BUS 3010 SB CH 8
Drag and drop the qualities of an effective plan on the left with their corresponding definitions on the right.
Unity - have only one guiding plan Continuity - build and refine previous plans on an ongoing basis Accuracy - collect and use all available information Flexibility - alter or change plans when necessary
Which of the following are steps in the planning process of an organization?
Which of the following are steps in the planning process of an organization?
One way to overcome the loss of control problems associated with exporting, licensing, and franchising is to expand by means of ______.
a strategic alliance
Henri Fayol believed that, if the situation changes, plans can be ______.
altered and changed
What is it called when top management decides the industries and national markets in which their organization plans to compete?
A corporate-level strategy
A fine food chain based in the U.S. reached out to a world-renowned chef and a popular French winery, and suggested that they go into business together in the U.S., France, and Belgium. What kind of agreement was the food chain suggesting?
A joint venture
______ occurs when the value created by two divisions cooperating is greater than the value that would be created if the two divisions operated separately and independently.
Synergy
A plan that indicates how a division intends to compete against its rivals in an industry is a ______-level strategy.
business
With exporting, there are ______ risks involved compared to opening a manufacturing plant abroad.
few
The strategy of expanding into a new industry that uses, distributes, or sells the company's products is ______ vertical integration.
forward
Planning is a(n) ______ process
goal-making strategy-making
A company engaged in ______ sells products at home that are made abroad
importing
When two or more companies form a strategic alliance to to jointly establish and share the ownership of a new business, it is a(n) ______.
joint venture
When companies utilize a global strategy for international expansion, they will undertake _______ of their products to suit the specific needs of customers in different countries.
little, if any, customization
Henri Fayol emphasized that managers must not be bound to a ______ plan.
static
When organizations move into a new industry that is not related to their current businesses, this is ______ diversification
unrelated
Identify the first step of the planning process.
Determining the organization's mission and goals
The planning process is designed solely to identify effective strategies.
False
True or false. A functional-level plan requires managers to evaluate how each employee functions in his or her job and then use this information to create a business-level plan.
False
True or false: Managers only need to identify their customers when defining a business.
False
Strengths, weaknesses, opportunities, and threats are components of a ______.
SWOT analysis
Which is a major advantage of a global strategy?
Significant cost savings associated with not having to customize products and marketing approaches to different national conditions
______ implementation is a five-step process.
Strategy
True or false: The low-cost strategy drives down an organization's costs below those of its competitors. This strategy is aimed at serving a broad market.
True
A corporate-level strategy is a plan of action that involves choosing in which industries and countries a company should invest its resources to achieve its:
goals. mission.
The risks associated with licensing is that the company granting the license:
has to give access to its technological know-how. risks losing control of its secrets.
When a company customizes its products and marketing to fit specific national conditions, it is following a ______ strategy.
multidomestic
Vertical integration is an organization's response to ______.
new opportunities
To ensure that all information is accurate in the planning process, managers must recognize that ______.
uncertainty exists
Why might managers decide to pursue unrelated diversification?
Because they believe they can purchase a failing company and use their skills to turn it around so it performs better and adds value
What should be the first critical component that the manager must define when determining an organization's mission?
Business
Which of the following are principal corporate-level strategies?
Concentration on a single industry Diversification International expansion Vertical integration
Match the level of management planning on the left with the correct definition on the right.
Corporate - CEO and top management team Business - The different divisions of the company that compete in distinct industries Functions - Choice, Departments, such as manufacturing, marketing Departments, such as manufacturing, marketing
Which of the following is not a step in strategy implementation?
Establishing a long-term timeframe for implementation that only includes broad, general goals
True or false: The international expansion strategy requiring the least foreign involvement, foreign investment, and risk comes from joint ventures.
False
Michael Porter identified two business-level strategies that only target one or two market segments. Match each strategy on the left with its description on the right.
Focused low-cost strategy - Serves one or a few market segments and tries to offer the lowest prices serving that reduced segment Focused differentiation strategy - Serves one or a few market segments and strives to differentiate their organization the most from the other competitors serving that segment
Vertical integration, which is a corporate-level strategy, expands business in two ways: either backward or forward. Match the type of vertical integration with its explanation.
Forward vertical integration -Entering into a new industry that uses, distributes, and sells company products Backward vertical integration - Entering into a new industry that produces raw materials for the company's products.
Mission statements accomplish which of the following tasks.
Identifies a company's products and customers Differentiates the company from its competitors States the broad purpose of the organization
How do managers typically distinguish time horizons?
Long-term plans, intermediate-term plans, and short-term plans
What type of strategy allows a company to sell a product for less than their competitors and still make a profit?
Low-cost
When a company's strategy is to produce products and they ask their manufacturing division to look for a way to produce them for less money and also ask their marketing department to find a less expensive way to get the word out about their products, what type of strategy are they using?
Low-cost
______ strategies help organizations enjoy a competitive advantage based on a specific price.
Low-cost
______ argued that the five forces are the major threats that an organization will encounter.
Porter
If managers decide to pursue a global strategy for selling products in the national market, how does that impact how products are produced and marketed?
Products will be standardized and there will be one basic marketing approach.
Which of the following represents the steps in a forward vertical value chain?
Raw materials, intermediate manufacturing, assembly, distribution
Which of the following are features of successful business-level strategies?
They increase profits. They reduce rivalry.
From a managerial perspective, what is the purpose of formulating a set of corporate strategies?
To help them achieve the corporation's mission
True or false: Divisional managers create business-level plans to establish goals for their divisions.
True
If a brewery decides to expand by buying the farms that produce the ingredients, this is an example of ______ integration.
backward vertical
The advantage of licensing is that the licenser does not have to ______ in a foreign country.
bear the development costs associated with opening up
The advantage of licensing is that the licenser does not have to ______ in a foreign country. Multiple choice question.
bear the development costs associated with opening up
A differentiation strategy makes entry difficult for new competitors because the competitors have no identifiable ______ to attract current customers.
brand name
The divisional managers' decisions pertaining to the goals and strategy of their unit are contained in a _______ -level plan.
business
Top managers at an expanding digital provider outlines a method for how adding popular programming with top stars to their streaming video programming will help them outperform their competitors. These managers are working on a(n) ________ -level strategy.
business
A plan to gain a competitive advantage in a particular market or industry is a ______ strategy.
business-level
Organizations that successfully pursue a differentiation strategy may be able to ______.
charge a higher price
The third step in the planning process is ______.
choosing the most effective way to put strategies into action
One reason that few risks are associated with exporting is that ______.
companies do not have to build manufacturing companies abroad
Michael Porter's Five Forces Model is important as it focuses on major ______ an organization will encounter.
competitive forces potential threats challenges
People would come from all over the greater city lines for Sami's Sushi until the owner of Sami's decided to expand to some of the well-populated suburbs. This decision was a corporate-level strategy referred to as ______.
concentration on a single industry
When a company reinvests its profits to strengthen its competitive position in its current industry, it is utilizing a(n) ______ strategy.
concentration on a single industry
Managers build and refine their previous plans at the corporate, business and functional levels to put together a broad framework. This ongoing planning process is referred to as ______.
continuity
Top management is responsible for creating the ______, which takes into account decisions involving the corporation's overall structure, strategy, goals, and mission.
corporate-level plan
Planning occurs at three levels of management, including:
corporate. business or division. department or functional.
An advantage of a multidomestic strategy is ______.
customization of product offerings and marketing approaches
When managers plan, they must forecast what may happen in the future to ______.
decide what to do in the present
The mission statement ______ its competitors.
differentiates an organization from distinguishes an organization from
Distinguishing an organization's products from the products of competitors on dimensions such as product design, quality, or after-sales service is an example of a ______ strategy.
differentiation
Managers use a ______ strategy to distinguish their products from those of their competitors by focusing on characteristics such as design, quality, and after-sale service.
differentiation
The ability to charge a premium price to distinguish its product is one outcome of a(n) ______ strategy.
differentiation
To perform the planning task, managers must first ______.
establish where the organization is at the present time
The corporate-level strategy of related diversification means companies enter an industry that creates a competitive advantage for an organization's ______.
existing division or business
The model that helps managers focus on the most important competitive forces in the external environment is the ______.
five forces model
Companies that try to specialize in one segment of the market and undercut the prices of the other sellers in the market are using a ______ strategy.
focused low-cost
In licensing, a company allows foreign organizations to take charge of both manufacturing and distribution, but in ______, a company sells rights to use brand names that are trademarked.
franchising
Licensing allows a foreign organization to take charge of both manufacturing and distribution, whereas ______ sells rights to foreign organizations to use a brand name.
franchising
Selling to a foreign organization the rights to use a brand name and operating know-how in return for a lump-sum payment and a share of the profits is called ______.
franchising
When a corporation sells the rights to use its name and expertise to a foreign company in exchange for a lump sum of money, it is called _______.
franchising
In large organizations, planning usually takes place at three levels of management. They are _____, _____, and _____.
functional corporate business
The goals that the managers of each function will pursue to help their division attain its business-level goals and allow the entire company to achieve its corporate goals reflect the ______ plans.
functional-level
Michael Porter suggests that when managers choose a business-level strategy, their organization should ______ in a particular market.
gain a competitive advantage
The major disadvantage of pursuing a _______ strategy is that by ignoring national differences, managers may leave themselves vulnerable to local competitors that differentiate their products to suit local tastes.
global
Managers need to decide to what extent the organization should customize its products for different national conditions. The product can be standardized in all markets in which the organization competes; this is called a ______ strategy. If the company customizes its products and marketing tactics to different national conditions, it is called a ______ strategy.
global; multidomestic
With the continuing threat of Internet hacking, cybersecurity has become an enormous industry, with companies vying to convince the large, global companies that they can provide the best strategies for protection. This industry is characterized by permanent ongoing intense rivalry that has resulted from advanced technology. These conditions indicate ______ in this industry.
hypercompetition
A company engaged in ______ sells products at home that are made abroad.
importing
Successful business-level strategies are designed to result in:
increased profits. increased brand loyalty.
Allowing a foreign organization to take charge of manufacturing and distributing a product in its country or world region in return for a negotiated fee is ______.
licensing
The business-level plan details both ______.
long-term divisional goals and division-level strategy
A ______ -cost strategy allows a company to sell a product for less than its competitors and still make a good profit.
low
When managers make the decision to price their products below that of their competitors, they are using a ______ strategy.
low-cost
The overriding purpose of an organization is specified by its ______.
mission
A broad declaration of an organization's purpose that identifies the organization's products and customers and distinguishes the organization from its competitors is known as a ______.
mission statement
A _______ strategy allows a company to customize product offerings and marketing approaches to local conditions, whereby managers are able to gain market share or charge higher prices for their products.
multidomestic
A strategy that is customized and marketed to accommodate particular national conditions is a ______ strategy.
multidomestic
The term hypercompetition applies to industries that are characterized by ______ competition.
permanent intense ongoing
The absence of a(n) ______ can result in hesitation, false steps, and changes of direction that can hurt an organization.
plan
The process of ________ is used to identify and select appropriate goals and courses of action for an organization.
planning
If a company purchases a business in a different industry so that it can apportion financial resources among divisions to increase financial returns, this is known as _______ strategy.
portfolio
Another reason for pursuing unrelated diversification is that purchasing businesses in different industries lets managers engage in _______, which is apportioning financial resources among divisions.
portfolio strategy
Almost all managers participate in some form of planning in order to:
predict future opportunities. predict future threats.
While defining a business and answering questions about their company's products, managers can identify:
present customer needs. who their true competitors are. future customer needs.
With a differentiation strategy, companies can distinguish their products using:
product design. quality. after-sales service.
One characteristic of a joint venture is that risk is ______.
reduced
Henri Fayol defined the quality of continuity during planning to mean that the company should focus on ______.
refining previous plans and continually modifying plans at all levels so they fit together
The strategy of entering of entering a new industry to create competitive advantage in one or more of the company's existing divisions is known ________ as diversification.
related
When a company decides to enter a new industry to gain a competitive advantage within one or more of the company's existing divisions, this is called ______.
related diversification
Using valuable skills among cooperating divisions to add value results from ______ diversification; using current strengths to turn around poorly performing companies in other industries can result from ______ diversification.
related; unrelated
When an organization enters into a strategic alliance with a foreign company, they share ______.
risks and rewards
The risks associated with licensing is that the company granting the license:
risks losing control of its secrets. has to give access to its technological know-how.
Types of standing plans include:
rules. standard operating procedures (SOPs). policies.
Jeremy forecasts what might happen if his company were to launch their new product into the market according to different schedules, prices, and features. He's thinking of making decisions to customize based on what he knows of his competitors' schedules and features. Jeremy is engaging in ______ planning.
scenario
The generation of multiple forecasts of future conditions followed by an analysis of how to respond effectively to each of those conditions is ______.
scenario planning
A company chooses a global strategy when it wants to sell ______ products while maintaining the same basic marketing approach in all competitive markets.
standardized
When the same situation occurs repeatedly, ______ plans are used.
standing
An agreement in which managers share their organization's resources knowledge, and skills with a foreign company is a(n) ______.
strategic alliance
The CEO and top managers use ______ to communicate to their managers and other employees a compelling vision of what they want the organization to accomplish.
strategic leadership
When the CEO and other top managers communicate their vision for the company to the rest of the managerial staff, this is referred to as ______.
strategic leadership
To achieve organizational goals, managers use ______ to launch courses of action that will move them towards their goals.
strategies
A cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals is a(n) ______.
strategy
The development of a set of corporate, business, and functional strategies that allow an organization to accomplish its mission and achieve its goals is known as ______.
strategy formulation
If two divisions of a diversified company can use the same manufacturing facilities and share resources, this is an example of ______.
synergy
To pursue related diversification successfully, managers search for new businesses where they can create ______.
synergy
The advantage to franchising is ______.
that the franchiser does not have to bear the development costs
An advantage of a strategic alliance for a U.S. company over a license or franchise is ______.
the company has more control over what is being produced and sold
When well executed by all functional areas, a functional-level plan allows ______ to achieve its corporate goals.
the entire company
The factors that Michael Porter identified include:
the level of rivalry among organizations in an industry. the power of large customers. the potential for entry into an industry.
The advantage of a strategic alliance is that ______.
the level of the company's involvement abroad increases
The advantage of licensing associated with opening up in a foreign country is that ______.
the licenser does not have to bear the development costs
The five forces model includes level of rivalry among organizations, the potential for entry into an industry, the power of large suppliers, the power of large customers, and _________.
the threat of substitute products
The SWOT analysis components that are used to anticipate potential problems or opportunities for business growth outside an organization are ______, and for internal problems or assets of an organization are ______.
threats and opportunities; weaknesses and strengths
In large organizations, planning usually takes place at ______ level(s) of management.
three
Managers of any organization that needs to sell its products abroad should ask ______.
to what extent should the organization customize its products to different national conditions?
At any one time only one central, guiding plan is put into operation to achieve an organizational goal. This is known as _______ .
unity
The belief that, at any time, only one central, guiding plan is put into operation to achieve an organizational goal is ______.
unity
Fayol stated that effective plans should have four essential qualities, including ______.
unity, continuity, accuracy, and flexibility
Accuracy means that, in the planning process, managers need to make every attempt to:
use all available information. collect all available information.
To pursue related diversification successfully, managers search for new businesses where they can:
use the existing skills and resources in their departments and divisions to create synergies. add value to new products and businesses.
The corporate-level strategy that is used when a company enters an industry that either supplies products to the company or purchases the company's products is ______.
vertical integration
When a soda pop company decides to expand by buying a bottling company, this is an example of forward ______.
vertical integration
There are two important goals of a mission statement; they are to describe their products for employees by pointing out ______ and ______.
what is unique or important about its products; what differentiate its products from its competitors
A manager of a medical durable equipment company decides to establish an operation in a foreign country independent of any local direct involvement. This manager is creating a ______.
wholly owned foreign subsidiary
Production operations established in a foreign country independent of any local direct involvement is a ______.
wholly owned foreign subsidiary
When companies decide to expand into a new industry in order to provide a good and/or service that is different from and, in addition to, what they are already providing, this is referred to as ________.
diversification
A time horizon is the intended ______ of a plan.
duration
The downside of using the franchise strategy is that franchisers risk losing ______ over the way the franchisee operates the franchise.
control
A plan that indicates in which industries and national markets an organization intends to compete is a ______ strategy.
corporate-level
When a company expands its business operations into a new industry in order to produce new kinds of goods or services, this is referred to as _______.
diversification
The type of plan that defines an organization's mission and goals, overall strategy, and structure is the ______.
corporate-level plan
Expanding a company's operations into an industry that produces inputs for its products is ______ vertical integration.
backward
