06-MGMT-ORG Strategy
105. A competitive advantage becomes a sustainable competitive advantage when other companies start duplicating the value a firm is providing to customers. a. True b. False
False
109. Sanfase, a technology company in Rockbourne, manufactures microprocessors for computers. Its product is a lot more powerful than its competitors. This scenario is an example of competitive inertia. a. True b. False
False
110. A strategic group is a task force within a company that analyzes the company's own weaknesses to determine how competitors could exploit them for competitive advantage. a. True b. False
False
111. Strategic reference points are the less visible, internal decision-making routines, problem-solving processes, and organizational cultures that determine how efficiently inputs can be turned into outputs. a. True b. False
False
112. According to portfolio strategy, the more businesses in which a corporation competes, the larger its overall chances of failing. a. True b. False
False
113. Growth, stability, and retrenchment are all types of portfolio strategies that companies use to decide which businesses they should be in. a. True b. False
False
115. Focus strategies typically work in saturated markets that competitors have large market shares or have complete monopoly in. a. True b. False
False
106. Rare resources are resources that are not controlled or possessed by many competing firms and are necessary to sustain a competitive advantage. a. True b. False
True
107. Imperfectly imitable resources are those resources that are impossible or extremely costly or difficult to duplicate. a. True b. False
True
108. A situational analysis is an assessment of the strengths and weaknesses in an organization's internal environment and the opportunities and threats in its external environment. a. True b. False
True
114. The threat of new entrants is a measure of the degree to which barriers to entry make it easy or difficult for new companies to get started in an industry. a. True b. False
True
100. SkyScape, a company that manufactures computer processors, launched a new product called ChipOne. This launch was a countermove against another product launched by GreenChip, SkyScape's competitor. Which of the following strategies was used by SkyScape to defend its market share? a. A response strategy b. An amalgamation strategy c. A recovery strategy d. An acquisition strategy
a
101. BoundStar and ClipKlik are two of the biggest companies in the smartphone industry. When BoundStar launched a new ultra-slim smart phone, ClipKlik also shortly launched a super-sleek smartphone. Phones launched by both the companies are similar in quality and build. ClipKlik will be able to remain competitive in the market though BoundStar launched its phone before ClipKlik. Which of the following strategies was used by ClipKlik to defend its market share? a. A response strategy b. An amalgamation strategy c. A recovery strategy d. An acquisition strategy
a
102. JoeChoe and SanPants are two popular clothing companies. Whenever JoeChoe launches a new range of clothing, SanPants also launches something similar, and vice versa. This ensures that neither company gets a massive lead over the other in terms of market share. Which of the following strategies is being used by JoeChoe and SanPants in this scenario? a. A response strategy b. An amalgamation strategy c. A recovery strategy d. An acquisition strategy
a
13. Which of the following best defines competitive inertia? a. It is a reluctance to change strategies or competitive practices that have been successful in the past. b. It is a risk-seeking strategy that aims to create and acquire companies in completely unrelated businesses. c. It is a discrepancy between a company's intended strategy and the strategic actions managers take when implementing that strategy. d. It is a corporate-level strategy that minimizes risk by diversifying investment among various businesses or product lines.
a
21. Which of the following best defines a SWOT analysis? a. It involves assessment of the strengths and weaknesses in an organization's internal environment. b. It measures the tangible rather than the intangible assets of an organization. c. It is conducted by regulatory agencies to measure the performance of organizations. d. Its aim is to review internal processes independently of the external industry environment.
a
22. Which of the following best defines a distinctive competence? a. It is what a company can make, do, or perform better than its competitors. b. It is creating or acquiring companies in completely unrelated businesses. c. It is the extent to which a competitor has similar amounts and kinds of resources. d. It is the competitive move designed to reduce a rival's market share or profits.
a
30. _____ are used by managers to measure whether their firm has developed the core competencies that it needs to achieve a sustainable competitive advantage. a. Strategic reference points b. Retrenchment strategies c. Process maps d. Strategic business units
a
32. Which of the following statements is true of a portfolio strategy? a. It is a corporate-level strategy with the purpose of reducing risk in the entire collection of stocks. b. It emphasizes on improving the way in which the company sells the same products. c. It measures the intensity of competitive behavior among companies in an industry. d. It focuses on turning around very poor company performance by significant cost reductions.
a
35. According to the Boston Consulting Group (BCG) matrix, _____ are companies that have a small share of a fast-growing market. a. question marks b. cash cows c. stars d. dogs
a
38. Jem Dons has three strategic business units (SBUs)—smartphones, healthcare, and accounting. Its smartphone unit is its most profitable unit and is the current market leader in the rapidly growing industry. In the context of the BCG matrix, which of the following categories of SBUs best describes the smartphones unit? a. Stars b. Cash cows c. Question marks d. Dogs
a
39. Jameson&Dawson has four strategic business units (SBUs)—agriculture, automobiles, advertising, and accommodations. The agriculture industry is a rapidly growing industry, and Jameson&Dawson's SBU holds majority of the market share in the industry. Hence, the company earns large profits from its agriculture unit and invests majority of its funds in it. In the context of the BCG matrix, which of the following categories of SBUs best describes the agriculture unit? a. Stars b. Cash cows c. Question marks d. Dogs
a
4. _____ is a competitive advantage that other companies have tried unsuccessfully to duplicate and have, for the moment, stopped trying to duplicate. a. Sustainable competitive advantage b. Comparative advantage c. Revealed competitive advantage d. Core competency advantage
a
40. In the context of the BCG matrix, which of the following businesses would be classified as a star? a. PrimeSmart, a smartphone manufacturer that is the market leader in a rapidly growing industry b. RainTech, an electronics company that is struggling for market share in a fast-growing industry c. HappyTot, a children's toy company that has been earning steady profits in a slow-growing industry d. RigsWheels, a tire manufacturer that has negligible market share in a slow-growing industry
a
41. Hankson Corp. has five strategic business units (SBUs)—information technology, insurance, publishing, fine arts, and tourism. It invests the majority of its funds in the information technology unit as the unit has a large market share and generates large amounts of its profits in a fast-growing market. In the context of the BCG matrix, which of the following categories of SBUs best describes the information technology unit? a. Stars b. Cash cows c. Question marks d. Dogs
a
42. Bennyson Corp. has five strategic business units (SBUs)—information technology, construction, education, consumer products, and energy. Its energy unit has a large market share in the industry and generates the majority of its profits. Bennyson is also considering investing more funds into the unit as the industry has been rapidly growing. In the context of the BCG matrix, which of the following categories of SBUs best describes the energy unit? a. Stars b. Cash cows c. Question marks d. Dogs
a
43. In the context of the Boston Consulting Group (BCG) matrix, unlike stars, question marks have: a. a small share of a fast-growing market. b. a large share of a slow-growing market. c. a small share of a slow-growing market. d. a large share of a fast-growing market.
a
6. Unlike a long-lasting competitive advantage, a sustainable competitive advantage is one where: a. competitors have tried unsuccessfully to duplicate the advantage and have, for the moment, stopped trying to duplicate it. b. organizations collect and store the resources they require while preventing their competitors from accessing those resources in order to curb competition. c. organizations have gained an edge by using their resources to provide greater value for customers than their competitors can. d. competitors buy a portion of an organization's market share and use it to improve their market presence, thereby increasing the longevity of their own organization.
a
71. In the context of Porter's five industry forces, the threat of new entrants can be defined as: a. a measure of the degree to which barriers to entry make it easy or difficult for new companies to get started in an industry. b. a measure of the intensity of competitive behavior among companies in an industry. c. a measure of the ease with which customers can find substitutes for an industry's products or services. d. a measure of the influence that customers have on the firm's prices.
a
72. Which of the following best defines cost leadership? a. It is the positioning strategy of producing a product or service of acceptable quality at consistently lower production costs than competitors can so that a firm can offer the product or service at the lowest price in the industry. b. It is the positioning strategy of providing a product or service that is sufficiently different from competitors' offerings that customers are willing to pay a premium price for it. c. It is the positioning strategy to produce a specialized product or service for a limited, specially targeted group of customers in a particular geographic region or market segment. d. It is the positioning strategy to grow brand performance by reacting to changes in the external environment after they occur instead of following a consistent adaptive strategy.
a
73. Maymart Inc. sells its products at the lowest prices in the industry, and it believes that this is the best way to stay ahead of its competition. It has also not compromised on the quality of its products as Maymart's suppliers and vendors sell best quality raw materials at the lowest prices. In the context of Porter's positioning strategies, which of the following strategies has been adopted by Maymart? a. The cost leadership strategy b. The differentiation strategy c. The price-fixing strategy d. The diversification strategy
a
74. Jake Lamps manufactures lamps, lights, shades, and bulbs. Its lighting lasts long and saves power, and it is superior in quality when compared to all its competitors. Its products are being sold at the lowest price in the market. In the context of industry-level strategy, the company is most likely using a(n) _____. a. cost leadership strategy b. focus strategy c. divestment strategy d. adaptive strategy
a
75. In the context of positioning strategies, _____ means providing a product or service that is sufficiently distinctive from competitors' offerings so that customers are willing to pay a premium price for it. a. differentiation b. retrenchment c. strategic dissonance d. competitive inertia
a
76. The positioning strategy of using cost leadership or differentiation to produce a specialized product or service for a limited, specially targeted group of customers in a particular geographic region or market segment is called a _____. a. focus strategy b. retrenchment strategy c. downsizing strategy d. stability strategy
a
8. Smarty Tots manufactures children's clothing and prices them at twice the price of other children's clothing brands. The clothes sell exceptionally well because customers believe that its clothes are made of non-irritant and non-allergenic fabric. Smarty Tots's competitors do not have access to this type of fabric and cannot produce the same quality of clothing. The special fabric used in the clothing gives Smarty Tots _____. a. a sustainable competitive advantage b. the advantage of undifferentiated marketing c. an oligopolistic advantage d. the advantage of competitive inertia
a
82. In the context of adaptive strategies, which of the following is true of defenders? a. They aggressively hold their current strategic position by doing the best job they can to hold on to customers in a particular market segment. b. They seek fast growth by searching for new market opportunities, encouraging risk taking, and being the first to bring innovative new products to market. c. They try to simultaneously minimize risk and maximize profits by following or imitating the proven successes of prospectors. d. They do not follow a consistent strategy and tend to react to changes in their external environment after they occur.
a
94. Which of the following statements is true of direct competition? a. It is determined by market commonality and resource similarity. b. It encourages the production of perfectly imitable resources. c. It uses cost leadership to produce a specialized product for limited customers. d. It minimizes the effects of industry competition.
a
99. A(n) _____ is a countermove, prompted by a rival's attack, that is designed to defend or improve a company's market share or profit. a. response b. attack c. recovery d. acquisition
a
1. PeoplePapers, a greeting cards manufacturing company, has retail stores in most parts of the country. It hires its employees from the best universities around the world and uses the best equipment in its manufacturing processes. In this scenario, the organization's processes, its employees, and its equipment are examples of its_____. a. reserves b. resources c. variable costs d. overheads
b
10. In the context of sustainable competitive advantage, unlike rare resources, imperfectly imitable resources: a. are not controlled or possessed by many competing firms. b. are impossible or extremely difficult to duplicate. c. can be used by firms to improve their effectiveness and efficiency. d. need not be nonsubstitutable resources to produce a competitive advantage.
b
12. Which of the following is the first step of a strategy-making process? a. Conducting situational analysis b. Assessing the need for strategic change c. Choosing strategic alternatives d. Evaluating strategic alternatives
b
15. Heeleo Inc. is a television manufacturer that has been in the market for several years. Most television companies are now manufacturing LED and smart televisions as they provide more utility and a better viewing experience when compared to direct view televisions. Heeleo, however, has been reluctant to adopt new strategies because it thinks that its direct view televisions were selling well when it first started and will continue to sell the same way even if new competitors and better products enter the market. Which of the following concepts is illustrated in this scenario? a. Strategic dissonance b. Competitive inertia c. Competitive advantage d. Strategic alliance
b
16. Cajemp Inc. is a real estate developer that has been in the market for several years. Most real estate developers are now constructing their projects using concrete blocks as they are more durable and easier to lay out when compared to traditional brick and mortar. Cajemp, however, has been reluctant to use concrete blocks because its brick and mortar houses have been selling well so far. They will continue to sell the same even if new competitors and better products enter the market. Which of the following concepts is illustrated in this scenario? a. Strategic dissonance b. Competitive inertia c. Competitive advantage d. Strategic alliance
b
18. Which of the following best defines strategic dissonance? a. It is a reluctance to change strategies or competitive practices that have been successful in the past. b. It is a discrepancy between a company's intended strategy and the strategic actions taken by managers while implementing that strategy. c. It is a risk-seeking strategy that aims to create and acquire companies in completely unrelated businesses. d. It is a corporate-level strategy that minimizes risk by diversifying investment among various businesses or product lines.
b
23. Bob's Assembly is a hardware manufacturer. It specializes in builders' hardware for doors, cabinets, windows, and bathrooms. Bob's Assembly products are economical and more durable than 95% of its competitors' products. This scenario illustrates the concept of _____. a. core capability b. distinctive competence c. competitive inertia d. strategic dissonance
b
27. Brickwall Builders is a real estate builder and developer. It specializes in building premium villas, office spaces, warehouses, and retail stores. Buildings of Brickwall Builders are economical, have a high resale value, and are available at very low down payment when compared to its competitors' buildings. This scenario illustrates the concept of _____. a. core capability b. distinctive competence c. competitive inertia d. strategic dissonance
b
31. _____ 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. Downsizing b. Diversification c. Retrenchment d. Exit planning
b
36. In the context of the Boston Consulting Group (BCG) matrix, which of the following is a similarity between stars and question marks? a. Both have large shares in their respective markets. b. Both have shares of a fast-growing market. c. Both have small shares in their respective markets. d. Both have shares of a slow-growing market.
b
47. In the context of the BCG matrix, which of the following businesses would be classified as a question mark? a. PrimeSmart, a smartphone manufacturer that is the market leader in a rapidly growing industry b. RainTech, an electronics company that is struggling for market share in a fast-growing industry c. HappyTot, a children's toy company that has been earning steady profits in a slow-growing industry d. RigsWheels, a tire manufacturer that has negligible market share in a slow-growing industry
b
5. A competitive advantage becomes a sustainable competitive advantage when: a. a company collaborates with its competitors to obtain a larger market share. b. other companies cannot duplicate the value a firm is providing to customers. c. a company uses a competitive move designed to reduce a rival's market share or profits. d. market commonality is large, and companies have overlapping products or services.
b
50. Break Technologies has five strategic business units (SBUs)—computers, refrigerators, washing machines, air conditioners, and televisions. Its computers unit is quite profitable in spite of operating in a slow-growing market, and it is profitable enough to provide funds for the operation of the other business units as well. In the context of the BCG matrix, which of the following categories of SBUs best describes the computers unit? a. Stars b. Cash cows c. Question marks d. Dogs
b
51. Jen&Durand has three strategic business units (SBUs)—entertainment and recreation, food and beverage, and apparel and accessories. Its apparel & accessories unit is extremely successful and has been in the market for many years, and it has acquired a large market share in its time. The market growth of the apparel & accessories sector has saturated, and new companies are reluctant to enter it. In the context of the BCG matrix, which of the following categories of SBUs best describes the computers unit? a. Stars b. Cash cows c. Question marks d. Dogs
b
53. BlinkDream has four strategic business units (SBUs)—accommodation, insurance, music, and publishing. Its publishing unit has always made large profits and holds a large market share in its slow-growing market. In the context of the BCG matrix, which of the following categories of SBUs best describes the publishing unit? a. Stars b. Cash cows c. Question marks d. Dogs
b
54. In the context of the Boston Consulting Group (BCG) matrix, unlike cash cows, dogs have: a. a large share of a fast-growing market. b. a small share of a slow-growing market. c. a large share of a slow-growing market. d. a small share of a fast-growing market.
b
69. _____ is a measure of the intensity of competitive behavior among companies in an industry. a. Bargaining power of firms b. Character of the rivalry c. Threat of new entrants d. Threat of substitute products
b
70. Which of the following is one of the five industry forces identified by Harvard professor Michael Porter? a. The threat of planned obsolescence b. The threat of new entrants c. The threat of competitive inertia d. The threat of strategic dissonance
b
77. JDB Cars has launched a new range of premium cars in Lakamba. The citizens of Lakamba are extremely wealthy and often spend a lot of their earnings on premium cars and houses. In this scenario, the company is most likely using a(n) _____. a. diversification strategy b. focus strategy c. divestment strategy d. adaptive strategy
b
78. Ian Auto manufactures agricultural equipment. Its agricultural equipment is very popular in countries that have majority of their income coming from agricultural products. In the context of industry-level strategy, Ian Auto is most likely using a(n) _____. a. diversification strategy b. focus strategy c. divestment strategy d. adaptive strategy
b
79. Renee Farm grows genetically modified fruits and vegetables by using nutrient enriched soil and chemically enhanced fertilizers. Its products are extremely popular among health conscious individuals who believe that natural fruits and vegetables do not have adequate amount of nutrients. Renee Farm's products are popular even though their market is very niche. In the context of industry-level strategy, Renee Farm is most likely using a(n) _____. a. diversification strategy b. focus strategy c. divestment strategy d. adaptive strategy
b
80. Tots County manufactures clothing and apparel exclusively for children in the age group of one to six years. In this scenario, the company is most likely using a(n) _____. a. diversification strategy b. focus strategy c. divestment strategy d. adaptive strategy
b
83. DramPharma is a company that manufactures and sells medicine to treat Huntington's disease, a rare genetic disorder. The company controls 80 percent of the world's industry in its segment. The company aims to seek steady growth in the industry. In terms of adaptive strategies, DramPharma would most likely be categorized as a(n) _____. a. reactor b. defender c. analyzer d. prospector
b
84. In the context of adaptive strategies, which of the following best describes prospectors? a. They seek moderate, steady growth by offering a limited range of products and services to a well-defined set of customers. b. They seek fast growth by searching for new market opportunities, encouraging risk taking, and being the first to bring innovative new products to market. c. They try to simultaneously minimize risk and maximize profits by following or imitating the proven successes of firms. d. They develop and follow a single strategy for extensive periods of time, irrespective of any changes taking place in the industry.
b
87. _____ are companies using an adaptive strategy that seeks to minimize risk and maximize profits by following or imitating the proven successes of companies that seek fast growth by searching for new market opportunities, encouraging risk taking, and being the first to bring innovative new products to market. a. Defenders b. Analyzers c. Prospectors d. Reactors
b
89. Which of the following is a difference between reactors and analyzers? a. Unlike reactors, analyzers are the first to bring innovative new products to market. b. Unlike analyzers, reactors tend to react to changes in their external environment after they occur. c. Unlike reactors, analyzers do not follow a consistent strategy. d. Unlike analyzers, reactors are the blend of the defender and prospector strategies.
b
96. Zinfizz is a beverage manufacturer. It presents WYB, a zero-calorie drink, to compete with MoodFresh's Shire, a low-calorie drink. When WYB is released in the market, MoodFresh cuts down the price on Shire to match WYB's price. Identify the strategic move that is most likely being implemented by MoodFresh in this scenario. a. Rejoinder b. Attack c. Recovery d. Acquisition
b
97. SweetCream is an ice cream manufacturer. It sells Guilt-Free, a zero-calorie ice cream, which competes with FlavorBell's MooSweet, a low-calorie ice cream. FlavorBell reduces MooSweet's prices to match Guilt-Free's prices. Identify the strategic move that is most likely being implemented by FlavorBell in this scenario. a. Rejoinder b. Attack c. Recovery d. Acquisition
b
98. TagWear, a company that manufactures shoes, offers customized lightweight and durable shoes in different colors and sizes to compete with its rival company's shoes. In this scenario, which of the following strategies is TagWear using to reduce its rival's market share? a. A response strategy b. An attack strategy c. A recovery strategy d. An acquisition strategy
b
11. In the context of sustainable competitive advantage, unlike rare resources, nonsubstitutable resources cannot be: a. used by firms to improve their effectiveness. b. controlled or possessed by many competing firms. c. replaced by other resources to produce similar value. d. used to sustain a competitive advantage.
c
19. Which of the following can help managers improve the speed and accuracy with which they determine the need for strategic change? a. Fostering competitive inertia b. Promoting strategic alliances with leading firms c. Looking for signs of strategic dissonance d. Limiting design iterations
c
2. Organizations can achieve a competitive advantage by using their resources to: a. create strategies that are simultaneously being implemented by competitors. b. duplicate the value a competitor firm provides to its customers. c. provide greater value for customers than competitors can. d. foster competitive inertia.
c
20. Cardwire Inc. has decided to lower the price of all its products to keep up with its competitors. To achieve this, the company needed to lower its overall costs. However, the procurement department at Cardwire has been spending twice its allotted budget to buy raw materials. Which of the following best illustrates the situation at Cardwire? a. Competitive inertia b. Job deskilling c. Strategic dissonance d. Price fixing
c
24. FasterRides Inc. has introduced a new bike in the market. Majority of its profits come from the sale of bikes. The company is recognized worldwide for its ability to design and produce bikes with superior handling, smooth transmission, powerful brakes, and other premium features that its competitors are lacking. This ability to produce superior quality bikes is the company's _____. a. strategic reference point b. strategic alternative c. distinctive competence d. competitive resonance
c
25. Funsase, a clothing company in Rockbourne, manufactures clothing with micro-cool, a special type of fabric that can absorb heat and keep the individual wearing the clothes cool in the summer. None of its competitors have been able to manufacture this type of clothing. This ability of producing superior quality clothing is the company's _____. a. strategic reference point b. strategic alternative c. distinctive competence d. competitive resonance
c
26. Operop Inc., a technology company in Brookeep, manufactures digital cameras. Its cameras have the highest pixel density, multiple zoom options, and a variety of picture effects that none of its competitors can match up to. This ability of producing superior quality cameras is the company's _____. a. strategic reference point b. strategic alternative c. distinctive competence d. competitive resonance
c
28. Unlike the distinctive competencies of a company, the core capabilities of a company: a. include things that the company can make, do, or perform better than its competitors. b. are tangible and more visible. c. determine how efficiently inputs can be turned into outputs. d. cannot be sustained for long without superior distinctive competencies.
c
29. Which of the following is the last step of a strategy-making process? a. Conducting situational analysis b. Assessing the need for strategic change c. Choosing strategic alternatives d. Evaluating strategic alternatives
c
3. Klivinich is a manufacturer of oral hygiene products. In addition to manufacturing and selling oral hygiene products, Klivinich also focuses on educating its customers on oral hygiene and dental problems. All its employees are trained to answer questions and help customers with oral hygiene and dental problems. This has helped Klivinich _____. a. produce low-cost products b. procure rare resources c. achieve a competitive advantage d. form a strategic alliance
c
33. In the context of portfolio strategy, _____ is the purchase of a company by another company. a. divestiture b. demerger c. acquisition d. restructuring
c
44. Prime Loader has three strategic business units (SBUs)—railway lines, banking, and coal mining. Because of a small market share, the company is not earning a profit in the banking sector, even though the banking sector is a fast-growing market. In the context of the BCG matrix, which of the following categories of SBUs best describes the banking unit? a. Stars b. Cash cows c. Question marks d. Dogs
c
45. Stenikson has three strategic business units (SBUs)—video games, fashion, and electronics. The company is planning to invest more money into its video games unit because it is a fast-growing market, even though the company has a very small share in the market. In the context of the BCG matrix, which of the following categories of SBUs best describes the video games unit? a. Stars b. Cash cows c. Question marks d. Dogs
c
46. Andersen Major has five strategic business units (SBUs)—technology, fashion, food and beverage, consumer products, and electronics. Its food and beverage unit has a small share in a rapidly growing sector, and the company believes that investing more money into the unit could lead to large profits in the future. In the context of the BCG matrix, which of the following categories of SBUs best describes the food and beverage unit? a. Stars b. Cash cows c. Question marks d. Dogs
c
48. Kensei Corp. has three strategic business units (SBUs)—pharmaceutical, publishing, and consulting. Its pharmaceutical unit is relatively new in the sector and does not have a large market share. The pharmaceutical sector is a fast-growing sector, and companies with a large market share in the sector have been earning large profits. In the context of the BCG matrix, which of the following categories of SBUs best describes the pharmaceutical unit? a. Stars b. Cash cows c. Question marks d. Dogs
c
49. Which of the following best defines cash cows in the BCG matrix? a. They are the companies that have a large share of a fast-growing market. b. They are the companies that have a small share of a fast-growing market. c. They are the companies that have a large share of a slow-growing market. d. They are the companies that have a small share of a slow-growing market.
c
52. In the context of the BCG matrix, which of the following businesses would be classified as a cash cow? a. PrimeSmart, a smartphone manufacturer that is the market leader in a rapidly growing industry b. Brain Cash, a finance company that is struggling for market share in a fast-growing industry c. HappyTot, a children's toy company that has been earning steady profits in a slow-growing industry d. Bigs Steel, a metal manufacturer that has negligible market share in a slow-growing industry
c
61. Arboral Inc., an auto manufacturing company, has been extremely successful in its home country. In an attempt to increase its profitability, it has opened up new manufacturing plants and showrooms in three more countries. Which of the following grand strategies was used by Arboral in this scenario? a. The stability strategy b. The retrenchment strategy c. The growth strategy d. The acquisition strategy
c
62. Ren's Cakes, a bakery, is extremely successful and is always full of customers in the location it is currently set up in. It wants to increase its profitability, and it believes that opening up more bakeries in the country will be the best way to go about it. Which of the following grand strategies is Ren's Cakes planning to use in this scenario? a. The stability strategy b. The retrenchment strategy c. The growth strategy d. The acquisition strategy
c
63. TinkTV, PopoNet, and Kreti Broadcast are merging together to form a large television network called Tale Broadcast. This was done in an attempt to increase profitability by combining the customers and services owned by the three companies. Which of the following grand strategies does the given scenario best exemplify? a. The stability strategy b. The retrenchment strategy c. The growth strategy d. The acquisition strategy
c
64. Chimera Inc., a chemical company, has been facing a loss in business. In an attempt to stop the declining profitability, it removed petrochemical products from its product list and concentrated on specialty chemicals, a less capital-intensive business. Which of the following grand strategies was used by Chimera in this scenario? a. The stability strategy b. The growth strategy c. The retrenchment strategy d. The acquisition strategy
c
65. Masceo, an oil and gas company, suffered major losses due to damaged oil pipelines. In an attempt to cover its costs, it laid off several employees and closed down three of its refineries. Which of the following grand strategies was used by Masceo in this scenario? a. The stability strategy b. The growth strategy c. The retrenchment strategy d. The acquisition strategy
c
66. Serrano, a clothing and apparel company, suffered major losses when one of its warehouses was destroyed in a fire mishap. In an attempt to make up for these losses, it had to sell one of its product lines to a rival company. Which of the following grand strategies was used by Serrano in this scenario? a. The stability strategy b. The growth strategy c. The retrenchment strategy d. The acquisition strategy
c
67. Limeria Inc., an industrial paint manufacturing company, has been incurring losses. In an attempt to stop this, it removed synthetic distempers from its product list and concentrated on enamel paints, a less capital-intensive business. Which of the following grand strategies was used by Limeria in this scenario? a. The stability strategy b. The growth strategy c. The retrenchment strategy d. The acquisition strategy
c
68. _____ consists of the strategic actions that a company takes after retrenchment to return to a growth strategy. a. Downsizing b. Competitive inertia c. Recovery d. Strategic dissonance
c
81. _____ are companies using an adaptive strategy aimed at protecting strategic positions by seeking moderate, steady growth and by offering a limited range of high-quality products and services to a well-defined set of customers. a. Reactors b. Prospectors c. Defenders d. Analyzers
c
86. Which of the following statements is true of analyzers? a. They are the first to bring innovative new products to market. b. They do not follow a consistent strategy. c. They are a blend of the defender and prospector strategies. d. They react to changes in their external environment after they occur.
c
90. Spade and Marcher Corp. manufactures and sells toy guns. These toy guns are a perfect imitation of real weapons. Inspired by Spade and Marcher's success, Hudy & Sons, an arms manufacturer in Korowlla, starts to manufacture toy guns too. Which of the following adaptive strategies is used by Hudy & Sons? a. Defenders b. Prospectors c. Analyzers d. Reactors
c
91. SmartHand, a company that manufactures wrist watches, has started manufacturing and selling sunglasses in the American market. The products turn out to be a huge success. Inspired by SmartHand's success, Jeremy & Daniel, manufacturers of wrist watches in Europe, start selling sunglasses in the European market. In the context of adaptive strategies, Jeremy & Daniel would most likely be categorized as a(n) _____. a. defender b. prospector c. analyzer d. reactor
c
92. Winston Corp. manufactures and sells toy cars. These toy cars are perfect imitational miniature versions of real cars. Inspired by the success of Winston Corp., Neil Danon, a plastic ware manufacturer in Orowella also started manufacturing toy cars. Which of the following adaptive strategies is used by Neil Danon? a. Defenders adaptive strategy b. Prospectors adaptive strategy c. Analyzers adaptive strategy d. Reactors adaptive strategy
c
93. In the context of adaptive strategies, which of the following is a difference between reactors and prospectors? a. Reactors tend to follow a more consistent strategy than prospectors. b. Unlike prospectors, reactors seek fast growth by encouraging risk taking. c. Reactors tend to be poorer performers than prospectors. d. Unlike prospectors, reactors are usually the first to bring innovative new products to market.
c
103. In the context of direct competition between firms, _____ affects the likelihood of an attack or a response to an attack. a. diversification b. cost leadership c. differentiation d. market commonality
d
104. In the context of direct competition between firms _____ largely affects response capability, that is, how quickly and forcefully a company can respond to an attack. a. diversification b. cost leadership c. differentiation d. resource similarity
d
14. Ziff Corp. was a leading electronics firm for about three decades. As new competitors entered the industry, Ziff Corp's market share dropped. The managers at Ziff Corp. refuse to change any of their strategies, as they believe that their existing strategies will get them back to becoming the market leaders as they did in the past. This scenario is an example of _____. a. distinctive competence b. strategic dissonance c. strategic uncertainty d. competitive inertia
d
17. Ziff Corp. was a leading electronics firm for about three decades. As new competitors entered the industry, Ziff Corp's market share dropped. The managers at Ziff Corp. refuse to change any of their strategies, as they believe that their existing strategies will help them become one of the market leaders as they did in the past. This scenario is an example of _____. a. distinctive competence b. strategic dissonance c. strategic uncertainty d. competitive inertia
d
34. Which of the following statements is true of the BCG matrix? a. It is used to guide the strategic alternatives that managers of individual businesses may use. b. It focuses on increasing profits or the number of places in which a company does business. c. It focuses on improving the way in which a company sells the same products to the same customers. d. It is used to categorize a corporation's businesses by growth rate and relative market share.
d
37. In the context of the Boston Consulting Group (BCG) matrix, which of the following is a similarity between stars and cash cows? a. Both have shares of a slow-growing market. b. Both have small shares in their respective markets. c. Both have shares of a fast-growing market. d. Both have large shares in their respective markets.
d
55. Brenden Industries has five strategic business units (SBUs)—petroleum extraction, groceries, jewelry, telecommunication, and oil clothing. The petroleum extraction unit is costing the company a huge amount of money. It has not earned any profit so far nor will it earn any profit in the future as the oil fields are diminishing and the company has a small share in this market. In the context of the BCG matrix, which of the following categories of SBUs best describes the petroleum extraction unit? a. Stars b. Cash cows c. Question marks d. Dogs
d
56. Brenden Corp. has five strategic business units (SBUs)—telecommunication, trucking, electronics, energy, and oil exploration. The telecommunication unit has slowed down in terms of growth and is now dominated mainly by a few large companies. Brenden Corp. has a low market share in the industry and does not generate enough revenue to even cover its costs. In the context of the BCG matrix, which of the following categories of SBUs best describes the telecommunication unit? a. Stars b. Cash cows c. Question marks d. Dogs
d
57. Keplem has a business unit in the insurance sector. The insurance sector is a slow-growing industry, and Keplem does not have a large market share in the industry. In the context of the BCG matrix, which of the following categories of SBUs best describes Keplem's business unit? a. Stars b. Cash cows c. Question marks d. Dogs
d
58. In the context of the BCG matrix, which of the following businesses would be classified as a dog? a. Ultimo Phone, a smartphone manufacturer that is the market leader in a rapidly growing industry b. Brain Cash, a finance company that is struggling for market share in a fast-growing industry c. Cleep Sweep, a detergent company that has been earning steady profits in a slow-growing industry d. Bigs Steel, a metal manufacturer that has negligible market share in a slow-growing industry
d
59. _____ is creating or acquiring companies that share similar products, manufacturing, marketing, technology, or cultures. a. Product positioning b. Retrenchment c. Competitive inertia d. Related diversification
d
60. In the context of grand strategies, the _____ of a company focuses on increasing profits, revenues, market share, or the number of places in which the company does business. a. retrenchment strategy b. stability strategy c. downsizing strategy d. growth strategy
d
7. Which of the following conditions must be met if a firm's resources are to be used to achieve a sustainable competitive advantage? a. The resources must be low-cost and commutable. b. The resources must be controlled by other competing firms. c. The resources must be perfectly imitable. d. The resources must be valuable, rare, and nonsubstitutable.
d
85. FreeSpirit is a global consumer products company. It manufactures a number of new products ranging from personal care to food and beverages. Its products are sold all across the world, and it continuously keeps searching for new markets to sell its products. It has also doubled its investment to market its products, and it invests heavily in social media and other advertisement mediums. In the context of adaptive strategies, FreeSpirit is most likely to be categorized as a(n) _____. a. reactor b. analyzer c. cost leader d. prospector
d
88. In the context of adaptive strategies, which of the following is a difference between prospectors and analyzers? a. Unlike prospectors, analyzers are the blend of the defender and reactor strategies. b. Unlike prospectors, analyzers seek fast growth by searching for new market opportunities. c. Unlike prospectors, analyzers encourage risk taking. d. Unlike prospectors, analyzers are rarely first to market with new products or services.
d
9. Unlike valuable resources, rare resources: a. do not improve a firm's efficiency and effectiveness. b. are susceptible to changes in customer demands and preferences. c. need not be nonsubstitutable resources to produce a competitive advantage. d. are not controlled or possessed by many competing firms.
d
95. In the context of direct competition, _____ is defined as the degree to which two companies have overlapping products, services, or customers in multiple markets. a. related product diversification b. resource similarity c. market inertia d. market commonality
d