Combo with "Strategic Management Chapter 5 - T/F" and 1 other

Gathering "competitive intelligence"

is good business practice.

Buyer power will be greater when

it is concentrated or purchases large volumes relative to seller sales

Which of the following would be an entry barrier?

large economies of scale

To illustrate interrelationships among different segments of the general environment: The persistence of large U.S. trade deficits (_____) has led to greater demand for protectionist measures, such as trade barriers and quotas (______). These measures lead to higher prices for U.S. consumers and fuel inflation (_____).

macroeconomic, political/legal, macroeconomic

A danger of forecasting discussed in the text is that

managers may view uncertainty as "black and white" while ignoring important "gray areas."

Interest rate increases have a ______ impact on the residential home construction industry and a _____ effect on industries that produce consumer necessities such as prescription drugs or basic grocery items

negative; neglible

Product differentiation by incumbents act as an entry barrier because

new entrants will have to spend heavily to overcome existing customer loyalties

Scanning the general environment would identify information on

the aging population and ethnic shifts

The bargaining power of the buyer is greater than that of the supplier when

the buyer's profit margin is low

All of the following are important elements of the political/legal segment of the general environment except

the increased use of Internet technology

Emerging sociocultural changes in the environment include

the increasing educational attainment of women in the past decade

The bargaining power of suppliers increases as

threat of forward integration by suppliers increases

The threat of new entrants is high where there are

low economies of scale

Which of the following firms would likely pose the least competitive threat?

A competitor to your product where a high switching cost exists.

According to Henry Mintzberg, the realized strategies of a firm: A. are a combination of deliberate and emergent strategies B. are a combination of deliberate and differentiation strategies C. must be based on the strategic plan of the company D. must be kept confidential for competitive reasons

A. are a combination of deliberate and emergent strategies

An organization is responsible to many different entities. In order to meet the demands of these groups, organizations must participate in stakeholder management. Stakeholder management means that: A. interests of the stockholders are not the only interests that matter B. stakeholders are second in importance to the stockholders C. stakeholders and managers inevitably work at cross-purposes D. all stakeholders receive financial rewards

A. interests of the stockholders are not the only interests that matter

We want to be the top-ranked supplier to our customers. (PPG) This is an example of a: A. nonfinancial strategic objective B. financial strategic objective. C. vision statement D. mission statement

A. nonfinancial strategic objective

The vision and mission statements of a company set the overall direction of the organization. Strategic objectives serve what role? A. operationalize the mission statement B. modify the mission statement C. are a shorter version of the mission statement D. are only clarified by the board of directors

A. operationalize the mission statement

Managers should do more than just focus on short-term financial performance. One concept that helps managers do this is stakeholder symbiosis. This means that: A. stakeholders are dependent on each other for their success B. stakeholders look out for their individual interests C. one can only gain at the expense of someone else D. all stakeholders want to maximize shareholder returns

A. stakeholders are dependent on each other for their success

The four key attributes of strategic management include the idea that: A. strategy must be directed toward overall organizational goals and objectives B. strategy must be focused on long-term objectives C. strategy must be focused on one specific area of an organization D. strategy must focus on competitor strengths

A. strategy must be directed toward overall organizational goals and objectives

Firms must be aware of goals other than short-term profit maximization. One area of concern should be social responsibility which is: A. the expectation that business will strive to improve the overall welfare of society B. the idea that organizations are solely responsible to local citizens C. the fact that court costs could impact the financial bottom line D. the idea that businesses are responsible to maintain a healthy social climate for their employees

A. the expectation that business will strive to improve the overall welfare of society

Examples of __________ include: To be the happiest place on earth (Disneyland), and Restoring patients to full life (Medtronic). A. vision statements B. mission statements C. strategic objectives D. operational objectives

A. vision statements

Peter Senge, of MIT, recognized three types of leaders. __________ champion and guide ideas, create a learning infrastructure, and establish a domain for taking action. A. Local line leaders B. Executive leaders C. Internal networkers D. Shop floor leaders

B. Executive leaders

Effective vision statements include: A. all strategic directions of the organization B. a brief statement of the company's direction C. strategic posturing and future objectives D. financial objectives and projected figures

B. a brief statement of the company's direction

According to the text, the strategic management process entails three ongoing processes: A. analyses, actions, and synthesis B. analyses, decisions, and actions C. analyses, evaluation, and critique D. analyses, synthesis, and antithesis

B. analyses, decisions, and actions

Members of boards of directors are: A. appointed by the Securities and Exchange Commission B. elected by the shareholders as their representatives C. elected by the public D. only allowed to serve one term of four years

B. elected by the shareholders as their representatives

In contrast to the vision of an organization, its mission should: A. be shorter in length B. encompass both the purpose of the company as well as the basis of competition C. encompass all the major rules and regulations of the corporate work force D. be less detailed.

B. encompass both the purpose of the company as well as the basis of competition

Fortune Brands states they will cut corporate overhead costs by $30 million a year. This is an example of a: A. nonfinancial strategic objective B. financial strategic objective C. vision statement D. mission statement

B. financial strategic objective

Many organizations have a large number of functional areas with very diverse and sometimes competing interests. Such organizations will be most effective if: A. each functional area focuses on achieving their own goals B. functional areas work together to attain overall goals C. goals are defined at the bottom and implemented at the top D. management and employees have separate goals

B. functional areas work together to attain overall goals

Stakeholders are: A. a new way to describe stockholders B. individuals, groups, and organizations who have a stake in the success of the organization C. creditors who hold a lien on the assets of the organization D. attorneys and their clients who sue the organization

B. individuals, groups, and organizations who have a stake in the success of the organization

While working to prioritize and fulfill their responsibilities, members of the board of directors of an organization should: A. represent their own interests B. represent the interests of the shareholders C. direct all actions of the CEO D. emphasize the importance of short-term goals

B. represent the interests of the shareholders

A CEO made a lot of mistakes in assessing the market and the competitive conditions and improperly redesigning the organization into numerous business units. Such errors led to significant performance declines. According to the text, this example illustrates the __________ perspective of leadership. A. external control B. romantic C. internal mechanism D. operational

B. romantic

Procter and Gamble has perfected a technique for compacting cleaning powder into a liquid concentration. Consumers, retailers, shipping and wholesalers, and environmentalists all have benefited from the resulting change in consumer shopping habits and the revolution in industry supply-chain economics. According to the text, this is an example of __________. A. zero-sum relationship among stakeholders B. stakeholder symbiosis C. rewarding stakeholders D. emphasizing financial returns

B. stakeholder symbiosis

WellPoint Health Network states: WellPoint will redefine our industry: through a new generation of consumer-friendly products that put individuals back in control of their future. This is an example of a: A. strategic objective B. vision statement C. vague statement of direction D. line manager's individual goal

B. vision statement

Peter Senge, of MIT, recognized three types of leaders. __________ are individuals that, although having little positional power and formal authority, generate their power through the conviction and clarity of their ideas. A. Local line leaders B. Executive leaders C. Internal networkers D. Shop floor leaders

C. Internal networkers

__________ may be considered the advance work that must be done in order to effectively formulate and implement strategies. A. Goal setting B. Corporate entrepreneurship C. Strategy analysis D. Organizational design

C. Strategy analysis

__________ involves ensuring proper strategic controls and organizational designs. A. Corporate governance B. Corporate-level strategy C. Strategy implementation D. Business-level strategy

C. Strategy implementation

Strategy formulation and implementation is a challenging ongoing process. To be effective, it should not involve: A. the CEO and the board of directors B. the board of directors, CEO, and CFO C. competitors D. line and staff managers

C. competitors

Effectiveness is often defined as: A. doing things right B. stakeholder satisfaction C. doing the right thing D. productivity enhancement

C. doing the right thing

According to the text, the triple bottom line approach to corporate accounting includes three components: A. financial, environmental, and customer B. financial, organizational, and customer C. financial, environmental, and social D. financial, organizational, and psychological

C. financial, environmental, and social

In large organizations, conflicts can arise between functional areas. In order to resolve these conflicts, strategic objectives: A. put financial objectives above human considerations B. align departments toward departmental goals C. help resolve conflicts through their common purpose D. cause debate and increase conflict

C. help resolve conflicts through their common purpose

According to Henry Mintzberg, decisions following from the strategic analysis of the firm are its: A. emergent strategy B. deliberate strategy C. intended strategy D. realized strategy

C. intended strategy

All of the following are ambidextrous behaviors EXCEPT: A. taking initiative and being alert to opportunities beyond the confines of one's own job B. being cooperative and seeking opportunities to combine one's efforts with others C. intensely focusing on the responsibilities of one individual and maximizing the output of the department in the organization in which that individual works D. being brokers, always looking to build internal linkages

C. intensely focusing on the responsibilities of one individual and maximizing the output of the department in the organization in which that individual works

There are several perspectives of competition. One perspective is zero-sum thinking. Zero-sum thinking means that: A. all parts of the organization gain at no loss B. in order for someone to gain others must experience no gain or benefit C. one can only gain at the expense of someone else D. everyone in the organization shares gains and losses equally

C. one can only gain at the expense of someone else

The three participants in corporate governance are: A. the shareholders, board of directors, and employees B. the shareholders, labor unions, and employees C. the shareholders, board of directors, and management D. the shareholders, banks and lending institutions, and management

C. the shareholders, board of directors, and management

Successful organizations are effective in motivating people. Employees work best when: A. they are asked to do their best B. work requirements are vague and unclear C. they are striving toward specific goals D. they are guided by an abstract mission statement

C. they are striving toward specific goals

Leadership is a necessary (but not sufficient) condition for organizational success. Leaders should emerge at which level(s) of an organization? A. only at the top B. in the middle C. throughout the organization D. only during times of change

C. throughout the organization

The text argues that a strategic perspective in an organization should be emphasized: A. at the top of the organization B. at the middle of the organization C. throughout the organization D. from the bottom up

C. throughout the organization

The hierarchy of organizational goals is in this order (least specific to most specific): A. vision statements, strategic objectives, mission statements B. mission statements, strategic objectives, vision statements C. vision statements, mission statements, strategic objectives D. mission statements, vision statements, strategic objectives

C. vision statements, mission statements, strategic objectives

The organizational versus the individual rationality perspective suggests that: A. what is good for a functional area is always good for the organization B. what is good for the organization is always good for a functional area C. what is best for a functional area may not be best for the organization D. the incremental perspective may be best for functional areas while the "rational" perspective may be best for the organization

C. what is best for a functional area may not be best for the organization

The four key attributes of strategic management include all of the following EXCEPT: A. including multiple stakeholder interests in decision making B. incorporating both short-term and long-term perspectives C. recognizing the trade-offs between effectiveness and efficiency D. emphasis on the attainment of short-term objectives

D. emphasis on the attainment of short-term objectives

Management innovations such as total quality, benchmarking, and business process reengineering cannot lead to sustainable competitive advantage because: A. companies that have implemented these techniques have lost money B. there is no proof that these techniques work C. they cost too much money and effort to implement D. every company is trying to implement them and hence it does not make a company different from others

D. every company is trying to implement them and hence it does not make a company different from others

Vision statements are used to create a better understanding of the overall purpose and direction of the organization. Vision statements: A. are very specific B. provide specific objectives C. set organizational structure D. evoke powerful and compelling mental images

D. evoke powerful and compelling mental images

The text addresses two perspectives of leadership as well as their implications. These two perspectives are: A. romantic and unromantic B. romantic and internal control C. external control and unromantic D. romantic and external control

D. romantic and external control

________ tracks the evolution of environmental trends, sequences of events, or streams of activities

Environmental monitoring

A firm striving for cost leadership will typically spend relatively more on product related R&D than on process related R&D.

False

Michael Porter's 3 generic strategies can be depicted on 2 dimensions: competitive advantage and product life cycle

False

The experience curve concept suggests that production costs tend tend to decrease as production increases regardless of where an industry is at in its life cycle.

False

The internet has provided a small subset of companies with greater tools for managing costs

False

The internet offers few advantages for focusers because niche players and small companies cannot implement capabilities as effectively as their large competitors.

False

To generate above average returns, a firm following an overall cost leadership position should not be concerned with attain attaining parity or proximity on the basis of differentation relative to its peers.

False

a disadvantage of firms that successfully integrate overall cost leadership and differentiation strategies is that they are relatively easy for competitors to imitate.

False

a successful differentation strategy increases rivalry since buyers become more price sensitive

False

a successful differentation strategy lowers entry barriers because of customer loyalty and the firm's ability to provide uniqueness in its products and services

False

an important idea behind the profit pool concept is that there is always a strong relationship between the generation of revenues and the capturing of profits

False

businesses that compete in markets that are in decline should simply be harvested or divested since they are no longer profitable

False

concentrating solely on one form of competitive advantage generally leads to the highest possible level of profitability.

False

during the decline stage of the product life cycle,harvesting strat means that a firm keeps a product going without significantly reducing market support, technological development, or other investments, while hoping competitors exit the market

False

during the growth stage of the market life cycle, customers are very likely to establish brand loyalty.

False

focus by itself often constitutes a competitive advantage.

False

given the attractiveness of premium pricing during the growth stage of the market life cycle, managers should emphasize short term results to false increase profits.

False

if a firm has a successful differentiation strategy, it is not necessary to attain parity on cost.

False

the decline stage of the industry life cycle is inevitably followed by death

False

the market life cycle should be used as a short run forecasting device because it provides a conceptual framework for understanding what false changes typically occur.

False

with reverse positioning, a strategy to be used during the mature stage of the industry life cycle, a product escapes its category by deliberately associating with a different one.

False

Which of the following would be considered part of a firm's general environment

Higher unemployment rates

Which is considered a force in the "Five Forces model"?

Rivalry among competing firms

A potential pitfall of a focus strategy is that focusers can become too focused to satisfy buyer needs.

True

An important advantage of first movers or pioneers in a market is that they may establish brand recognition that may later serve as an important switching cost.

True

Firms that compete on overall cost leadership are vulnerable if all rivals share a common input or raw material that contributes a significant amount to total costs.

True

Incumbent firms that thought a niche market was too small to enter in the past may use internet technologies to enter that segment with true focusers

True

Mass customization enables manufacturers to be more responsive to customer demands for high quality products

True

Most analysts agree that use of the Internet will lower transaction costs.

True

One potential pitfall of a differentiation strategy is that a brand's identification in the marketplace may become diluted through excessive product line extensions.

True

One way the internet and digital technologies are creating opportunities for firms with differentiation strategies is by enabling mass true customization.

True

With a focus strategy, creating niche by differentiating one's product or service often allows small firms to compete successfully with market leaders.

True

an important potential pitfall of an integrated overall cost leadership and differentiation strategy is that firms may fail to implement either one and true become stuck in the middle

True

as markets mature, competition on the basis of differentiation is preferable to price competition.

True

as markets mature, the magnitude of differentiation and cost leadership advantages among competitors decrease.

True

many firms facing a turnaround situation try to reduce their costs by outsourcing the production of many inputs.

True

the example of Lexus automobiles in the text points out that a firm can strengthen its differentation strategy by achieving integration at multiple points along the value chain.

True

Environmental forecasting involves developing plausible projections about the ______ of environmental change

all of the above

A large fabricator of building components purchased a steel company to provide raw materials for its production process. This is an example of

backward integration

The aging of the population, changes in ethnic composition, and effects of the baby boom are

demographic changes

The bargaining power of suppliers is enhanced under the following market condition

dominance by a few suppliers

Two of the key inputs to developing forecasts discussed in the text are

environmental scanning and competitor intelligence

A supplier group would be most powerful when there is/are

few substitute products

An independent group of suppliers, such as farmers, gather to form a cooperative to sell their products to buyers directly, replacing their former distributors. This is an example of

forward integration

In Porter's Five Forces model, conditions under which a supplier group can be powerful include all of the following except

readily available substitute products

Increasingly larger numbers of women entering the work force since the early 1970s is an example of

sociocultural changes