Strategic Management: Chapter 5

The Family Farmer Bankruptcy Act of 1986 created which type of bankruptcy

Chapter 12

The form of bankruptcy in which all the organizations assets are sold in parts for their tangible worth is

Chapter 7

Which chapter of bankruptcy code applies to municipalities

Chapter 9

"If it ain't broke, don't fix it" refers to managing by crisis

False

A chief executive officer is located in the divisional level of a large firm

False

A differentiation strategy can be especially attractive when the industry has many different niches and segments, thereby allowing a focuser to pick a competitvely attractive niche suited to its own resources

False

A growing trend is for franchisers to buy out their part of the business from their franchisees

False

A low-cost focus strategy can be especially attractive when the target market niche is small

False

According to porter, strategies allow organizations to gain competitive advantage from three different bases: cost leadership, differentiation, and decentralization

False

Although bankruptcy can be an effective type of retrenchment, it does not allow firms to avoid major debt obligations and void union contracts

False

Chapter 13 bankruptcy is similar to Chapter 11, but available only to large corporations

False

Deutsche Bank's entrance into the casino business in Las Vegas is an example of related diversification

False

Differentiation guarantees competitive advantage

False

Diversification strategies are becoming more popular as organizations are finding it easier to manage diverse business activities

False

Divestiture is selling all of a company's assets, in parts, for their tangible worth

False

Divestiture would be an appropriate strategy when a need exists to introduce a new technology quickly

False

Horizontal integration is an appropriate strategy when the competitors of an organization are doing poorly

False

Jiffy Lube international would be a good example of a firm seeking the best-value focus strategy

False

Secondary buyouts decreased substantially from 2011 to 2012

False

Strategists in governmental organizations operate with far more strategic autonomy than than their counter parts in private firms

False

There are four basic types of diversification: concentric, conglomerate, forward, and backward

False

Unrelated Diversification may be an especially effective strategy when an organization's basic industry is experiencing increasing annual sales and profits

False

When the correlation between dollar sales and dollar marketing expenditures has historically been low, market penetration is an appropriate strategy

False

While outsourcing manufacturing, tech support, and back-office work is quite common, it is still unheard of for companies to outsource product design

False

a differentiation strategy can only be achieved with a large target market

False

Mergers and acquisitions are created for all reasons excepts

To increase the number of employees

A best-value strategy offers products or services to a wide range of customers at the best price-value available on the market

True

A leveraged buyout occurs when a firm's management and other private investors use borrowed funds to buy out the firm's shareholders

True

A strategy or seeking ownership or increased control of a firm's suppliers is backward integration

True

An acquisition occurs when a large organization purchases a smaller one or vice versa

True

An appropriate strategy when an organization has excess production capacity is market development

True

Chapter 7 bankruptcy is a liquidation procedure used only when a firm sees no hope of being able to operate successfully or to obtain necessary creditor agreement

True

Chapter 9 bankruptcy applies to municipalities

True

Cooperative arrangements and joint ventures are being used increasingly

True

First mover advantages refer to the benefits a firm may achieve by entering a new market or developing a new product or service prior to rival firms

True

For consumers who are price-sensitive, cost leadership emphasizes producing standardized products at a very low per-unit cost

True

Forward integration strategy is especially effective when the availability of quality distributors is so limited as to offer a competitive advantage to those firms that integrate forward

True

Franchising is an effective means of implementing forward integration

True

Gaining ownership or increased control over distributors or retailers is called forward integration strategy

True

Horizontal integration is seeking ownership or increased control over competitors

True

In a turbulent, high velocity market, a lead-change strategy is best whenever the firm has the resources to purse this approach

True

Joint ventures tend to fail when managers who must collaborate daily in operating the venture are not involved in forming or shaping the venture

True

Liquidation is often appropriate when retrenchment and divestiture have failed

True

Long-Term objectives represent the results expected from pursuing certain strategies

True

Market development includes introducing present products into new geographic areas

True

McDonalds currently owns more than 50 percent of its restaurants

True

Most companies favor related diversification strategies in order to exploit common use of a well-known brand name

True

Objectives provide direction and allow for organizational synergy

True

Product Development is a strategy that seeks increased sales by improving or modifying present products or services

True

Product Development is an appropriate strategy when an organization has successful products that are in the maturity stage of the product life cycle

True

Public enterprises generally cannot diversify into unrelated businesses or merge with other firms

True

Selling a division or part of an organization is called divestiture

True

Stockton, a city in California, declared chapter 9 bankruptcy in 2012 to avoid having to close key functions such as their police and fire departments

True

Strategic objectives include larger market share, quicker on-time delivery than rivals, shorter design-to-market times than rivals, lower costs than rivals, and wider geographic coverage than rivals

True

The acquisition of human-resources software and consulting services company Kenexa by IBM is an example of related diversification

True

The most effective differentiation bases are those that are hard or expensive for rivals to duplicate

True

The nonprofit sector is America's largest employer

True

The practice of a firm borrowing money to fund dividend payouts to itself is known as dividend recapitalization

True

The strategic management process is just as vital for small companies as for large companies

True

Unrelated diversification is an appropriate strategy when an organization's present channels of distribution can be used to market the new products to current customers

True

When an acquisition or merger is not desired by both parties, it can be called a takeover or a hostile takeover

True

White knight is a term that refers to a firm that agrees to acquire another firm when the other firm is facing a hostile take over by a different company

True

market penetration, market development, and product development are intensive strategies

True

the number of hostile takeovers is on the rise

True

Many more firms have failed at ________ than have succeeded due to the immense challenge of managing businesses in many industries rather than a single industry

Unrelated diversificaiton

Fedex entering the computer repair business offering major companies overnight computer repair is an example of

Unrelated diversification

Integration strategies are sometimes collectively referred to as which of the following categories of strategies

Vertical integration

under which condition would a differentiation strategy be especially effective

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

What is a serious obstacle for many small business owners

a lack of strategic management knowledge

When the PE firm Clayton, dubilier & Rice bought David's bridal from the PE firm Leonard Green & Partner LP this was an example of

a secondary buyout

What kind of strategy is retrenchment

a turnaround strategy

Bankruptcy

can be an effective retrenchment strategy

Retrenchment would be an effective strategy when an organization

is plagued by inefficiency and low profitability

Financial objectives involve all of the following except

larger market share

Selling all of a company's assets, in parts, for their tangible worth is called

liquidation

Which strategy would be effective when the stockholders of a firm can minimize their losses by selling the organization's assets

liquidation

What principle is based on the belief that the true measure of a really good strategist is the ability to solve problems

managing by crisis

what is not an example of a cooperative arrangement

marketing plans

What situation is not conducive to market development

new channels of distribution are expensive or unreliable

Which strategy should an organization use when its products are currently in the declining stage of the products life cycle

related diversification

Research shows strategic management in small firms is more formal than in large firms

False

Diversification Strategies

Related Unrelated

A low-cost focus strategy offers products or services to a small range of customers at the lowest price available on the market

True

Retrenchment and turnaround are the same strategy

True

Porter's 5 Generic Strategies

Basic: Cost leadership Differentiation Focus Advanced: Cost Leadership- low cost Cost leadership- best value

Divestiture has become a popular strategy for firms to focus on their core business and become more diversified

False

Since a combination strategy bears no risk, many organizations pursue a combination of two or more strategies simultaneously

False

Strategic objectives include those associated with growth in revenues, growth in earnings, higher dividends, larger profit margins, and improved cash flow

False

if a firm's present suppliers are expensive and unreliable in meeting the firm's needs for parts, components, and/or raw materials, the firm should pursue a horizontal integration strategy

False

IKEA group investing 1.9 billion in India to open 25 new stores between 2013 and 2018 is an example of which type of strategy

Market Development

Which strategy seeks to increase market share for present products or services in present markets through greater marketing efforts

Market Penetration

Intensive strategies

Market penetration Market development Product development

When companies take over functional operations of other firms this is called

Outsourcing

Which strategy generally entails large research and development expenditures

Product development

Which strategy is appropriate when an organization competes in an industry characterized by rapid technological developments

Product development

Revlon closing its manufacturing plant in France and laying off 5 percent of its workforce is an example of

Retrenchment

A cost leadership strategy can be especially effective when most buyers use the product in the same ways

True

Which strategy should be implemented when a division is responsible for an organizations overall poor performance

divestiture

Which level of strategy is most likely not present in small firms

divisional

Backward integration is not effective when

the advantages of stable prices are not important

In which situation would horizontal integration be an effective strategy

when an organization can gain monopolistic characteristics

What is not a guideline for when an organization should use unrelated diversification

when existing markets for an organization's present products are not yet saturated

Under which condition would a cost leadership strategy be especially effective

when the products of rival sellers are essentially identical and supplies are readily available from any of several eager sellers

Which strategy is effective when new, but related, products could be offered at highly competitive prices

Related diversification

What is not a reason that joint ventures fail

Stakeholders from both partners are equally satisfied

There are more than 10,000 mergers in the United states annually that total more than

$700 billion

Today McDonalds owns about _________ percent of its restaurants

67

Types of bankruptcy

7 9 11 12 13

What occurs when two or more companies form a temporary partnership for the purpose of capitalizing on an opportunity

A joint venture

When two organizations of about equal size unite to form one enterprise, which of these occurs

A merger

Under which strategy would you offer products or services to a wide range of customers at the lowest price available on the market

Cost leadership-low cost

Liberty Media Corp. selling its Starz television network is an example of which type of strategy

Divestiture

Which term refers to selling a division of an organization

Divestiture

The controversial practice of a company borrowing money simply to fund dividend payouts to itself is known as

Dividend recapitalization

According to Porter, which strategy offers products or services to a niche group of customers at the lower price available on the market

Focus-low cost

3 Integrative Strategies

Forward Backward Horizontal

Amazon installing "Amazon lockers" in order to combat issues with missing deliveries or having packages stolen, is an example of what strategy

Forward integration

Websites that sell products directly to consumers are examples of which type of strategy

Forward integration

What refers to a strategy of seeking ownership of, or increased control over a firm's competitors

Horizontal integration

Which strategy would be most appropriate when the distinctive competencies of two or more firms complement eachother especially well

Joint Venture

What principle is built on the idea that there is no general plan for which way to go an what to do

Managing by subjectives

When a domestic company first begins to export to India, it is an example of

Market development

Long term objectives are needed at which level(s) in an organization

Corporate, divisional and functional (all of the above)

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 core competencies

False

Which of these strategies is effective when the number of suppliers is small and the number of competitors is large

Backward integration