MGT 3370 Chapter 6 Study Guide

_____ is a strategy for reducing risk by buying a variety of items so that the failure of one stock or one business does not doom the entire portfolio. a. Acquisition b. Diversification c. Strategic dissonance d. Differentiation e. Recovery

b. Diversification

Which of the following is an example of core capabilities of an organization? a. The organization's overhead costs. b. The organization's skill in maintaining large inventories effectively. c. The organization's balance sheet. d. The popularity of products and services sold by the organization e. The organization's customer share.

b. The organization's skill in maintaining large inventories effectively

Resource similarity and _____ are factors that determine the extent to which firms will be in direct competition with each other. a. product differentiation b. market commonality c. resource quality d. customer autonomy e. related diversification

b. market commonality

A _____ is an assessment of the strengths and weaknesses in an organization's internal environment and the opportunities and threats in its external environment. a. firm-level strategy b. situational analysis c. competitive deskilling d. differentiation analysis e. market audit

b. situational analysis

_____ are the central companies in a strategic group. a. Secondary firms b. Dogs c. Question marks d. Cash cows e. Core firms

e. Core firms

Which of the following is an example of a common approach to corporate-level strategy? a. Focus strategies b. ROI strategies c. Adaptive strategies d. Positioning strategies e. Grand strategies

e. Grand strategies

_____ strategies typically work in market niches that competitors have overlooked or have difficulty serving. a. Focus b. Mass production c. Deskilling d. Entropy e. Unrelated diversification

a. Focus

______ are the assets, capabilities, processes, information, and knowledge that an organization uses to improve its effectiveness and efficiency, to create and sustain competitive advantage, and to fulfill a need or solve a problem. a. Resources b. Competitive advantages c. Strategic stances d. Distinctive competencies e. Grand strategies

a. Resources

Organizations can achieve a _____ by using their resources to provide greater value for customers than competitors can. a. competitive advantage b. strategic dissonance c. competitive inertia d. strategic reference point e. distinctive competence

a. competitive advantage

A(n) _____ strategy is a corporate strategy that addresses the question "How should we compete in this line of business?" a. industry-level b. firm-level c. SBU-level d. niche-specific e. operations-level

a. industry-level

A _____ resource is a resource that is not controlled or possessed by many competing firms. a. rare b. perfectly imitable c. substitutable d. slack e. capital

a. rare

In the context of the strategic reference point theory, the _____ strategy aims to protect an existing competitive advantage. a. risk-avoiding b. divesting c. risk-extension d. deskilling e. risk-seeking

a. risk-avoiding

_____ is the measure of the intensity of competitive behavior between companies in an industry. a. Competitive barrier b. Character of culture c. Character of the rivalry d. Process gain e. Anti-competitiveness

c. Character of the rivalry

_____ is the rivalry between two companies that offer similar products and services, acknowledge each other as rivals, and act and react to each other's strategic actions. a. Competitive inertia b. Differentiation c. Direct competition d. Character of the rivalry e. Distinctive competence

c. Direct competition

_____ is a discrepancy between a company's intended strategy and the strategic actions managers take when actually implementing that strategy. a. Differentiation discrepancy b. Competitive dissonance c. Strategic dissonance d. Competitive inertia e. Customer inertia

c. Strategic dissonance

A company that is seeking to grow by taking risks and looking for innovations is best characterized as a(n) _____. a. analyzer b. reactor c. prospector d. defender e. innovator

c. prospector

The strategy-making process begins with: a. the finalization of strategic alternatives. b. satisficing. c. the assessment of the need for strategic change. d. a situation analysis. e. the evaluation of alternatives.

c. the assessment of the need for strategic change.

_____ is defined as the purchase of a company by another company. a. Diversification b. Recovery c. Differentiation d. Acquisition e. Downsizing

d. Acquisition

The _____ is a portfolio strategy that managers use to categorize their corporation's businesses by growth rate and relative market share. This strategy helps them to decide how to invest corporate funds. a. Maslow grid b. SWOT matrix c. portfolio management matrix d. BCG matrix e. investment matrix

d. BCG matrix

Which of the following is NOT one of the five industry forces that determine an industry's overall attractiveness and potential for long-term profitability? a. Bargaining power of buyers b. Character of the rivalry c. Threat of substitute products d. Organizational synergy e. Bargaining power of suppliers

d. Organizational synergy

_____ consists of the strategic actions that a company takes to return to a growth strategy. a. Stability b. Differentiation c. Focus d. Recovery e. Portfolio

d. Recovery

An industry-level strategy that is best suited to changes in the organization's external environment is a(n)_____ strategy. a. differentiation b. diversification c. positioning d. adaptive e. growth

d. adaptive

The purpose of a _____ strategy is to increase profits, revenues, market share, or the number of places (stores, offices, locations) in which the company does business. a. recovery b. niche c. divestment d. growth e. retrenchment

d. growth

The research on diversification in portfolio management indicates that the best approach is probably _____. a. unrelated diversification b. divestiture c. repositioning d. related diversification e. related differentiation

d. related diversification

Companies often choose a _____ strategy when their external environment doesn't change much or after they have struggled with periods of explosive growth. a. retrenchment b. portfolio c. pioneering d. stability e. growth

d. stability