Chapter 6
The top row of a QSPM consists of alternative strategies derived from all of these except: a. Grand Strategy Matrix. b. BCG Matrix. c. Space Matrix. d. CPM Matrix. e. IE Matrix.
D
One positive feature of QSPM is that it does not require intuitive judgments and educated assumptions.
False
Stage 2 in the strategy-formulation framework involves the Quantitative Strategic Planning Matrix.
False
Star, question mark, cash cow and dogs are the four quadrants exhibited by the SPACE Matrix.
False
Which stage of the strategy formulation framework includes an Internal Factor Evaluation Matrix and a Competitive Profile Matrix? a. input b. matching c. decision d. penetration e. research
A
Which matrix is included in the decision stage of the strategy formulation framework? a. Internal Factor Evaluation Matrix b. Quantitative Strategic Planning Matrix c. BCG Business Portfolio Matrix d. Grand Strategy Matrix e. SPACE Matrix
B
Which strategies aim at improving internal weaknesses by taking advantage of external opportunities? a. SO b. WO c. SW d. ST e. WT
B
Which analytical tool determines the relative attractiveness of various strategies based on the extent to which key external and internal critical success factors are capitalized? a. BCG Matrix b. SPACE Matrix c. TOWS Matrix d. IE Matrix e. QSPM
E
The Grand Strategy Matrix is based on two evaluative dimensions, market share and market growth.
False
The SWOT matrix is widely used as an organizational tool and, if used appropriately, does not have any significant weaknesses.
False
The firm should pursue conservative strategies if the coordinates of a SPACE directional vector are (1,4).
False
The first stage of the strategy-formulation framework is the input stage, followed by the decision stage.
False
The four strategies of the SPACE Matrix are aggressive, conservative, offensive and defensive.
False
The midpoint on the x-axis of a BCG Matrix is typically set at 0.05.
False
When completing the matching stage of the strategy-formulation framework, the SWOT Matrix needs to be completed before the SPACE Matrix.
False
Good intuitive judgment is always needed to determine appropriate weights and ratings in the input stage matrices.
True
Having no temporal qualities, the BCG Matrix is a snapshot of an organization at a given point in time.
True
In a BCG Matrix the pie slice indicates the proportion of corporate profits generated by that division.
True
One of the steps of the SWOT Matrix is to list the firm's key external opportunities.
True
Relative market share position is given on the x-axis of the BCG Matrix.
True
The major overall benefit of the BCG Matrix is that it draws attention to the cash flow, investment characteristics and needs of an organization's various divisions.
True
Both IE and BCG Matrices are called portfolio matrices.
True
Conservative strategies in a SPACE Matrix most often include product development, market development, market penetration and concentric diversification.
True
Culture includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes and heroines that describe a firm.
True
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
A firm should pursue defensive strategies if the coordinates of a SPACE directional vector are (2,3).
False
According to the Grand Strategy Matrix, Quadrant III organizations compete in rapid-growth industries and have weak competitive positions.
False
According to the Grand Strategy Matrix, when a Quadrant I firm is too heavily committed to a single product, then concentric diversification may reduce the risks associated with a narrow product line.
True
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. An opportunity
C
The two positive-rated dimensions on SPACE Matrix are a. FS and CA. b. CA and ES. c. FS and IS. d. IS and ES. e. FS and ES.
C
Cash cows represent the organization's best long-run opportunities for growth and profitability.
False
Focusing on Higher-Order Issues means it is often possible to achieve similar results using different means or paths.
False
Now averaging 18 members the trend in America is toward larger boards of directors.
False
On the x-axis of the IE Matrix, an internal factor evaluation score of 2.5 represents a weak internal position.
False
Step 1 of a QSPM assigns weights to each key external and internal factor.
False
Strategy changes may be highly effective and productive if a supportive culture does not exist.
False
Strengths-opportunities strategies are based on using a firm's internal strengths to take advantage of external opportunities and threats.
False
Sustainability is the idea that a business can meet its financial goals without hurting customers.
False
An organization's present strategies, objectives and mission provide a basis for generating and evaluating feasible alternative strategies, coupled with the external and internal audit information.
True
Boards of directors are composed mostly of outsiders who are becoming more involved in an organization's strategic management.
True
A positive feature of QSPM is that sets of strategies can be examined sequentially or simultaneously.
True
Which stage of the strategy formulation framework contains the Internal-Factor Evaluation Matrix? a. input stage b. analysis stage c. matching stage d. decision stage e. output stage
A
Most likely, what was a cash cow in the past? a. dog b. failure c. question mark d. cat e. star
E
Total attractiveness scores are defined as the sum of the attractiveness scores in a given column of the QSPM and are computed in the second step of the QSPM.
False
Shifting focus from specific issues to more general ones may increase strategists' options for gaining organizational commitment.
True
Successful strategists minimize their own political exposure on issues that are highly controversial and in circumstances where opposition from major power centers was likely.
True
Firms located in which quadrant of the Grand Strategy Matrix are in an excellent strategic position? a. I b. II c. III d. IV e. V
A
A division with a high relative market share position in a low-growth industry can be described as a a. star b. cash cow c. question mark d. dog e. failure
B
Although Quadrant _____ companies are growing, according to the Grand Strategy Matrix, they are unable to compete effectively, and they need to determine why the firm's current approach is ineffective and how the company can best change to improve its competitiveness. a. I b. II c. III d. IV e. V
B
In the 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
What includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes and heroines that describe a firm? a. Strategy b. Culture c. Mission d. Objectives e. QSPM
B
According to the Grand Strategy Matrix, organizations in which .quadrant have a strong competitive position but are in a slow-growth industry, a. I b. II c. III d. IV e. V
D
The two internal dimensions represented on the axes of the SPACE Matrix are a. environmental stability and industry strength. b. industry strength and internationalization. c. internationalization and competitive advantage. d. competitive advantage and financial strength. e. financial strength and environmental stability.
D
Through which tactic is it possible to achieve similar results using different means or paths? a. Generalization b. Satisficing c. Focus on higher-order issues d. Equifinality e. Specialization
D
What analytical tool has four quadrants based on two dimensions: competitive position and market growth? a. Competitive Profile Matrix b. Internal-External Matrix c. SPACE Matrix d. Grand Strategy Matrix e. QSPM
D
Which of the following is not a step of a SWOT Matrix? a. List the firm's key external threats. b. Match strengths with external opportunities and record the resultant SO strategies in the appropriate cell. c. Match internal weaknesses with external threats and record the resultant WT strategies. d. List the firm's external weaknesses. e. List the firm's external opportunities.
D
Which of these is not a SPACE Matrix quadrant? a. Aggressive b. Defensive c. Competitive d. Offensive e. Conservative
D
Which strategies use a firm's strengths to avoid or reduce the impact of external threats? a. SW b. WO c. SO d. ST e. WT
D
How many cells are in a SWOT Matrix? a. two b. four c. six d. eight e. nine
E
Which of the following is the first step in developing 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/threats and internal strengths/weaknesses in the left column of the QSPM.
E
Which section of the SWOT Matrix involves matching internal strengths with external opportunities? a. The WT cell b. The SW cell c. The WO cell d. The ST cell e. The SO cell
E
Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies? a. Input b. Output c. Decision d. Throughput e. Matching
E
Which strategies are defensive tactics directed at reducing internal weaknesses and avoiding environmental threats. a. SO b. WO c. SW d. ST e. WT
E
The BCG Matrix does not reflect whether or not various divisions or their industries are growing over time.
True
The ES and CA dimension variables in a SPACE Matrix are assigned a numerical value ranging from -1 (best) to -6 (worst).
True
The IE Matrix can be divided into three major regions that have different strategy implications: grow and build, hold and maintain and harvest or divest.
True
The Sarbanes-Oxley Act put an end to the "country-club" atmosphere of most boards and has shifted power from CEOs to directors.
True
The Strengths-Weaknesses-Opportunities-Threats(SWOT) Matrix, the Strategic Position and Action Evaluation (SPACE) Matrix, the Boston Consulting Group (BCG) Matrix, the Internal-External (IE) Matrix and the Grand Strategy Matrix are included in stage two of the strategy-formulation framework.
True
The Toxics Release Inventory (TRI) is administered by the Environmental Protection Agency in the United States.
True
The firm should pursue aggressive strategies if the coordinates of a SPACE directional vector are (5,4).
True
The most important determinants of an organization's overall strategic position are considered to be the two internal dimensions, financial strength (FS) and competitive advantage (CA), and the two external dimensions, industry strength (IS) and environmental stability (ES).
True
The purpose of matching key factors is to generate feasible alternative strategies.
True
The size of the circle in a BCG Matrix corresponds to the proportion of corporate revenue generated by that business unit.
True
To objectively evaluate feasible alternative strategies identified in Stage 2, the QSPM uses input information derived from Stage 1.
True
Viewing businesses as star, cash cow, dog or question mark is an oversimplification.
True
Whenever two firms merge, it becomes especially important to evaluate and consider culture-strategies linkages.
True
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. Conglomerate diversification c. Joint venture d. Retrenchment e. Liquidation
A
An organization that has a low relative market share position and competes in a slow-growth industry is referred to as a a. dog. b. question mark. c. star. d. cash cow. e. cowboy.
A
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
For what type of company is the BCG Matrix ideal for analyzing? a. Companies with more than one division b. All companies c. Companies with annual sales greater than $1 million d. Companies with annual sales of less than $1 million e. Large companies
A
How would a division with a low relative market share position in a high growth industry be described? a. question mark b. cash cow c. star d. stuck-in-the-middle e. dog
A
In the SPACE analysis, what does a (+6, +3) strategy profile portray? a. A strong industry b. An unstable environment c. A stable environment d. A weak industry e. A weak financial position
A
Today, what are boards of directors composed mostly of? a. outsiders b. management c. union d. employees e. stockholders
A
What are two external dimensions of the SPACE Matrix? a. Environmental stability and industry strength b. Environmental stability and competitive advantage c. Industry strength and competitive advantage d. Competitive advantage and financial strength e. Financial strength and industry strength
A
What term is defined as the product of multiplying ratings by attractiveness scores in each row of the QSPM? a. Total attractiveness scores b. Sum total attractiveness scores c. Weighted scores d. Total weighted scores e. Factors
A
When a division of an organization has a high relative market share and is in a fast-growing industry, it is called a a. star b. cash cow c. cat d. question mark e. dog
A
Which of these is an attractive strategy for a cash cow division? a. Concentric diversification b. Horizontal integration c. Conglomerate diversification d. Backward integration e. Forward integration
A
BCG Matrix requires more information about the divisions than the IE Matrix.
False
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
The BCG Matrix limitations include all of these except: a. viewing every business as a star, cash cow, dog or question mark can be an oversimplification. b. requiring at least three years' worth of data. c. not reflecting divisional or industry growth over time. d. not allowing a company to be classified as somewhere in between two categories. e. other variables such as size of market and competitive advantages are not considered.
B
What is a weakness 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. The matrix has no temporal qualities 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
What tactic involves shifting focus from specific issues to more general ones? a. Equifinality b. Focus on higher-order issues c. Generalization d. Satisficing e. None of the above
C
Which of these is a limitation of QSPM? a. Only a few strategies can be evaluated simultaneously. b. The cost of doing the analysis c. Intuitive judgments and educated guesses are required. d. Sets of strategies must be examined in reverse order. e. It requires equal participation from everyone.
C
Which stage of the strategy-formulation framework involves the Quantitative Strategic Planning Matrix? a. Stage 1 b. Stage 2 c. Stage 3 d. Stage 4 e. Stage 5
C
Which strategy formulation technique reveals the relative attractiveness of alternative strategies and thus provides an objective basis for selecting specific strategies. a. SWOT b. SPACE c. QSPM d. IFE e. CPM
C
All of the following are principles of good organizational governance, as established by Business Week, except: a. No directors do business with the company or accept consulting or legal fees from the firm. 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, excluding stock options. d. At least two directors are current or former company executives. e. The CEO is not also the Chairperson of the Board.
D
Each of the nine techniques included in the strategy formulation framework rely on the use of a. strictly factual data. b. luck. c. financial formulas and statistics. d. intuition and analysis. e. synergy.
D
The act of oversight and direction for an organization is referred to as a. corporate lawmaking. b. centralized control. c. organizational direction. d. establishing norms. e. governance.
E
What term is defined as the product of multiplying ratings by attractiveness scores in each row of the QSPM? a. Total attractiveness scores b. Sum total attractiveness scores c. Weighted scores d. Total weighted scores e. Factors
E
Which analytical tool consists of a nine-cell matrix? a. Matching Matrix b. Competitive Profile Matrix c. SPACE Matrix d. Grand Strategy Matrix e. Internal-External Matrix
E
A SWOT Matrix is composed of four cells for the four types of strategies it creates.
False