BUS CH 5

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What was the largest acquisition completed in 2007?

At&T acquiring Bellsouth Corp

Bankruptcy:

Can be an effective type of retrenchment strategy.

What term refers to selling a division of an organization

Divestiture

Chapter 9 bankruptcy applies to municipalities

True

Horizontal integration is seeking ownership or increased control over competitors

True

McDonalds currently owns more than 50 percent of its restaurants.

True

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

True

Southwest Airlines selling tickets through Galileo is an example of which type of strategy?

Forward Integration

Web sites to 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

Mergers and acquisitions are created for all of the following reasons except to:

Increase its number of employees

Retrenchment would be an effective strategy when an organization

Is plagued by inefficiency, low profitability, poor employee morale and pressure from stockholders to improve performance.

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

Joint Venture

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

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

Low cost

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

True

Chapter 11 bankruptcy filings fell to a 10-year low in 2006

True

In 2005, immigrants started 25 percent more companies per capita than native born citizens did

True

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

Market development includes introducing present products into new geographic areas.

True

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

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

True

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

True

AT&T's acquisition of BellSouth in 2007 was the largest telecommunications acquisition ever approved in the U.S

True

All sizes and types of organizations can utilize and benefit from strategic-management concepts and techniques

True

Cooperative arrangements and joint ventures between competitors are becoming increasingly popular

True

First mover advantage refers 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 very low per-unit cost

True

Liquidation is often appropriate when retrenchment and divestiture have failed

True

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

True

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

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

Retrenchment and turnaround are the same strategy

True

The nonprofit sector is America's largest employer

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

According to Porter, which strategy offers products or services to a small range of customers at the lowest price available on the market

Low-cost focus

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

Managing by exception

Burger King opening its first restaurant in Japan is an example of which type of strategy?

Market development

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

Market development

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

Market penetration

All of the following are cooperative arrangements except

Marketing plans

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

Merger

When companies take over functional operations of other firms, such as human resources, information systems, payroll, accounting, or customer service, 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

Which of the following is not a reason joint ventures fail?

Stakeholders from both partners are equally satisfied.

All of the following are important factors in the Balanced Scorecard except

Stockholders equity

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

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

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.

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

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

True

Integration strategies are sometimes collectively referred to as which of these strategies?

Vertical integration

In which situation would horizontal integration be an especially effective strategy?

When an organization can gain monopolistic characteristics in a particular are or region without being challenged by the federal government for "Tending substantially" to reduce competition.

All of the following situations are conducive to market development except:

When an organization competes in a high-growth industry.

Under which condition would a differentiation strategy be especially effective

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

Backward integration is effective in all of these except:

When the advantage of stable prices are not important.

Which of the following is not an example of when an organization should use an unrelated diversification strategy?

When the organization has a strong management team.

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.

Adding new, unrelated products or services is called

Related diversification

Which strategy should an organization use if it competes in a no-growth or a slow-growth industry.

Related diversification

Adding new, unrelated products or services for present customers is called

Related diversification

Morgan Stanley's building of a $1 billion casino is an example of:

Retrenchment

Nortel cutting another 2,900 jobs in 2007 in an attempt to stay in business would be an example of

Retrenchment

What kind of strategy is retrenchment?

A turnaround or reorganization strategy

Financial objectives involve all of the following except:

Larger market share

What percent of McDonalds' restaurants are actually owned by the McDonalds corporation

67 percent.

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

A joint venture

According to journalists' findings, what is a serious obstacle for many small business owners

A lack of strategic-management knowledge.

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

Backward Integration

What happened to bankruptcy filing in 2006?

Decreased by 20 percent.

Which of the following is most likely not included in the functional level of a small company?

Department Managers

Whirlpool selling its struggling Hover floor-care business to Techtronic Industries is an example of which type of strategy?

Divestiture

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

Divisional

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

All of these (corporate, divisional, functional)

The Family Farmer Bankruptcy Act of 1986 created

Chapter 12

Which chapter of the bankruptcy code applies to municipalities

Chapter 9


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