EXAM 1 (Chapters 1-5) Business Strategy

In 3-5 sentences explain whether or not you believe organizations should evaluate performance based on the Triple Bottom Line (or 3-Ps) framework

I definitely believe organizations should evaluate performance based on the Three P's: people, planet and profits. Profits are obviously important, so that the company can survive and thrive -- and take care of every employee involved. But, profit isn't everything. I think businesses should be treated almost like human-beings. If we are expected to be responsible of taking care of the environment and people around us, then why shouldn't the companies we create?

In 3-5 sentences, explain how the strategic management process is both an art and a science.

Strategic management is both an art & a science because it takes both innovation & new ideas, as well as logistical realities to master it. As a strategic manager, you need to be very aware of what plans have had more success in the past than others, because those learned lessons definitely help. That's the science portion of it. However, at the same time, it's still an art in the sense that there are so many factors that play into a companies business, because no two companies are the exact same. Therefore, strategic management is an art, because you need to be able to come up with brand new ideas to solve different problems, because the problems you face will be different than any other company's problems.

Under which strategy would you offer products or services to a wide range of customers at the lowest price available on the market? 1.) Cost leadership 2.) Focused cost leadership 3.) Differentiation 4.) Focused Differentiation 5.) Broad Scope

1.) Cost Leadership

A low-cost focus strategy can be especially attractive when the target market niche is small 1.) True 2.) False

1.) True

Effective goals are specific, measurable, aggressive, realistic and time-bound 1.) True 2.) False

1.) True

Examination of the strategic groups in an industry provides a firm's executives with a better understanding of their closest rivals, reveals alternative paths to success, and highlights untapped opportunities. 1.) True 2.) False

1.) True

Firms, like organisms, must be "adept at adapting" or they will not survive. 1.) True 2.) False

1.) True

Low-performing firms typically underestimate their competitor's strengths and overestimate their own strengths. 1.) True 2.) False

1.) True

Political forecasts can be the most important part of an external audit for firms that depend heavily on government contracts. 1.) True 2.) False

1.) True

Strategic management borrows many ideas from ancient uses of strategy over time. 1.) True 2.) False

1.) True

Strategic management is an attempt to organize qualitative and quantitative information in a way that allows effective decisions to be made under conditions of uncertainty. 1.) True 2.) False

1.) True

The 'time-bound' aspect of SMART goals is based on the premise that deadlines are motivating and help individuals more effectively manage their time 1.) True 2.) False

1.) True

The most effective differentiation bases are those that are hard or expensive for rivals to duplicate. 1.) True 2.) False

1.) True

The process of performing an internal audit, compared to the external audit, provides more opportunity for participants to understand how their jobs, departments and divisions fit into the whole organization 1.) True 2.) False

1.) True

A resource is valuable if it is rare, hard to imitate, or 1.) not easily substitutable 2.) inefficient 3.) easily substitutable 4.) inexpensive 5.) expensive

1.) not easily substitutable

What can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives? 1.) strategic management 2.) strategic formulation 3.) strategy evaluation 4.) strategy implementation 5.) strategic leading

1.) strategic management

What are the means by which long-term objectives will be achieved? 1.) strategies 2.) strengths 3.) weaknesses 4.) policies 5.) opportunities

1.) strategies

Collecting and evaluating information on competitors is essential for successful 1.) strategy formulation 2.) internal analysis 3.) strategy evaluation 4.) strategy implementation 5.) strategy correction

1.) strategy formulation

All of the following are basic functions of marketing EXCEPT 1.) value chain analysis 3.) customer analysis 3.) product and service planning 4.) pricing 5.) distribution

1.) value chain analysis

A differentiation strategy can only be achieved with a large target market. 1.) True 2.) False

2.) False

A vision statement commonly answers the question, "What is our business?" whereas a mission statement is more likely to answer the question "What do we want to become?" 1.) True 2.) False

2.) False

According to Porter, strategies allow organizations to gain competitive advantage from three different bases: cost leadership, differentiation, and decentralization. 1.) True 2.) False

2.) False

Economic factors do not have much impact on the attractiveness of strategies 1.) True 2.) False

2.) False

Major competitors' strengths are areas of concern but do not represent key threats to a firm. 1.) True 2.) False

2.) False

Once an effective strategy is designed, modifications are rarely required. 1.) True 2.) False

2.) False

Opportunities are a firm's distinctive competencies that cannot be easily matched or imitated by competitors 1.) True 2.) False

2.) False

The application of entrepreneurial thinking and doing are limited to those individuals who are beginning new business ventures. 1.) True 2.) False

2.) False

While interesting, organizational culture does not significantly affect business decisions. 1.) True 2.) False

2.) False

Under which condition would a cost leadership strategy be especially effective? 1.) When buyers are small and have little power to bargain down prices. 2.) When the products of rival sellers are essentially identical and suppliers are readily available from any of several eager sellers. 3.) When there are many ways to achieve product differentiation that have value to buyers. 4.) When most buyers use the product in different ways 5.) When buyers incur high costs in switching their purchases from one seller to another.

2.) When the products of rival sellers are essentially identical and suppliers are readily available from any of several eager sellers.

Narrow aims designed to provide clear and tangible guidance to employees as they perform their work on a daily basis. 1.) mission statement 2.) goals 3.) policies 4.) by-laws 5.) vision statement

2.) goals

What is the essential bridge between the present and the future that increases the likelihood of achieving desired results? 1.) motivating 2.) planning 3.) controlling 4.) organizing 5.) staffing

2.) planning

Which phase of strategic management is most strongly associated with "action"? 1.) strategy formulation 2.) strategy implementation 3.) strategy evaluation 4.) competing advantages 5.) measuring performance

2.) strategy implementation

Which "generic" strategy offers products or services to a niche group of customers at the lowest price available on the market? 1.) Cost leadership 2.) Best value 3.) Focused cost leadership 4.) Focused differentiation 5.) Differentiation

3.) Focused cost leadership

What are enduring statements of purpose that distinguish one business from other similar firms? 1.) Objective 2.) Policies 3.) Mission Statements 4.) Rules 5.) Employee conduct guidelines

3.) Mission statements

When the products being purchased are standard or undifferentiated, it results in ________ bargaining power of consumers 1.) negative 2.) negligible 3.) higher 4.) lower 5.) marginalized

3.) higher

Generally, external opportunities and threats are 1.) not worth monitoring and evaluating 2.) unable to have a specific impact on an organization 3.) uncontrollable by a single organization 4.) key functions in strategy implementation 5.) key functions in strategy exploitation

3.) uncontrollable by a single organization

What are the six major types of external forces that should be examined as part of an external audit?

political, economic, social, technological, environmental and legal factors

A cost leadership strategy can be especially effective when most buyers use the product in the same ways. 1.) True 2.) False

1.) True

What is NOT one of Porter's five competitive forces? 1.) bargaining power of consumers 2.) bargaining power of unions 3.) bargaining power of suppliers 4.) rivalry among competing firms 5.) potential entry of new competitors

2.) bargaining power of unions

Pricing is one of the basic functions of 1.) management information systems 2.) finance/accounting 3.) marketing 4.) production/operations 5.) research & development

3.) marketing

Discuss how technology has affected advertising and other marketing activities.

Technology has affected advertising because of the way that consumers are now very informed due to easy access to research at their fingertips. Marketing before technology resembled more of a funnel. People simply didn't know as much about certain products before they had to make choices on what to buy. But now that people can research anything about any type of product in today's time, marketers need to be especially careful and strategic about the information they portray about their products, & word of mouth that gets out about their products.

Give an example of a company that uses a differentiation strategy and give a brief justification in support of your example.

The Walt Disney Company is a major example of a company that uses differentiation. Everything that revolves around all things Disney has to do with their own characters & movies that they own all the rights too

Under which condition would a differentiation strategy be especially effective? 1.) When many rival firms are following a similar differentiation approach 2.) When there are few ways to differentiate the product or service that buyers perceive as having value 3.) When most buyers use the product in the same way 4.) When technological change is fast paced and competition revolves around rapidly evolving product features 5.) When the differentiation base is easy or inexpensive for rivals to duplicate.

4.) When technological change is fast paced and competition revolves around rapidly evolving product features

Effective goals should be all of the following EXCEPT: 1.) specific 2.) measurable 3.) realistic 4.) continually changing 5.) time-bound

4.) continually changing

A __________ is a specific move designed to outwit or trick competitors, often involving creativity to enhance success. 1.) strategic position 2.) strategic plan 3.) strategic pattern 4.) strategic ploy 5.) strategic perspective

4.) strategic ploy

Internal ________ are controllable activities in an organization that are performed especially well. 1.) objectives 2.) opportunities 3.) incompetencies 4.) strengths 5.) factors

4.) strengths

Which group would be classified as stakeholders? 1.) Employees 2.) Customers 3.) Owners 4.) Suppliers 5.) All of the above

5.) All of the above

Changes in which of the following can significantly affect firms? 1.) patent laws 2.) lobbying activities 3.) tax rates 4.) antitrust legislation 5.) all of the above

5.) all of the above

Strategic management enables an organization to ________, instead of just responding to threats in its business environment. 1.) be reactive 2.) be immune to threats 3.) avoid responsibility for shaping its future 4.) relinquish control over its destiny 5.) be proactive

5.) be proactive

In 3-5 sentences explain why is it important for an organization's mission statement to have a customer orientation.

The mission statement is meant to be the companies statement of purpose. It's important for a company's mission statement to have a customer orientation so that it's clear which customer's needs they are aiming to fulfill. Customer orientation is centered around placing as much emphasis on the customers interests as the company's interest.