial marketing resources (T/F)

environmental

the acronym SCDE stands for social, cultural, demographic, and ________ forces

False

A differentiation strategy can only be achieved with a large target market.

Distinctive competencies

A firm's strengths that cannot be easily matched or imitated by competitors are called _____?

When nonprice determinants, like income and number of buyers, are unchanged

According to the law of demand, when will higher corn prices produce the quantity demanded of corn?

C

All of the following are basic activities of management EXCEPT a. staffing b. planning c. consolidating d. organizing e. motivating

A

All of the following are basic functions of marketing EXCEPT a. value chain analysis b. product planning c. promoting products d. pricing products e. distributing products

False

Allocating resources is one of the four basic activities performed by managers (T/F)

A

An effective mission statement should do all of the following EXCEPT a. Include monetary amounts, numbers =, percentages, and ratios b. be inspiring c. reveal the firm is environmentally responsible

C

An independent group of suppliers, such as farmers, gather to form a cooperative to sell their products to buyers directly, replacing their former distributor. This is an example of? a. threat of entry b. backward integration c. forward integration

generating and evaluating feasible alternative strategies

An organization's present strategies, objectives, vision, and mission, coupled with the external and internal audit information, provide a basis for...?

C

Which of the following statements is CORRECT? a. The NPV method does not consider all relevant cash flows, particularly cash flows beyonds the payback period b. The NPV method assumes that cash flows will be reinvested at the WAAC, while the IRR method assumes reinvestment at the risk-free rate c. The NPV method assumes that cash flows will be reinvested at the WAAC, while the IRR method assumes reinvestment at the IRR.

A

Which of the following statements is NOT true about strategic groups? a. Rivalry within the same strategic group tends to be lower than rivalry between different strategic groups b. profitability varies between strategic groups c. it is possible to have multiple strategic groups within the same group

B

Which of there following industries is likely to be the most profitable? a. High threat of substitutes b. High entry barriers, little competition c. High buyer power, high supplier power

A

Which of these strategies is effective when the number of suppliers is small and the number of competitors is large? a. Backward integration b. Forward integration c. horizontal diversification

Times-interest-earned ratio

Which ratio is calculated by dividing profits before interest and taxes by total interest charges?

A

Without assumptions, planning would be? a. impossible b. easier c. difficult

strategy formulation

collecting and evaluating information on competitors is essential for successful

True

external audits attempt to identify key variables that offer actionable responses (T/F)