MGT 4810 Ch. 5
Which level of strategy is most likely NOT present in small firms? A) Company B) Functional C) Divisional D) Operational E) All of the above are present in small firms.
C
Which strategy would be most appropriate when the distinctive competencies of two or more firms complement each other especially well? A) Conglomerate diversification B) Divestiture C) Joint venture D) Retrenchment E) Integration
C
Yum Brands owns A) none of its outside-U.S. restaurants. B) a small share of its outside-U.S. restaurants. C) nearly half of its outside-U.S. restaurants. D) a substantial majority of its outside-U.S. restaurants. E) virtually all of its outside-U.S. restaurants.
E
In which situation would horizontal integration be an especially effective strategy? A) When an organization can gain monopolistic characteristics in a particular area or region without being challenged by the federal government for "tending substantially" to reduce competition B) When an organization competes in a slowing industry C) When decreased economies of scale provide major competitive advantages D) When an organization has neither the capital nor human talent needed to successfully manage an expanded organization E) When competitors are succeeding due to managerial expertise or having particular resources an organization possesses
A
There were far more global mergers and acquisitions in 2014 than in any year since A) 2007. B) 1999. C) 1985. D) 1967. E) 1951.
A
Under which strategy would you offer products or services to a wide range of customers at the lowest price available on the market? A) Cost Leadership - Low Cost B) Cost Leadership - Best Value C) Focus - Low Cost D) Focus - Best Value E) Differentiation
A
What kind of strategy is retrenchment? A) A turnaround strategy B) An expansion strategy C) A diagonal strategy D) An intensive strategy E) An offensive strategy
A
Financial objectives involve all of the following EXCEPT A) growth in revenues. B) larger market share. C) higher dividends. D) greater return on investment. E) a rising stock price.
B
Under which condition would a differentiation strategy be especially effective? A) When there are few ways to differentiate the product or service that buyers perceive as having value B) When technological change is fast paced and competition revolves around rapidly evolving product features C) When most buyers use the product in the same way D) When many rival firms are following a similar differentiation approach E) When the differentiation base is easy or inexpensive for rivals to duplicate
B
All of the following situations are conducive to market development EXCEPT A) when new channels of distribution are expensive and unreliable. B) when an organization is successful at what it does. C) when new untapped or unsaturated markets exist. D) when an organization has excess production capacity. E) when an organization's basic industry is rapidly becoming global in scope.
A
Amazon's start of rapid delivery services in some U.S. cities is an example of which type of strategy? A) Forward integration B) Backward integration C) Horizontal integration D) Related diversification E) Unrelated diversification
A
The form of bankruptcy in which all the organization's assets are sold in parts for their tangible worth is A) Chapter 7. B) Chapter 8. C) Chapter 9. D) Chapter 11. E) Chapter 13.
A
Which strategy seeks to increase market share for present products or services in present markets through greater marketing efforts? A) Market penetration B) Forward integration C) Market development D) Backward integration E) Product development
A
What occurs when two or more companies form a temporary partnership or consortium for the purpose of capitalizing on some opportunity? A) Retrenchment B) A joint venture C) Liquidation D) Forward integration E) Divestiture
B
When companies are hired by other companies to take over functional operations such as human resources, information systems, payroll, accounting, or customer service, this is called A) marketing. B) outsourcing. C) licensing. D) franchising. E) divestiture.
B
When two organizations of about equal size unite to form one enterprise, which of these occurs? A) Hostile B) Merger C) Acquisition D) Leveraged buyout E) Friendly takeover
B
Which term refers to selling a division or part of an organization? A) Joint venture B) Divestiture C) Concentric diversification D) Liquidation E) Horizontal integration
B
According to Porter, which strategy offers products or services to a niche group of customers at the lowest price available on the market? A) Cost Leadership - Low Cost B) Cost Leadership - Best Value C) Focus - Low Cost D) Focus - Best Value E) Differentiation
C
Bankruptcy A) should never be used as a strategy. B) should be used only when one is legally forced to do so. C) can be an effective type of retrenchment strategy. D) should only be used for large firms. E) should only be used for small, private firms.
C
Forward integration and backward integration are sometimes collectively referred to as A) horizontal integration. B) diversification. C) vertical integration. D) stuck-in-the-middle. E) hierarchical integration.
C
A pasta manufacturer's purchase of some pet food brands is an example of A) backward integration. B) divestiture. C) retrenchment. D) unrelated diversification. E) forward integration
D
Backward integration is effective in all of these cases EXCEPT A) when an organization competes in an industry that is growing rapidly. B) when an organization has both capital and human resources to manage the new business of supplying its own raw materials. C) when an organization needs to acquire a needed resource quickly. D) when the advantages of stable prices are not particularly important. E) when present suppliers have high profit margins.
D
Gap's opening of its first five stores in China is an example of which type of strategy? A) Forward integration B) Backward integration C) Horizontal integration D) Market development E) Product development
D
Long-term objectives are needed at which level(s) in an organization? A) Corporate B) Divisional C) Functional D) All of the above E) Corporate & divisional levels, but not functional level
D
Procter & Gamble's (P&G) sale of many of its brands in order to focus on its core brands is an example of which type of strategy? A) Related diversification B) Unrelated diversification C) Retrenchment D) Divestiture E) Liquidation
D
Selling all of a company's assets, in parts, for their tangible worth is called A) joint venture. B) divestiture. C) concentric diversification. D) liquidation. E) unrelated integration.
D
Staples 170 store closings in North America in 2014 is an example of A) divestiture. B) backward integration. C) liquidation. D) retrenchment. E) forward integration.
D
The Family Farmer Bankruptcy Act of 1986 created which of the major types of bankruptcy? A) Chapter 7 B) Chapter 8 C) Chapter 9 D) Chapter 12 E) Chapter 13
D
Under which condition would a cost leadership strategy be especially effective? A) When there are many ways to achieve product differentiation that have value to buyers B) When most buyers use the product in different ways C) When buyers incur high costs in switching their purchases from one seller to another D) When buyers are small and have little power to bargain down prices E) When the products of rival sellers are essentially identical and supplies are readily available from any of several eager sellers
E
What principle is built on the idea that there is no general plan for which way to go and what to do? A) Managing by crisis B) Managing by extrapolation C) Managing by objectives D) Managing by hope E) Managing by subjectives
E
When a domestic company first begins to export to India, it is an example of A) horizontal integration B) backward integration. C) forward integration. D) concentric diversification. E) market development.
E
Which strategy would be effective when the stockholders of a firm can minimize their losses by selling the organization's assets? A) Integration B) Differentiation C) Diversification D) Cost leadership E) Liquidation
E
Which of the following is noted in the text as a serious obstacle for many small business owners? A) A lack of business ethics B) An excess of employees and managerial staff C) A lack of experience in networking D) A lack of strategic-management knowledge E) Having too many suppliers
D
Which strategy generally entails large research and development expenditures? A) Market penetration B) Retrenchment C) Forward integration D) Product development E) Divestiture
D
Which strategy is appropriate when an organization competes in an industry characterized by rapid technological developments? A) Retrenchment B) Product development C) Backward integration D) Liquidation E) Market penetration
B
Which strategy is effective when new, but related, products could be offered at highly competitive prices? A) Forward integration B) Related diversification C) Related integration D) Conglomerate diversification E) Unrelated diversification
B
Which strategy should an organization use when its products are currently in the declining stage of the product's life cycle? A) Divestiture B) Related diversification C) Backward integration D) Unrelated diversification E) Retrenchment
B
Which strategy should be implemented when a division is responsible for an organization's overall poor performance? A) Backward integration B) Divestiture C) Forward integration D) Cost leadership E) Related diversification
B
The controversial practice of a company borrowing money simply to fund dividend payouts to itself is known as A) a leveraged buyout. B) retrenchment. C) first mover advantage. D) dividend recapitalization. E) dividend divestiture.
D
What refers to a strategy of seeking ownership of, or increased control over a firm's competitors? A) Forward integration B) Conglomerate diversification C) Backward integration D) Horizontal integration E) Concentric diversification
D
Which of the following is NOT a reason joint ventures fail? A) Managers who must collaborate daily in operating the venture are not involved in forming or shaping the venture. B) The venture may not be supported equally by both partners. C) The venture may benefit the partnering companies but may not benefit the customers who then complain about poorer service or criticize the companies in other ways. D) Venture risk was minimized. E) The venture may begin to compete more with one of the partners than the other.
D
Which of these strategies is effective when the number of suppliers is small and the number of competitors is large? A) Conglomerate diversification B) Forward integration C) Concentric diversification D) Backward integration E) Horizontal diversification
D
What principle is based on the belief that the true measure of a really good strategist is the ability to solve problems? A) Managing by crisis B) Managing by objectives C) Managing by extrapolation D) Managing by exception E) Managing by hope
A
Retrenchment would be an effective strategy when an organization A) has shrunk so quickly that major internal reorganization is needed. B) is one of the stronger competitors in a given industry. C) is plagued by inefficiency, low profitability, poor employee morale and pressure from stockholders to improve performance. D) has decided to capitalize on opportunities, maximize threats, take advantage of strengths and overcome weaknesses. E) does not have a clearly distinctive competence and has failed to meet its objectives and goals consistently over time.
C
Websites that sell products directly to consumers are examples of which type of strategy? A) Backward integration B) Product development C) Forward integration D) Horizontal integration E) Conglomerate diversification
C
When the private equity (PE) firm Clayton, Dubilier & Rice bought David's Bridal from the PE firm Leonard Green & Partner LP this was an example of A) dividend recapitalization. B) a joint venture. C) a secondary buyout. D) a leveraged buyout. E) a merger.
C
Which chapter of the bankruptcy code applies to municipalities? A) Chapter 7 B) Chapter 8 C) Chapter 9 D) Chapter 12 E) Chapter 13
C
All of the following are cooperative arrangements EXCEPT A) Research and Development (R&D) partnerships. B) joint-bidding consortia. C) cross-licensing agreements. D) cross-manufacturing agreements. E) marketing plans.
E
Mergers and acquisitions are created for all of the following reasons EXCEPT to A) gain new technology. B) reduce tax obligations. C) gain economies of scale. D) smooth out seasonal trends in sales. E) shift company profits to the United States from countries with low corporate tax rates.
E
Which of the following is NOT a guideline for when an organization should use an unrelated diversification strategy? A) When revenues derived from an organization's current products or services would increase significantly by adding the new unrelated, products B) When an organization's present channels of distribution can be used to market the new products to current customers C) When the new products have countercyclical sales patterns compared to an organization's present products D) When an organization competes in a highly competitive and/or a no-growth industry E) When existing markets for an organization's present products are not yet saturated
E
