HMGT 4700 Test 2

72. Two limitations of the Quantitative Strategic Planning Matrix are weights and ratings.

false

On the x-axis of the IE Matrix, an internal factor evaluation score of 2.5 represents a weak internal position.

false

One positive feature of OSPM is that it does not require intuitive judgments and educated assumptions.

false

Positioned in or around cell IX in the IE Matrix, successful organizations are able to achieve a portfolio of businesses.

false

Product quality is an important consideration in the BCG Matrix.

false

Quadrant III organizations compete in rapid-growth industries and have weak competitive positions, according to the Grand Strategy Matrix.

false

Satisficing means it is often possible to achieve similar results using different means or paths.

false

Since a combination strategy is not risky, many organizations pursue a combination of two or more strategies simultaneously.

false

Small companies could skip Stages 1 and 2 of the strategy-formulation framework and develop a QSPM.

false

Step 1 of a QSPM assigns weights to each key external and internal factor.

false

Strategic analysis and choice largely involves making objective decisions based on subjective information.

false

Successful top managers keep a low political profile on acceptable proposals.

false

The Grand Strategy Matrix is based on two evaluative dimensions, market share and market growth.

false

The Internal Factor Evaluation Matrix and the External Factor Evaluation Matrix are part of the final stage of the strategy formulation framework.

false

The SPACE Matrix axes are labeled aggressive, conservative, defensive and competitive.

false

The Sum Total Attractiveness Scores are defined by the product of multiplying the weights (step 2) by the attractiveness scores (step 4) in each row of the QSPM.

false

The appropriate strategies are intensive, integration, defensive and diversification when a firm's directional vector is located in the aggressive quadrant of the SPACE Matrix.

false

The company's total sales and number of employees are key considerations in the Boston Consulting Group Matrix.

false

The firm should pursue conservative strategies if the coordinates of a SPACE directional vector are (1,4).

false

The four strategies of the SPACE Matrix are aggressive, conservative, offensive and defensive.

false

The midpoint on the x-axis of a BCG Matrix, which corresponds to a division that has half the market share of the leading firm in the industry, is typically set at 0.05.

false

The overall aim of the Balanced Scorecard is to balance financial objectives with strategic objectives.

false

To effectively formulate competitive strategies, an organization should match its external opportunities and threats.

false

Unrelated diversification may be an especially effective strategy when an organization's basic industry is experiencing increasing annual sales and profits

false

When the correlation between dollar sales and dollar marketing expenditures has historically been low, market penetration is an appropriate strategy.

false

. A leveraged buyout occurs when a firm's management and other private investors use borrowed funds to buy out the firm's shareholders.

true

. A low-cost focus strategy offers products or services to a small range of customers at the lowest price available on the market.

true

. All sizes and types of organizations can utilize and benefit from strategic-management concepts and techniques.

true

. An appropriate strategy when an organization has excess production capacity is market development

true

. By examining the relative market share and industry growth rate of each division relative to all other divisions with the BCG matrix, a multidivisional organization is allowed to manage its portfolio of businesses.

true

. Culture includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes and heroines that describe a firm.

true

. Matching techniques include both the SPACE Matrix and the TOWS Matrix.

true

. The most effective differentiation bases are those that are hard or expensive for rivals to duplicate.

true

According to the Grand Strategy Matrix, when a Quadrant I firm is too heavily committed to a single product, then concentric diversification may reduce the risks associated with a narrow product line.

true

An acquisition occurs when a large organization purchases a smaller one or vice versa.

true

An organization's present strategies, objectives and mission provide a basis for generating and evaluating feasible alternative strategies, coupled with the external and internal audit information.

true

Any number of sets of alternative strategies can be included in the QSPM, and any number of strategies can comprise a given set.

true

Boards of directors are composed mostly of outsiders who are becoming more involved in an organization's strategic management.

true

Both IE and BCG Matrices are called portfolio matrices.

true

By continuously chatting and informally questioning, successful CEOs stay abreast of how things are progressing and know when to step in to intervene.

true

Conservative strategies in a SPACE Matrix most often include intensive strategies and concentric diversification.

true

Cooperative arrangements and joint ventures between competitors are becoming increasingly popular.

true

Culture is the unique way an organization does business.

true

Divisions with a low relative market share position and a high industry growth are called question marks in the BCG Matrix.

true

Donald Trump starting TrumpUniversity in 2005 is a good example of unrelated diversification.

true

Equifinality means it is often possible to achieve similar results using different means or paths.

true

First mover advantage refers to the benefits a firm may achieve by entering a new market or developing a new product or service prior to rival firms.

true

Franchising is an effective means of implementing forward integration.

true

Generally, the BCG Matrix and the IE Matrix are used only in formulating strategies in multidivisional firms.

true

Having no temporal qualities, the BCG Matrix is a snapshot of an organization at a given point in time.

true

In the SPACE Matrix, growth potential, profit potential and financial stability could all fall under the category of industry strength.

true

Liquidation is often appropriate when retrenchment and divestiture have failed.

true

Relative market share position is given on the x-axis of the BCG Matrix.

true

Strategists themselves, not analytical tools, are always responsible and accountable for strategic decisions.

true

Successful strategists establish additional hurdles or tests for strongly supported ideas that are considered unacceptable, but which are best not opposed openly.

true

Successful strategists minimize their own political exposure on issues that are highly controversial and in circumstances where opposition from major power centers was likely.

true

Technical know-how, market share and product life cycle are some examples of areas to consider when evaluating a company's competitive advantage.

true

The BCG Matrix does not reflect whether or not various divisions or their industries are growing over time.

true

The IE Matrix can be divided into three major regions that have different strategy implications: grow and build, hold and maintain and harvest or divest.

true

The Quantitative Strategic Planning Matrix is an excellent decision stage analytical tool.

true

The Threats-Opportunities-Weaknesses-Strengths (TOWS) Matrix, the Strategic Position and Action Evaluation (SPACE) Matrix, the Boston Consulting Group (BCG) Business Portfolio Matrix, the Internal-External (IE) Business Portfolio Matrix and the Grand Strategy Matrix are included in stage two of the strategy-formulation framework.

true

The divisions of an organization should utilize strategy-formulation analytical tools to develop their own strategies and objectives.

true

The firm should pursue aggressive strategies if the coordinates of a SPACE directional vector are (5,4).

true

Good intuitive judgment is always needed to determine appropriate weights and ratings in the input stage matrices.

True

Which of these quadrants in SPACE Matrix implies staying close to the firm's basic competencies and not taking excessive risks?a. Conservativeb. Competitivec. Defensived. Aggressivee. None of these

a

All of the following situations are conducive to market development except:a. when an organization competes in a high-growth industry.b. when an organization is very successful at what it does.c. when new untapped or unsaturated markets exist.d. when an organization has excess production capacity.e. when an organization's basic industry is becoming rapidly global in scope.

a

. The __________ stage includes an Internal Factor Evaluation Matrix and a Competitive Profile Matrix. a. input b. matching c. decision d. penetration e. research

a

. The most ideal situation for a company to be in on the TOWS Matrix would be if they had all a. SO strategies. b. WO strategies. c. ST strategies. d. WT strategies.

a

78. Which strategy seeks to increase market share of present products or services in present markets through greater marketing efforts.a. market penetration b. forward integration c. market development d. backward integration e. product development

a

Firms located in which quadrant of the Grand Strategy Matrix are in an excellent strategic position?a. Ib. IIc. IIId. IV

a

How would a division with a low relative market share position in a high growth industry be described?a. Question markb. Cash cowc. Stard. Stuck-in-the-middlee. Dog

a

. Strategy analysis and choice largely involves making __________ decisions based on __________ information.a. long-term; short-term b. subjective; objective c. short-term; long-term d. subjective; short-term e. objective; subjective

b

. The ________ stage involves a single technique, QSPM. a. Stage 2 b. Decision c. Input d. Matching e. Stage 1

b

. The purpose of each Stage 2 matching tool is to a. identify the strengths, weaknesses, opportunities and threats of the firm. b. generate the feasible alternative strategies for the firm. c. pick the best strategy for the firm to carry out. d. decide who the company's major competitors are.

b

. Which strategy should an organization use if it competes in a no-growth or a slow-growth industry.a. divestitureb. related diversificationc. backward integrationd. unrelated diversificatione. retrenchment

b

102. __________ is not an input stage matrix. a. IFE b. IE c. CPM d. EFE

b

106. Poor product quality, coupled with reliable suppliers, would suggest a. WT strategies. b. WO strategies. c. ST strategies. d. SO strategies.

b

In the QSPM, a minimum of _______ internal and ______ external critical success factors should be included.a. 2; 2b. 4; 4c. 10; 10d. 40; 40e. 20; 20

c

Integration strategies are sometimes collectively referred to as which of these strategies? a. Horizontal integration b. Diversification c. Vertical integration d. Stuck-in-the-middle e. Hierarchical integration

c

. Which strategies use a firm's strengths to avoid or reduce the impact of external threats? a. SW b. WO c. SW d. ST e. WT

d

100. Each of the nine techniques included in the strategy formulation framework rely on the use of a. strictly factual data. b. luck. c. financial formulas and statistics. d. intuition and analysis. e. synergy.

d

Win-Dixie closing one-third of its stores and eliminating 22,000 jobs in an attempt to emerge from bankruptcy would be an example of:a. divestiture.b. backward integration.c. liquidation.d. retrenchment.e. forward integration.

d

. Divestiture is the selling of land a firm owns.

false

A TOWS Matrix is composed of four cells for four types of strategies it creates.

false

A differentiation strategy can only be achieved with a small target market.

false

. Product development is a strategy that seeks increased sales by improving or modifying present products or services.

true

WT strategies are defensive tactics.

true

. Budget Rent-a-Car opening car rental shops in Wal-Mart stores is an example of which type of strategy? a. forward integration b. backward integration c. horizontal integration d. related diversification e. unrelated diversification

a

. In which situation would horizontal integration be an especially effective strategy? a. When an organization can gain monopolistic characteristics in a particular area or region without being challenged by the federal government for "tending substantially" to reduce competition. b. When an organization competes in a slowing industry. c. When decreased economies of scale provide major competitive advantages. d. When an organization has neither the capital nor human talent needed to successfully manage an expanded organization. e. When competitors are succeeding due to managerial expertise or having particular resources an organization possesses.

a

For companies located in Quadrant III of the Grand Strategy Matrix, the first strategy recommended isa. extensive cost and asset reduction.b. asset expansion.c. employee expansion.d. immediate liquidation of assets.

a

In the SPACE analysis what does a (+6, +3) strategy profile portray?a. A strong industryb. An unstable environmentc. A stable environmentd. A weak industrye. A weak financial position

a

The culture of a firm is important when considering strategies becausea. cultural products can support strategies so managers can often implement changes swiftly and easily.b. everyone in the firm should have a vote as to which strategies to implement.c. culture can dictate the choice of strategies.d. Employees always welcome cultural change.

a

__________ is included in the decision stage of the strategy formulation framework.a. Internal Factor Evaluation Matrixb. Quantitative Strategic Planning Matrixc. BCG Business Portfolio Matrixd. Grand Strategy Matrixe. SPACE Matrix

b

__________ reveals whether aggressive, conservative, defensive, or competitive strategies are most appropriate. a. Grand Strategy Matrix b. SPACE Matrix c. Competitive Profile Matrix d. TOWS Matrix e. QSPM

b

______________ is common to the defensive and conservative quadrants of a SPACE Matrix.a. Product developmentb. Concentric diversificationc. Divestitured. Market penetratione. Retrenchment

b

. A TOWS Matrix is composed of __________ cells. a. four b. six c. nine d. eight e. two

c

. A(n) __________ reveals the relative attractiveness of alternative strategies and thus provides an objective basis for selecting specific strategies. a. TOWS b. SPACE c. QSPM d. IFE e. CPM

c

. Which level of strategy is most likely not present in small firms? a. Corporate/company b. Functional c. Divisional d. Operational e. All of these are present in small firms

c

. __________ is known as the tactic of shifting focus from specific issues to more general ones.a. Equifinalityb. Focus on higher-order issuesc. Generalizationd. Satisficinge. None of the above

c

105. __________ is not a TOWS strategy. a. SO b. WO c. SW d. ST e. WT

c

A(n) __________ strategy could be most effective when a firm has excess production capacity and its basic industry is experiencing declining sales and profits.a. backward integrationb. forward integrationc. concentric diversificationd. joint venturee. integration

c

According to Porter, which strategy offers products or services to a small range of customers at the lowest price available on the market?a. low-costb. best-valuec. low-cost focusd. best-value focuse. differentiation

c

Bankruptcya. should never be used as a strategy.b. should be used only when one is legally forced to do so.c. can be an effective type of retrenchment strategy.d. should only be used for large firms.e. should only be used for small, private firms.

c

The BCG Matrix limitations includea. being a time-consuming and costly analysis.b. requiring at least three years' worth of data.c. not reflecting divisional or industry growth over time.d. not allowing a company to be classified as somewhere in between two categories.e. both c & d.

e

Selling all of a company's assets in parts for their tangible worth is calleda. joint venture.b. divestiture.c. concentric diversification.d. liquidation.e. unrelated integration.

d

Which of the following is most likely not included in the functional level of a small company? a. Finance b. Marketing c. R & D d. Department managers e. Human resource managers

d

Which of the following is not a reason joint ventures fail?a. Managers who must collaborate daily in operating the venture are not involved in forming or shaping the venture.b. The venture may not be supported equally by both partners.c. The venture may benefit the partnering companies but may not benefit the customers who then complain about poorer service or criticize the companies in other ways.d. Stakeholders from both partners are equally satisfied.e. The venture may begin to compete more with one of the partners than the other.

d

Which of the following is not a step of a TOWS Matrix? a. List the firm's key external threats b. Match strengths with external opportunities and record the resultant SO strategies in the appropriate cell c. Match internal weaknesses with external threats and record the resultant WT strategies d. List the firm's external weaknesses e. List the firm's external threats

d

Which of these is not a SPACE Matrix quadrant? a. Aggressive b. Defensive c. Competitive d. Offensive e. Conservative

d

Which of these strategies is effective when the number of suppliers is small and the number of competitors is large? a. Conglomerate diversification b. Forward integration c. Concentric diversification d. Backward integration e. Horizontal diversification

d

Which strategy generally entails large research and development expenditures?a. market penetrationb. retrenchmentc. forward integrationd. product developmente. divestiture

d

__________ means it is possible to achieve similar results using different means or pathsa. Generalizationb. Satisficingc. Focus on higher-order issuesd. Equifinalitye. Specialization

d

__________ should not be included as a factor in the Environmental Stability (ES) computation.a. Technological changesb. Competitive pressurec. Rate of inflationd. Liquiditye. Seasonal effects

d

Long-term objectives are needed at which level(s) in an organization?a. Corporateb. Divisionalc. Functionald. All of thesee. None of these

d.

. All of the following are important factors in the Balanced Scorecard except: a. customer service. b. employee morale. c. product quality. d. business ethics. e. stockholder equity.

e

. The __________ determines the relative attractiveness of various strategies based on the extent to which key external and internal critical success factors are capitalized.a. BCG Matrixb. SPACE Matrixc. TOWS Matrixd. IE Matrixe. QSPM

e

. Under which condition would a cost leadership strategy be especially effective?a. When there are many ways to differentiate the product or service and many buyers perceive these differences as having value.b. When buyer needs and uses are diversec. When few rival firms are following a similar approachd. When technological change is fast paced and competition revolves around rapidly evolving product features.e. When the products of rival sellers are essentially identical and supplies are readily available from any of several eager sellers.

e

. What principle is built on the idea that there is no general plan for which way to go and what to do? a. Managing by crisis b. Managing by extrapolation c. Managing by objectives d. Managing by hope e. Managing by exception

e

. __________ strategies are defensive tactics directed at reducing internal weaknesses and avoiding environmental threats. a. SO b. WO c. SW d. ST e. WT

e

Adding new, unrelated products or services for present customers is calleda. forward integration.b. related diversification.c. backward integration.d. conglomerate diversification.e. unrelated diversification.

e

All of the following are cooperative arrangements except:a. R&D partnerships.b. joint-bidding consortia.c. cross-licensing agreements.d. cross-manufacturing agreements.e. marketing plans.

e

Mergers and acquisitions are created for all of the following reasons except toa. gain new technology.b. reduce tax obligations.c. gain economies of scale.d. smooth out seasonal trends in sales.e. increase its number of employees.

e

The __________ of the strategy formulation framework contains the TOWS Matrix, the SPACE Matrix, the Grand Strategy Matrix and the Competitive Profile Matrix. a. input stage b. matching stage c. decision stage d. output stage e. None of the above

e

What is the highest number of strategies that can be examined at one time with the QSPM?a. 5b. 2c. 1d. 10e. There is no limit.

e

When a domestic company first begins to export to India, it is an example ofa. horizontal integration.b. backward integration.c. forward integration.d. concentric diversification.e. market development.

e

Which of the following is not an example of when an organization should use an unrelated diversification strategy?a. When revenues derived from an organization's current products or services would increase significantly by adding the new unrelated, products.b. When an organization's present channels of distribution can be used to market the new products to current customers.c. When the new products have counter-cyclical sales patterns compared to an organization's present products.d. When an organization competes in a highly competitive and/or a no-growth industry.e. When the organization has a strong management team.

e

Which of the following is the first step in developing QSPM?a. Compute the Total Attractiveness Scoresb. Examine the Stage 2 matrices and identify alternative strategies the organization should consider implementingc. Assign weights to each key external and internal factord. Determine the Attractiveness Scorese. Make a list of the firm's key external opportunities/threats and internal strengths/weaknesses in the left column of the QSPM

e

Which of these do QSPM limitations include?a. Only a few strategies can be evaluated simultaneouslyb. The cost of doing the analysisc. Subjective judgments and educated guesses are requiredd. It is only as good as the prerequisite input information and matching analyses upon which it is basede. Both c & d

e

Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies? a. Input b. Output c. Decision d. Stage 3 e. Matching

e

Which strategy would be effective when the stockholders of a firm can minimize their losses by selling the organization's assets.a. integrationb. differentiationc. diversificationd. cost leadershipe. liquidation

e

"If it ain't broke, don't fix it" refers to managing by crisis.

false

. A best-value strategy offers products or services to a wide range of customers at the lowest price on the market.

false

. A chief executive officer is located in the divisional level of a large firm.

false

. A growing trend is for franchisers to buy out their part of the business from their franchisees.

false

. Although bankruptcy can be an effective type of retrenchment strategy, it does not allow firms to avoid major debt obligations and to void union contracts.

false

. Basic input information for the matching and decision stage matrices is provided by the information derived from SPACE, TOWS and BCG matrices.

false

. Divestiture would be an appropriate strategy when a need exists to introduce a new technology quickly.

false

. Generally, small organizations have a business plan whereas large organizations have culture.

false

. Horizontal integration is an appropriate strategy when the competitors of an organization are doing poorly.

false

. Increasing advertising expenditures can be a market development strategy.

false

. Jiffy Lube International would be a good example of a firm seeking the best-value focus strategy.

false

. Market penetration, market development, product development and joint venture are intensive strategies.

false

. Research shows strategic management in small firms is more formal than in large firms, but large firms that engage in strategic management outperform those that do not.

false

. SO strategies are based on using a firm's internal strengths to take advantage of external opportunities and threats.

false

. Stage 2 in the strategy-formulation framework involves a single technique, the Quantitative Strategic Planning Matrix.

false

. Star, question mark, cash cow and dogs are the four quadrants exhibited by the SPACE Matrix.

false

. Strategic objectives include those associated with growth in revenues, growth in earnings, higher dividends, larger profit margins and improved cash flow.

false

. Strategists in governmental organizations operate with far more strategic autonomy than their counterparts in private firms.

false

. The number of internal factors and external factors in the matching stage is reduced to generate feasible strategies

false

. The related diversification strategy is effective when an organization has a weak management team.

false

. There are four basic types of diversification: concentric, conglomerate, forward and backward.

false

. Total attractiveness scores are defined as the sum of the attractiveness scores in a given column of the QSPM.

false

A differentiation strategy can be especially attractive when the industry has many different niches and segments, thereby allowing a focuser to pick a competitively attractive niche suited to its own resources.

false

A firm should pursue competitive strategies if the coordinates of a SPACE directional vector are (4,6).

false

A firm should pursue defensive strategies if the coordinates of a SPACE directional vector are (2,3).

false

According to Porter, strategies allow organizations to gain competitive advantage from three different bases: cost leadership, differentiation and integration.

false

Alternative strategies derived from the TOWS Matrix, SPACE Matrix, BCG Matrix, IE Matrix and Competitive Profile Matrix are included in the QSPM's top row.

false

BCG Matrix requires more information about the divisions than the IE Matrix.

false

Cash cows represent the organization's best long-run opportunities for growth and profitability.

false

Companies are avoiding outsourcing more and more because it is more expensive than traditional methods and it does not allow a firm to concentrate on core competencies.

false

Divestiture is selling all of a company's assets, in parts, for their tangible worth.

false

Divisions in Quadrant IV are called dogs because the organization must decide whether to strengthen them by pursuing intensive strategies or engaging in joint venture.

false

Dogs on the BCG Matrix usually become stars after market penetration.

false

From matching an internal weakness with an external threat, a WT strategy in the TOWS Matrix could result.

false

Gaining a differentiation advantage is a primary reason for pursuing forward, backward, and horizontal integration strategies.

false

Identifying and evaluating alternative strategies shouldn't involve the managers and employees who earlier assembled the organizational vision and mission statements, performed the external audit and conducted the internal audits.

false

If a firm's present suppliers are expensive and unreliable in meeting the firm's needs for parts, components and/or raw materials, the firm should pursue a horizontal integration strategy.

false

In performing SPACE analysis, barriers to entry into market are best categorized as a competitive advantage (CA) variable.

false

Integration and diversification strategies are most often included in competitive strategies in a SPACE Matrix.

false

Matching strengths with weaknesses is how SW strategies are created.

false

Now averaging 18 members rather than 12 as they did a few years ago, the trend in America is toward larger boards.

false

The relative desirability of one strategy over another is indicated by the magnitude of the difference between the total attractiveness scores in a given set of strategic alternatives.

false

. For consumers who are price sensitive, cost leadership emphasizes producing standardized products at very low per-unit cost.

true

. Forward integration strategy is especially effective when the availability of quality distributors is so limited as to offer a competitive advantage to those firms that integrate forward.

true

. Gaining ownership or increased control over distributors or retailers is called forward integration strategy.

true

. Horizontal integration is seeking ownership or increased control over competitors.

true

. In a turbulent, high-velocity market, a lead-change strategy is best whenever the firm has the resources to pursue this approach.

true

. Joint ventures tend to fail when managers who must collaborate daily in operating the venture are not involved in forming or shaping the venture.

true

. Long-term objectives represent the results expected from pursuing certain strategies.

true

. Market development includes introducing present products into new geographic areas.

true

. Most companies favor related diversification strategies in order to exploit common use of a well-known brand name.

true

. Objectives provide direction and allow for organizational synergy.

true

. Only to get into a situation where they can work from strengths to take advantage of opportunities, organizations generally will pursue the other three types of strategies (WO, ST, or WT).

true

. Product development is an appropriate strategy when an organization has successful products that are in the maturity stage of the product life cycle.

true

. Retrenchment and turnaround are the same strategy.

true

. Shifting focus from specific issues to more general ones may increase strategists' options for gaining organizational commitment.

true

. Strategic objectives include larger market share, quicker on-time delivery than rivals, quicker design-to-market times than rivals, lower costs than rivals, and wider geographic coverage than rivals.

true

. The ES and CA dimension variables in a SPACE Matrix are assigned a numerical value ranging from -1 (best) to -6 (worst).

true

. The major overall benefit of the BCG Matrix is that it draws attention to the cash flow, investment characteristics and needs of an organization's various divisions.

true

. The nonprofit sector is America's largest employer.

true

. Unrelated diversification is an appropriate strategy when an organization's present channels of distribution can be used to market the new products to current customers.

true

. Viewing businesses as star, cash cow, dog, or question mark is an oversimplification.

true

37. The Boston Consulting Group Matrix is good for firms with many "profit centers."

true

A cost leadership strategy can be especially effective when most buyers use the product in the same way.

true

A positive feature of OSPM is that sets of strategies can be examined sequentially or simultaneously.

true

A strategy of seeking ownership or increased control of a firm's supplier is backward integration.

true

The first stage of the strategy-formulation framework is the input stage, followed by the matching stage.

true

The left column of a QSPM consists of information taken directly from the Internal Factor Evaluation Matrix and the External Factor Evaluation Matrix.

true

The most important determinants of an organization's overall strategic position are considered to be the two internal dimensions, financial strength (FS) and competitive advantage (CA), and the two external dimensions, industry strength (IS) and environmental stability (ES).

true

The purpose of each stage 2 matching tool is to generate feasible alternative strategies, not to select or determine which strategies are best.

true

The purpose of matching key factors is to generate feasible alternative strategies.

true

The size of the circle in a BCG Matrix corresponds to the proportion of corporate revenue generated by that business unit. The pie slice indicates the proportion of corporate profits generated by that division.

true

To objectively evaluate feasible alternative strategies identified in Stage 2, the QSPM uses input information derived from Stage 1.

true

When an acquisition or merger is not desired by both parties, it is called a takeover or hostile takeover.

true

Whenever two firms merge, it becomes especially important to evaluate and consider culture-strategies linkages.

true

What are two external dimensions of SPACE Matrix?a. Environmental stability and industry strength.b. Environmental stability and competitive advantage.c. Industry strength and competitive advantaged. Competitive advantage and financial strength.e. Financial strength and industry strength.

a

What is the BCG Matrix ideal for analyzing?a. Companies with more than one divisionb. All companiesc. Companies with annual sales greater than $1 milliond. Companies with annual sales of less than $1 millionc. Large companiesAns: a Page: 206

a

What kind of strategy is retrenchment?a. A turnaround or reorganization strategyb. An expansion strategyc. A conglomerate strategyd. An intensive strategye. An offensive strategy

a

What principle is based on the belief that the true measure of a really good strategist is the ability to solve problems? a. Managing by crisis b. Managing by objectives c. Managing by extrapolation d. Managing by exception e. Managing by hope

a

What term is defined as the product of multiplying ratings by attractiveness scores in each row of the QSPM?a. Total attractiveness scoresb. Sum total attractiveness scoresc. Weighted scoresd. Total weighted scorese. Factors

a

When a division of an organization has a high relative market share and is in a fast-growing industry, it is called aa. star.b. cash cow.c. question mark.d. dog.

a

Which of these is an attractive strategy for a cash cow division?a. Concentric diversificationb. Horizontal integrationc. Conglomerate diversificationd. Backward integratione. Forward integration

a

__________ in the Grand Strategy Matrix is recommended for a firm with rapid market growth and a strong competitive position.a. Market penetrationb. Conglomerate diversificationc. Joint ventured. Retrenchmente. Liquidation

a

A division with a high relative market share position in a low-growth industry can be described as aa. star.b. cash cow.c. question mark.d. dog.e. failure.

b

Although Quadrant _____ companies are growing, according to the Grand Strategy Matrix, they are unable to compete effectively, and they need to determine why the firm's current approach is ineffective and how the company can best change to improve its competitiveness.a. Ib. IIc. IIId. IV

b

Financial objectives involve all of the following except: a. growth in revenues. b. larger market share. c. higher dividends. d. greater return on investment. e. a rising stock price.

b

The BCG Matrix and the IE Matrix are different in all of the following aspects excepta. their axes.b. the IE requires more information about the divisions than the BCG Matrix.c. the way they plot organizational divisions.d. their strategic implications.

b

The BCG measures relative market share position asa. a division's sales compared to the sales of similar companies.b. a division's market share divided by the market share of the largest rival in that industry.c. the number of products a division has on the market compared to the competitors.d. the number of employees in a division compared to the number of employees in the largest rival in the industry.

b

Under which condition would a differentiation strategy be especially effective?a. When the target market niche is large, profitable and growingb. When technological change is fast paced and competition revolves around rapidly evolving product features.c. When industry leaders do not consider the niche to be crucial to their own success.d. When the industry has many different niches and segments, thereby allowing a company to pick a competitively attractive niche suited to its own resources.e. When few, if any, other rivals are attempting to specialize in the same target segment.

b

Under which strategy would you offer products or services to a wide range of customers at the lowest price available on the market?a. low-costb. best-valuec. low-cost focusd. best-value focuse. differentiation

b

What includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes and heroines that describe a firm?a. Strategyb. Culturec. Missiond. Objectivese. QSPM

b

What occurs when two or more companies form a temporary partnership or consortium for the purpose of capitalizing on some opportunity.a. Retrenchmentb. A joint venturec. Liquidationd. Forward integratione. Divestiture

b

What should be included in strategies in the QSPM?a. all strategies suggested by Stage 2 matrices.b. only the best or most promising strategies suggested by Stage 2 matrices.b. strategies that will assure organizational success.c. strategies that encourage corporate expansion.

b

What term refers to selling a division of an organization.a. Joint ventureb. Divestiturec. Concentric diversificationd. Liquidatione. Horizontal integration

b

What type of strategies would you recommend when a firm's SPACE Matrix directional vector has the coordinates (-2, +3)?a. Aggressiveb. Conservativec. Competitived. Defensivee. Integrative

b

When companies take over functional operations of other firms, such as human resources, information systems, payroll, accounting, or customer service, this is calleda. marketing.b. outsourcing.c. licensing.d. franchising.e. divestiture.

b

When two organizations of about equal size unite to form one enterprise, which of these occurs?a. hostile takeoverb. mergerc. acquisitiond. LBOe. divestiture

b

Which strategies aim at improving internal weaknesses by taking advantage of external opportunities? a. SO b. WO c. SW d. ST e. WT

b

Which strategy is appropriate when an organization competes in an industry characterized by rapid technological developments?a. retrenchmentb. product developmentc. backward integrationd. liquidatione. market penetration

b

Which strategy should be implemented when a division is responsible for an organization's overall poor performance?a. backward integrationb. divestiturec. forward integrationd. cost leadershipe. related diversification

b

Retrenchment would be an effective strategy when an organizationa. has shrunk so quickly that major internal reorganization is needed.b. is one of the stronger competitors in a given industry.c. is plagued by inefficiency, low profitability, poor employee morale and pressure from stockholders to improve performance.d. has decided to capitalize on opportunities, maximize threats, take advantage of strengths and overcome weaknesses.e. does not have a clearly distinctive competence and has failed to meet its objectives and goals consistently over time.

c

Stage 1 consists of IFE, EFE and CPM. What stage is this in the strategy formulation framework? a. Output b. Decision c. Input d. Matching e. Functional

c

The Grand Strategy Matrix can be used to evaluate competitive position and market growth fora. individual products.b. company divisions and individual products.c. whole companies and company divisions.d. just whole companies.

c

The two positive-rated dimensions on SPACE Matrix are a. FS and CA. b. CA and ES. c. FS and IS. d. IS and ES. e. FS and ES.

c

Web sites to sell products directly to consumers are examples of which type of strategy? a. backward integration b. product development c. forward integration d. horizontal integration e. conglomerate diversification

c

Which strategy would be most appropriate when the distinctive competencies of two or more firms complement each other especially well?a. Conglomerate diversificationb. Divestiturec. Joint ventured. Retrenchmente. Integration

c

__________ is not a Stage 2 matching technique. a. The SPACE Matrix b. The Grand Strategy Matrix c. The Competitive Profile Matrix d. The Business Portfolio Matrix e. The TOWS Matrix

c

. Goodyear Tire & Rubber Co. selling its North American farm-tire business to Titan International is an example of which type of strategy? a. related diversification b. unrelated diversification c. retrenchment d. divestiture e. liquidation

d

. If an organization were to match high employee turnover with increased local competition, what type of strategies would be appropriate? a. SO strategies b. WO strategies c. ST strategies d. WT strategies

d

. If the SPACE Matrix directional vector falls in the aggressive quadrant, which of these strategies are not appropriate?a. Intensiveb. Integrativec. Diversificationd. Defensivee. Combination

d

. Most likely, a cash cow was what in the past?a. dogb. question markc. calfd. stare. failure

d

. The top row of a QSPM consists of alternative strategies derived from all of these excepta. TOWS Matrix.b. BCG Matrix.c. Space Matrix.d. CPM Matrix.e. IE Matrix.

d

. What refers to a strategy of seeking ownership of or increased control over a firm's competitors? a. Forward integration b. Conglomerate diversification c. Backward integration d. Horizontal integration e. Concentric diversification

d

137. What has four quadrants based on two dimensions: competitive position and market growth?a. Competitive Profile Matrixb. TOWS Matrixc. SPACE Matrixd. Grand Strategy Matrixe. QSPM

d

A firm located in the aggressive quadrant of the SPACE Matrix should use its internal strengths to a. take advantage of external opportunities. b. overcome internal weaknesses. c. avoid external threats. d. do all of the above.

d

According to journalists' findings, what is a serious obstacle for many small business owners.a. a lack of business ethicsb. an excess of employees and managerial staffc. a lack of experience in networkingd. a lack of strategic-management knowledgee. having too many suppliersEssay

d

Adding new, unrelated products or services is calleda. forward integration.b. related diversification.c. backward integration.d. conglomerate diversification.e. unrelated diversification.

d

Advanced Medical Optics using acquisitions to obtain all medical aspects of eye care, from laser surgery to contacts to implants for all ages is an example of which type of strategy? a. forward integration b. backward integration c. horizontal integration d. market development e. product development

d

Backward integration is effective in all of these except: a. when an organization competes in an industry that is growing rapidly. b. when an organization has both capital and human resources to manage the new business of supplying its own raw materials. c. when an organization needs to acquire a needed resource quickly. d. when the advantage of stable prices are not important. e. when present suppliers have high profit margins.

d

Financial strengths are measured on the SPACE Matrix by variables such as investment, leverage, liquidity, working capital and a. ease of entry into the market. b. product quality. c. operations and facilities. d. working capital.

d

Matching internal strengths with external opportunities is part of which section of the TOWS Matrix? a. The WT cell b. The WO cell c. The ST cell d. The SO cell e. The center four cells

d

Quadrant _____ organizations have a strong competitive position but are in a slow-growth industry, according to the Grand Strategy Matrix.a. Ib. IIc. IIId. IV

d