Chapter 7 MGMT

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A weakness of the single-product strategy is that the ____.

firm using it will suffer if its product is replaced by a new one

How can managers use information provided by the GE Business Screen to manage their various business opportunities more effectively?

to determine asset allocation

Why is it critical for an organization to understand that eventually a product will go into the decline stage?

to stay in business

Which is an international strategy in which a company attempts to combine the benefits of global scale efficiencies with the benefits and advantages of local responsiveness?

transnational

A(n) ____ strategy is a pattern of action that develops over time in an organization in the absence of missions and goals, or despite missions and goals.

emergent

Which type of strategy is based on a pattern of action that develops over time in an organization, in the absence of mission and goals or despite mission and goals?

emergent

When a firm identifies a weakness within its organization, what can it do to address that weakness?

It can modify its mission.

Yahoo! has a business strategy that creates revenue by selling ads. Yahoo! uses a(n) ____ strategy.

deliberate

Jones International is a large organization with holdings in the United States, Europe, and Southeast Asia. The corporation's mix of strategic business units (SBUs) allows the company to exploit its strengths and capabilities in more than one line of business and to exploit synergies across business lines. One of the disadvantages of Jones International's strategy is that it ____.

increases management complexity

Which of the following is used to show how sales volume of a product can change over time?

product life cycle

Ugar has relocated a production firm to a country that has lower production costs, and is closer to his customers. What type of advantage does this offer Ugar's firm?

production efficiencies

3M is a highly innovative firm that is constantly seeking new markets and is oriented toward growth and taking risks. It uses a(n) ____ strategy.

prospector

Which of the strategy types in the Miles and Snow model avoids long-term commitment to any single technology, is highly decentralized, and has a propensity to take risk?

prospector

An organization that implements a defender strategy focuses on ____.

protecting its market from new competitors

For years, the Tabasco Company used a(n) ____ strategy and manufactured only its famous hot sauce.

single-product

What does the BCG matrix use to evaluate an organization's set of businesses?

stable performance over time

What is the advantage to those organizations who use unrelated diversification?

stable performance over time

Extra funds should be channeled to the ____, which is a product with a high share of a fast-growing market.

star

Sabine is focusing on the processes to use to achieve her strategies and goals for the year. What is Sabine working on?

strategy implementation

What is the method by which processes are operationalized or executed within the organization?

strategy implementation

Many companies make bead jewelry, but Chamilia is the only one with a licensing agreement with Disney to make beads that include Disney characters. The agreement is a(n) ____ for Chamilia.

strength

Which framework is useful for managers as they plot how sales volume changes over the life of products?

the product life cycle

Organizational opportunities are ____.

areas in the environment that may generate higher performance

When are global efficiencies most easily obtained?

When a single unit has worldwide responsibility

When is a multidomestic strategy particularly effective for international firms?

When there are clear differences among markets.

What is a strategy?

A comprehensive plan for accomplishing an organization's goals.

What is the advantage of setting business-level strategies?

Ability to focus efforts in a targeted manner.

How can encouraging creativity and flexibility help an organization that is pursuing a prospector strategy?

Opportunities can be created and it can quickly change to take advantage of them.

Which of the following is an advantage of unrelated diversification?

Organizations can allocate capital to maximize corporate performance.

Why would one organization want to purchase an SBU that has been classified as a "dog"?

Possible synergistic effects on the buying organization.

How is an organizational threat different from an organizational weakness?

Threats are uncovered by analyzing the organization's environment, while weaknesses are internal to the organization

In which way can managers use information from the product life cycle?

To determine which strategies for products need to evolve

The starting point in formulating strategies is usually ____.

a SWOT analysis

Abercrombie & Fitch uses its ability to manage its supply chain more effectively than most of its competitors to create ____.

a distinctive competence

Strategy formulation is ____.

a set of processes involving the organization's strategies

The aircraft engine division of General Electric has its own mission and a strategy that often differs considerably from other parts of the corporation. What is a division such as this called?

a strategic business unit

Google is a highly successful search engine site. It maintained that expertise and tried to expand app development to maintain its current business while innovating in new markets. It used a(n) ____ strategy.

analyzer

The local party store developed a busy lunch business by offering slices of pizza and deli sandwiches to go. They also offered a wide selection of soft drinks in their coolers. Recently a fast food restaurant opened down the street, and offers salads and bottled water. To compete, the party store did the same, and expanded its other menu offerings. Which type of business strategy did this store use?

analyzer

When a new line of organic salad dressing was launched, it was very successful. Competitors soon began to produce a similar product. What should the organization do to keep its competitive advantage?

develop strategies to slow the entry of competitors

Mercedes-Benz sells high quality automobiles at high prices. It uses a(n) ____ strategy to distinguish their product from other automotive companies.

differentiation

Which strategy would Pepsi use to promote its Aquafina brand on the basis of its purity?

differentiation

Which component of strategy that indicates what the organization does exceptionally well?

distinctive competence

As the plant manager, Eli is concerned with having enough employees to meet production needs and managing cash flow for a specific product. Which stage of the product life cycle is Eli likely managing?

introduction

Using the Boston Consulting Group matrix, SBUs are classified on the basis of ____.

market share and market growth rate

Which of the following is(are) used to promote products or services and the overall public image of the organization?

marketing and sales

Why is it important to identify weaknesses in a SWOT analysis?

to correct them

Ramkumar works in an organization's European office, and Atmir works in the Asian-Pacific office. Even though they both work for the same firm, both offices operate differently, based on the unique needs in each country. Which of the following contributes to that?

worldwide learning

Where is power and authority held in a multidomestic corporation?

with the managers of subsidiaries in host countries

In the growth stage of the product life cycle, the ____.

sales of the product increase

Which strategy in the Miles and Snow model represent a middle-of-the-road approach to business strategy?

analyzer

Unlike multidomestic firms, global corporations ____.

assume that customers are the same regardless of nationality

A company that stops buying supplies from other companies and begins to provide its own has diversified through ____.

backward vertical integration

In a SWOT analysis, how will the identification of strengths help to accomplish an organization's mission?

by allowing the exploitation of skills and capabilities

A(n) ____ strategy is a pattern of action that develops over time in an organization in the absence of missions and goals, or despite missions and goals

emergent

What does the GE Business Screen use to determine the attractiveness of an organization?

competitive position

Scott works for a firm that specializes in oil and gas products. During the last recession, one of the business units lost considerable income, but other parts of the business were healthy enough to offset that loss. Which type of corporate strategy was Scott's company using?

competitive support

A small retail shop in the local community offers a wide variety of women's clothing at low prices. In order to be competitive with larger chains found at the mall, the store owner frequently works alone, and she has adjusted store hours to capitalize on busy days. What should this retail shop owner be pursuing as part of her general business-level strategy?

concentrating on reducing operating costs

GE competes in industries ranging from medical devices, to financial services, to turbine engines. GE's mixed strategy is an example of ____ strategy.

corporate-level

Most grocery stores carry a wide variety of national brands in addition to their own private label brands. The private label brands are often made by the same national brands they are competing with. Which type of strategy is a firm using when it creates a lower-priced private label brand in addition to its other, higher-priced brands?

cost leadership

The local dollar store sells a variety of products, all at $1 each. These items are no different than the products of other retail chains, but sizes are slightly smaller. In addition, the store is a little out of the way for most shoppers, but shoppers find the value is worth the trip. In which way does the local dollar store compete with nearby retailers?

cost leadership

Which of the following helps an organization perceive, or even generate, new opportunities in its environment?

creativity

Mrs. Fields was the first high quality, high priced cookie. Its success attracted competition. Mrs. Field's slowed growth to focus on making current operations more profitable. This is an example of a ____ strategy.

defender

A(n) ____ strategy is a plan chosen and implemented to support specific goals, such as an increase of market share by 5 percent.

deliberate

Wounded Warrior Project (WWP) spends a lot of money telling the stories of wounded veterans. There are many nonprofits helping veterans, but WWP is the most well-known, with celebrity involvement and advertising. WWP is using a ____ strategy.

differentiation

Chaparral Steel is so efficient in its steel production and casting processes that it is the only U.S. steel producer that regularly exports its products to Japan. This is an example of Chaparral Steel's ____.

distinctive competence

The number of different businesses that an organization runs, and the extent to which these businesses relate to one another, is represented by ____.

diversification

Fox News covers stories from what many believe to be a right-of-center political point of view. They use a(n) ____ strategy to differentiate their product from other news outlets.

focus

In which type of strategy does an organization concentrate on a specific regional market, product line, or group of buyers?

focus

Porter's generic strategies classify firms based on a specific regional market or product line. Which type of strategy is this?

focus

Franke, a Swiss manufacturer of sink and facet systems, sold accessories through retail stores and now sells directly to customers using the Internet. Franke used ____.

forward vertical integration

The primary concern of strategy implementation is ____.

how the strategy is operationalized and executed

Decentralizing power in the hands of a local subsidiary ____.

may make it difficult to transfer learning from one subsidiary to another

If two automotive suppliers are about the same size, and decide to join together as one company, they are using a diversification strategy referred to as a(n) ____.

merger

Curl Up and Dye is a local hair salon that has a steady clientele from the surrounding community. However, a new salon has just opened in the area, and some clients have mentioned that the new salon offers similar services at lower prices. Curl Up and Dye now needs to pursue a strategy that will ____.

neutralize the impending threat

In environmental SWOT analysis, the external organizational position is analyzed according to its ____.

opportunities and threats

The local coffee shop imports its coffee beans from a small, private farm in South America. The unique quality and taste of the beans, and the roasting process used, cannot be imitated, and brings consumers to the store from miles around. The coffee shop is now considering selling the beans online, creating ____.

organizational opportunity

The expiration of a pharmaceutical drug patent allows generic drug makers to introduce the same chemical compound under a different name and at lower prices. This is an example of ____ for the developer of the original drug.

organizational threat

If an organization has higher prices for a similar good or service, the prices are considered to be an organizational ____.

organizational weakness

ZeroBreeze Inc. is an outerwear manufacturer that caters to a large customer base. In addition to the high volume of coats and jackets that it manufactures, the company sells light jackets for low prices. Many customers buy ZeroBreeze jackets because they are durable and inexpensive. Which of the following strategies is illustrated in the scenario?

overall cost leadership

Based on differentiation strategy, why are customers willing to pay more for one product over a similar product?

perceived extra value

Which of the following is a major tool for managing diversification?

portfolio generation

Olesia is managing the diversification of divisions for her organization. She wants to monitor how to engage and manage subsidiaries to maximize corporate performance. What should Olesia use to track this information?

portfolio management techniques

Camille's Coffee Shop has a very small share of the market and has no plans for growth. According to the BCG matrix, this business is a ____.

portfolio tool

Adolph Coors Company heavily developed Zima brand beer that was targeted to Generation Xers, but Zima gained only a small share of a rapidly growing market. According to the BCG matrix, Zima is an example of a ____.

question mark

Companies should invest carefully and closely monitor a ____, which is a product that has a small share of a growing market.

question mark

Turner Broadcasting was looking for a source of movies to show on its various cable television stations. When Turner purchased a movie studio with its vault of old movies, it was an example of a(n) ____ diversification strategy.

related

When an airline uses profits from one region to lower prices in another region it is using ____.

resource deployment

Hewlett Packard contemplated selling its PC division, eliminating one of the markets it competes in. This is an example of change in ____.

scope

Southwest Airlines gained access to the Atlanta market when it purchased Air Tran. This is an example of a change in Southwest's ____.

scope

The Windows operating system is used in 90% of the world's PCs. Microsoft has an international ____.

strength

What is a potential downfall when using a SWOT analysis?

subjective assessment

Rumi has found that selling gluten-free products at her bakery has been an effective strategy and has allowed her to achieve some of her strategic goals for sales. Which of the following makes this an effective strategy for Rumi?

superior alignment with her environment

United Continental Holdings includes Continental Airlines, United Airline, Chelsea Food Services, and United Cruises, because it was thought that they could accomplish more joined together than they can operating as separate units. Which advantage of related diversification does this best represent?

synergy

What can exist when the economic value of companies joined together is greater than the value of the parts?

synergy

Business-level strategy focuses primarily on ____.

the areas in which the firm chooses to conduct business in a particular industry or market


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