Chapter 7 Questions

Ramkumar works in an organization's European office, and Atmir works in the Asia 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

A theoretical advantage of unrelated diversification is that _____.

a business will have stable performance over time

When devising a new strategy, it is best to start with what?

A SWOT analysis

What is a strategy?

A comprehensive plan for accomplishing an organization's goals

Jewel's company was just purchased by a much larger competitor who makes products in a similar line. The products made by Jewel's company will still be made, but branded with the new company's name. Which type of diversification does this process involve?

Acquisition

Teresita has a successful business that produces sauces, salsas, and salad dressings. Recently, she stopped buying labels from her supplier because she found she can make them less expensively in-house. This also allows her to change labels for seasonal and small batch items. Which type of diversification did Teresita engage in?

Backward vertical integration

How can a global firm capture economies of scale in its production process?

By building factories that serve more than one country

In which way do organizations determine alternatives for working in a particular industry or market?

By setting business-level strategies

According to the BCG matrix, which type of organization is not expected to grow substantially, even though it currently has a large share of the market?

Cash cows

Which of the following occurs when an organization is not implementing valuable strategies that are being implemented by competing organizations?

Competitive disadvantage

What does an organization use to manage its operations across several industries and several markets simultaneously?

Corporate-level strategy

What is the set of strategic alternatives from which an organization chooses as it manages its operations simultaneously across several industries and several markets?

Corporate-level strategy

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

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.

Firms that successfully implement which type of strategy are generally able to charge more than competitors because customers are willing to pay more to obtain the extra value they perceive?

Differentiation

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

Using which strategy allows an organization to concentrate on a specific regional market, product line, or group of buyers?

Focus strategy

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

It can modify its mission.

Which of the following is true of the BCG matrix?

It helps managers understand how strategic business units contribute to an overall organization.

In the context of SWOT analysis, which of the following would be considered as an organization's weakness?

Low cash reserves

Lighthouse Cinema has remained a popular entertainment option for the surrounding area, but sales have been stagnant over the past few years. Which stage of the product life cycle is the theater in?

Maturity

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

Organization structure

Which of the following is an advantage of unrelated diversification?

Organizations can allocate capital to maximize corporate performance.

Using simple product design coupled with efficient high-volume manufacturing capacity may help a company achieve what?

Overall cost leadership

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

Anke's organization is constantly looking for new opportunities and new markets for its products. Her firm is highly innovative and not afraid of taking risks. Which type of business-level strategy does Anke's organization use?

Prospector

In which type of strategy does an organization operate in several businesses that are somehow linked with one another?

Related diversification

Jones International uses a mix of strategic business units (SBUs), which allows the company to exploit its strengths and capabilities in more than one line of business and to exploit synergies across business lines. Jones International employs which type of corporate-level strategy?

Related diversification

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?

Related diversification

Petra is uncertain where to begin in formulating strategy for her division. What is a good place for her to start?

SWOT analysis

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

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

To determine asset allocation

Polani's company is a leader in the creation of mobile phone cases, and it recently has expanded to make cases for tablets and laptops. Polani's company is using related diversification. What is an advantage of this strategy for the firm?

Synergy

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

To determine which strategies for products need to evolve

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

In the context of SWOT analysis, which of the following would be considered as an organization's strength?

Unique reputation

Where is power and authority held in a multidomestic corporation?

With the managers of subsidiaries in host countries

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

differentiation

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

diversification

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 _____.

dog

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

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

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

Decentralizing power in the hands of a local subsidiary _____.

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

An organization that implements a defender strategy focuses on _____.

protecting its market from new competitors

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

sales of the product increase

The market for memory chips for electronic devices is growing at an incredible rate, and GloTech has the largest share of that market. According to the BCG matrix, GloTech is a _____

star

If an organization has higher prices for a similar good or service, the prices are an organizational _____.

weakness