sm final

Easy Learning Objective: 1 4. (p. 272) Which of the following firms pioneered the portfolio approach to strategic analysis and choice? A. Bain Consulting B. Boston Consulting Group C. Booz Allen Hamilton D. McKinsey & Company

b

Easy Learning Objective: 5 49. (p. 311) __________ increase managerial effectiveness by standardizing many routine decisions and clarifying the discretion managers and subordinates can exercise in implementing functional tactics. A. Outsourcing B. Standard operating procedures C. Corporate cultures D. Action plans

b

Hard Learning Objective: 5 54. (p. 312) Policies ________ basic aspects of organization behavior. A. Negotiate B. Institutionalize C. Justify D. Determine

b

Hard Learning Objective: 3 54. (p. 278) The ______ portrays the notion that firms need to be self-sufficient in capital. A. Environmental approach B. Parenting approach C. Portfolio approach D. Patching approach

c

Medium Learning Objective: 2 25. (p. 273) Low market share businesses in low market growth industries are called: A. Stars B. Cash cows C. Dogs D. Question marks

c

Medium Learning Objective: 2 31. (p. 274) How many strategic approaches are suggested by the Industry Attractiveness-Business Strength matrix? A. 2 B. 4 C. 3 D. 5

c

Medium Learning Objective: 2 39. (p. 275) Which of the following factors is NOT considered in determining industry attractiveness? A. Nature of competitive rivalry B. Bargaining power of suppliers/customers C. Firm's level of differentiation D. Financial norms

c

Medium Learning Objective: 2 52. (p. 277) The only relationship between business units with the portfolio matrix is: A. Creation of competitive advantage B. Internally synergies C. Cash D. Core competencies

c

Medium Learning Objective: 2 58. (p. 281) Enhanced bargaining power with distributors and retailers to gain shelf space, shelf positioning, stronger push, more dealer attention and better profit margins represents which of the following sources of value building in multi-business companies? A. Market-related opportunities B. Functional-related opportunities C. Potential competitive advantage D. Operating opportunities

c

Medium Learning Objective: 2 67. (p. 286) In the parenting framework, the corporate office of a multibusiness company is the A. "child" B. "brother" C. "parent" D. "sister"

c

Medium Learning Objective: 2 20. (p. 273) In the BCG matrix, which of these businesses often generate cash in excess of their needs? A. Stars B. Question marks C. Cash cows D. Dogs

c

Medium Learning Objective: 2 30. (p. 274) The Industry Attractiveness-Business Strength matrix has ____ cells, while the BCG matrix has ___ cells. A. 6,4 B. 4,6 C. 9,4 D. 4,9

c

Medium Learning Objective: 5 47. (p. 311) __________ are directives designed to guide the thinking, decisions and actions of managers and their subordinates in implementing a firm's strategy. A. Functional tactics B. Action plans C. Short-term objectives D. Policies

d

Easy Learning Objective: 2 10. (p. 273) __________ provides a basis for comparing the relative strengths of the businesses in the firm's portfolio in terms of their positions in their respective markets. A. Relative competitive position B. Relative market share C. Market growth rate D. Growth-share rate

a

Easy Learning Objective: 5 51. (p. 311) Policies are also sometimes called A. standard operating procedures B. action plans C. functional tactics D. business strategy objectives

a

Easy Learning Objective: 5 74. (p. 288) Which one of the following is NOT a lever by which corporate parents add value according to the BCG parenting strategy approach? A. corporate engagement B. strategy development C. financing advantages D. business synergies

a

Easy Learning Objective: 5 85. (p. 295) Firms should use _______ to help managers decide when to pull out of old opportunities that are no longer promising. A. Exit rules B. Boundary rules C. Abandonment rules D. Priority rules

a

Easy Learning Objective: 5 90. (p. 294) The fundamental argument of the _______ approach is that no one can predict how long a competitive advantage will last, particularly in turbulent markets. A. Patching B. Parenting C. Portfolio D. Strategic environment

a

Hard Learning Objective: 2 19. (p. 273) ________ is the current foundation of corporate portfolios—they sustain corporate overhead, dividends and provide debt capacity. A. Cash cows B. Dogs C. Stars D. Question marks

a

Hard Learning Objective: 2 49. (p. 276) _________ has many sources of advantage and fined those advantages potentially sizable. A. Specialization businesses B. Stalemate businesses C. Fragmented businesses D. Volume businesses

a

Hard Learning Objective: 4 59. (p. 281) Which of the following represents an operating opportunity to build value or sharing? A. Shared inbound or outbound shipping and materials handling B. Shared management know-how C. Shared after-sales service D. Shared brand name

a

Medium Learning Objective: 2 9. (p. 273) __________ usually is expressed as market share of a business divided by the market share of its largest competitor. A. Relative competitive position B. Relative market share C. Market growth rate D. Growth-share rate

a

Medium Learning Objective: 2 44. (p. 276) _________ are those that have few sources of advantage, but the size is large--typically the result of scale economies. A. Volume businesses B. Stalemate businesses C. Specialization businesses D. Fragmented businesses

a

Medium Learning Objective: 2 47. (p. 276) Which type of business involves differentiated products with low brand loyalty, easily replicated technology and minimal scale economies? A. Fragmented businesses B. Specialization businesses C. Volume businesses D. Stalemate businesses

a

Medium Learning Objective: 2 36. (p. 274) Which of the following is NOT a strategic approach suggested by the industry attractiveness-business strength matrix? A. Outsource management B. Invest to grow C. Invest selectively and manage for earnings D. Harvest or divest for resources

a

Medium Learning Objective: 4 64. (p. 285) The least profitable firms are: A. Broadly diversified firms whose strategies are build around very general resources such as money B. Ones that involve combining resources into competitive advantage C. Rigidly specialized in an attractive industry D. Flexible

a

Medium Learning Objective: 5 50. (p. 311) _______ communicate guidelines to decisions. A. Policies B. Action plans C. Functional tactics D. Business strategy objectives

a

Easy Learning Objective: 2 26. (p. 273) Crabtree Soup has been facing intense competition and suffering low profit margins for a year now. The market for their specialty soups has matured and the firm is being managed for short-term cash flow to supplement SwissCo's corporate-level resource needs. Which type of firm is Crabtree Soup as per the BCG Growth-Share matrix? A. Star B. Dog C. Cash cow D. Question mark

b

Easy Learning Objective: 2 37. (p. 274) The ______ decisions of the industry attractiveness-business strength matrix remain quite similar to those of the BCG growth-share matrix. A. Management approach B. Resource allocation C. Business strategy D. Functional strategy

b

Easy Learning Objective: 4 56. (p. 280) __________ is concerned with whether or not the potential competitive advantages expected to arise from each value opportunity have materialized. A. Strategic choice B. Strategic analysis C. Strategic evaluation D. Strategic growth

b

Easy Learning Objective: 4 63. (p. 283) Situations that involve _______ occur when no real overlapping capabilities or products exist other than financial resources. A. Financial diversification B. Unrelated diversification C. Related diversification D. Leveraged businesses

b

Easy Learning Objective: 5 52. (p. 311) Policies establish __________ over _________ by clearly stating how things are to be done _________. A. Indirect control; dependent action; in the future B. Indirect control; independent action; now C. Direct control; independent action; in the future D. Direct control; dependent action; now

b

Easy Learning Objective: 5 46. (p. 311) One way operating managers ensure decision making is consistent with the mission, strategy and tactics of the business while allowing considerable latitude to operating personnel is through the use of: A. Empowerment B. Policies C. Strategic evaluation D. Facilitating strategic design

b

Easy Learning Objective: 5 84. (p. 295) _________ focus on which opportunities can be pursued and which ones are beyond pursuing. A. Timing rules B. Boundary rules C. Financial rules D. Project rules

b

Medium Learning Objective: 2 33. (p. 274) How many cells are in the industry attractiveness-business strength matrix? A. 4 B. 9 C. 12 D. 16

b

Medium Learning Objective: 5 69. (p. 286) Ensuring that certain issues are addressed, objectively assessed and assisting in any resolution may be a parenting opportunity that could add value. These issues--like attracting and keeping people with specialized skills--are: A. Marketing-based B. Management-based C. Age-based D. Part of the business definition

b

Medium Learning Objective: 5 80. (p. 293) According to the patching approach, strategic analysis should: A. Focus on strategic processes alone B. Focus on strategic processes more than strategic positioning C. Focus on strategic positioning more than strategic planning D. Focus on strategic positioning more than strategic processes

b

45. (p. 311) ________ is the act of allowing an individual or team the right and flexibility to make decisions and initiate action. A. Management B. Micromanagement C. Empowerment D. Developing strategy

c

Medium Learning Objective: 2 15. (p. 273) For the ABC Company, the Delta business has a low market share position in a fast growing market. As per the BCG matrix, Delta is a A. Cash cow B. Star C. Question mark D. Dog

c

Medium Learning Objective: 2 16. (p. 273) For the ABC Company, the Theta business is in a low market share position in a slow growing market. As per the BCG matrix, Theta is a A. Cash cow B. Question mark C. Dog D. Star

c

Medium Learning Objective: 2 21. (p. 273) Cash cows are yesterday's A. Problem children B. Question marks C. Stars D. Dogs

c

Medium Learning Objective: 2 22. (p. 273) In the BCG matrix, which of these are managed for short-term cash flow? A. Cash cows B. Question marks C. Dogs D. Stars

c

Medium Learning Objective: 2 23. (p. 273) As per the BCG matrix, which of these are cash guzzlers because of their uncertain profit potential? A. Cash cows B. Stars C. Question marks D. Dogs

c

Medium Learning Objective: 2 24. (p. 273) As per the BCG matrix, which of these businesses should be divested or liquidated? A. Cash cows B. Guzzlers C. Dogs D. Stars

c

Medium Learning Objective: 2 35. (p. 274) In the industry attractiveness-business strength matrix, the position of a business is calculated by _______ its rating along the two dimensions of the matrix. A. Subjectively qualifying B. Objectively qualifying C. Subjectively quantifying D. Objectively quantifying

c

Medium Learning Objective: 2 8. (p. 272) The ______ serves as an indicator of the relative attractiveness of the markets served by each business in the firm's portfolio of businesses. A. Market share B. Market projection C. Market growth rate D. Relative competitive position

c

Medium Learning Objective: 2 14. (p. 273) For the ABC Company, the Alpha business is in a dominant market share position in a mature market. As per the BCG matrix, Alpha is a A. Star B. Question mark C. Cash cow D. Dog

c

Medium Learning Objective: 2 50. (p. 277) Skills in achieving differentiation characterize winners in ________ businesses A. Volume B. Stalemate C. Specialization D. Fragmented

c

Medium Learning Objective: 2 12. (p. 273) For the ABC Company, the Omega business is in a dominant market share position in a fast growing market. As per the BCG matrix, Omega is a A. Cash cow B. Question mark C. Star D. Dog

c

Medium Learning Objective: 2 27. (p. 273) _______ are businesses whose high growth rate gives them considerable appeal, but whose low market share makes their profit potential uncertain. A. Dogs B. Stars C. Question marks D. Cash cows

c

Medium Learning Objective: 4 66. (p. 285) Realizing ____ from shared capabilities and core competencies is a key way value is added in multibusiness companies. A. competencies B. profits C. synergies D. resources

c

Medium Learning Objective: 5 73. (p. 287) Governments, regulators, unions and suppliers represent ________ who potentially could be managed more effectively by the parent, than by the individual business units. A. Specialized expertise B. Predictable errors C. External stakeholders D. Internal stakeholders

c

Medium Learning Objective: 5 79. (p. 294) Under the ________ approach to strategy, establishing a vision, building resources and leveraging across markets are all strategic steps to be taken by the firm. A. Patching B. Parenting C. Resources D. Position

c

Medium Learning Objective: 5 83. (p. 295) Which type of simple rules help managers rank the accepted opportunities? A. How-to rules B. Financial rules C. Priority rules D. Boundary rules

c

Medium Learning Objective: 5 71. (p. 287) Lengthy product life cycles can lead to over reliance on old products. This is an example of: A. External relations B. Linkage C. Predictable error D. Specialized expertise

c

Medium Learning Objective: 5 77. (p. 293) When markets are turbulent and rapidly changing, _______ is seen as critical to the creation of economic value in a multi-business company. A. Positioning B. Leveraging resources C. Patching D. Parenting

c

Easy Learning Objective: 2 34. (p. 274) Which matrix makes fine distinctions among business portfolio positions with the inclusion of high/medium/low axes? A. Industry strength matrix B. Growth-share matrix C. Strategic environments matrix D. Industry attractiveness-business strength matrix

d

Easy Learning Objective: 5 48. (p. 311) One way operating managers _____ is through the use of policies. A. outsource B. strategize C. politicize D. empower

d

1. (p. 272) The _______ approach was one of the early approaches for charting strategy and allocating resources in multi-business companies. It was particularly popular in the 1960s and 1970s. A. Case B. Matrix-management C. Portfolio D. Patching

C

Medium Learning Objective: 2 32. (p. 274) Corporate strategists found the growth-share matrix's singular axes A. Limiting in their ability to reflect the complexity of a business's situation B. A good way to simplify the complexity of a business's situation C. A good reflection of the simplistic nature of most corporate-level decisions D. To difficult to manipulate

a

Medium Learning Objective: 5 70. (p. 286) Consider Vepco, a company that began as a rocket propulsion development firm and grew through vertical integration. The firm is trying to figure out how to keep pace with the accelerated trends toward outsourcing that has developed in the last 10 years. Which type of parenting opportunity does this represent? A. Business definition/redefinition B. Management C. Specialized expertise D. Predictable errors

a

Medium Learning Objective: 5 75. (p. 293) The duration of an advantage in patching is: A. Unpredictable B. Sustained C. Short-term D. Dependent on resources

a

Medium Learning Objective: 5 81. (p. 293) Eisenhardt and Sull suggest that managers should flexibly seize opportunities: A. As long as that flexibility is disciplined B. As long as the opportunities has positive net present value C. As long as the capital raised in capital markets can finance the opportunities D. As long as the managers keep a corporate strategic focus on profitability

a

Hard Learning Objective: 5 53. (p. 311) Policies establish __________ over independent action. A. strategic control B. Indirect control C. direct control D. visionary control

b

Medium Learning Objective: 2 13. (p. 273) Businesses with high market share in low-growth industries are called: A. Stars B. Cash cows C. Question marks D. Dogs

b

Medium Learning Objective: 2 38. (p. 274) The industry attractiveness-business strength matrix improves on the BCG matrix in some fundamental ways. Which of the following is NOT one of these? A. The terminology associated with the industry attractiveness-business strength matrix is preferable because it is less offensive B. The terminology associated with the industry attractiveness-business strength matrix can be much more complicated than the BCG matrix C. The multiple measures associated with each division of the industry attractiveness-business strength matrix tap many factors relevant to business strength and market attractiveness besides market share and market growth D. There is broader assessment during the planning process of the industry attractiveness-business strength matrix

b

Medium Learning Objective: 2 46. (p. 276) _________ has many sources of advantage. However, these are all small. A. Stalemate businesses B. Fragmented businesses C. Specialization businesses D. Volume businesses

b

Medium Learning Objective: 2 48. (p. 276) Skills in achieving differentiation in product design, branding expertise, innovation, first-mover and sometimes scale characterize winners in: A. Stalemate businesses B. Specialization businesses C. Volume businesses D. Fragmented businesses

b

Medium Learning Objective: 4 60. (p. 280) The most compelling reason companies should diversify can be found in situations when: A. Core competencies are not similar B. Core competencies can be leveraged with other products or into other markets C. Management is similar in various businesses D. Cash resources can be leveraged

b

Medium Learning Objective: 5 76. (p. 293) _______ is the process by which corporate executives routinely remap businesses to match rapidly changing market opportunities. A. Parenting B. Patching C. Portfolio matching D. Environmental strategy

b

Medium Learning Objective: 5 86. (p. 295) Gizmo Co. has rules for product development. Its project teams must know when a product has to be delivered to the customer and total product development time must be less than 1 year. This represents an example of: A. Exit rules B. Timing rules C. Boundary rules D. Priority rules

b

Difficult Learning Objective: 2 53. (p. 277) Which of the following is NOT a limitation of the portfolio approaches? A. Identifying individual businesses or distinct markets was not often as precise as the underlying assumptions required B. The underlying assumption about the relationship between C. The approach did not emphasize that market share and profitability are the same across different industries and market segments D. The portfolio approach limited strategic options, which were seen mostly as basic strategic missions rather than descriptions of the flow of resources in a company

c

Easy Learning Objective: 1 2. (p. 272) In the past ________ years, we have seen a virtual explosion in the extent to which single-business companies seek to acquire other businesses to grow and diversify. A. 5 B. 50 C. 30 D. 100

c

Easy Learning Objective: 2 11. (p. 273) In the BCG growth-share matrix, the ________ are businesses in rapidly growing markets with large market shares. A. Cash cows B. Question marks C. Stars D. Dogs

c

Easy Learning Objective: 2 6. (p. 272) ________ attempt to help managers "balance" the flow of cash resources among their various businesses while also identifying the overall strategic purpose within the group of businesses. A. Growth techniques B. Market share techniques C. Portfolio techniques D. Environment techniques

c

Easy Learning Objective: 2 28. (p. 273) As per the BCG matrix, which of these should be selectively divested? A. Cash cows B. Stars C. Question marks D. Dogs

c

Easy Learning Objective: 2 45. (p. 276) _________ has few sources of advantage, with most of them small. This results in very competitive situations. A. Fragmented businesses B. Volume businesses C. Stalemate businesses D. Specialization businesses

c

Easy Learning Objective: 2 7. (p. 272) The ________ is the projected rate of sales growth for the market being served by a particular business. A. Market share B. Market projection C. Market growth rate D. Relative competitive position

c

Easy Learning Objective: 5 87. (p. 295) Spelling out key features of how a process is executed is the purpose of which type of simple rules? A. Boundary rules B. Priority rules C. How-to Rules D. Exit rules

c

Easy Learning Objective: 5 88. (p. 294) Simple rules need to: A. Provide just enough structure to limit managers' flexibility to a safe amount B. Capture opportunities that may not always be consistent with corporate intent C. Provide enough structure to allow managers to move quickly to capture opportunities that are consistent with corporate intent D. Define the sources of competitive advantage within a firm's industry

c

Medium Learning Objective: 2 29. (p. 274) The _________ matrix was developed by McKinsey & Company at General Electric. A. Industry awareness B. Growth-share C. Industry attractiveness-business strength D. Strategic environments

c

Medium Learning Objective: 2 51. (p. 276) The two dimensions in the BCG's Strategic Environments matrix are ____ and _____ of competitive advantage. A. length, timing B. yes and no C. sources, size D. many, few

c

Medium Learning Objective: 2 43. (p. 275) Which matrix allows one way for multi-business companies to rationalize what businesses they are in--businesses that share core competencies and associated competitive advantages. A. Growth-share matrix B. Portfolio attractiveness matrix C. Strategic environments matrix D. Business strength matrix

c

Medium Learning Objective: 2 5. (p. 272) What was the key challenge as companies jumped on the diversification bandwagon? A. Making the business profitable B. Finding businesses to buy C. Managing the resource needs of diverse businesses D. Financing acquisitions

c

Medium Learning Objective: 4 62. (p. 283) _______ is those that rely on the same or similar capabilities to be successful and attain competitive advantage in their respective product markets. A. Leveraged businesses B. Networked businesses C. Related businesses D. Unrelated businesses

c

Medium Learning Objective: 4 65. (p. 285) For competitive advantage to be sustainable, any combination of competencies must be: A. Expensive B. Easily imitated C. Unique D. Sustainable themselves

c

Medium Learning Objective: 4 57. (p. 280) The most compelling reason companies should diversify can be found in situations where _______ can be leveraged with other products or into markets that are not a part of where they were created. A. cash B. disruptive competencies C. core competencies D. finances

c

Hard Learning Objective: 5 82. (p. 294) The position-based approach to strategy works best in: A. Moderately changing, well-structured markets B. Rapidly changing, ambiguous markets C. Turbulent markets D. Slowly changing, well-structured markets

d

Medium Learning Objective: 1 3. (p. 272) Which of the following is NOT a reason for the emergence of multi-business companies? A. Companies can enter businesses with greater growth potential B. Companies can enter businesses with different cyclical considerations C. Companies can diversify inherent risks D. Companies can slow their internal growth

d

Medium Learning Objective: 2 17. (p. 273) Zeon Plus Company requires substantial investment to maintain and expand their dominant position in the growing electronic zeonites market. In fact, this investment is often in excess of the funds that the firm can generate internally. However, Zeon Plus does have a very large market share. What type of company is this, according to the BCG growth-share matrix? A. Cash cow B. Dog C. Question mark D. Star

d

Medium Learning Objective: 2 68. (p. 286) The _________ perspective sees multi-business companies as creating value by influencing the businesses they own. A. Strategic environment B. Growth-share matrix C. Patching D. Parenting

d

Medium Learning Objective: 2 41. (p. 275) Which of the following is a factor in the cost position that helps determine business strength? A. Delivery times B. Manufacturing flexibility C. Brand awareness D. Economies of scale

d

Medium Learning Objective: 2 18. (p. 273) When using the BCG growth-share matrix, the dividing point for the growth rate of an industry in constant dollars is typically: A. The market's growth rate B. The consumer price index C. The growth rate of the gross domestic product (GDP) D. The growth rate of the gross national product (GNP)

d

Medium Learning Objective: 2 40. (p. 275) Which of the following factors is considered in determining a business's strength for the industry attractiveness-business strength matrix? A. Threat of substitute products B. Economic factors C. Sociopolitical considerations D. Response time

d

Medium Learning Objective: 2 42. (p. 275) Which matrix involves a framework that can help ensure that businesses' strategies are consistent with strategies appropriate to their strategic environment? A. Strategic choice matrix B. Growth-share matrix C. Industry attractiveness-business strength matrix D. Strategic environments matrix

d

Medium Learning Objective: 3 55. (p. 281) Opportunities to build value via diversification, integration or joint venture strategies are usually NOT found in which of the following? A. Market-related activities B. Operations-related activities C. Management activities D. Non-value chain activities

d

Medium Learning Objective: 4 61. (p. 283) The core competency must represent a major source of value to be a basis for competitive advantage. Furthermore, the core competence: A. Must be negotiable B. Must be financial C. Must be diversified D. Must be transferable

d

Medium Learning Objective: 5 89. (p. 294) _______ need to be brief, be axiomatic and convey fundamental guidelines to decisions or actions. A. Key rules B. Fundamental rules C. Competitive advantages D. Simple rules

d

Medium Learning Objective: 5 72. (p. 287) Whether apparent or not, _______ among business units within or outside the parent company may be complex or difficult to establish without parent company help. A. Capabilities B. Expertise C. Sales D. Linkages

d

Medium Learning Objective: 5 78. (p. 293) The strategic logic of patching is to: A. Pursue more resources B. Leverage resources C. Establish a defensible position D. Pursue opportunities

d