Capstone Chap.4 The Internal Assessment, Capstone Chap.5 Strategies in Action, Capstone Chap.6 Strategy Analysis and Choice
12) In the SPACE analysis, what does a (+6, +3) strategy profile portray? A) A strong industry position B) An unstable environment C) A stable environment D) A weak industry position E) A weak financial position
A
13) The most important determinants of an organization's overall strategic position are considered to be the two internal dimensions, financial position (FP) and competitive position (CP), and the two external dimensions, industry position (IP) and stability position (SP).
A
14) Market penetration can be classified as either a conservative, aggressive, or competitive strategy when using the Strategic Position and Action Evaluation (SPACE) Matrix.
A
14) The ________ decision is the allocation and reallocation of capital and resources to projects, products, assets, and divisions of an organization. A) investment B) dividend C) financing D) restructuring E) benchmark
A
15) The firm should pursue conservative strategies if the coordinates of a SPACE directional vector are (-1, +4).
A
16) The firm should pursue aggressive strategies if the coordinates of a SPACE directional vector are (+5, +4).
A
21) A cost leadership strategy can be especially effective when the market is composed of many price-sensitive buyers.
A
21) According to Roger Schroeder, which basic function within production and operations deals with aggregate planning and scheduling? A) Capacity B) Inventory C) Workforce D) Process E) Quality
A
22) According to the Grand Strategy Matrix, which strategy is recommended for a firm with rapid market growth and a strong competitive position? A) Market penetration B) Unrelated diversification C) Joint venture D) Retrenchment E) Liquidation
A
23) A recent study reported that the stock price appreciation of technology companies in the lowest third of R&D spending have consistently outperformed companies in the highest third over 1-, 3-, 5-, and 10-year periods since 1977.
A
23) For companies located in Quadrant III of the Grand Strategy Matrix, the first strategy recommended is A) extensive cost and asset reduction. B) asset expansion. C) employee expansion. D) immediate liquidation of assets. E) divestiture.
A
24) When a firm located in Quadrant I of the Grand Strategy Matrix is too heavily committed to a single product, related diversification may be appropriate to reduce the risks associated with a narrow product line.
A
25) The IFE Matrix should be ________ in multidivisional firms. A) constructed for each autonomous division B) all-inclusive C) constructed only for the major divisions D) developed before the EFE Matrix E) revised monthly
A
4) Amazon's start of rapid delivery services in some U.S. cities is an example of which type of strategy? A) Forward integration B) Backward integration C) Horizontal integration D) Related diversification E) Unrelated diversification
A
17) In the Boston Consulting Group (BCG) Matrix, which element represents the industry growth rate in sales, measured in percentage terms? A) X-axis B) Y-axis C) First quadrant D) Second quadrant E) Third quadrant
B
19) All of the following are limitations of the Boston Consulting Group (BCG) Matrix EXCEPT A) viewing every business as a star, cash cow, dog or question mark can be an oversimplification. B) the matrix requires at least three years worth of data. C) the matrix does not reflect divisional or industry growth over time. D) the matrix does not allow a company to be classified as somewhere in between two categories. E) variables such as size of market and competitive advantages are not considered in the Matrix.
B
19) The times-interest-earned ratio would be classified as a(n) A) activity ratio. B) leverage ratio. C) profitability ratio. D) liquidity ratio. E) growth ratio.
B
19) Which term refers to selling a division or part of an organization? A) Joint venture B) Divestiture C) Concentric diversification D) Liquidation E) Horizontal integration
B
2) An organization's present strategies, objectives, vision, and mission, coupled with the external and internal audit information, provide a basis for A) generating structural strategies, but not evaluating those strategies. B) evaluating structural strategies, but not generating those strategies. C) generating feasible alternative strategies, but not evaluating those strategies. D) evaluating feasible alternative strategies, but not generating those strategies. E) generating and evaluating feasible alternative strategies.
B
2) Because a combination strategy bears no risk, many organizations pursue a combination of two or more strategies simultaneously.
B
20) Under which condition would a differentiation strategy be especially effective? A) When there are few ways to differentiate the product or service that buyers perceive as having value B) When technological change is fast paced and competition revolves around rapidly evolving product features C) When most buyers use the product in the same way D) When many rival firms are following a similar differentiation approach E) When the differentiation base is easy or inexpensive for rivals to duplicate
B
22) A best-value strategy must offer products or services to a wide range of customers at the best price-value available on the market.
B
23) A differentiation strategy can only be achieved with a large target market.
B
24) Differentiation guarantees competitive advantage as long as standard products sufficiently meet customer needs.
B
24) The process whereby a firm determines the costs associated with organizational activities from purchasing raw materials to manufacturing products to marketing those products is called A) The Resource-Based Approach. B) Value Chain Analysis. C) Strategic Cost Analysis. D) The Internal Factor Evaluation Matrix. E) Cost-Benefit Analysis
B
25) To succeed, a differentiation strategy depends on the existence of many different niches and segments within a market, thereby allowing a focuser to pick a competitively attractive niche suited to its own resources.
B
27) What occurs when two or more companies form a temporary partnership or consortium for the purpose of capitalizing on some opportunity? A) Retrenchment B) A joint venture C) Liquidation D) Forward integration E) Divestiture
B
29) A secondary buyout occurs when a corporation's shares are bought by the company's management and other private investors using borrowed funds
B
3) A growing trend is for franchisers to buy out their part of the business from their franchisees.
B
30) Companies are avoiding outsourcing more and more because it is more expensive than traditional methods and it does not allow a firm to concentrate on its core business.
B
4) What is the term for a historical narrative describing the unique accomplishments of a group and its leaders? A) Rite B) Saga C) Story D) Myth E) Folktale
B
6) Which function of management is concerned with span of control and chain of command? A) Planning B) Organizing C) Controlling D) Staffing E) Motivating
B
8) Horizontal integration is an appropriate strategy when the competitors of an organization are doing poorly
B
8) The management function of organizing is included in human resource management.
B
9) The controlling function of management is synonymous with strategy formulation.
B
10) Pricing is one of the basic functions of A) marketing. B) finance/accounting. C) management information systems. D) production/operations. E) research and development.
A
11) All of the following situations are conducive to market development EXCEPT A) when new channels of distribution are expensive and unreliable. B) when an organization is successful at what it does. C) when new untapped or unsaturated markets exist. D) when an organization has excess production capacity. E) when an organization's basic industry is rapidly becoming global in scope.
A
11) ________ can reveal the demographic characteristics of an organization's customers. A) Customer profiling B) Test marketing C) Market development D) The vision statement E) Telemarketing
A
12) All of the following are basic functions of marketing EXCEPT A) value chain analysis. B) customer analysis. C) product and service planning. D) pricing. E) distribution.
A
7) In which situation would horizontal integration be an especially effective strategy? A) When an organization can gain monopolistic characteristics in a particular area or region without being challenged by the federal government for "tending substantially" to reduce competition B) When an organization competes in a slowing industry C) When decreased economies of scale provide major competitive advantages D) When an organization has neither the capital nor human talent needed to successfully manage an expanded organization E) When competitors are succeeding due to managerial expertise or having particular resources an organization possesses
A
7) The purpose of matching key factors is to generate feasible alternative strategies.
A
9) What are the two external dimensions of the SPACE Matrix? A) Stability position and industry position B) Stability position and competitive position C) Industry position and competitive position D) Competitive position and financial position E) Financial position and industry position
A
9) Which strategy seeks to increase market share for present products or services in present markets through greater marketing efforts? A) Market penetration B) Forward integration C) Market development D) Backward integration E) Product development
A
13) The purchase of 80 percent of Procter & Gamble's pet-food brands by Mars Inc., best known for its M&M chocolates and its Mars and Snickers candy bars, is an example of related diversification
B
14) Unrelated diversification may be an especially effective strategy when an organization's basic industry is experiencing increasing annual sales and profits
B
15) What category of ratios measures a firm's ability to meet its short-term obligations? A) Profitability B) Liquidity C) Leverage D) Activity E) Growth
B
1) A firm's strengths that cannot be easily matched or imitated by competitors are called A) internal audits. B) distinctive competencies. C) external audits. D) interrelated properties. E) internal properties.
B
1) Strategy analysis and choice largely involves making ________ decisions based on ________ information. A) long-term; short-term B) subjective; objective C) short-term; long-term D) subjective; short-term E) objective; subjective
B
1) Which strategy is effective when new, but related, products could be offered at highly competitive prices? A) Forward integration B) Related diversification C) Related integration D) Conglomerate diversification E) Unrelated diversification
B
11) What type of strategies would you recommend when a firm's SPACE Matrix directional vector has the coordinates (-2, +3)? A) Aggressive B) Conservative C) Competitive D) Defensive E) Integrative
B
10) The two positive-rated dimensions on the SPACE Matrix are A) FP and CP. B) CP and SP. C) FP and IP. D) IP and SP. E) FP and SP.
C
17) Bankruptcy A) should never be used as a strategy. B) should be used only when one is legally forced to do so. C) can be an effective type of retrenchment strategy. D) should only be used for large firms. E) should only be used for small, private firms.
C
17) Which ratio would be considered an activity ratio? A) Debt-to-equity B) Net profit margin C) Average collection period D) Earnings per share E) Current ratio
C
18) Retrenchment would be an effective strategy when an organization A) has shrunk so quickly that major internal reorganization is needed. B) is one of the stronger competitors in a given industry. C) is plagued by inefficiency, low profitability, poor employee morale and pressure from stockholders to improve performance. D) has decided to capitalize on opportunities, maximize threats, take advantage of strengths and overcome weaknesses. E) does not have a clearly distinctive competence and has failed to meet its objectives and goals consistently over time.
C
2) ________ exemplifies the complexity of relationships among the functional areas of business. A) Government auditing B) External auditing C) Financial ratio analysis D) Environmental scanning E) Distribution strategy
C
20) If total fixed costs are $10,000, variable costs per unit are $5, and the price per unit is $15, what is the breakeven quantity? A) 500 B) 667 C) 1,000 D) 2,000 E) 5,000
C
3) The match an organization makes between its internal resources and skills and the opportunities and risks created by its external factors can be defined as A) input. B) concept formulation. C) strategy. D) SWOT. E) weakness.
C
3) The three all-encompassing internal resource categories used in the resource-based view are physical resources, human resources, and A) financial resources. B) shareholder resources. C) organizational resources. D) non-renewable resources. E) technological resources.
C
5) All of the following are basic activities of management EXCEPT A) staffing. B) planning. C) consolidating. D) organizing. E) motivating
C
5) Forward integration and backward integration are sometimes collectively referred to as A) horizontal integration. B) diversification. C) vertical integration. D) stuck-in-the-middle. E) hierarchical integration.
C
6) Which of the following is a limitation associated with a SWOT Matrix? A) Viewing every business as a Star, Cash Cow, Dog, or Question Mark is an oversimplification. B) Many businesses fall right in the middle of the matrix. C) It is a static assessment in time. D) Other variables besides relative market share position and industry growth rate in sales need to be considered. E) The matrix does not reflect whether or not various divisions or their industry are growing over time.
C
7) Staffing involves all of these activities EXCEPT A) recruiting employees. B) rewarding employees. C) analyzing customers. D) managing union relations. E) training and developing employees.
C
15) Procter & Gamble's (P&G) sale of many of its brands in order to focus on its core brands is an example of which type of strategy? A) Related diversification B) Unrelated diversification C) Retrenchment D) Divestiture E) Liquidation
D
16) Staples 170 store closings in North America in 2014 is an example of A) divestiture. B) backward integration. C) liquidation. D) retrenchment. E) forward integration.
D
18) In the Boston Consulting Group (BCG) Matrix, which strategy would be most appropriate for a division classified as a Dog? A) Market penetration B) Market development C) Product development D) Retrenchment E) Forward integration
D
21) What analytical tool has four quadrants based on two dimensions: competitive position and market growth? A) Competitive Profile Matrix (CPM) B) Internal-External (IE) Matrix C) Strategic Position and Action Evaluation (SPACE) Matrix D) Grand Strategy Matrix E) Quantitative Strategic Planning Matrix (QSPM)
D
26) All of the following are principles of good organizational governance, as established by BusinessWeek, EXCEPT A) each director attends at least 75 percent of all meetings. B) the audit, compensation and nominating committees are made up solely of outside directors. C) each director owns a large equity stake in the company. D) at least three directors are current or former company executives. E) the CEO is not also the Chairperson of the Board.
D
26) The controversial practice of a company borrowing money simply to fund dividend payouts to itself is known as A) a leveraged buyout. B) retrenchment. C) first mover advantage. D) dividend recapitalization. E) dividend divestiture.
D
5) Which of the following is NOT one of the steps involved in constructing a SWOT Matrix? A) List the firm's key external threats. B) Match internal strengths with external opportunities, and record the resultant SO strategies in the appropriate cell. C) Match internal strengths with external threats, and record the resultant ST strategies. D) List the firm's external weaknesses. E) List the firm's external opportunities.
D
6) Which of these strategies is effective when the number of suppliers is small and the number of competitors is large? A) Conglomerate diversification B) Forward integration C) Concentric diversification D) Backward integration E) Horizontal diversification
D
8) The two internal dimensions represented on the axes of the SPACE Matrix are A) stability position and industry position. B) industry position and internationalization. C) internationalization and competitive position. D) competitive position and financial position. E) financial position and stability position.
D
10) When a domestic company first begins to export to India, it is an example of A) horizontal integration. B) backward integration. C) forward integration. D) concentric diversification. E) market development.
E
12) Which of the following is NOT a guideline for when an organization should use an unrelated diversification strategy? A) When revenues derived from an organization's current products or services would increase significantly by adding the new unrelated, products B) When an organization's present channels of distribution can be used to market the new products to current customers C) When the new products have countercyclical sales patterns compared to an organization's present products D) When an organization competes in a highly competitive and/or a no-growth industry E) When existing markets for an organization's present products are not yet saturated
E
13) Which of the following is NOT a key question that can reveal internal strengths and weaknesses regarding a firm's marketing function? A) Does the firm have an effective sales organization? B) Has the firm's market share been increasing? C) Are markets segmented effectively? D) Are the firm's products and services priced appropriately? E) Does the firm have good liquidity?
E
16) What category of ratios measures how effectively a firm can maintain its economic position in the growth of the economy and industry? A) Profitability B) Liquidity C) Leverage D) Revenue Growth E) Growth
E
18) Which ratio is calculated by dividing profits before interest and taxes by total interest charges? A) Inventory turnover B) Fixed assets turnover C) Total assets turnover D) Debt-to-equity ratio E) Times-interest-earned ratio
E
20) Which of the following analytical tools consists of a nine-cell matrix? A) Boston Consulting Group (BCG) Matrix B) Competitive Profile Matrix (CPM) C) Strategic Position and Action Evaluation (SPACE) Matrix D) Grand Strategy Matrix E) Internal-External (IE) Matrix
E
22) For many firms a key decision with great bearing on Research and Development (R&D) spending is whether to be a "first mover" or a A) "first activator." B) "second mover." C) "average player." D) "tech leader." E) "late follower."
E
25) Which of the following is the first step in developing a QSPM? A) Compute the Total Attractiveness Scores. B) Examine the Stage 2 matrices and identify alternative strategies the organization should consider implementing. C) Assign weights to each key external and internal factor. D) Determine the Attractiveness Scores. E) Make a list of the firm's key external opportunities and threats and internal strengths and weaknesses in the left column of the QSPM
E
28) Mergers and acquisitions are created for all of the following reasons EXCEPT to A) gain new technology. B) reduce tax obligations. C) gain economies of scale. D) smooth out seasonal trends in sales. E) shift company profits to the United States from countries with low corporate tax rates.
E
4) How many cells are in a SWOT Matrix? A) Two B) Four C) Six D) Eight E) Nine
E
