Strategic Planing

Amanda is a management consultant for a soda manufacturer that wants to expand into health drinks such as green tea and after-workout drinks. Based on what you have read, which of these is sensible advice for Amanda to offer her client? - "Pinpoint the best time to enter this new market, and then make a yes-or-no decision quickly." - "Carefully consider the entry choices over time before making a decision." - "Your best bet is to undercut competitors' prices and lure them into a price war." - "Focus on what your company does well rather than trying to expand into untried areas."

"Carefully consider the entry choices over time before making a decision."

Pam owns Discount Auto Zone, a company that got its start making auto parts related for hybrid vehicles, but her firm has had difficulty establishing itself as a maker of parts for the more profitable internal combustion engine. What is most likely contributing to Discount Auto Zone's problem in this area? - Newcomers cannot use existing assets or reconfigure their value chains. - New competitors usually ignore stakeholders who are not stockholders. - It is difficult for outsiders to gauge which stage of the "life cycle" that industry is in. - Entry barriers usually protect the incumbent players in a profitable industry.

Entry barriers usually protect the incumbent players in a profitable industry.

The average cost of production for a bottle of vitamin water in the industry is $5 while its average price is $8. Facuet H20 Inc. manufactures the same product for $3 per bottle and sells it for $8 per bottle. Which of the following statements is most likely true of Facuet H20 Inc. in this scenario? - It has a competitive advantage in the industry. - It has a competitive disadvantage in the industry. - It has competitive parity with other firms in the industry. - It has formed a strategic alliance with other firms in the industry.

It has a competitive advantage in the industry.

What is the strategic management process? - The CEO decides who the product managers will be for a company. - The CEO defines the main problems facing a company. - Strategic leaders design a method to formulate and implement strategy. - Strategic leaders focus on creating a vision that reflects the company's strategy.

Strategic leaders design a method to formulate and implement strategy.

Hank runs a company that manufactures satellites for commercial and government use. It has few rivals. At the moment, the power of buyers, the power of suppliers, and the threat of substitutes are all low. Based on this information, what can Hank conclude? - The manufacturer is likely to see little profit until the power of buyers improves. - In this scenario, suppliers are likely to create and sell effective substitutes. - This firm is an example of near-perfect competition. - The company is likely to be very profitable as long as the threat to entry is low.

The company is likely to be very profitable as long as the threat to entry is low

A company uses the planned emergence approach in the development of its strategies. Which of the following is an implication of this? - The employees will be isolated from the process of setting the company's vision and mission. - The lower-level employees will be restricted to the tasks involved in strategic implementation. - The company's organizational structure and systems will be designed to support bottom-up strategic initiatives. - The top management will create a strategy that is based on hard data alone, rather than an inspiring vision.

The company's organizational structure and systems will be designed to support bottom-up strategic initiatives.

If Modern Furniture LLC obtains an 18 percent return on invested capital, which of the following will help determine if it has a competitive advantage over other pharmaceutical companies? - comparing the return to the return on invested capital obtained by other firms in the industry - assessing the value based on the shareholders' expectations of return on their capital - evaluating the liquidity ratios for other pharmaceutical companies - comparing the value to the history of the firm's return of investment over a number of years

comparing the return to the return on invested capital obtained by other firms in the industry

HardLine Ltd. is a landline telephone manufacturer whose average return on invested capital is approximately 2 percent. Because demand for landline telephones has declined significantly, the industry average return on invested capital has been negative (-5 percent) for the last few years. In this scenario, HardLine Ltd. has a - competitive advantage. - balanced scorecard. - competitive disadvantage. - power position.

competitive advantage.

Which of the following functions do the general managers in strategic business units primarily perform? - design generic business strategies based on guidelines received from corporate headquarters - set overarching strategic objectives to unify the entire conglomerate under one mission - take responsibility for decisions and actions within a single functional area - allocate scarce resources among different business divisions

design generic business strategies based on guidelines received from corporate headquarters

In the pyramid of corporate social responsibility, ________ responsibilities are the foundational building block. - economic - ethical - philanthropic - legal

economic

A successful strategy details a set of goal-directed actions that managers make to gain and sustain a competitive advantage; in order to create this strategy, managers must focus on three pillars. Which of the following below is not one of these pillars? - formulation - execution - implementation - analysis

execution

Hot Wok Cuisine is a premium Asian restaurant chain that differentiates itself from a large number of competitors by providing exclusively organic Chinese cuisine. It has some pricing power because it provides differentiated products and therefore, has some entry barriers in place. In this scenario, Hot Wok Cuisine is most likely operating in a(n) - oligopoly. - monopoly. - perfectly competitive industry. - monopolistically competitive industry.

monopolistically competitive industry.

According to Porter's Five Forces approach, the overall goal of applying the Five Forces analysis to an industry is to make a judgment about its - overall attractiveness. - revenue streams. - future volatility. - market share.

overall attractiveness.

Competitive rivalry based solely on ________ is destructive to firms as it transfers most of the value created in the industry to the customers. - price-cutting - new product releases - promotional campaigns - product differentiation

price-cutting

Bob is exploring multiple suppliers in order to find the best price. However, instead of calling all eight potential suppliers, he only reaches out to the first three and bases his selection on those instead of contacting all suppliers. Bob's action best describes the concept of - satisficing. - optimal decision making. - the illusion of control. - escalating commitment.

satisficing.

A customer-oriented vision statement focuses employees to think about how best to - make a product easier to use. - increase their efficiency to benefit consumers. - improve a popular product. - solve a problem for a consumer.

solve a problem for a consumer.

Makita, DuPont, Builder's Square, and Nut's & Bolts are all hardware stores that compete against each other through everyday low pricing and discounts on bulk purchases. All four stores cater to the needs of highly price-sensitive customers. Thus, together these stores form a ________ group. - focus - command - strategic - cross-functional

strategic

EverMart Inc. is a large company that sells a variety of products such as cosmetics, jewelry, frozen foods, navigation electronics, and airplanes. Apart from this, the company also has a strong presence in the service industry through its chain of dance studios, casinos, and nightclubs. Each of its product divisions operates as an individual business and is responsible for its own profits and losses. Thus, these product divisions under EverMart can be referred to as - limited liability companies. - functional departments. - strategic business units. - corporations.

strategic business units.

A ________ is best described as any activity a firm pursues to explore and develop new products and processes, new markets, or new ventures. - strategic initiative - value chain - supply chain - corrective action

strategic initiative

When do employees fail to adopt the organizational values of a firm? - when the internal stakeholders of the firm are involved in designing the values - when the top managers in the firm are merely paying lip service to the firm's stated values - when the strategic leaders in the firm propagate and exhibit the same values - when the organizational structure, such as its strategic decision making, is aligned with its values

when the top managers in the firm are merely paying lip service to the firm's stated values