Strategic Management Test 1 Ch. 1-4

The ______ environment is composed of segments external to an industry that are usually beyond a firm's control, such as demographics and economic factors, that can affect a firm's strategy.

general

A firm's vision, mission, and strategic objectives form a hierarchy of ______

goals

The bargaining power of buyers depends on the ______.

importance of purchases from that group compared with the industry's overall business

Social responsibility is the expectation that businesses or individuals will strive to ______.

improve the overall welfare of society

The Internet may ______ buyer power by providing consumers more information to make buying decisions and by ______ switching costs.

increase; lowering

According to value-chain analysis, a firm ______.

is profitable when the value it receives exceeds total costs

Match the type of leader (on the left) with the corresponding description (on the right).

local line leaders - have significant profit-and-loss responsibility executive leaders - guide ideas, create a learning infrastructure, and call for action Internal networkers - have little formal authority, inspire others with conviction and clarity of ideas

Which of the following are characteristics of a well-written organizational vision statement? (Check all that apply.)

long-term overarching massively inspiring

A CEO can improve perceptual acuity by ______. (Check all that apply.)

meeting with and listening to others seeking out information

A(n) ______ includes both the company's purpose as well as the basis of competition and competitive advantage.

mission statement

According to the __________ view of leadership, the leader is assumed to be the most important element in a company's success or failure.

romantic

The three primary participants in corporate governance are the ______, management, and board of directors.

shareholders

Corporate governance is the relationship among ______ in determining the direction and performance of corporations.

shareholders, management, and the board of directors

The ______ segment of the general environment consists of the values, beliefs, and lifestyles of a society.

sociocultural

The effect on the business clothing and restaurant industries due to an increase of women in the workforce are examples of which segment of the general environment?

sociocultural

Increases in household income due to more women entering the workforce in white collar jobs is likely to affect which two segments the most?

sociocultural and economic

Two approaches to evaluate firm performance include which of the following? (Check all that apply.)

stakeholder view (balance scorecard) financial ratio analysis

______ is a technique for measuring the performance of a firm according to its balance sheet, income statement, and market valuation.

Financial ratio analysis

Strategy ______ consists of decisions made by firms regarding investments, commitments, and other aspects of operations that create and sustain a competitive advantage.

Formulation

Strategic management is directed toward a company's ______.

Goals and Objectives

Strategic management is directed toward the organization's overall organizational _____ and _____.

Goals, Objectives

The SWOT framework is popular with managers for several reasons, including which of the following?

It forces managers to consider both the internal and external factors simultaneously.

______ refers to the function of purchasing inputs used in the firm's value chain.

Procurement

Which of the following actions should firms take to build sustainability capabilities in both primary and support activities in the value chain? (Check all that apply.)

Research and development Finance Marketing Procurement

The ______ view of leadership assumes that the organization's leader is the driving force in the success or failure of the business.

Romantic

A technique for analyzing a basic list of internal and external conditions is called a ______ analysis.

SWOT

In order for strategic objectives to be meaningful they need to be ______. (Check all that apply.)

Timely Specific Measurable

True or false: Intended strategy rarely survives in its original form.

True

Which type of analysis views the organization as a sequential process of value-creating activities?

Value-chain

What are the four levels of a company's strategy formulation?

business, corporate, international, and entrepreneurial

True or false: The most effective organizations have strong leaders at the top who make all the decisions that the rest of the organization then carries out.

false

Strategic management of an organization entails which of the following ongoing processes?

analyses decisions actions

Sound strategies are of no value if they ______.

are not properly implemented

Developments in computer software and hardware, nanotechnology, and R&D in exotic materials are examples of trends in which segment of the general environment?

technological

The two opposing ways of examining stakeholder management are called ______ and ______.

symbiosis; zero sum

Match the strategic management process with its corresponding term.

Analyses - Strategic Analysis Decisions - Strategy Formulation Actions - Strategy Implementation

Which of the following are key attributes of strategic management? (Check all that apply.)

Directs the organization toward overall goals and objectives Incorporates both short-term and long-term perspectives Includes multiple stakeholders in decision making

The six major entry barriers in Porter's five forces model include which of the following? (Check all that apply.)

Economies of scale and product differentiation. Capital requirements and switching costs. Limited access to distribution channels and cost disadvantages independent of scale.

______ involves surveillance of a firm's external environment to predict environmental changes and detect changes already underway.

Environmental scanning

True or false: The only thing a firm needs to achieve a sustainable competitive advantage is a resource that is difficult to imitate.

False

True or false: The value-chain concept does not apply to service organizations.

False

______ is associated with receiving, storing, and distributing product inputs.

Inbound logistics

______ strategies are those organizational decisions that follow from analysis and rarely survive in their original forms.

Intended

Which of the following are reasons managers should use Porter's five forces model? (Check all that apply.)

It can help them assess how to improve the firm's competitive position within the industry. It can help them develop their supply chains through developing strong relationships with both suppliers and customers. It can help them decide whether to enter, remain, or exit an industry.

Which of the following are true of strategy implementation? (Check all that apply.)

It involves coordinating and integrating activities within the firm and with suppliers and customers. It involves establishing appropriate controls and organizational designs. It ensures that the organization is committed to excellence.

Which of the following statements about the competitive environment are correct? (Check all that apply.)

It is also referred to as the task environment. The competitive environment consists of factors such as competitors, customers, and suppliers. The competitive environment often influences the nature of the competition in an industry.

Which of the following are ways that resource inimitability (difficulty to imitate) is a key to value creation? (Check all that apply.)

It makes profits more likely to be sustainable. It constrains competition.

Spotting key trends requires a combination of which of the following? (Check all that apply.)

Knowing one's business. Understanding one's customers. Keeping an eye on what's happening.

Which of the following help to explain the extent to which employees and managers may be able to obtain a proportionately high level of generated profits? (Check all that apply.)

Manager bargaining power Employee bargaining power Employee exit cost Employee replacement cost

Which of the following are caveats of using industry analysis? (Check all that apply.)

Managers should not always avoid low-profit industries. The five-forces model is essentially a static analysis. Porter's model assumes a zero-sum game, meaning there is a winner and loser.

Which of the following is an example of a CEO with perceptual acuity?

Marga starts a ride-sharing business in a city with few parking garages.

Which of the following processes are included in inbound logistics? (Check all that apply.)

Material handling Warehousing Returns to suppliers

_____ statements, like vision statements, should be massively inspiring to an organization's main stakeholders and include the purpose of the organization, its scope of operations, and the basis of its competitive advantage.

Mission

______ is the first source of resource inimitability due to being inherently difficult to copy.

Physical uniqueness

______ groups are clusters of firms that share similar strategies.

Strategic

The ______ process consists of the analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages.

Strategic Management

Which of the following statements are correct regarding strategic groups? (Check all that apply.)

Strategic groups are clusters of firms that share similar strategies. No two firms are totally different. No two firms are exactly the same.

______ analysis is the starting point of the strategic management process and includes the advanced work that must be done to effectively formulate and execute strategies.

Strategy

______ resources are organizational assets that include physical and financial assets and are relatively easy to identify.

Tangible

Companies enter foreign market to access which of the following? (Check all that apply.)

Technical professionals Larger potential markets Factors of production, such as raw materials and labor

Organizational goals and objectives should represent what is best for ______.

The Entire Organization

Which of the following statements about the strategic management process is true?

The three processes are highly interdependent.

Vision statements represent ______.

a destination that is driven by and evokes passion

Which attributes must a resource have to provide a firm with a sustainable competitive advantage? (Check all that apply.)

ability to exploit opportunities be rare among competitors have no substitutes

Which of the following threaten an industry by forcing down prices, bargaining for higher quality or more services, and playing competitors against each other?

buyers

Which of the following are examples of tangible resources? (Check all that apply.)

cash equipment

Michael Porter's five forces model is the most commonly used analytical tool for examining which of the following type of environment?

competitive

Strategies often fail when managers fail to do which of the following? (Check all that apply.)

conduct a thorough analysis of the external and internal environments analyze the company's overarching goals

When addressing the value-chain concept, it is important to focus on the interrelationship between the organization and its most important stakeholders, which are ______.

customers

Which of the following are part of a firm's competitive environment? (Check all that apply.)

customers suppliers competitors

The process of examining large data sets to uncover hidden patterns, market trends, and customer preferences is known as ______.

data analytics

The ______ segment of the general environment consists of changes in a market's characteristics such as age, race, ethnicity, and education.

demographic

Which of the following elements of the general environment is the easiest to understand and quantify?

demographic

Resources are only rare when other companies ______.

do not possess the same valuable resource

Interest rate increases, currency exchange rates, and the Dow Jones are examples of factors to be considered in which segment of the general environment?

economic

The ______ segment of the general environment consists of the characteristics of the economy, including national income and monetary conditions.

economic

Which of the following are social responsibility expectations that go beyond a firm's product and service quality?

environmental sustainability fair labor standards accurate financial and accounting reporting

The extent of the threat of potential entrants into an industry depends on which of the following? (Check all that apply.)

existing barriers to entry the combined reaction from existing competitors

Procurement activities include the purchase of which of the following? (Check all that apply.)

office equipment machinery raw materials

Which of the following are examples of physical uniqueness? (Check all that apply.)

patented products that cannot be copied a beach resort location on a one-of-a-kind island a company's mineral rights

The Sarbanes-Oxley Act of 2002 greatly increased the accountability of auditors, executives, and corporate lawyers. This law is an example of which segment of the general environment?

political/legal

The ______ segment of the general environment consists of how a society creates and exercises power, including rules, laws, and taxation policies.

political/legal

Which of the following are included in the six segments of the general environment? (Check all that apply.)

political/legal and technological demographic and sociocultural economic and global

The Internet has increased the bargaining power of buyers by ______. (Check all that apply.)

providing customers with more information to make buying decisions decreasing switching costs

Resources that not many firms possess are known as ______ resources.

rare

The ______ view of the firm states that a firm's competitive advantages are due to its endowment of strategic resources that are valuable, rare, costly to imitate, and costly to substitute.

resource-based

______ are a set of organizational goals that are used to operationalize the mission statement and cover a well-defined time frame.

strategic objectives

Strategic resources must meet four criteria in order for them to provide a firm with the potential for a ______ competitive advantage.

sustainable

A one-time cost that customers pay when changing vendors is known as ______.

switching costs

The ______ segment of the general environment is concerned with innovation and state of knowledge in industrial arts, engineering, applied sciences, and pure science, and their interaction with society.

technological

Resources that competitors can easily imitate generate ______.

temporary value

The resource-based view of the firm combines which of the following perspectives? (Check all that apply.)

the company's internal analysis an external analysis of the industry and its competitive environment

The application of value-chain activities is easily applied to service organizations when one understands ______.

the focus is on adding value for customers

Managers should understand how they can create win-win relationships with their suppliers and customers so that they can overcome ______.

the zero-sum game issue

The ______ is the possibility that the profits of established firms in the industry may be eroded by new competitors.

threat of new entrants

Firms use "Big Data" to accomplish which of the following goals?

to better customize their offerings to customrs

Examples of key elements of the global segment of the general environment include which of the following? (Check all that apply.)

trade agreements between nations currency exchange rates

True or false: Trends in one segment of the general environment can have an effect on other segments.

true

A firm's hierarchy of goals include its ______.

vision mission statement strategic objectives

The ______ view of stakeholder management views the management process as groups competing for the organization's resources.

zero sum