fin bus strategic mgmt exam
A firm can achieve sustained competitive advantage by doing what?
A and B
Any industry whose annual growth in sales exceeds ______ percent could be considered to have rapid growth. A- 5 B- 25 C.-10 D.-20 E.-15
A- 5
Two exemplary, hypothetical mission statements are provided near the end of Chapter 2 for what two companies? A- Avon and L'Oreal B-Ford and General Motors C.Apple and IBM D.-Starbucks and Chipotle E.-Kroger and Publix
A- Avon and L'Oreal
Which statement below is false? A- In a QSPM, the range for Total Attractiveness Scores is 1 = not attractive, 2 = somewhat attractive, 3 = reasonably attractive, and 4 = highly attractive. B-The QSPM weights are identical to those in the EFE Matrix and IFE Matrix. C.-The magnitude of the difference between the STAS in a given set of QSPM strategic alternatives indicates the relative desirability of one strategy over another. D.-There is no limit to the number of strategies that can be evaluated or the number of sets of strategies that can be examined at once using the QSPM. E.-Work row by row in developing a QSPM.
A- In a QSPM, the range for Total Attractiveness Scores is 1 = not attractive, 2 = somewhat attractive, 3 = reasonably attractive, and 4 = highly attractive.
A meta-analysis of 20 years of empirical research on mission statements came to what conclusion? A- There is a small positive relationship between mission statements and measures of financial organizational performance. . B- There is a large negative relationship between mission statements and measures of financial organizational performance. C.- There is a small negative relationship between mission statements and measures of financial organizational performance. D.-There is no relationship between mission statements and measures of financial organizational performance. E.-None of the above
A- There is a small positive relationship between mission statements and measures of financial organizational performance.
When should a vision statement reveal the type of business in which the firm engages? A- Always B.-When the firm is a monopoly or oligopoly C.-Sometimes, depending on the firm top strategist's preferences D.-When the firm has a mission statement as well E.-When the firm has diverse businesses
A-Always
Good mission statements identify the utility of a firm's products to its customers. What is a synonym for utility? A-Value, importance, and usefulness B-Importance and usefulness C.-Usefulness D.-Importance E.-Value
A-Value, importance, and usefulness
Are the interpretations of the weights in a CPM and EFE Matrix the same? A-Yes B-Usually C.-No D.-Never E.-Sometimes
A-YES
In multidivisional organizations, should divisional units perform strategic-management tasks, including the development of their own statement of vision and mission? A-Yes B-No C.-Sometimes D.-Under certain conditions or situations E.-C and D above
A-YES
Chapter 2 says "to have a vision that says 'to become the best retailing firm in the USA' " is _____________________. A. -much too broad .B.-too short C.-excellent D.-admirable E.-weak
A. -much too broad
The "markets" component of mission statements refers to _____________. A. the regions in which the company operates the supplier and distributor network of the firm C. the sectors in which the company operates D. the segments in which the company operates E. the industries in which the company operates
A. the regions in which the company operates
Which of the following statements is true? A.-There is no one best mission statement for a particular organization. B.-First and foremost, mission statements should be employee-oriented, and then shareholder-oriented. C.-Mission statements should not be published for competitors to see. D.-An effective mission statement paves the way for an effective vision statement. E.-A single-division organization could have several mission statements for different purposes.
A.-There is no one best mission statement for a particular organization.
Which of the following activities are included in strategy implementation?
All of the above
Which of the following statements is false? An excellent mission statement could be shorter than an excellent vision statement.
An excellent mission statement could be shorter than an excellent vision statement.
Which of the following statements is false? Apple Computer's mission statement should open the possibility for diversification by Apple into pesticides.
Apple Computer's mission statement should open the possibility for diversification by Apple into pesticides.
To survive and prosper, a business must gain and sustain ___________ major competitive advantages over rival firms.
At least several
How many key external factors should be included in an EFE Matrix? A. -15 B. -20 C-10 D.-25 E.-30
B-20
In a QSPM analysis, would it ever be appropriate or useful for a company to not include a weight column at all, but rather just sum the AS columns to determine the relative attractiveness of six strategies? A-Yes but only for small firms B.-No C-Yes D.-Yes but only for multi-divisional companies E.-Yes but only for nonprofit organizations
B. NO
In writing a mission statement, and trying to include the customer component, is it sufficient to simply include the word "customer" in the statement? A-Oftentimes B.-No C-Sometimes D.-Occasionally E.-Yes
B.-No
The Industrial Organization view of strategic planning advocates that external (industry) factors are more important than internal ones for gaining and sustaining competitive advantage. Do the authors David and David agree? A.-Yes. Michael Porter is correct. B.-No. Matching key external opportunities and threats with key internal strengths and weaknesses provides the basis for successful strategy formulation. C-Yes. It is like an ocean tide rising or falling. No one can stop that flow. D.-No. Internal factors are controllable and external factors are not. E.-No. Internal factors (strengths and weaknesses) are more important
B.-No. Matching key external opportunities and threats with key internal strengths and weaknesses provides the basis for successful strategy formulation.
______________ involves companies hiring other companies to take over various parts of their functional operations, such as human resources, information systems, payroll, accounting, customer service, and even marketing. A-Backward integration B.-Outsourcing C-Displacement D.-Procurement E.-Partnering
B.-Outsourcing
In a BCG Matrix, ____________ is defined as the ratio of a division's own market share (or revenues) in a particular industry to the market share (or revenues) held by the largest rival firm in that industry. a-market share position B.-relative market share position c-rival market share position D.-market share E.-rival market share
B.-relative market share position
Official business failure calculations include what events?
Bankruptcies and foreclosures B. Liquidations and court-mandated receiverships C. Reverse mortgages and buyouts D. All of the above E. A & B ------- A&B
Four companies long dashA, B, C, and Dlong dashhave revenues of 1, 2, 3, and 4, respectively. Company C develops a BCG Matrix. What would the RMSP be for company C if all four firms have the same net income? A- 0.25 B- 0.40 C.-0.75 D-0.50 E.-0.20
C-0.75
In an EFE Matrix, how much more important is a weight of 0.20 than a weight of 0.15? A- 5.0% B.-.05% C.-33% D-25% E.-50%
C-33%
Most practitioners and academicians of strategic management feel that an effective statement should include ______ mission statement components. A-3 B.-6 C.-9 D-15 E.-12
C-9
Which of the following statements is true? C-Just because one firm receives a 3.20 overall rating and another receives a 2.80 in a CPM, it does not necessarily follow that the first firm is precisely 14.3 percent better than the second, but it does suggest that the first firm is better in some areas.
C-Just because one firm receives a 3.20 overall rating and another receives a 2.80 in a CPM, it does not necessarily follow that the first firm is precisely 14.3 percent better than the second, but it does suggest that the first firm is better in some areas.
What strategy seeks to increase market share for present products or services in present markets through greater marketing efforts? A-Vertical integration B.-Forward integration C.-Market penetration D-Market development E.-Market saturation
C-MARKET PENETRATION
The state in the United States with highest state taxes is ___________ and the state with the lowest state taxes is ______________. A. New York; Alaska B. California; Mississippi C. New York; Wyoming D.California; Alaska E.California; South Dakota
C. NEW YORK, WYOMING
The strategy-formulation analytical framework consists of how many stages and how many matrices? A- 4 and 10 B. -3 and 10 C.-3 and 9 D- 2 and 8 E.-3 and 8
C.- +3 and 9
The range of total weighted scores in a CPM Matrix is: A-0.0 to 4.0. B.-1.0 to 5.0. C.-1.0 to 4.0. D-0.0 to 5.0. E.-1.0 to 6.0
C.-1.0 to 4.0.
Which statement(s) given below is/are false? A- During the process of developing vision and mission statements, some organizations use discussion groups of managers to develop and modify existing statements. B.-The process of developing a mission statement should create an "emotional bond" and "sense of mission" between the organization and its employees. C.-An outside person with expertise in developing such statements, who has unbiased views, should not actually manage the mission statement dash development process. D- A & B above E.-B & C above
C.-An outside person with expertise in developing such statements, who has unbiased views, should not actually manage the mission statement dash development process.
Asking the question ________________ is synonymous with asking "What is our mission?" A-What is our objective? B.-Why are we here? C.-What is our business? D-What are we doing? E.-Where are we going?
C.-What is our business
If a company has high customer loyalty, such as Harley-Davidson's, what rating would be appropriate for that factor in a SPACE Matrix? A--7 on SP axis B.+1 on CP axis C.-1 on CP axis D-1 on SP axis E.+7 on CP axis
C.-1 on CP axis
Fill in the two blanks. An industry can be stable or unstable on SP, yet high or low on IP. The smartphone industry, for instance, would be unstable (_____) on SP yet high-growth on IP, whereas the canned food industry would be stable (_____) on SP yet low-growth on IP. A-6; -6 B -2; -6 C -6,-2 D -2; -2 E.-3; -3
C: -6,-2
The population of the world recently surpassed ___ billion; the United States has slightly more than ___ million people. A-21; 910 B.-14; 610 C.-1; 110 D.-7; 310 E-28; 910
D- 7 AND 310
External forces can be divided into five broad categories, including the following category: A.-Ethics B.Sustainability C.-Technology D.-A & C E.-B & C
D-A&C
In both the BCG and IE Matrices, the size of each circle represents the percentage of _______ contribution of each division, and pie slices reveal the percentage of _____ contribution of each division to the company. A- sales; net income B.-revenues; earnings C.-sales; profits D.-A, B, and C E- revenues; retained earnings
D-A,B, AND C
Which of the following statements is true? D-Regardless of the number of key opportunities and threats included in an EFE Matrix, the highest possible total weighted score for an organization is 4.0 and the lowest possible total weighted score is 1.0.
D-Regardless of the number of key opportunities and threats included in an EFE Matrix, the highest possible total weighted score for an organization is 4.0 and the lowest possible total weighted score is 1.0.
A benefit of outsourcing is cost restructuring. Is the following statement true? Outsourcing changes the balance of fixed costs to variable costs by moving the firm more to variable costs; outsourcing also makes variable costs more predictable. A-Sometimes B.-No C.-Usually D.-Yes E-Possibly
D-YES
Why are both profit and vision needed to motivate a workforce effectively? A- Vision is viewed negatively by some stakeholders of a firm. B. - Manager and employee bonuses are usually based on profit. C. - Profit and vision statements are usually found in an Annual Report. D. - Profit is viewed negatively by some stakeholders of a firm. E- Top executive bonuses are oftentimes based on accomplishing a mission and vision.
D. - Profit is viewed negatively by some stakeholders of a firm.
__________ is the unique way an organization does business. It is the human dimension that creates solidarity and meaning, and it inspires commitment and productivity in an organization when strategy changes are made. A-Humanity B.-Synergy C.-Accountability D.-Culture E.-Management
D. CULTURE
What would an appropriate SP axis number for Apple Inc.? A - 1 B.+ 6 C. + or - 7 D. - 6 E + 1
D. - 6
According to Michael Porter, the nature of competitiveness in a given industry can be viewed as a composite of the following forces: A- Rivalry among competing firms and potential entry of new competitors. B.-Potential development of substitute products and bargaining power of consumers. C.-Bargaining power of suppliers and bargaining power of distributors. D.-A and B E- A, B, and C
D.-A and B
What source provides excellent online information and advice on approximately 1,700 stocks, more than 90 industries, the stock market, and the economy, including company income statements and balance sheets? A-Mergent Online B.Standard & Poor's NetAdvantage C.-Value Line Investment Survey D-Lexis-Nexis Academic E.-IBISWorld
D.-LEXIS NEXIS ACADEMIC
The _________ Matrix determines the relative attractiveness of various strategies based on the extent that key external and internal factors are capitalized on or improved. A- Internal-External (IE) B.-SWOT C-BCG D.-QSPM E-SPACE
D.-QSPM
What is Rudin's Law? A-When a crisis forces choosing among alternatives, most people do not choose the best option. B.-When a crisis forces choosing among alternatives, most people guess at the best option. C.-When a crisis forces choosing among alternatives, most people choose a bad option. D.-When a crisis forces choosing among alternatives, most people choose the worst possible one. E-When a crisis forces choosing among alternatives, most people panic.
D.-When a crisis forces choosing among alternatives, most people choose the worst possible one.
In a BCG Matrix, divisions in Quadrant III (lower left) have a high relative market share position but compete in a low-growth industry. They are called _______________. A-laggards B.-stars C.-dogs D.-cash cows E-question marks
D.-cash cows
Women make up only ______ percent of board members at companies in the S&P 500, but in 2014, ______ percent of new board members appointed were women. A-49; 59 B.-9; 19 C.-39; 49 D.-19; 29 E-29; 39
D.-19; 29
First mover advantages refers to the benefits a firm may achieve by entering a new market or developing a new product or service prior to rival firms. An advantage of being a first mover is: A-Securing access to rare resources. B.-Gaining new knowledge of key factors and issues. C.-Carving out market share and a position that is easy to defend and costly for rival firms to overtake. D.-A, B, and C E-A and B
D.-A, B, and C
When comparing mission statements of rival firms, perhaps the most important component to examine is what? A-Customers B.-Concern for survival, growth, and profitability C.-Employees D.-Self-concept E-Philosophy
D.-Self-concept
What is often considered to be the first step in strategic planning?
Developing a vision statement
Going clockwise beginning with the top axis, what are the four axes of a SPACE Matrix? A- SP, CP, FP, and IP B.- CP, FP, IP, and SP C.- AP, BP, CP, and DP D. -IP, SP, CP, and FP E -FP, IP, SP, and CP
E -FP, IP, SP, and CP
There are four important differences between the BCG Matrix and the IE Matrix. Which statement below is not a difference between the two matrices? A- The IE Matrix requires more information about the divisions than does the BCG Matrix. B. - The strategic implications of each matrix are different. C.- The x and y axes are different. D. -The IE Matrix has nine quadrants versus four in a BCG Matrix. E. -The sizes of the circles and pie slices can vary.
E- The sizes of the circles and pie slices can vary.
For maximum effectiveness, how many board of director members should there be for a company, according to Lublin and Yermack? A- 13 B.-15 C.-11 D.-17 E.-9
E-9
An advantage of a strong dollar include which of the following? A- Companies with substantial outside U.S. operations see their overseas expenses, such as salaries paid in euros, become cheaper. B. -It gives U.S. companies greater firepower for international acquisitions. C. Companies importing goods have greater buying power because their dollars now go further overseas. D. A & B above E. A, B, and C above
E-ALL ABOVE, A,B,C
The old adage "If it ain't broke, don't fix it" pertains to which of the following? A-Managing by continuity B.-Managing by crisis C.-Managing by subjectives D.-Managing by hope E.-Managing by extrapolation
E-MANAGING BY EXTRAPOLATION
Which statement given below is false? A-Some companies develop mission statements simply because owners or top management believe it is fashionable, rather than out of any real commitment. B.-Some strategists spend almost every moment of every day on administrative and tactical concerns, ignoring the importance of a clear mission. C.-Managers at Johnson & Johnson (J&J) meet regularly with employees to review, reword, and reaffirm the firm's vision and mission. D.-A and C above E.-None of the above
E-NONE
In an EFE Matrix, how much more important is a rating of 4 than a rating of 3? A-25% B.20% C.66% D.50% E.33%
E. 33%
Strengths and weaknesses can be determined by elements of being rather than performance. For example, ______________. a strength may involve ownership of natural resources B. a strength may be a historic reputation for quality C. a weakness may be a current ratio below 1.0 D. All of the above E. A & B above
E. A/B
Which states have zero state income tax? A- Texas and Florida B.-Nevada, Alaska, and Wyoming C.-South Dakota and Washington D.-A and B E.-A, B, and C
E. ALL
King and Cleland recommend that organizations carefully develop a written mission statement in order to reap the following benefit: a. to make sure all employees/managers understand the firm's purpose or reason for being. B. to provide a basis for the allocation of resources. C. to provide a basis for prioritization of key internal and external factors utilized to formulate feasible strategies. D. to provide a basis for organizing work, departments, activities, and segments around a common purpose. E. All of the above
E. All of the above
In an EFE Matrix, the average total weighted score is: A- 3.5. B-3.0. C.-2.0. D.-4.0. E.-2.5.
E.-2.5
Regarding vision statements, which statement below is false? A.- Vision statements should be two sentences or less in length. B.-Vision statements should do more than identify the product/service a firm offers. C.-Vision statements should be written from a customer perspective. D.-Vision statements should answer the question "What is our mission?" E.-A and D above
E.-A and D above
An MIS technique that involves using software to mine huge volumes of data to help executives make decisions is called: A-data mining. B.-machine learning. C.-business analytics. D.-predictive analytics. E.-All of the above
E.-ALL ABOVE
According to Vern McGinnis, a mission statement should do what? A-Define what the organization is and what the organization aspires to be B.-Be limited enough to exclude some ventures and broad enough to allow for creative growth C.-Distinguish a given organization from all others D.-Serve as a framework for evaluating both current and prospective activities E.-All of the above
E.-All of the above
An example of an economic variable is "value of the dollar" that recently hit a 7-year high compared with the yen, a 9-year high compared with the euro, a 5-year high compared with the Australian dollar, and an 11-year high compared with some other currencies. The high dollar results in what economic factor(s)? A-The high dollar worsens the U.S. trade deficit. B.-The high dollar makes it expensive for foreigners to travel to the United States. C.-The high dollar makes it cheap for Americans to travel abroad. D.-The high dollar makes U.S. goods more expensive in overseas markets. E.-All of the above
E.-All of the above
The bargaining power of consumers can be the most important force affecting competitive advantage. Consumers gain increasing bargaining power under the following circumstance(s): A- If they are informed about sellers' products, prices, and costs B.-If they can inexpensively switch to competing brands or substitutes C.-If sellers are struggling in the face of falling consumer demand D.-If they are particularly important to the seller E.-All of the above
E.-All of the above
Which statement is a limitation of the SWOT? A- SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself. B.-SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. C.-SWOT is a static assessment (or snapshot) in time. D.-There are no weights, ratings, or numbers in a SWOT analysis. E.-All of the above.
E.-All of the above.
Which statement below is false? A-In a QSPM, an AS value of 4 is 33 percent more important than a 3. B.-In a QSPM, if you assign an AS score to one strategy, then assign an AS score(s) to the otherlong dashin other words, if one strategy receives a dash, then all others must receive a dash in a given row. C.-If you have more than one strategy in the QSPM, then let the AS scores range from 1 to "the number of strategies being evaluated." D.-In a QSPM, never rate one strategy and not the other. E.-All statements are true.
E.-All statements are true.
Which statement below is false? A-Successful strategists do a lot of chatting and informal questioning to stay abreast of how things are progressing and to know when to intervene. B.-Successful strategists lead strategy but do not dictate it. They give few orders, announce few decisions, depend heavily on informal questioning, and probe and clarify until a consensus emerges. C.-Successful strategists ensure that all major power bases within an organization are represented in, or have access to, top management. D.-A & C E.-None of the above
E.-None of the above
Which statement below is false? A- Successful strategists let weakly supported ideas and proposals die through inaction. B.-Successful strategists establish additional hurdles or tests for strongly supported ideas considered unacceptable but not openly opposed. C.-Successful strategists keep a low political profile on unacceptable proposals and strive to let most negative decisions come from subordinates or a group consensus. D.-A & B E.-None of the above.
E.-None of the above.
What is a major limitation of the BCG Matrix? A- Many businesses fall right in the middle of the BCG Matrix and thus are not easily classified. B- The BCG Matrix does not reflect whether various divisions or their industries are growing over time. C- Other variables besides the two used long dash such as size of the market and competitive advantages long dash are important in making strategic decisions about various divisions. D-A and B E.A, B, and C
E.A, B, and C
___________________ is the act of strengthening employees' sense of effectiveness by encouraging them to participate in decision making and to exercise initiative and imagination, and rewarding them for doing so.
Empowerment
The recommended length of a mission statement is how many words? Fewer than 25 B. Fewer than 75 C. Fewer than 500 D. Fewer than 300 E. Fewer than 150
Fewer than 150
Consistent business success rarely happens by chance. How does it happen?
It most often results from careful planning followed by diligent, intelligent, hard work
Which of the following is listed in the chapter as a reason often given for poor or no strategic planning in a firm?
No formal training in strategic management B. Overconfidence C. Laziness D. No monetary rewards for doing planning E. All of the above all of the above
In writing a mission statement, if you say "We follow the golden rule in all that we do," as is stated in the L'Oreal statement, that sentence would satisfy what component? Ethics B. Philosophy Your answer is correct.C. Markets D. Self-concept E. Integrity
Philosophy
According to the chapter, the worst thing strategists can do is develop strategic plans themselves and then do what?
Present the plans to operating managers to execute.
Which of the following statements is false? Regarding weights in a CPM or EFE Matrix, be mindful that 0.08 is mathematically 25 percent higher than 0.06, so even small differences can reveal important perceptions regarding the relative importance of various factors.
Regarding weights in a CPM or EFE Matrix, be mindful that 0.08 is mathematically 25 percent higher than 0.06, so even small differences can reveal important perceptions regarding the relative importance of various factors.
A fundamental strategy-evaluation activity includes what?
Reviewing external and internal factors that are the bases for current strategies, measuring performance, and taking corrective actions.
The term strategic planning is used synonymously in this text with what other term?
Strategic management
______________ is "the science of planning and directing large-scale military operations, of maneuvering forces into the most advantageous position prior to actual engagement with the enemy."
Strategy
Recent research by Rose and Cray examined the strategic-management process and concluded that perhaps the most important "activity" is what?
The feedback loop
Unskilled leaders work out their conflicts in courtrooms and battlefields. Brilliant strategists rarely go to battle or to court; they generally achieve their objectives how?
Through tactical positioning well in advance of any confrontation
Generally, in war, the best policy is to take a state intact; to ruin it is inferior to this. To capture the enemy's entire army is better than to destroy it; to take intact a regiment, a company, or a squad is better than to destroy it. For to win 100 victories in 100 battles is not the epitome of skill. What is the epitome of skill?
To subdue the enemy without fighting
Who said: "Perfection is not attainable. But if we chase perfection, we can catch excellence."
Vince Lombardi, Head Coach Green Bay Packers (1959-67)
According to Menz and Sheef, when are chief strategy officers (CSOs) most often hired?
When there is an increase in management interdependence and growth in acquisition activity
According to the chapter, an important question to answer in developing a strategic plan is:
Where are we now?, where do we want to go?, and how are we going to get there?
Which of the following statements is true? Wild guesses should never be made in formulating strategies, but reasonable assumptions based on available information must always be made.
Wild guesses should never be made in formulating strategies, but reasonable assumptions based on available information must always be made.
Is the following statement true? A benefit of developing a comprehensive mission statement is that divergent views among managers can be revealed and resolved through the process. Never B. Yes, when diversity among top managers is high C. Sometimes D. No E. Yes
YES
Which of the following statements is false? You may assign the same rating to firms included in a CPM analysis if the firms are similar on the respective factor.
You may assign the same rating to firms included in a CPM analysis if the firms are similar on the respective factor.
A pitfall(s) to watch for and avoid in strategic planning, as listed in the chapter, is:
all of the above
According to Chapter 1, ____________ may be the most important word in management.
communication
A mission statement should include the following components: customers, products/services, markets, and technology B. survival/growth/profitability, philosophy, self-concept, and public image C. enduring, inspiring, and reconciliatory D. A and B above Your answer is correct.E. A, B, and C above
customers, products/services, markets, and technology B. survival/growth/profitability, philosophy, self-concept, and public image A/B
Guidelines, rules, and procedures established to support implementation efforts are called what?
policies
To build four new manufacturing plants in Europe is an example of a(n) ____________.
strategy
What are the four types of strategies generated by a SWOT analysis? . A- SO, WO, ST, and WT B- SO, ST, SW, and SS C.-WO, WT, WS, and SS D.-SW, ST, WO, and WT E.-SO, SW, ST, and WW
A- SO, WO, ST, and WT
Dale McConkey said, "Plans are less important than planning." What does this statement mean?
Communication, understanding, and commitment are vitally important in strategic planning.