mgmt exam 2
The Global Capsule in Chapter 5 says perhaps the best variable to monitor and to use to decide where to begin doing business is what factor?
Gross Domestic Product
What strategy seeks to increase market share for present products or services in present markets through greater marketing efforts?
Market penetration
What are the four types of strategies generated by a SWOT analysis?
SO, WO, ST, WT
In developing a SPACE Matrix, what term (axis) refers to the volatility of profits and revenues for firms in a given industry?
SP
Which statement is a limitation of the SWOT?
SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
What is a major limitation of the BCG Matrix?
The BCG Matrix does not reflect whether various divisions or their industries are growing over time.
What strategy may be best under the following conditions? The organization competes in a highly competitive or a no-growth industry, as indicated by low industry profit margins and returns. The organization's present channels of distribution can be used to market new products to current customers. New products have countercyclical sales patterns compared with an organization's present products. The organization's basic industry is experiencing declining annual sales and profits.
Unrelated diversification
Which of the following statements is FALSE?
Value chain analysis and benchmarking are opposite ways to address the management of resources.
What is Rudin's Law?
When a crisis forces choosing among alternatives, most people choose the worst possible one.
The two general types of diversification strategies are related diversification and unrelated diversification. When are businesses said to be related?
When their value chains possess competitively valuable cross-business strategic fits
Which statement below is FALSE? Question content area bottom Part 1 A. QSPM analysis should be performed after EPS/EBIT analysis. This is the correct answer. B. If you have more than one strategy in the QSPM, then let the AS scores range from 1 to "the number of strategies being compared." Your answer is not correct. C. In a QSPM, never assign duplicate AS scores across a row. D. In a QSPM, if you assign an AS score to one strategy, then assign an AS score(s) to the other; in other words, if one strategy receives a dash, then all others must receive a dash in a given row. E. In a QSPM, an AS value of 4 is 33 percent more important than a 3.
a
If a company has high customer loyalty (like Harley-Davidson does), what rating would be appropriate for that factor in a SPACE Matrix?
-1 on CP axis
What would be an appropriate SP axis number for Apple Inc.?
-6
An industry can be stable or unstable on SP, yet high or low on IP. The smartphone industry, for instance, would be unstable (_____) on SP yet high-growth on IP, whereas the canned food industry would be stable (_____) on SP yet low-growth on IP.
-6,-2
Four companies—A, B, C, and D—have revenues of 1, 2, 3, and 4, respectively. Company C develops a BCG Matrix. What would the RMSP be for company C if all four firms have the same net income?
.75
VCA is the process whereby a firm determines the value (price minus cost) of each and all activities ______.
that went into producing and marketing a product
The firm should pursue conservative strategies if the coordinates of a SPACE directional vector are (-1, +4).
true
A pasta manufacturer's purchase of some pet food brands is an example of
unrelated diversification
What kind of strategy is retrenchment?
A turnaround strategy
The time frame for long-term objectives and strategies should be consistent, usually from ______ to ______ years.
2-5
The strategy-formulation analytical framework consists of how many stages and how many matrices?
3 & 9
If a corporation's profits are $120, and its three divisions have $30, $80, and $10 of profits respectively, and equal revenues, what percent is the pie slice in Division 3?
33.3
Any industry whose annual growth in sales exceeds ______ percent could be considered to have rapid growth.
5
Secondary buyouts occur when what happens?
A private equity firm buys a firm from another private equity firm
Hobby Lobby CEO David Green says, "The secret to being a great manager is to manage by the book." To what book is he referring?
BIBLE
If an organization's present suppliers are especially expensive, unreliable, or incapable of meeting the firm's needs for parts, components, assemblies, or raw materials, what strategy is best?
Backward integration
What are two major types of bankruptcy?
Chapters 7 and 11
According to Michael Porter, strategies allow organizations to gain competitive advantage from two different bases. What are the bases?
Cost leadership and differentiation
According to Porter, strategies allow organizations to gain competitive advantage from two different bases. What are the bases?
Cost leadership and differentiation
When a core competence evolves into a major competitive advantage, what is it called?
Distinctive competence
The largest consumer-products company in the world, Procter & Gamble (P&G), is in the process of selling more than half of its brands (nearly 100) in order to focus on its core brands (about 80). What is this strategy called?
Divestiture
Which statement below is FALSE? Question content area bottom Part 1 A. Successful strategists let weakly supported ideas and proposals die through inaction. B. Successful strategists establish additional hurdles or tests for strongly supported ideas considered unacceptable but not openly opposed. C. Successful strategists keep a low political profile on unacceptable proposals and strive to let most negative decisions come from subordinates or a group consensus. D. Successful strategists commonly have the title chief executive officer or president. Your answer is not correct. E. Successful strategists are generally iridescent.
E
The two positive-rated dimensions on the SPACE Matrix are
FP and IP
If Gap opens five stores for the first time in China, this is an example of which type of strategy?
Market development
Nonprofit organizations are basically just like for-profit companies except for two major differences. What is one of the differences?
Nonprofits do not pay taxes or have shareholders.
What is the name of the strategy that involves selling off land and buildings to raise needed cash, pruning product lines, closing marginal businesses, closing obsolete factories, automating processes, reducing the number of employees, and instituting expense control systems?
Retrenchment
Which statement below is FALSE? Question content area bottom Part 1 A. Successful strategists do a lot of chatting and informal questioning to stay abreast of how things are progressing and to know when to intervene. B. Successful strategists lead strategy but do not dictate it. They give few orders, announce few decisions, depend heavily on informal questioning, and probe and clarify until a consensus emerges. C. Successful strategists ensure that all major power bases within an organization are represented in, or have access to, top management. D. Successful strategists are commonly difficult to get along with in social settings. Your answer is correct. E. Successful strategists may be small business owners or college presidents.
Successful strategists are commonly difficult to get along with in social settings.
There are four important differences between the BCG Matrix and the IE Matrix. Which statement below is NOT a difference between the two matrices?
The sizes of the circles and pie slices can vary.
What type of strategy aims to target a new market where competition is not yet present instead of going where many firms are already competing on price and the gains of one firm are often at the expense of another?
blue ocean
First mover advantages refers to the benefits a firm may achieve by entering a new market or developing a new product or service prior to rival firms. An advantage of being a first mover is ______.
carving out market share and a position that is easy to defend and costly for rival firms to overtake
In a BCG Matrix, divisions in Quadrant III (lower left) have a high relative market share position but compete in a low-growth industry. They are called ______.
cash cows
Under which strategy would you offer products or services to a wide range of customers at the lowest price available on the market?
cost leadership - low cost
______ is the unique way an organization does business. It is the human dimension that creates solidarity and meaning, and it inspires commitment and productivity in an organization when strategy changes are made.
culture
When an organization splits into two or more parts, this type of strategy is a _____.
divestiture
Which term refers to selling a division or part of an organization?
divestiture
Which level of strategy is most likely NOT present in small firms?
divisional
Gaining ownership or increased control over distributors or retailers is called _____.
forward integration
The chapter lists six reasons why many mergers and acquisitions fail, including which of the following?
inability to achieve synergy
______ is a popular strategy that occurs when two or more companies form a temporary partnership or consortium for the purpose of capitalizing on some opportunity.
joint venture
When an organization has pursued both a retrenchment strategy and a divestiture strategy and neither has been successful, then perhaps the best strategy is ______.
liquidation
Which of the following is NOT one of the steps involved in constructing a SWOT Matrix?
list the firm's external weaknesses
The old adage, "If it ain't broke, don't fix it" pertains to which of the following?
managing by extrapolation
According to the Grand Strategy Matrix, which strategy is recommended for a firm with rapid market growth and a strong competitive position?
market penetration
When two organizations of about equal size unite to form one enterprise, which of these occurs?
merger
Which statement below is FALSE?
n a QSPM, the range for Total Attractiveness Scores is 1=not attractive, 2=somewhat attractive, 3=reasonably attractive, and 4=highly attractive.
The ______ Matrix determines the relative attractiveness of various strategies based on the extent that key external and internal factors are capitalized on or improved.
qspm
In a BCG Matrix, ______ is defined as the ratio of a division's own market share (or revenues) in a particular industry to the market share (or revenues) held by the largest rival firm in that industry.
relative market share position
Forward integration and backward integration are sometimes collectively referred to as
vertical integration
In the Boston Consulting Group (BCG) Matrix, which element represents the industry growth rate in sales, measured in percentage terms?
y axis
In a QSPM analysis, would it ever be appropriate or useful for a company not to include a weight column at all, but rather total the AS columns to determine the relative attractiveness of six strategies?
yes
Going clockwise beginning with the top axis, what are the four axes of a SPACE Matrix?
FP, IP, SP, and CP
Objectives should include which of the following characteristics?
Measurable, challenging, and hierarchical
In both the BCG and IE Matrices, the size of each circle represents the percentage of _______ contribution of each division, and pie slices reveal the percentage of _____ contributed of each division to the company.
revenues; operating profits