Wk 2 Chapter 8

The low-cost strategy drives down an organization's costs below those of its competitors. This strategy is aimed at serving a broad market

True Reason: The low-cost strategy drives down the organization's costs below that of its rivals. Unlike the focused low-cost strategy, which serves only one segment, the low-cost strategy is aimed at serving many or most segments of a particular market.

Drag and drop the qualities of an effective plan on the left with their corresponding definitions on the right

Unity ~ Have only one guiding plan Continuity~ Build and refine previous plans on an ongoing basis Accuracy ~ Collect and use all available information Flexibility ~ Alter or change plans when necessary

Which of the following are principal corporate-level strategies?

Vertical integration Concentration on a single industry International expansion Diversification

What is the time frame for a long-term plan?

5+ years Reason: This would also be a short-term plan. A long-term plan is 5+ years. This is the time frame for a short-term plan. A long-term plan is 5+ years. This is the time frame for an intermediate-term plan. A long-term plan is 5+ years.

What should be the first critical component that the manager must define when determining an organization's mission?

Business

Managers use a ______ strategy to distinguish their products from those of their competitors by focusing on characteristics such as design, quality, and after-sale service.

Differentiation

Which of the following is not a step in strategy implementation?

Establishing a long-term timeframe for implementation that only includes broad, general goals

The planning process is designed solely to identify effective strategies.

False Reason: The planning process goes beyond just identifying effective strategies; it also includes plans to ensure that these strategies are put into action.

Managers only need to identify their customers when defining a business.

False Reason: To define a business, managers must identify their customers, identify those customers' needs, and determine if those needs are being satisfied.

Michael Porter identified two business-level strategies that only target one or two market segments. Match each strategy on the left with its description on the right. Instructions

Focused low-cost strategy~ Serves one or a few market segments and tries to offer the lowest prices serving that reduced segment Focused differentiation strategy~ Serves one or a few market segments and strives to differentiate their organization the most from the other competitors serving that segment

How do managers typically distinguish time horizons?

Long-term plans, intermediate-term plans, and short-term plans

Strengths, weaknesses, opportunities, and threats are components of a ______.

SWOT analysis

Which of the following are steps in the planning process of an organization?

Selecting the most effective way to implement organizational strategy Determining the organization's mission and goals Formulating strategies to achieve the goals

When the same situation occurs repeatedly, ______ plans are used.

Standing

To achieve organizational goals, managers use ______ to launch courses of action that will move them towards their goals.

Strategies

Which of the following are features of successful business-level strategies?

They increase profits. They reduce rivalry.

From a managerial perspective, what is the purpose of formulating a set of corporate strategies?

To help them achieve the corporation's mission

When managers make the decision to price their products below that of their competitors, they are using a ______ strategy.

low-cost

The overriding purpose of an organization is specified by its ______.

mission

A corporate-level strategy is a plan of action that involves choosing in which industries and countries a company should invest its resources to achieve its:

mission. goals.

A strategy that is customized and marketed to accommodate particular national conditions is a ____ strategy.

multidomestic

When a company customizes its products and marketing to fit specific national conditions, it is following a ______ strategy.

multidomestic Reason: The company must accommodate multiple nations, not just one. Therefore, it must use a multidomestic strategy. A domestic strategy only takes care of one country's needs. The company must be multidomestic to customize products for the needs of different nations' conditions. A regional strategy would be too confining. The company must customize its products and customize to accommodate multiple nations' needs.

Types of standing plans include:

policies. standard operating procedures (SOPs). rules.

While defining a business and answering questions about their company's products, managers can identify:

present customer needs. future customer needs. who their true competitors are.

When a company decides to enter a new industry to gain a competitive advantage within one or more of the company's existing divisions, this is called ______.

related diversification Reason: Related diversification is defined as entering a new business or industry to create a competitive advantage in one or more of an organization's existing divisions or businesses.

Jeremy forecasts what might happen if his company were to launch their new product into the market according to different schedules, prices, and features. He's thinking of making decisions to customize based on what he knows of his competitors' schedules and features. Jeremy is engaging in ______ planning.

scenario

The generation of multiple forecasts of future conditions followed by an analysis of how to respond effectively to each of those conditions is ______.

scenario planning

The CEO and top managers use ______ to communicate to their managers and other employees a compelling vision of what they want the organization to accomplish.

strategic leadership

When the CEO and other top managers communicate their vision for the company to the rest of the managerial staff, this is referred to as ______.

strategic leadership

A cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals is a(n) ______.

strategy

The development of a set of corporate, business, and functional strategies that allow an organization to accomplish its mission and achieve its goals is known as ______.

strategy formulation

The five forces model includes level of rivalry among organizations, the potential for entry into an industry, the power of large suppliers, the power of large customers, and _________.

the threat of substitute products

The SWOT analysis components that are used to anticipate potential problems or opportunities for business growth outside an organization are ______, and for internal problems or assets of an organization are ______.

threats and opportunities; weaknesses and strengths

In large organizations, planning usually takes place at ______ level(s) of management.

three

Fayol stated that effective plans should have four essential qualities, including ______.

unity, continuity, accuracy, and flexibility

To perform the planning task, managers must first ______.

establish where the organization is at the present time

The corporate-level strategy of related diversification means companies enter an industry that creates a competitive advantage for an organization's ______.

existing division or business

The model that helps managers focus on the most important competitive forces in the external environment is the ______.

five forces model

Companies that try to specialize in one segment of the market and undercut the prices of the other sellers in the market are using a ______ strategy.

focused low-cost

In large organizations, planning usually takes place at three levels of management. They are ___, ___, and ___.

functional corporate business

Michael Porter suggests that when managers choose a business-level strategy, their organization should ______ in a particular market.

gain a competitive advantage

Distinguishing an organization's products from the products of competitors on dimensions such as product design, quality, or after-sales service is an example of a ______ strategy.

differentiation

Expanding a company's operations into an industry that produces inputs for its products is ______ vertical integration.

backward

If a brewery decides to expand by buying the farms that produce the ingredients, this is an example of ______ integration.

backward vertical

The third step in the planning process is ___.

choosing the most effective ways to implement and put these strategies into action Reason: The three major steps in the planning process: (1) determining an organization's mission and major goals, (2) choosing or formulating strategies to realize the mission and goals, and (3) selecting the most effective ways to implement and put these strategies into action.

People would come from all over the greater city lines for Sami's Sushi until the owner of Sami's decided to expand to some of the well-populated suburbs. This decision was a corporate-level strategy referred to as ______.

concentration on a single industry

When a company reinvests its profits to strengthen its competitive position in its current industry, it is utilizing a(n) ______ strategy.

concentration on a single industry