BUAD 479 Chapters 4, 5, 6
By 2018, revenues from global data analytics software are expected to reach ________ billion, a ________ percent increase from 2012. Leading firms providing the software include IBM, SAP, Oracle, Microsoft, Qlik Technologies, Tibco Software, and Tableau Software. A. $21.7; 64 B. .217; .64 C. 2.17; 6.4 D. 50; 50 E. 217; 640
a
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 likely best? A. Backward integration B. Vertical integration C. Horizontal diversification D. Forward integration E. Market development
a
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? A. 8.33 B. 33.3 C. 25.0 D. 12.5 E. None of the above
a
In developing an IFE Matrix, what is an important guideline? A. Include factors that are both actionable and divisional to the extent possible. B. Assign higher weights for factors that have higher ratings. C. Include at least 20 factors. D. Never assign a weight of more than 1.0 for a factor. E. Never assign a rating of more than 4.0 for a factor.
a
Spending on online advertisements globally is increasing about _____ percent annually, according to edMarketer, and represents about _____ percent of total advertising spending in the United States. A. 25; 39 B. 50; 50 C. 40; 25 D. 39; 25 E. 25; 40
a
The strategy-formulation analytical framework consists of how many stages and how many matrices? A. 3 and 9 B. 3 and 8 C. 4 and 10 D. 2 and 8 E. 3 and 10
a
Which of Porter's generic strategies means producing products and services that fulfill the needs of small groups of consumers? A. Focus B. Differentiation C. Cost leadership D. Initiator E. Being a first-mover
a
__________ 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. A. Culture B. Synergy C. Accountability D. Humanity E. Management
a
________________ 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. A. Joint venture B. Joint alliance C. Coordinating D. Alliancing E. Combining
a
A benefit of outsourcing is cost restructuring. Is the following statement true? Outsourcing changes the balance of fixed costs to variable costs by moving the firm more to variable costs; outsourcing also makes variable costs more predictable. A. Sometimes B. Yes C. No D. Possibly E. Usually
b
According to James Van Horne, the functions of finance/accounting comprise three decisions. What are the three? A. The investment decision, the financing decision, and the treasury stock decision B. The investment decision, the financing decision, and the dividend decision C. The investment decision, the liquidity decision, and the dividend decision D. The liquidity decision, the financing decision, and the dividend decision E. The investment decision, the financing decision, and the leverage decision
b
For maximum effectiveness, how many board of director members should there be for a company, according to Lublin and Yermack? A. 11 B. 9 C. 17 D. 13 E. 15
b
Four companieslong dash—A, B, C, and Dlong dash—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? A. 0.40 B. 0.30 C. 0.25 D. 0.50 E. 0.20
b
Gaining ownership or increased control over distributors or retailers is called what? A. Vertical integration B. Forward integration C. Market penetration D. Backward integration E. Market development
b
Going clockwise beginning with the top axis, what are the four axes of a SPACE Matrix? A. IP, SP, CP, and FP B. FP, IP, SP, and CP C. SP, CP, FP, and IP D. AP, BP, CP, and DP E. CP, FP, IP, and SP
b
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. A. market share B. relative market share position C. rival market share position D. market share position E. rival market share
b
In an IFE Matrix, how much more important is a weight of .016 than a weight of .07? A. 12.9 percent B. 129 percent C. 5.6 percent D. 90 percent E. 56 percent
b
In developing an IFE Matrix, do not allow more than 30 percent of the key factors to be financial ratios. Why? A. Because financial ratios can be misleading B. Since financial ratios are generally the result of many factors, it is difficult to know what particular strategies should be considered based on financial ratios. C. Because financial ratios have limitations such as firms using different accounting methods D. Because financial ratios can vary from industry to industry E. Because finance is only one part of an organization's business operations
b
The extent to which a manufacturing plant's output reaches its potential output is called ________________, a key strategic variable. A. capacity maximum B. capacity utilization C. maximum utilization D. min-to-max capacity E. maximum capacity
b
The time frame for long-term objectives and strategies should be consistent, usually from _____ to _____ years. A. 2; 10 B. 2; 5 C. 1; 5 D. 1; 10 E. 1; 15
b
The two general types of diversification strategies are related diversification and unrelated diversification. When are businesses said to be related? A. When their objectives and strategies are about the same B. When their value chains possess competitively valuable cross-business strategic fits C. When they are about the same size D. When they compete in about the same areas E. When they compete in the same SIC code industry
b
What strategy may be best under the following conditions? a. The organization competes in a highly competitive or a no-growth industry, as indicated by low industry profit margins and returns. b. The organization's present channels of distribution can be used to market new products to current customers. c. New products have countercyclical sales patterns compared with an organization's present products. d. The organization's basic industry is experiencing declining annual sales and profits. A. Vertical integration B. Unrelated diversification C. Retrenchment D. Related diversification E. Divestiture
b
________________ is an analytical tool used to determine whether a firm's value chain analysis is competitive compared with those of rivals and thus conducive to winning in the marketplace. A. Perceptual mapping B. Benchmarking C. Competitive postering D. Competitive Profile Analysis E. Breakeven analysis
b
According to Porter, strategies allow organizations to gain competitive advantage from three different bases. What are the three bases? A. Cost leadership, differentiation, and initiator B. Being a first-mover, being a late-follower, and differentiation C. Cost leadership, differentiation, and focus D. Initiator, differentiation, and focus E. Differentiation, focus, and being a first-mover
c
Fill in the two blanks. 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. A. -2; -2 B. -2; -6 C. -6; -2 D. -6; -6 E. -3; -3
c
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 _______________. A. dogs B. laggards C. cash cows D. question marks E. stars
c
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? A. Reengineering B. Restructuring C. Divestiture D. Vertical integration E. Retrenchment
c
There are four important differences between the BCG Matrix and the IE Matrix. Which statement below is not a difference between the two matrices? A. The x and y axes are different. B. The IE Matrix requires more information about the divisions than does the BCG Matrix. C. The sizes of the circles and pie slices can vary. D. The strategic implications of each matrix are different. E. The IE Matrix has nine quadrants versus four in a BCG Matrix.
c
What are the five major types of bankruptcy? A. Chapters 3, 5, 7, 9, and 11 B. Chapters 5, 7, 11, 13, and 15 C. Chapters 7, 9, 11, 12, and 13 D. Chapters 1, 3, 5, 7, and 9 E. Chapters 2, 4, 6, 7, and 8
c
What is Rudin's Law? A. When a crisis forces choosing among alternatives, most people do not choose the best option. B. When a crisis forces choosing among alternatives, most people panic. C. When a crisis forces choosing among alternatives, most people choose the worst possible one. D. When a crisis forces choosing among alternatives, most people choose a bad option. E. When a crisis forces choosing among alternatives, most people guess at the best option.
c
Which statement below is false? A. The QSPM weights are identical to those in the EFE Matrix and IFE Matrix. B. There is no limit to the number of strategies that can be evaluated or the number of sets of strategies that can be examined at once using the QSPM. C. In a QSPM, the range for Total Attractiveness Scores is 1 = not attractive, 2 = somewhat attractive, 3 = reasonably attractive, and 4 = highly attractive. D. Work row by row in developing a QSPM. E. The magnitude of the difference between the STAS in a given set of QSPM strategic alternatives indicates the relative desirability of one strategy over another.
c
________________ is the process by which a person (1) determines whether to attempt a task, (2) works out the most effective way of reaching desired objectives, and (3) prepares to overcome unexpected difficulties with adequate resources. A. Strategizing B. Controlling C. Planning D. Leading E. Organizing
c
Any industry whose annual growth in sales exceeds ______ percent could be considered to have rapid growth. A. 10 B. 15 C. 20 D. 5 E. 25
d
Cultural products include which of the following dimensions? A. Values, beliefs, rites, and rituals B. Ceremonies, myths, stories, and legends C. Sagas, heroes, heroines, and symbols D. All of the above E. A and B above
d
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: A. Securing access to rare resources. B. Gaining new knowledge of key factors and issues. C. Carving out market share and a position that is easy to defend and costly for rival firms to overtake. D. A, B, and C E. A and B
d
In a QSPM analysis, would it ever be appropriate or useful for a company to not include a weight column at all, but rather just sum the AS columns to determine the relative attractiveness of six strategies? A. Yes but only for small firms B. Yes but only for multi-divisional companies C. Yes but only for nonprofit organizations D. No E. Yes
d
In developing an IFE Matrix, when can both internal and external factors be included? A. Sometimes B. Anytime C. Whenever a firm does not develop or have an EFE Matrix D. Never E. For firms in some industries, such as utility companies
d
In performing breakeven analysis, which of the following are considered variable costs? A. Advertising expenses B. Labor expenses C. Raw material expenses D. B and C E. A and B
d
Lorsch found that executives in successful companies are emotionally committed to the firm's culture, but he concluded that culture can inhibit strategic management in the following way: A. Managers frequently miss the significance of changing external conditions because they are blinded by strongly held beliefs. B. When a particular culture has been effective in the past, the natural response is to stick with it in the future, even during times of major strategic change. C. Employees can get so attached to cultural products that they ignore strategies and tactics. D. A and B E. A, B, and C
d
Nonprofit organizations are basically just like for-profit companies except for two major differences. What are the differences? A. Nonprofits do not have competitors. B. Nonprofits do not pay taxes. C. Nonprofits do not have shareholders to provide capital. D. B and C E. A and B
d
Strengths that cannot be easily matched or imitated by competitors are called what? A. Distinctive advantages B. Valuable resources C. Synergies D. Distinctive competencies E. Competitive advantages
d
Target recently joined Best Buy in offering to match online prices of rival retailers. Both companies are seeking to combat ________ by shoppers who check out products in their stores but buy them on rival's websites. A. price shopping B. price checking C. price hopping D. showrooming E. price comparing
d
The chapter lists nine reasons why many mergers and acquisitions fail, including the following reason: A. Inability to achieve synergy B. Too large an acquisition C. Improprieties on one or both sides D. A and B E. A, B, and C
d
The _________ Matrix determines the relative attractiveness of various strategies based on the extent that key external and internal factors are capitalized on or improved. A. BCG B. SPACE C. Internal-External (IE) D. QSPM E. SWOT
d
What is a major limitation of the BCG Matrix? A. Many businesses fall right in the middle of the BCG Matrix and thus are not easily classified. B. The BCG Matrix does not reflect whether various divisions or their industries are growing over time. C. Other variables besides the two usedlong dash—such as size of the market and competitive advantageslong dash—are important in making strategic decisions about various divisions. D. A, B, and C E. A and B
d
What strategy seeks to increase market share for present products or services in present markets through greater marketing efforts? A. Market development B. Market saturation C. Vertical integration D. Market penetration E. Forward integration
d
What would an appropriate SP axis number for Apple Inc.? A. - 1 B. + 1 C. + 6 D. - 6 E. + or - 7
d
Which statement below is false? A. When a key internal factor is both a strength and a weakness, the factor may be included twice in the IFE Matrix, and a weight and rating assigned to each statement. B. In an IFE Matrix, the number of factors has no effect on the range of total weighted scores because the weights always sum to 1.0. C. Always sequence factors in an IFE Matrix from highest to lowest weight. D. The average IFE Matrix score is 2.0. E. All statements are true.
d
Which statement below is true? A. There were far more global mergers and acquisitions in 2014 than in any year since 2007, exceeding $3.5 billion. B. More than 10,000 mergers transpire annually in the United States, with same-industry combinations predominating. C. In the United States, mergers and acquisitions totaled $1.52 trillion in 2014, comprising 45 percent of global deals, up from $998 billion, or 43 percent, the prior year. D. All of the statements are true. E. A leveraged buyout converts a public firm into a private company.
d
Why do many U.S. companies plan to reshore in 2016-2017? A. A desire to get products to market faster and respond rapidly to customer orders B. Higher transportation and warehousing costs C. Improved quality and protection of intellectual property D. A and C E. A, B, and C
d
______________ involves companies hiring other companies to take over various parts of their functional operations, such as human resources, information systems, payroll, accounting, customer service, and even marketing. A. Displacement B. Procurement C. Partnering D. Outsourcing E. Backward integration
d
A limitation of financial ratio analysis includes the following statement: A. Financial ratios are not very "actionable" in terms of revealing potential strategies needed (because they generally are based on performance of the overall firm). B. Departures from industry average financial ratios do not always indicate that a firm is doing especially well or badly. C. Financial ratios are based on accounting data, and firms differ in their treatment of such items as depreciation, inventory valuation, R&D expenditures, pension plan costs, mergers, and taxes. D. Seasonal factors can influence comparative financial ratios. E. All the statements are limitations.
e
Empirical indicators, characteristics of resources that enable a firm to implement strategies, include the following: A. Rare and hard to imitate B. Global and liquid C. Scarce and unique D. Not easily substitutable E. A and D
e
If a company has high customer loyalty, such as Harley-Davidson's, what rating would be appropriate for that factor in a SPACE Matrix? A. -1 on SP axis B. +7 on CP axis C. -7 on SP axis D. +1 on CP axis E. -1 on CP axis
e
In an IFE Matrix, the weights of all factors included must sum to ___________. A. 4.0 B. 5.0 C. 2.0 D. 3.0 E. 1.0
e
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 _____ contribution of each division to the company. A. sales; net income B. revenues; earnings C. sales; profits D. revenues; retained earnings E. A, B, and C
e
Objectives should include which of the following characteristics? A. Measurable, realistic, and understandable B. Measurable, challenging, and hierarchical C. Qualitative, obtainable, congruent among organizational units, and associated with a timeline D. A, B, and C E. A and B
e
Recent research reveals that small- and medium-size firms expanding into other countries should form alliances with noncompetitors rather than with rival firms. Why? A. Alliances with competitors are more costly, directly and indirectly, and provide redundant knowledge and resources. B. The benefits of allying with competitors are offset by higher monitoring and control costs. C. Alliances with noncompetitors are positively associated with international performance, whereas alliances with competitors are negatively related. D. Competing firms oftentimes share less knowledge than they could or should. E. All of the above
e
Secondary buyouts occur when what happens? A. A private equity firm buys a publically held firm. B. A company buys a firm and then sells the firm within a year. C. A company buys a firm and then itself is purchased by another company. D. A private equity firm buys a privately held firm. E. A private equity firm buys a firm from another private equity firm.
e
The basic functions of marketing include the following: A. Customer analysis, selling products and services, and product and service planning B. Pricing, distribution, and marketing research C. Cost/benefit analysis D. A and B E. A, B, and C
e
The management function of staffing, or human resource (HR) management, includes activities such as the following: A. Training, developing, caring for, evaluating, and rewarding B. Dismissing employees and managing union relations C. Recruiting, interviewing, testing, selecting, and orienting D. Disciplining, promoting, transferring, and demoting E. All of the above
e
The old adage "If it ain't broke, don't fix it" pertains to which of the following? A. Managing by continuity B. Managing by hope C. Managing by subjectives D. Managing by crisis E. Managing by extrapolation
e
What are the five basic functions of management? A. Planning, organizing, motivating, strategizing, and controlling B. Planning, organizing, motivating, staffing, and leading C. Planning, organizing, leading, motivating, and controlling D. Planning, organizing, motivating, strategizing, and leading E. Planning, organizing, motivating, staffing, and controlling
e
What are the four types of strategies generated by a SWOT analysis? A. WO, WT, WS, and SS B. SO, SW, ST, and WW C. SW, ST, WO, and WT D. SO, ST, SW, and SS E. SO, WO, ST, and WT
e
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? A. Bankruptcy B. Divestiture C. Reengineering D. Liquidation E. Retrenchment
e
When an organization has pursued both a retrenchment strategy and a divestiture strategy, and neither has been successful, then perhaps the best strategy would be ____. A. restructuring B. Chapter 7 bankruptcy C. Chapter 11 bankruptcy D. liquidation E. B and D
e
Which of the following statements is false? A. Although evidence is mounting that firms should use partnering as a means for achieving strategies, most U.S. firms in many industrieslong dash—such as financial services, forest products, metals, and retailinglong dash—still operate in a merge or acquire mode to obtain growth. B. Partnering has become a core competency, a strategic issue of high importance. C. In a global market tied together by the Internet, joint ventures, and partnerships, alliances are proving to be a more effective way to enhance corporate growth than mergers and acquisitions. D. Partnering is not yet taught at most business schools and is often viewed within companies as a financial issue rather than a strategic issue. E. All of the above statements are true.
e
Which of the following statements is false? A. The resource-based view approach to competitive advantage contends that internal resources are more important for a firm than external factors in achieving and sustaining competitive advantage. B. In contrast to the Industrial Organization (I/O) theory presented in the previous chapter, proponents of the RBV view/theory contend that organizational performance is primarily determined by internal resources. C. Resource-based view theory asserts that resources are actually what helps a firm exploit opportunities and neutralize threats. As indicated in the Academic Research Capsule 4-1, RBV theory may be helpful in identifying diversification targets. D. Empirical research by Neffke reveals that it is the nature of a firm's human capital, more than any other variable in the firm's value chain, that impacts that firm's choice of diversification targets. Specifically, firms select acquisition targets that offer opportunities to leverage existing human resources. E. A through D are true statements.
e
Which statement below is false? A. In a QSPM, never rate one strategy and not the other. 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 evaluated." C. In a QSPM, if you assign an AS score to one strategy, then assign an AS score(s) to the otherlong dash—in other words, if one strategy receives a dash, then all others must receive a dash in a given row. D. In a QSPM, an AS value of 4 is 33 percent more important than a 3. E. All statements are true.
e
Which statement below is false? 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. A & C E. None of the above
e
Which statement below is false? 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. A & B E. None of the above.
e
Which statement below is false? A. The benefits of paying dividends to investors must be balanced against the benefits of internally retaining funds, and there is no set formula on how to balance this trade-off. B. In 2014-2016, companies are aggressively boosting their dividends paid to shareholders. C. Dividends are sometimes paid out even when the firm has incurred a negative annual net income. D. Dividends are sometimes paid out even if the funds could be better reinvested in the business, and/or even if the firm has to obtain outside sources of capital to pay for the dividends. E. All the statements are true.
e
Which statement is a limitation of the SWOT? A. SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. B. SWOT is a static assessment (or snapshot) in time. C. There are no weights, ratings, or numbers in a SWOT analysis. D. SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself. E. All of the above.
e
Which statement(s) below is false? A. According to Porter, the business of a firm can best be described as a value chain, in which total revenues minus total costs of all activities undertaken to develop and market a product or service yields value. B. A firm will be profitable so long as total revenues exceed the total costs incurred in creating and delivering the product or service. C. Conducting a value chain analysis is supportive of the research-based view's examination of a firm's assets and capabilities as sources of distinctive competence. D. All firms in a given industry have a similar value chain, which includes activities such as obtaining raw materials, designing products, building manufacturing facilities, developing cooperative agreements, and providing customer service. E. Firms should strive to understand their own value chain operations, not those of their competitors, suppliers, and distributors.
e
Women make up only ______ percent of board members at companies in the S&P 500, but in 2014, ______ percent of new board members appointed were women. A. 39; 49 B. 29; 39 C. 49; 59 D. 9; 19 E. 19; 29
e