Strategic Management test 1 Chs 1,2,3,6,7
An industry analysis provides which of the following?
A rigorous way of identifying the industry's profit potential Insight into a firm's strategic position within an industry The level of profitability that can be expected for the average firm in the industry
Stakeholder impact analysis is a decision tool that helps a company do which of the following?
Achieve a competitive advantage Act as a good corporate citizen
What must a firm do after diagnosing its specific competitive challenge?
Create an effective guiding policy
Why is employee involvement crucial when developing an inspiring vision and mission?
Employees may develop helpful strategic initiatives. Belief in the vision and mission statements motivates employees.
The economic system in which the owners of shares in a public company are the company's legal owners and the providers of risk capital is called .
Field 1: shareholder Field 2: capitalism
When a new firm enters an industry, which of the following often occur?
Incumbent firms lower prices. Industry profit potential declines. Incumbent firms spend more to satisfy customers.
Which of the following statements about Airbnb is correct?
It handles more accommodations than the three biggest hotel chains combined.
Why is employee involvement crucial when developing an inspiring vision and mission?
It handles more accommodations than the three biggest hotel chains combined.
What should a successful vision do for an organization?
It should inspire employees. It should make employees feel that their work is important.
Which of the following reduces profit margins for air carriers?
Large corporate customers contracting with the U.S. airline industry
Which of the following innovative ideas helped Airbnb develop a successful business in the peer-to-peer rental space?
Presenting a well-designed website Ensuring a smooth transaction between hosts and guests
Which of the following are characteristics of the strategic plan that makes up an intended strategy?
Rational Structured Top-down
What are the approaches that can be utilized when strategizing for competitive advantage?
Strategic planning Scenario planning Strategy as planned emergence
The threat of Blank______ is one of the five forces and can be exemplified by the threat that videoconferencing presents to business travel
The companies pursue similar strategies. The companies differ in important dimensions from companies in other strategic groups. The companies form part of a specific industry.
What is strategic leadership?
The use of influence and power by executives to direct the activities of individuals while pursuing an organization's goals
What is true about the external forces called technological factors?
They capture the application of knowledge to create new process and products.
Which statements correctly describe the ESG criteria?
They evaluate firms on standards that go beyond financial results. They include environmental, social, and governmental aspects.
Which of the following are characteristics of the strategic plan that makes up an intended strategy?
Top-down Rational Structured
Sociocultural factors are constantly in flux and also differ across groups. True false question.
True
True or false: Smart strategic leaders devise ways to make sure that their employees feel invested in the firm's vision.
True
What is the typical result of cognitive limitations?
We choose the option that is "good enough" and satisfies immediate needs.
Which of the following types of questions does scenario planning ask?
What if
When a firm implements a strategy that leads to superior performance relative to other companies in the same industry, it is said to have achieved Blank______.
a competitive advantage
Many drivers find a GPS navigation system useful. Because installing a GPS system in an automobile adds value to the vehicle, the system functions as Blank_____
a complement
According to Michael Porter, the profit potential of an industry is Blank______.
a function of five forces related to competition
A stakeholder has Blank______ when its needs are within the bounds of the law or are otherwise relevant to the firm.
a legitimate claim
When a stakeholder has power over a company that stakeholder is Blank______.
able to influence the company to do something it would otherwise not do
A group of companies that deal with more or less the same set of suppliers and buyers make up Blank______.
an industry
The most rigorous means of investigating the profit potential within a specific industry is to conduct Blank______.
an industry analysis
The pressures that industry suppliers can exert on an industry's profit potential, is also called the Blank______.
bargaining power of suppliers
The power of Blank______ is the pressure they can put on the margins of producers in the industry by demanding a lower price or higher product quality.
buyers
Which of the following leads to systematic errors in decision making and hinders rational thinking?
cognitive biases
A Blank______ is a product or service that adds value to the original product offering.
complement
A(n) Blank______ is a statement of principles to guide an organization as it works to achieve its vision and fulfill its mission.
core values statement
What method for improving strategic decision making involves having a separate team or individual carefully analyze and critique the underlying assumptions and potential downsides of a proposed course of action?
devil's advocacy
What method for improving strategic decision making involves having a separate team or individual carefully analyze and critique the underlying assumptions and potential downsides of a proposed course of action?
devils advocacy
When a firm's static fit does not match the competitive reality, the firm experiences strategic
dissonance
Global warming would be an example of a Blank______ factor in a firm's external environment.
ecological
Growth rates, interest rates, and levels of employment would be considered Blank______ factors in a firm's general environment.
economic
A core values statement provides information to employees regarding the company's Blank______.
ethics and morals
Stakeholder impact analysis is a Blank______-step process that allows managers to better understand and address stakeholders' needs.
five
Michael Porter developed the five forces model to help firms do which of the following?
gain and sustain a competitive advantage determine the profit potential of different industries
In the PESTEL model, political factors are those that relate to Blank_
government bodies
Which of the following are examples of sociocultural factors?
increased number of health-conscious consumers growth of the Hispanic population
The stakeholders of a firm are Blank______.
individuals or groups that can affect and are affected by the actions of the firm
A(n) Blank______ strategy is the outcome of a rational and structured, top-down strategic plan
intended
Research about how CEOs spend their days suggests that CEOs spend most of their time Blank______.
interacting with others
The relationship between the natural environment and business organizations can best be described as Blank______
interdependent
Which of the following are factors in a firm's legal environment? Multiple select question. laws regulations demographic trends innovative technology mandates
laws regulations mandates
Which of the following is an example of a major innovation in process technology?
lean manufacturing
Deregulation of industries leads to intensified competition and higher value at lower prices for consumers. This is an example of Blank______ factors influencing business.
legal
Which of the following are the three important stakeholder attributes managers must pay particular attention to during stakeholder impact analysis?
legitimacy urgency power
Managers have Blank______ direct influence over external forces in the firm's general environment than those in the firm's task environment.
less
Which of the following tend to result from strong competitive rivalry?
limits to the industry's profit potential
Which of the following contribute to consumer buying power?
low switching costs real time, accurate price comparisons
Studies show that CEOs spend the majority of their time Blank______.
meeting people face-to-face
Top-down strategy is derived from Blank______.
military strategy
After creating a vision as part of the strategic management process, what must a a firm establish next?
mission
An organization's Blank______ is what an organization actually does, including the products and services it plans to provide and the markets in which it will compete.
mission
In the airline industry, the Blank______ involved in offering international routes restricts movement between hub-and-spoke and point-to-point airlines.
mobility barrier
What are cognitive biases?
obstacles in thinking that result in systematic errors in decision making and hinder rational thinking
In the five forces model, threat of entry refers to the risk Blank______.
of potential competitors entering the industry
What is the overall purpose of a firm's strategy?
perform better than other companies in the same industry
Which factors result from the processes and actions of government bodies that influence the decisions and behavior of firms?
political
Which of the following is an important part of strategic leadership and is the strategic leader's ability to influence and direct individuals to do things?
power
When suppliers can demand higher prices for their inputs or reduce the quality of the input factor delivered, they demonstrate that they are Blank______.
powerful
Which of the following are examples of economic factors in the firm's general environment?
price stability interest rates growth rates
Which of the following are important strategic dimensions in mapping strategic groups?
product and service offerings expenditures on research and development cost structure
Which of the following are ways in which the power of buyers affects producers?
requesting more service demanding higher quality obtaining price discounts
Which of the following are ways in which the power of buyers affects producers?
requesting more service obtaining price discounts demanding higher quality
The intensity with which companies in an industry jockey for market share and profitability is known as Blank______.
rivalry
A strategy-planning activity in which top management envisions various what-if scenarios to anticipate plausible futures in order to derive strategic responses is known as -------planning.
scenario
Which of the following is a tool that managers can use to address the needs of stakeholders while maintaining a competitive advantage?
stakeholder impact analysis
What term describes the groups or individuals who can impact or be impacted by a firm's actions?
stakeholders
A(n) group is a set of companies within a specific industry that seek to achieve competitive advantage in similar ways.
strategic
Effective guiding policy is supported by and stays consistent through the use of Blank______.
strategic commitments
Managers are able to influence which of the following types of external forces?
strategic group composition the structure of their industry
Which of the following is the least formal approach to setting the strategy process?
strategy as planned emergence
Which of the following are three approaches that strategic leaders rely on to formulate and implement strategy?
strategy as planned emergence strategic planning scenario planning
What is strategy?
the set of actions a firm takes to achieve a competitive advantage
Both strategy formulation and strategy implementation are aspects of Blank______.
the strategy process
The pressure of rivalry increases when which of the following forces increase in intensity?
the threat of entry the power of buyers and suppliers the threat of substitutes
According to upper-echelons theory, the way strategic leaders of a firm interpret a situation is influenced by which of the following?
the values and experiences of the firm's leaders
According to upper-echelons theory, the way strategic leaders of a firm interpret a situation is influenced by which of the following?
the values and experiences of the firm's leaders correct
Which theory proposes that when faced with decisions, we tend to satisfice rather than optimize?
theory of bounded rationality
The Blank______ is the idea that products or services available from outside the given industry will come close to meeting the needs of current customers.
threat of substitutes
Serena is the CEO of an online retailer. She and her immediate staff have decided to implement a company-wide marketing strategy to improve online sales in Central and South America. What type of strategic approach is Serena engaging in?
top-down strategic planning
If parts of a firm's intended strategy fall by the wayside, it is referred to as Blank______.
unrealized strategy.
According to the Blank______, effective leadership is the outcome of certain intrinsic talents as well as education.
upper-echelons theory
Effective guiding policy is supported by and stays consistent through the use of Blank______.
vision
In crafting a strategic management plan, leaders must first determine the company's long-term objective. This means leaders must first define the organization's Blank______.
vision
In the strategic management process, which basic principle must be defined first?
vision
Which of the following terms best describes an organization's primary objective and what it ultimately wants to accomplish?
vision
When does strategic dissonance occur?
when a firm's strategy no longer achieves the expected outcome
Strategy formulation concerns the choice of strategy in terms of Blank______ to compete.
where and how
