MGMT 481 test 1
The three original broadcast networks captured about ________ of the prime-time audience in 1978, but today their combined market share is less than ________. A) 75%/40% B) 75%/25% C) 90%/50% D) 90%/25% E) 100%/40%
90%/50%
Mission
A company's primary purpose that often specifies the business in which the firm intends to compete - or the customers it intends to serve
Substitute
A product that is fundamentally different yet serves the same function or purpose as another product
Strategy Vehicles
Activities and strategic choices - such as make versus buy, acquisitions, and strategic alliances - that influence a firm's ability to enter particular markets, deliver unique value to customers, or create barriers to imitating its product
Resources
All assets, capabilities, organizational processes, firm attributes, information, knowledge, and so on, controlled by a firm that enable the firm to conceive of and implement strategies that improve its efficiency and effectiveness
How do line managers become "owners" of the strategy? A) By attending top manager meetings B) By executing plans formulated by other people C) By involvement in the strategic-management process D) By becoming a shareholder of the firm E) By buying off top managers
By involvement in the strategic-management process
Rivalry
Competition among firms within an industry typically this involves firms putting pressure on each other and limiting each other's profit potential by attempting to steal profits and/or market shares.
Functional Strategy
Decisions about how to effectively implement the business unit strategy within functional areas like finance, product development, operations, information technology, sales and marketing, and customer service.
Business Unit Strategy
Decisions about how to gain and sustain advantage, made at the manager level for each standalone business unit within a company
Corporate Strategy
Decisions about what markets to compete in, made by executives at the corporate level of an organization.
Segmentation Analysis
Dividing up customers into groups or segments based on similar needs or wants
________ allows firms to sell products, advertise, purchase supplies, bypass intermediaries, track inventory, and eliminate paperwork. A) Social networking B) E-commerce C) Blogging D) Video sites E) None of the above
E-commerce
________ and ________ are external forces transforming business and society today. A) E-commerce; strategy B) E-commerce; globalization C) Strategy; globalization D) Corporate culture; stakeholders E) Stakeholders; strategy
E-commerce; globalization
During what stage of strategic management are a firm's specific internal strengths and weaknesses determined? A) Formulation B) Implementation C) Evaluation D) Feedback E) Goal-setting
Formulation
What step in the strategic development process involves mobilizing employees and managers to put strategies into action? A) Formulating strategy B) Strategy evaluation C) Implementing strategy D) Strategic advantage E) Competitive advantage
Implementing strategy
What types of skills are especially critical for successful strategy implementation? A) Interpersonal B) Marketing C) Technical D) Conceptual E) Thinking
Interpersonal
Distinctive Competence
Is a competitively valuable activity that a firm performs better than its rivals
Which statement best describes intuition? A) It represents the marginal factor in decision-making. B) It represents a minor factor in decision-making integrated with analysis. C) It should be coupled with analysis in decision-making. D) It is better than analysis in decision-making. E) It is management by ignorance.
It should be coupled with analysis in decision-making.
Shareholders
Owners of a company
What can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives? A) Strategy formulation B) Strategy evaluation C) Strategy implementation D) Strategic management E) Strategic leading
Strategic management
________ is used to refer to strategic formulation, implementation and evaluation, with ________ referring only to strategic formulation. A) Strategic planning; strategic management B) Strategic planning; strategic processing C) Strategic management; strategic planning D) Strategic management; strategic processing E) Strategic implementation; strategic focus
Strategic management; strategic planning
SWOT Analysis
Strategic planning method used to evaluate the strengths, weaknesses, opportunities, and threats involved in a business.
Which phase of strategic management is called the action phase? A) Strategy formulation B) Strategy implementation C) Strategy evaluation D) Allocating resources E) Measuring performance
Strategy implementation
________ is not a strategy-implementation activity. A) Taking corrective actions B) Establishing annual objectives C) Devising policies D) Allocating resources E) Motivating employees
Taking corrective actions
Unique Value
The reason a firm wins with customers or the value proposition it offers to customers, such as a low cost advantage or differentiation advantage.
Strategy Implementation
The translation of a chosen strategy into organizational action so as to effectively implement the activities required to achieve strategic goals and objectives
Stakeholders
Those who have a share or an interest in the activities and performance of an organization
Rarity
To be uncommon, or not available to other competitors
What is not a reason given for poor or no strategic planning in organizations? A) Waste of time B) Being content with success C) Firefighting D) Poor reward structure E) Trust of management
Trust of management
(1) markets to compete in; (2) unique value the firm will offer in those markets; (3) the resources and capabilities required to offer that unique value better than competitors; and (4) ways to sustain the advantage by preventing imitation
What are the four strategic choices?
Virtuous Circle
When more sellers attract more buyers, who, in turn, attract more sellers.
Positive network Externalities
When the value of a product increases with the number of users
Value
Worth or utility
The goal of strategic management is to A) achieve competitive advantage. B) maintain competitive advantage. C) achieve and maintain competitive advantage. D) eliminate competitive advantage E) eliminate and abolish competitive advantage.
achieve and maintain competitive advantage.
Both business and military organizations must ________ and ________ to be successful. A) be impervious to change; continually improve B) adapt to change; continually improve C) shun change; stay the course D) be impervious to change; stay the course E) none of the above
adapt to change; continually improve
Strategic management focuses on integrating management, ________, and information systems to achieve organizational success. A) marketing B) finance/accounting C) production/operations D) research and development E) all of the above
all of the above
The strategic-management process is becoming more widely used by A) small firms. B) nonprofit institutions. C) governmental organizations. D) multinational conglomerates. E) all of the above
all of the above
Strategic management enables an organization to ________, instead of just responding to threats in its business environment. A) be proactive B) determine when the threat will subside C) avoid the threats D) defeat their competitors E) foresee into the future
be proactive
Superior strategy formulation and implementation ________ an opponent's superiority in numbers and resources. A) are irrelevant to B) are not enough to surmount C) can overcome D) can lead to E) unite
can overcome
Anything that a firm does especially well compared to rival firms is referred to as A) competitive advantage. B) comparative advantage. C) opportunity cost. D) sustainable advantage. E) an external opportunity.
competitive advantage.
The first step in strategic planning is generally A) developing a vision statement. B) establishing goals and objectives. C) making a profit. D) developing a mission statement. E) determining opportunities and threats.
developing a vision statement.
Strategy evaluation is necessary because A) internal and external factors are constantly changing. B) the SEC requires strategy evaluation. C) success today is a guarantee of success tomorrow. D) the IRS requires strategy evaluation. E) firms have limited resources.
internal and external factors are constantly changing.
The strategic-management process A) occurs once a year. B) is a sequential process. C) is a continuous process. D) applies mostly to companies with sales greater than $100 million. E) applies mostly to small businesses.
is a continuous process.
According to Greenley, strategic management offers all of these benefits except: A) it provides an objective view of management problems. B) it creates a framework for internal communication among personnel. C) it encourages a favorable attitude toward change. D) it maximizes the effects of adverse conditions and changes. E) it gives a degree of discipline and formality to the management of a business.
it maximizes the effects of adverse conditions and changes.
The strategic-management process represents a(n) ________, ________, and ________ approach for determining an enterprise's future direction. A) logical; systematic; subjective B) intuitive; disorganized; subjective C) logical; systematic; objective D) intuitive; disorganized; objective E) intuitive; systematic; subjectiv
logical; systematic; objective
A strong ________ heritage underlies the study of strategic management. A) military B) government C) political D) social E) cultural
military
According to Webster's New World Dictionary, ________ is "the science of planning and directing large-scale military operations, of maneuvering forces into the most advantageous position prior to actual engagement with the enemy." A) competitive advantage B) war C) strategy D) formulation E) business
strategy
An important activity in ________ is taking corrective action. A) strategy evaluation B) strategy implementation C) strategy formulation D) strategy leadership E) all of the above
strategy evaluation
Internal ________ are activities in an organization that are performed especially well. A) opportunities B) competencies C) strengths D) management E) factors
strengths
Usually, external opportunities and threats are A) uncontrollable by a single organization. B) controlled by governments. C) not as important as internal strengths and weaknesses. D) key functions in strategy implementation. E) key functions in strategy exploitation.
uncontrollable by a single organization.
Cost Advantage
An advantage that a firm has over its competitors in the activities associated with producing a product or service, thereby allowing it to produce the same product at lower cost.
Resource-Based Review of Firm
Determining the strategic resources available to a company.
Market
The industry and geographic area that a company competes in
Organizations should take a(n) ________ approach in their industry. A) adversarial rather than a collegial B) collegial rather than an adversarial C) reactive rather than a proactive D) proactive rather than a reactive E) cooperative rather than a competitive
proactive rather than a reactive
Business or military success is A) generally the happy result of accidental strategies. B) undermined by the element of surprise. C) the product of both attention to changing external and internal conditions and the insightful adaptations to those conditions. D) unrelated to external conditions. E) none of the above.
the product of both attention to changing external and internal conditions and the insightful adaptations to those conditions.
Forward Integration
A firm goes into the business of its former buyers, rather than continuing to sell to them.
Backward Integration
A firm purchases one or more of its suppliers in order to make a product itself rather than buying it from another firm
Supplier
A firm that provides products that are inputs to another firm's production process
Priorities
A firm's values and rankings of what is most important
Emergent Strategy
A plan or pattern of action that develops and emerges over time in an organization despite a mission or goals
Deliberate Strategy
A plan or pattern of action that is formulated through a deliberate planning process that is then carried out to achieve the mission or goals of an organization
Business Strategy
A plan to achieve competitive advantage that involves making four strategic choices: (1) markets to compete in; (2) unique value the firm will offer in those markets; (3) the resources and capabilities required to offer that unique value better than competitors; and (4) ways to sustain the advantage by preventing imitation
Value Chain
A visual description of the steps required to turn raw materials into finished products and/or services. The value chain also describes key functions of the firm linked to each stage and functions that span the productive activities of the firm
Differentiation Advantage
An advantage a firm has over its competitors by making a product more attractive by offering unique qualities in the form of features, reliability, and convenience that distinguishes it from competing products
Inimitability
An attribute of a resource that describes the degree of difficulty a competitor would face in copying, imitating, or mimicking the value of that resource
________ can best be described as short-term in nature. A) Mission statements B) Tenure C) Annual objectives D) Strategies E) Management
Annual objectives
Switching Costs
Barriers that help keep buyers using the same supplier by imposing extra costs for switching suppliers.
Threats
Conditions in the competitive environment that endanger the profitability of a firm.
Which of the following statements is false? A) No organization can pursue all the strategies that potentially could benefit the firm. B) Most organizations today recognize that strategic-management concepts and techniques can enhance the effectiveness of decisions. C) A key role of strategists is to facilitate continuous organizational learning and change. D) Effective strategic planning should accept the assumptions underlying the current corporate strategy. E) Even the most technically perfect strategic plan will serve little purpose if it is not implemented.
Effective strategic planning should accept the assumptions underlying the current corporate strategy.
External Analysis
Examining the forces that influence industry attractiveness, including opportunities and threats that exist in the environment.
Network Effects
Growth in demand for a firm's product that results from a growth in the number of existing customers.
In which phase of strategic management are annual objectives especially important? A) Formulation B) Control C) Evaluation D) Implementation E) Management
Implementation
The changes that occurred when Robert Iger took over the reigns at Disney demonstrate which current trend in organizations? A) Increased formalization of the strategic management process B) Increased structuring of strategic management C) Increased decentralizing of strategic management D) Increased emphasis on strategic planning E) Increased central planning of the strategic management process
Increased decentralizing of strategic management
) What is not a pitfall an organization should avoid in strategic planning? A) Failing to communicate the plan to employees B) Involving all managers rather than delegating planning to a "planner" C) Top managers not actively supporting the strategic planning process D) Doing strategic planning only to satisfy accreditation or regulatory requirements E) Failing to create a collaborative climate supportive of change
Involving all managers rather than delegating planning to a "planner"
Core Competence
Is a proficiently performed internal activity that is central to a firm's strategy and competitiveness
Competence
Is an activity that a firm has learned to perform with proficiency—a capability
What is not a guideline given for effective strategic planning? A) Continually strengthen the "good ethics is good business" policy. B) It should not include jargon or arcane planning language. C) It should not be too formal, predictable, or rigid. D) It should welcome bad news. E) It should be controlled by "technicians."
It should be controlled by "technicians."
What are enduring statements of purpose that distinguish one business from other similar firms? A) Policies B) Mission statements C) Objectives D) Rules E) Employee conduct guidelines
Mission statements
The trends in newspaper circulation in the United States provide support for which statement? A) Sustainable competitive advantage is easy to maintain. B) Several firms can have similar competitive advantages. C) Some products are relatively immune to changes in the external environment. D) Most competitive advantages are hard to sustain. E) Competition is generally good for companies and consumers.
Most competitive advantages are hard to sustain.
Strategic Leaders
Organizational leaders charged with formulating and implementing a strategy with the objective of ensuring the survival and success of an organization
Which of the following is not included in the strategic management model? A) Measure and evaluate performance B) Perform internal research to identify customers C) Establish long-term objectives D) Implement strategies E) Develop mission and vision statements
Perform internal research to identify customers
What are guides to decision making? A) Laws B) Rules C) Policies D) Objectives E) Goals
Policies
Dynamic Capabilities
Procedures, processes, and routines that continuously expand existing resources or improve operating capabilities.
Operating Capabilities
Procedures, processes, or routines for delivering value to customers, employees, suppliers, or investors
Complementary Products or Services
Products or services that can be used in tandem with those from another industry
Sustainable Competitive Advantage
Requires giving buyers lasting reasons to prefer a firm's products or services over those of its competitors
Above-Average Profits
Returns in excess of what an investor expects from other investments with a similar amount of risk.
Which of the following statements is false? A) Open-mindedness is an important guideline for effective strategic management. B) Strategic management must become a self-perpetuating socialist mechanism. C) No organization has unlimited resources. D) Strategic decisions require trade-offs. E) Strategic management must be a self-reflective learning process.
Strategic management must become a self-perpetuating socialist mechanism.
What are the means by which long-term objectives will be achieved? A) Strategies B) Strengths C) Weaknesses D) Policies E) Opportunities
Strategies
Which individuals are most responsible for the success and failure of an organization? A) Strategists B) Financial planners C) Personnel directors D) Stakeholders E) Human resource managers
Strategists
Assets
Tangible or intangible resources or factors of production that create economic value for the firm when employed. This chapter focuses on physical, financial, human, and intangible assets.
Internal Analysis
The analysis of a firm's resources and capabilities to assess how effectively the firm is able to deliver the unique value (value proposition) that it hopes to provide to customers.
Attractiveness of an Industry
The degree to which an average firm in the industry can earn good profits
Organized to Exploit
The degree to which the legal, administrative, and operating structure of the firm allows it to capture the rents generated by resources
Price Sensitivity
The degree to which the price of a product or service affects consumers' willingness to purchase the product or service
Capabilities
The procedures, processes, and routines firms employ in their activities
Strategic Management Process
The process by which organizations formulate a plan and allocate resources to achieve competitive advantage that involves making four strategic choices;
Barriers to Entry
The way organizations make it more difficult for potential entrants to get a foothold in the industry.
Opportunities
Ways of taking advantage of conditions in the environment to become more profitable.
Competitive Parity
When a company survives but has no real competitive advantage over rivals
Competitive Advantage
When a firm generates higher profits compared to its competitors.
Sustained Competitive Advantage
When firms combine the legal elements, intellectual property rights, administrative elements, and cultural elements, allowing them to capture high profits that come from their valuable, rare, and inimitable resources, capabilities, or priorities.
Competitive Failure
When firms that can't create value for their stakeholders don't survive
An organization's vision statement A) is a constant reminder to its employees of why the organization exists. B) broadly charts the future direction of an organization. C) addresses the basic question: "What is our business?" D) answers the question: "What do we want to become?" E) none of the above
answers the question: "What do we want to become?"
The Internet has transferred power from ________ to ________. A) businesses, individuals B) governments, businesses C) individuals, businesses D) businesses, governments E) individuals, governments
businesses, individuals
Military strategy is based on an assumption of ________, whereas business strategy is based on an assumption of ________. A) conflict; cooperation B) conflict; competition C) cooperation; conflict D) competition; conflict E) cooperation; competition
conflict; competition
Long-term objectives should be all of the following except A) measurable. B) continually changing. C) reasonable. D) challenging. E) consistent.
continually changing.
The act of strengthening employees' sense of effectiveness by encouraging and rewarding them for participating in decision-making and exercising initiative and imagination is referred to as A) authoritarianism. B) proaction. C) empowerment. D) transformation. E) delegation.
empowerment.
The fact that Apple has no manufacturing facilities of its own A) has caused it to build up massive debt on its balance sheet. B) has enabled it to remain financially lean with virtually no long-term debt. C) has been problematic for Apple in terms of debt. D) illustrates that having more fixed assets than rival firms can provide major competitive advantages in a global recession. E) means that it is in the same position as Sony.
has enabled it to remain financially lean with virtually no long-term debt.
All of the following are guidelines for effective strategic planning except: A) it should be simple and nonroutine. B) it should be a learning process for all managers and employees. C) it should be a paper process more than a people process. D) it should not disregard qualitative information. E) it should not be a formal system for control.
it should be a paper process more than a people process.
According to research, organizations using strategic management are ________ than those that do not. A) more profitable B) more complex C) less profitable D) less static E) less complex
more profitable
) Specific results an organization seeks to achieve in pursuing its basic mission are A) strategies. B) rules. C) objectives. D) policies. E) tenets.
objectives.
Terms such as objectives, mission, strengths, and weaknesses were first formulated to address problems A) on the battlefield. B) in the boardroom. C) on the trading floor. D) in the military hierarchy. E) in interpersonal relationships.
on the battlefield.
The one factor that has most significantly impacted the nature and core of buying and selling in nearly all industries has been A) the Internet. B) political borders. C) corporate greed. D) customer and employee focus. E) the government.
the Internet.
All of these are pitfalls an organization should avoid in strategic planning except: A) using plans as a standard for measuring performance. B) using strategic planning to gain control over decisions and resources. C) failing to involve key employees in all phases of planning. D) too hastily moving from mission development to strategy formulation. E) being so formal in planning that flexibility and creativity are stifled.
using plans as a standard for measuring performance.