Bus 195 Chapter 6

A firm should pursue defensive strategies if the coordinates of a SPACE directional vector are (+2, +3).

False

It is vital that strategists always consider all feasible alternatives that could benefit the firm.

False

On the x-axis of the IE Matrix, an IFE total weighted score of 2.5 represents a weak internal position.

False

One positive feature of QSPM is that it does not require intuitive judgments and educated assumptions.

False

Shifting focus from general issues to specific issues generally helps strategists gain commitment and achieve desired results.

False

The first stage of the strategy-formulation framework is the input stage, and it is directly followed by the decision stage.

False

The midpoint on the x-axis of a Boston Consulting Group (BCG) Matrix is typically set at 0.05.

False

The trend in the United States is toward larger boards of directors, with an average of 18 members being the norm.

False

Total attractiveness scores are defined as the sum of the attractiveness scores in a given column of the QSPM and are computed in the second step of the Quantitative Strategic Planning Matrix (QSPM).

False

Trying to achieve optimal results with an unpopular strategy is always better than achieving satisfactory results with a popular strategy.

False

When completing the matching stage of the strategy-formulation framework, the SWOT Matrix needs to be completed before the SPACE Matrix.

False

Market penetration can be classified as either a conservative, aggressive, or competitive strategy when using the Strategic Position and Action Evaluation (SPACE) Matrix.

True

One of the steps of the SWOT Matrix is to list the firm's key external opportunities.

True

Relative market share position is given on the x-axis of the Boston Consulting Group (BCG) Matrix.

True

Stars, Question Marks, Cash Cows, and Dogs are the four quadrants exhibited by the Boston Consulting Group (BCG) Matrix.

True

Strengths-opportunities strategies are based on using a firm's internal strengths to take advantage of external opportunities.

True

The BCG Matrix does not reflect whether or not various divisions or their industries are growing over time.

True

The Sarbanes-Oxley Act put an end to the "country-club" atmosphere of most boards and has shifted power from CEOs to directors.

True

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix, the Strategic Position and Action Evaluation (SPACE) Matrix, the Boston Consulting Group (BCG) Matrix, the Internal-External (IE) Matrix, and the Grand Strategy Matrix are included in stage two of the strategy-formulation framework.

True

The major benefit of the Boston Consulting Group (BCG) Matrix is that it draws attention to the cash flow, investment characteristics, and needs of an organization's various divisions.

True

The most important determinants of an organization's overall strategic position are considered to be the two internal dimensions, financial position (FP) and competitive position (CP), and the two external dimensions, industry position (IP) and stability position (SP).

True

The pie slice in a BCG Matrix corresponds to the proportion of corporate revenue generated by that business unit.

True

To objectively evaluate feasible alternative strategies identified in Stage 2, the Quantitative Strategic Planning Matrix (QSPM) uses input information derived from Stage 1.

True

When a firm located in Quadrant I of the Grand Strategy Matrix is too heavily committed to a single product, related diversification may be appropriate to reduce the risks associated with a narrow product line.

True

Whenever two firms merge, it becomes especially important to evaluate and consider culture-strategy linkages.

True

The Boston Consulting Group (BCG) Matrix is designed specifically to enhance which type of firm's efforts to formulate strategies? A) Companies with more than one division B) Large companies C) Companies with annual sales greater than $1 million D) Companies with annual sales of less than $1 million E) All companies

A) Companies with more than one division

Firms located in which quadrant of the Grand Strategy Matrix are in an excellent strategic position? A) I B) II C) III D) IV E) V

A) I

Which stage of the strategy-formulation framework includes an IFE Matrix and the Competitive Profile Matrix? A) Input B) Matching C) Decision D) Penetration E) Research

A) Input

In the Boston Consulting Group (BCG) Matrix, how would a division with a low relative market share position in a high growth industry be described? A) Question Mark B) Cash Cow C) Star D) Stuck-in-the-middle E) Dog

A) Question Mark

What are the two external dimensions of the SPACE Matrix? A) Stability position and industry position B) Stability position and competitive position C) Industry position and competitive position D) Competitive position and financial position E) Financial position and industry position

A) Stability position and industry position

What term is defined as the product of multiplying the weights by the Attractiveness Scores in each row of the QSPM? A) Total Attractiveness Scores B) Sum Total Scores C) Weighted Scores D) Total Weighted Scores E) Factors

A) Total Attractiveness Scores

For companies located in Quadrant III of the Grand Strategy Matrix, the first strategy recommended is A) extensive cost and asset reduction. B) asset expansion. C) employee expansion. D) immediate liquidation of assets. E) divestiture.

A) extensive cost and asset reduction.

Successful strategists minimize their own political exposure on issues that are ________ and in circumstances where opposition from major power centers is likely. A) highly controversial B) nominally controversial C) power centered D) strategy centered E) tactic optimized

A) highly controversial

Today, boards of directors are composed mostly of A) outsiders. B) management. C) union members. D) company employees. E) past executives.

A) outsiders.

In the BCG Matrix, a division with a high relative market share position in a low-growth industry can be described as a A) Star. B) Cash Cow. C) Question Mark. D) Dog. E) Failure.

B) Cash Cow.

What type of strategies would you recommend when a firm's SPACE Matrix directional vector has the coordinates (-2, +3)? A) Aggressive B) Conservative C) Competitive D) Defensive E) Integrative

B) Conservative

________ includes the set of shared values, beliefs, attitudes, customs, norms, rites, rituals, personalities, heroes, and heroines that describe a firm. A) Strategy B) Culture C) Mission D) Objectives E) QSPM

B) Culture

Which strategies aim at improving internal weaknesses by taking advantage of external opportunities? A) SO B) WO C) SW D) ST E) WT

B) WO

Strategy analysis and choice largely involves making ________ decisions based on ________ information. A) long-term; short-term B) subjective; objective C) short-term; long-term D) subjective; short-term E) objective; subjective

B) subjective; objective

Which of the following is a limitation associated with a SWOT Matrix? A) Viewing every business as a Star, Cash Cow, Dog, or Question Mark is an oversimplification. B) Many businesses fall right in the middle of the matrix. C) It is a static assessment in time. D) Other variables besides relative market share position and industry growth rate in sales need to be considered. E) The matrix does not reflect whether or not various divisions or their industry are growing over time.

C) It is a static assessment in time.

Which of these is a limitation of QSPM? A) Only a few strategies can be evaluated at once. B) It is prohibitively expensive. C) It requires intuitive informed judgments. D) Strategies cannot be examined sequentially. E) It makes it more likely that key factors will be overlooked or weighted inappropriately.

C) It requires intuitive informed judgments.

Which board of director's duty falls under the category of control and oversight over management? A) Select new directors B) Pass bylaws and related resolutions C) Select the CEO D) Maintain good public image E) Ensure equitable stockholder representation

C) Select the CEO

The match an organization makes between its internal resources and skills and the opportunities and risks created by its external factors can be defined as A) input. B) concept formulation. C) strategy. D) SWOT. E) weakness.

C) strategy

According to the Grand Strategy Matrix, organizations in which quadrant have a strong competitive position but are in a slow-growth industry? A) I B) II C) III D) IV E) V

D) IV

Which of these is NOT a SPACE Matrix quadrant? A) Aggressive B) Defensive C) Competitive D) Offensive E) Conservative

D) Offensive

Which of the following analytical tools consists of a nine-cell matrix? A) Boston Consulting Group (BCG) Matrix B) Competitive Profile Matrix (CPM) C) Strategic Position and Action Evaluation (SPACE) Matrix D) Grand Strategy Matrix E) Internal-External (IE) Matrix

E) Internal-External (IE) Matrix

Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies? A) Input B) Output C) Decision D) Throughput E) Matching

E) Matching

How many cells are in a SWOT Matrix? A) Two B) Four C) Six D) Eight E) Nine

E) Nine

Which analytical tool determines the relative attractiveness of various strategies based on the extent to which key external and internal critical success factors are capitalized upon or improved? A) Boston Consulting Group (BCG) Matrix B) Strategic Position and Action Evaluation (SPACE) Matrix C) Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix D) Internal-External (IE) Matrix E) Quantitative Strategic Planning Matrix (QSPM)

E) Quantitative Strategic Planning Matrix (QSPM)

Forward integration would be an appropriate strategy for which of the following types of divisions in the Boston Consulting Group (BCG) Matrix? A) Dogs B) Failures C) Question Marks D) Cat E) Star

E) Star

An organization's present strategies, objectives, vision, and mission, coupled with the external and internal audit information, provide a basis for generating and evaluating feasible alternative strategies.

True

Both the Internal-External (IE) and Boston Consulting Group (BCG) Matrices are called portfolio matrices.

True

Conservative strategies in a SPACE Matrix most often include product development, market development, market penetration, and related diversification.

True

Culture includes the set of shared values, beliefs, attitudes, customs, norms, rites, rituals, personalities, heroes, and heroines that describe a firm.

True