Smart Book 6

According to Bryan Barry, which of these are things a manager can do to keep a strategic plan on track? (select all that apply)

-Engage people -Stay focused -Keep it simple -Keep moving

What are two characteristics of strategy formulation? Choose all that apply.

-It is the basis for determining long-term goals. -It is a time-consuming process.

Corporate-level strategy: (select all that apply)

-answers questions such as "what business are we in?" and "what products and services shall we offer?" -focuses on the organization as a whole -involves senior executives in planning

What two things does the BCG matrix evaluate?

-business growth rates -market share

What are Porter's four competitive strategies?

-cost-leadership -differentiation -cost-focus -focused-differentiation

The three sources from which strategic position emerges are having:

-few needs and many customers -broad needs and few customers -broad needs and many customers

Which two of Porter's competitive strategies are appropriate when addressing a narrow market? Choose all that apply.

-focused-differentiation -cost focus

Select all of the true statements regarding unrelated diversification:

-it occurs when a company acquires another company in a completely unrelated business -companies may use it in an attempt to reduce risk

What are the three core processes of business identified by Bossidy and Charan?

-people -strategy -operations

What four characteristics are being addressed in a VRIO analysis?

-rarity -value -imitability -organization

Which of the following represent competitive forces used in Porter's model for industry analysis?

-threats of new entrants -bargaining power of buyers -bargaining power of suppliers -rivalry among competitors -threat of substitute products or services

The Internet has enabled consumers to "price shop" several retailers in order to find the best price for items such as appliances, electronics, and even cars. This has increased the consumer's ability to better negotiate favorable prices with retailers, demonstrating which of Porter's five competitive forces?

Bargaining power of buyers

Pacific Specialty Bikes store gets customized parts for its high-end models from a local manufacturer, Premium Supply. When the manufacturer announced a price increase, the bike store tried to switch to other local manufacturers but learned they that they wouldn't be able to meet delivery schedules. As a result, Pacific Bike chose to pay the higher prices from Premium Supply. Which of Porter's competitive forces does this demonstrate?

Bargaining power of suppliers

The president, chief financial officer, and chief operating officer of Jensen Mfg. meet annually to discuss the direction of the company including what products they will continue to offer and what new products they will introduce. Which level of strategic management does this represent?

Corporate level

Which level of strategic management focuses on the organization as a whole?

Corporate level

Which of Porter's four competitive strategies keeps the costs, and hence prices, of a product or service below those of competitors but targets only a narrow market?

Cost-focus strategy

Which of Porter's four competitive strategies offers products or services that are of unique or superior value compared to those of competitors and that target a wide market?

Differentiation strategy

The strategy of moving into new lines of business is called _____.

Diversification

What strategy is American Tile Corp. using when it acquires a company that makes industrial cleaning products which American Tile doesn't currently offer?

Diversification

Jordan plans to open a computer repair business this summer. As he plans, he writes down the long-term goals of the business so he can decide where he wants to go strategically. Which stage of the strategic management process is Jordan in?

Establish the mission, vision, and values statements

_____ is the process that helps align the last two phases of the strategic-management process: strategic implementation and strategic control.

Execution

True or false: It is common practice today for most small business owners to engage in strategic planning.

False

A grand strategy that involves expansion of things like sales revenues, market share, or number of employees is known as a(n) _____ strategy.

Growth

Which of these situations provides an external opportunity that the company may exploit to gain competitive advantage?

Monica's rare book company has weak competition.

When pursuing a cost-focus strategy, a company would target a _____ market.

Narrow

After completing his competitor analysis, Justin realized his company was the only one with all-natural ingredients in their pizza crust and could use this to get the pizza into more health food grocery stores. What aspect of a SWOT analysis has Justin uncovered?

Oppurtunity

Refer to Figure 6.2. The "feedback loop" in the strategic-management process involves

Reversing actions if necessary

A(n) _____ analysis is an assessment of the strengths, weaknesses, opportunities, and threats affecting the organization.

SWOT

In which step of the strategic-management process does an organization establish the mission and vision statements?

Step one

Which core process of business involves analyzing and understanding how success will be accomplished?

Strategy

You own a small deli near campus and learn that the university is exploring whether it should open a Subway sandwich franchise in the Student Union. Which of Porter's competitive forces does this represent for you?

Threat of new entrants

Within a SWOT analysis, the letter "T" represents a company's _____.

Threats

The growing popularity of reading news online has significantly reduced the sales of print copies of US newspapers. Which of Porter's five competitive forces does this demonstrate?

Threats of substitute products or services

True or false: According to Bossidy and Charan, execution is the central part of any company's strategy.

True

The second step of the strategic management process involves

assessing the current reality

Bethany wants to buy a pair of designer boots. To find the best price, she searches the Internet and compares prices among the eight sites that sell the boots. Which of Porter's five competitive forces is demonstrated in this scenario?

bargaining power of buyers

Companies pursuing a cost-leadership strategy keep costs/prices _____ those of competitors and target a _____ market.

below; wide

Juanita feels it is important for her taxi company to continually measure itself against its best competition. She keeps track of the number of rides per hour and turnaround times for all her drivers and compares it to that of other high-performing taxi companies in the area. Juanita is using the process of _____ to compare her company with another.

benchmarking

The process by which a company compares its performance with that of other high-performing organizations is known as _______.

benchmarking

Strategic _____ involves monitoring the execution of strategy and taking corrective action when necessary.

control

Computer maker Dell tries to have the lowest prices for its computers in order to attract a large consumer group. In Porter's four competitive strategies, this would be an example of the _____ strategy.

cost-leadership

Johanna has been asked by the department manager to prepare a SWOT analysis on two of the company's products. In which step of the strategic management process would a company use a SWOT analysis?

current reality assessment

Smartwater is a brand of bottled water that promotes health benefits and features a tall, smooth, clear bottle not found in competitor brands. Based on this, which of Porter's competitive strategies is the company using?

differentiation

Business growth rate, as used in the BCG matrix, is concerned with how fast the _____ is(are) growing.

entire industry

According to the BCG matrix, a company will do better in a _____ market in which it has a high market share.

fast-growing

A _____ is a vision or projection of the future that is made following a SWOT analysis.

forecast

Leonore's Luxury Leather Footwear Corp. conducted a SWOT analysis and determined that at least 57% of consumers would demand high-end footwear and their sales should increase by 18% in the next year. This vision of what could happen is known as a _____.

forecast

Strategy _______ is the process of choosing among different strategies and altering them to best fit the organization's needs.

formulation

A business that wants to reach more customers and hires more employees to get this done is focusing on a _____ strategy.

growth

Porter's five competitive forces form a model for _____ analysis.

industry

To be successful, strategic planning requires a company to have a _____ orientation.

long-term

When considering SWOT analysis, what is an example of an organizational weakness?

obsolete technology

Skate/24 had only one competitor in the local market and that competitor just went out of business. Within a SWOT analysis, this is an example of an organizational _________ for Skate/24.

opportunity

Environmental factors that an organization may exploit for competitive advantage are called organizational ______.

oppurtunities

Within a SWOT analysis, an organizational threat will come from _____ the company.

outside

According to Bossidy and Charan, the first core process of business is _____.

people

Of the three core processes of business identified by Bossidy and Charan, which do they believe is the most important?

people

One way Chip's Coffee House retains staff is by offering two-weeks paid vacation and health insurance benefits for part-time employees. Which of Bossidy and Charan's core processes is this business focusing on?

people

Strategic positioning attempts to achieve sustainable competitive advantage by:

preserving what is distinctive about a company

At first Rohan thought it was a good idea to offer a car repair pick-up service at his auto repair shop, but then he realized that most customers called Tow-It-Now Inc. and it would be difficult to match that company's service. Which part of a VRIO analysis helped Rohan evaluate this idea?

rarity

When conducting a VRIO analysis, one question that must be answered is, "Is the resource or capability currently controlled by only a few firms or no other firms? This would determine the _____ associated with the resource.

rarity

A company that grows its business by purchasing a business that is related to its existing portfolio is engaging in _____.

related diversification

A(n) ______ strategy requires little or no change to a company's product or service.

stability

When Johnson & Johnson promoted its baby shampoo as a gentle cleanser suitable for adults, it did this without changing the formulation of the product. Which type of corporate strategy does this exemplify?

stability

Having (1) few needs and many customers, (2) broad needs and few customers, and (3) broad needs and many customers are the three sources from which _____ emerges

strategic position

Michael Porter defined _____ as an attempt to achieve sustainable competitive advantage by preserving what is distinct about a company.

strategic positioning

In which core process of business developed by Bossidy and Charan would a company ask "Who is my competition?" and "How will my business make money on a sustainable basis?"

strategy

The skills and capabilities that give an organization special competencies and competitive advantages in executing strategies in pursuit of its mission are called organizational ______.

strengths

When a company is readily able to switch to another company in order to get the raw materials it needs to make products, Porter would say that the bargaining power of ______ goes down.

suppliers

When other companies cannot duplicate the value provided by a competitor, then the competitor has established a(n) _____ competitive advantage.

sustainable

Luxury Linens Inc. produces the highest thread-count sheets available anywhere and does so at a price that none of its competitors can duplicate. It can be said that Luxury Linens has a(n) _____.

sustainable competitive advantage

Newly-implemented government regulations have reduced the availability of raw materials for Blair Woodworking Corp. This would be considered an external organizational ______ in a SWOT analysis.

threat

Sasha has run a small diner near the train station for the past ten years. Six months ago, a chain restaurant serving gourmet burgers and sandwiches opened up near him and he has had to re-think his menu. He added some specialty sandwiches and free fries with every burger in order to retain his customers. Which of Porter's five competitive forces has affected Sasha's business?

threat of new entrants

In terms of a SWOT analysis, organizational _______ are environmental factors that hinder an organization from achieving a competitive advantage.

threats

Joan runs a drop-in play center and until recently she was the only business in town where families could find reasonably-priced entertainment for their children. Joan learned that two fast-food restaurants with play areas are being built nearby so she is coming up with ways to convince her customers that her center is preferable. Which of Porter's five competitive forces is Joan specifically worried about?

threats of substitute products or services

Wisconsin Dairy Farms wants to grow revenue and feels the best way to do this is by purchasing a business that is not in the dairy industry. After a lengthy analysis, it purchases Hydro Generator Corp. which supplies energy along the Pacific coast. What type of strategy is the company using?

unrelated diversification

Carlos is doing a VRIO analysis for a product his company is thinking about producing. The first question he asks is, "Does this new capability allow us to minimize the threat of the main competitor gaining more market share?" He decides the answer to this question is "yes." Which aspect of the VRIO analysis does this question answer?

value

In the large city where Cassandra lives, many people are asking for her restaurant to deliver food to their offices. Her restaurant has never delivered food before but since so many people have requested this service Cassandra decides it's a good idea to do it. In a VRIO analysis, Cassandra has determined the ____ of this capability.

value

When would a company use a VRIO analysis?

when deciding whether or not a new product might work in the marketplace