Chapter 6 (SB)

the steps in the strategic-management process

1. Establish the mission and the vision 2. Assess the current reality 3. Formulate the grand strategy 4. Implement the strategy 5. Maintain strategic control

Value can be assessed by asking:

Does the resource or capability allow the firm to exploit an opportunity or neutralize a threat?

Which of these situations provides an external opportunity that the company may exploit to gain competitive advantage?

Monica's rare book company has weak competition.

Having (1) few needs and many customers, (2) broad needs and few customers, and (3) broad needs and many customers are the three sources from which _____ emerges.

STRATEGIC POSITION

The second step of the strategic-management process involves assessing the organization's current reality. Which of these are tools for assessing the current reality?

SWOT analysis forecasting VRIO analysis benchmarking

The growing popularity of reading news online has significantly reduced the sales of print copies of US newspapers. Which of Porter's five competitive forces does this demonstrate?

Threats of substitute products or services

Benchmarking is defined as

a process by which a company compares its performance with that of high-performing organizations.

a forecast is defined as

a vision or projection of the future

Which is the second step in the strategic-management process?

assess the current reality

Bethany wants to buy a pair of designer boots. To find the best price, she searches the Internet and compares prices among the eight sites that sell the boots. Which of Porter's five competitive forces is demonstrated in this scenario?

bargaining power of buyers

Pacific Specialty Bikes store gets customized parts for its high-end models from a local manufacturer, Premium Supply. When the manufacturer announced a price increase, the bike store tried to switch to other local manufacturers but learned they that they wouldn't be able to meet delivery schedules. As a result, Pacific Bike chose to pay the higher prices from Premium Supply. Which of Porter's competitive forces does this demonstrate?

bargaining power of suppliers

Which of the following represent competitive forces used in Porter's model for industry analysis?

bargaining power of suppliers rivalry among competitors threats of new entrants bargaining power of buyers threat of substitute products or services

Companies pursuing a cost-leadership strategy keep costs/prices _____ those of competitors and target a _____ market.

below;wide

The process by which a company compares its performance with that of other high-performing organizations is known as _______.

benchmarking

Select all of the true statements regarding unrelated diversification:

companies may use it in an attempt to reduce risk it occurs when a company acquires another company in a completely unrelated business

Which level of strategic management focuses on the organization as a whole?

corporate-level

Which of Porter's competitive strategies are appropriate when addressing a narrow market?

cost-focus and focused-differentiation

The strategy of moving into new lines of business is called _____.

diversification

Business growth rate, as used in the BCG matrix, is concerned with how fast the _____ is(are) growing.

entire industry

According to the BCG matrix, a company will do better in a _____ market in which it has a high market share.

fast growing

The three sources from which strategic position emerges are having

few needs and many customers broad needs and many customers broad needs and few customers

corporate-level strategy

focuses on the organization as a whole involves senior executives in planning answers questions such as "what business are we in?" and "what products and services shall we offer?"

A _____ is a vision or projection of the future that is made following a SWOT analysis.

forecast

Strategy _______ is the process of choosing among different strategies and altering them to best fit the organization's needs.

formulation

Porter's five competitive forces form a model for _____ analysis.

industry

rarity can be assessed by asking

is the resource or capability currently controlled by only a few firms or no other firms?

A stability strategy is characterized by

little or no significant change.

To be successful, strategic planning requires a company to have a _____ orientation.

long-term

diversification involves

moving into new lines of business

When considering SWOT analysis, what is an example of an organizational weakness?

obsolete technology

Environmental factors that an organization may exploit for competitive advantage are called organizational ______.

opportunities

After completing his competitor analysis, Justin realized his company was the only one with all-natural ingredients in their pizza crust and could use this to get the pizza into more health food grocery stores. What aspect of a SWOT analysis has Justin uncovered?

opportunity

Skate/24 had only one competitor in the local market and that competitor just went out of business. Within a SWOT analysis, this is an example of an organizational _________ for Skate/24.

opportunity

Sustainable competitive advantage exists when

other companies cannot duplicate the value that an organization delivers to customers.

Within a SWOT analysis, an organizational threat will come from _____ the company.

outside

Strategic positioning attempts to achieve sustainable competitive advantage by:

preserving what is distinctive about a company

When conducting a VRIO analysis, one question that must be answered is, "Is the resource or capability currently controlled by only a few firms or no other firms? This would determine the _____ associated with the resource.

rarity

What four characteristics are being addressed in a VRIO analysis?

rarity organization value imitability

A company that grows its business by purchasing a business that is related to its existing portfolio is engaging in _____.

related diversification

A(n) ______ strategy requires little or no change to a company's product or service.

stability

The first step in the strategic-management process is to establish the mission, vision, and values statements. The firm's vision statement:

states what the organization wants to become and where it wants to go strategically

In which step of the strategic-management process does an organization establish the mission and vision statements?

step 1

many small business owners do not engage in

strategic planning

Michael Porter defined _____ as an attempt to achieve sustainable competitive advantage by preserving what is distinct about a company.

strategic positioning

When a company is readily able to switch to another company in order to get the raw materials it needs to make products, Porter would say that the bargaining power of ______ goes down.

suppliers

The Internet has enabled consumers to "price shop" several retailers in order to find the best price for items such as appliances, electronics, and even cars. This has increased the consumer's ability to better negotiate favorable prices with retailers, demonstrating which of Porter's five competitive forces?

the bargaining power of buyers

Two characteristics of strategy formulation are that it is:

the basis for determining long-term goals. a time-consuming process.

Newly-implemented government regulations have reduced the availability of raw materials for Blair Woodworking Corp. This would be considered an external organizational ______ in a SWOT analysis.

threat

In terms of a SWOT analysis, organizational _____ are environmental factors that hinder an organization from achieving a competitive advantage.

threats

Sasha has run a small diner near the train station for the past ten years. Six months ago, a chain restaurant serving gourmet burgers and sandwiches opened up near him and he has had to re-think his menu. He added some specialty sandwiches and free fries with every burger in order to retain his customers. Which of Porter's five competitive forces has affected Sasha's business?

threats of new entrants

You own a small deli near campus and learn that the university is exploring whether it should open a Subway sandwich franchise in the Student Union. Which of Porter's competitive forces does this represent for you?

threats of new entrants

When you ask "does this resource or capability allow our firm to exploit an opportunity or neutralize a threat?" you are assessing the resource or capability's _________.

value

When would a company use a VRIO analysis?

when deciding whether or not a new product might work in the marketplace