Chapter 6: Strategic Management

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

entire industry

Which two of Porter's competitive strategies are appropriate when addressing a narrow market? Choose all that apply.

focused-differentiation cost-focus

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

forecast

A business that wants to reach more customers and hires more employees to get this done is focusing on a _____ strategy.

growth

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

step one

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

strategic positioning

When other companies cannot duplicate the value provided by a competitor, then the competitor has established a(n) _____ competitive advantage.

sustainable

Luxury Linens Inc. produces the highest thread-count sheets available anywhere and does so at a price that none of its competitors can duplicate. It can be said that Luxury Linens has a(n) _____.

sustainable competitive advantage

When Johnson & Johnson promoted its baby shampoo as a gentle cleanser suitable for adults, it did this without changing the formulation of the product. Which type of corporate strategy does this exemplify?

stability

The skills and capabilities that give an organization special competencies and competitive advantages in executing strategies in pursuit of its mission are called organizational ______.

strengths

Carlos is doing a VRIO analysis for a product his company is thinking about producing. The first question he asks is, "Does this new capability allow us to minimize the threat of the main competitor gaining more market share?" He decides the answer to this question is "yes." Which aspect of the VRIO analysis does this question answer?

value

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?

Threat of new entrants

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

What are the four activities for developing strategic thinking identified in the text?

broaden task and functional knowledge understand the business engage in lateral thinking set aside time to reflect

When would a company use a VRIO analysis?

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

What are Porter's four competitive strategies?

Cost-focus Cost-leadership Differentiation Focused-differentiation

Jordan plans to open a computer repair business this summer. As he plans, he writes down the long-term goals of the business so he can decide where he wants to go strategically. Which stage of the strategic management process is Jordan in?

Establish the mission, vision, and values statements

According to Bryan Barry, which of these are things a manager can do to keep a strategic plan on track? (select all that apply)

Stay focused Keep it simple Keep moving Engage people

Before introducing the new software, Star Software Inc., conducted benchmark activities to assess how popular the product would be in the marketplace. Which stage of the strategic management process is being used in this situation?

assess the current reality

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

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

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

What are two characteristics of strategy formulation? Choose all that apply.

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

Strategic positioning attempts to achieve sustainable competitive advantage by:

preserving what is distinctive about a company

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

diversification

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

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

formulation

At first Rohan thought it was a good idea to offer a car repair pick-up service at his auto repair shop, but then he realized that most customers called Tow-It-Now Inc. and it would be difficult to match that company's service. Which part of a VRIO analysis helped Rohan evaluate this idea?

rarity

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

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

industry

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

long-term

What are the three core processes of business identified by Bossidy and Charan?

strategy people operations

Refer to Figure 6.2. Place the steps in the strategic-management process in the correct order, with the first step listed at the top.

1. establish the mission, vision, and values statements 2. assess the current reality 3. formulate corporate, business, and functional strategies 4. execute the strategies 5. maintain strategic control

The president, chief financial officer, and chief operating officer of Jensen Mfg. meet annually to discuss the direction of the company including what products they will continue to offer and what new products they will introduce. Which level of strategic management does this represent?

corporate-level

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

corporate-level

Johanna has been asked by the department manager to prepare a SWOT analysis on two of the company's products. In which step of the strategic management process would a company use a SWOT analysis?

current reality assessment

What strategy is American Tile Corp. using when it acquires a company that makes industrial cleaning products which American Tile doesn't currently offer?

diversification

True or false: It is common practice today for most small business owners to engage in strategic planning.

false

Leonore's Luxury Leather Footwear Corp. conducted a SWOT analysis and determined that at least 57% of consumers would demand high-end footwear and their sales should increase by 18% in the next year. This vision of what could happen is known as a _____.

forecast

Corporate-level strategy: (select all that apply)

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

What four characteristics are being addressed in a VRIO analysis?

rarity value organization imitability

Refer to Figure 6.2. The "feedback loop" in the strategic-management process involves

revising actions if necessary.

In the large city where Cassandra lives, many people are asking for her restaurant to deliver food to their offices. Her restaurant has never delivered food before but since so many people have requested this service Cassandra decides it's a good idea to do it. In a VRIO analysis, Cassandra has determined the ____ of this capability.

value