Business Strategy 495 - Practice Exam Questions

What is an industry?

Collection of firms offering similar products and services which share similar customers Some industries tend to have ... - competitors with homogeneous characteristics - very different companies (heterogeneous) - Just a few firms (concentrated) - Many firms (fragmented)?- Etc.

Decisions about which markets to compete refer to

Corporate strategy

Which of the following is the first activity in strategy evaluation?

Examining the underlying bases of current strategies

Which of these examples of a mission statement focus area does NOT identify the utility of the firm's products to its customers?

ExxonMobil focuses on oil and gas rather than energy

Panera installing online ordering and delivery from their restaurants is an example of which type of strategy?

Forward integration

What refers to a strategy of seeking ownership of, or increased control over a firm's competitors?

Horizontal integration

If Chipotle opens five stores for the first time in China, this is an example of which type of strategy?

Market development

Which strategy seeks to increase market share for present products or services in present markets through greater marketing efforts?

Market penetration

Which of the following is NOT an external force that must be examined in formulating strategies?

Organizational

According to Porter, what is usually the most powerful of the five competitive forces?

Rivalry among competing firms

What step in the strategic management process involves mobilizing employees and managers to put strategies into action?

Strategy implementation

How is the Balanced Scorecard used in the strategy process?

The balanced scorecard is a strategy evaluation and control technique. It is based on the need of firms to "balance" financial measures that are oftentimes used exclusively in strategy evaluation with various nonfinancial measures such as product quality and employee morale. An effective Balanced Scorecard contains a carefully chosen combination of strategic and financial objectives tailored to the company's business.

An industry's buyers are most powerful when

They can threaten vertical integration

Which of these basic questions should a vision statement answer?

What do we want to become?

Under which condition would a differentiation strategy be especially effective?

When technological change is fast paced and competition revolves around rapidly evolving product features

A firm's strengths that cannot be easily matched or imitated by competitors are called

distinctive competencies.

The acronym PESTEL stands for political, economic, sociocultural, technological, , and legal forces.

environment

An external audit focuses on identifying and evaluating trends and events within the control of management.

false

Well conceived and properly executed mission and vision statements are not subject to revision.

false

To perform an external audit, a company first must

gather competitive intelligence and information about external trends.

The act of oversight and direction for an organization is referred to as

governance.

Whenever new firms can easily enter a particular industry, the intensity of competitiveness among firms tends to

increase

Pricing is one of the basic functions of

marketing

Corrective actions are almost always __ except when external and internal factors have not significantly changed and the firm is progressing satisfactorily toward achieving stated objectives.

needed

A resource is valuable if it is rare, hard to imitate, or

not easily substitutable.

Strategy-evaluation activities should ideally be performed

on a continuous basis.

Strategic management focuses on integrating functional areas to achieve organizational success. Which of the following is NOT one of the functional areas that is the focus of strategic management?

organizational behavior

Today, boards of directors are composed mostly of

outsiders

If you discover during the course of strategy evaluation that major changes have occurred in the firm's internal strategic position, you should

take corrective actions.

Land is an example of a(n) __ resource.

tangible

Since _ resources can more easily be bought and sold, _ resources are often more important for gaining and sustaining competitive advantages.

tangible; intangible

What is the vertical dimension of industry scope? Evaluate the vertical dimension of the main industry in which your company operates

-Refers to the degree to which firms in an industry are vertically integrated along value chain activities -Topgolf Callaway Main Industries: Athletic and Sporting Goods Manufacturing in the US and Golf Driving Ranges and Family Fun Centers in the US -More profitable/main industry: Golf driving ranges and family fun centers in the US (industry rev. = 16.8 million, 9.7% profit margin., 58,137 # of businesses) -marketing to families or groups of people who enjoy recreational golf with a family-like environment that is inclusive to those who play golf or those who do not play golf

Core competencies refer to

-he ability to integrate multiple technologies -The collective learning of the organization -A range of skills and capabilities critical for developing competitive advantage

Compare and contrast vision statements with mission statements.

-vision statements: The overall objective of a vision statement is to create a short one-sentence statement that answers the question of, "Who do we want to become?" The vision statement should reveal the type of business the firm engages -mission statements: Declaring an organization's "reason for being."• It answers the pivotal question "What is our business?"• It is essential for effectively establishing objectives and formulating strategies.• It reveals what an organization wants to be and whom it wants to serve --> also known as a creed statement

Identify and briefly explain four of the key characteristics of strategic decisions.

1. Directive; 2 Cross-functional; 3 Integrated (impacts the entire organization); 4 Involve a significant commitment of resources (consequential, high stakes); 5. Not-easily-reversible

What is the cornerstone of effective strategy evaluation?

Adequate and timely feedback

Which of the following is often considered to be the first step in strategic planning?

Developing a vision statement

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?

Divestiture

List and then briefly describe each of the forces found in the Porter's Five Forces Model of competition. Use examples (preferable from your company's industry) to illustrate each of the forces. How can you use this model to enhance value creation for your company?

Porter's 5 forces show that you are competing with your direct competitors, but you also are in a fight for profits with a broader set of competitors. These five forces also help you hone in on what is really causing profitability in the industry. Identify key aspects or elements of each competitive force that impact the firm.• Evaluate how strong and important each element is for the firm.• Decide whether the collective strength of the elements is worth the firm entering or staying in the industry. In relation to TopGolf Callaway 1. Potential entry of new competitors 2. Bargaining power of consumers 3. Rivalry among competing firms 4. Potential development of substitute products 5. Bargaining power of suppliers

Which of the following is NOT a reason for the increasing difficulty of evaluating strategies?

Product life cycles are longer.

within an industry are sets of firms competing in similar ways for similar customers and interacting more directly within each group than with competitors drawn from other strategic groups in the industry.

Strategic groups

A good mission statement has

a customer orientation.

The purpose of a mission statement is to declare all of these EXCEPT

an annual financial plan.

In the process of developing a mission statement, it is important to involve

as many managers as possible.

In value chain analysis, the activities of an organization are divided into two major categories of value activities, primary and support. Which of the following is a primary activity?

assembling the product

All stakeholders' claims on an organization __ pursued with equal emphasis.

cannot be

The strategic-management process

is a continuous process.

A core competence

is something that a firm does especially well in relation to rival companies

In determining the __, marketers often make decisions related to areas such as warehousing, distribution channels, and retail site locations.

place

In order to appeal to diverse stakeholders, an effective mission statement should be

reconciliatory.

Internal __ are controllable activities in an organization that are performed especially well.

strengths

Because of the success of the iPad and the iPhone, Apple has tremendous brand recognition. Brand recognition is one of Apple's

strengths.

The goal of strategic management is to

to achieve and maintain competitive advantage

Evaluating strategies on a continuous rather than on a periodic basis allows benchmarks of progress to be established and more effectively monitored.

true

In most large organizations that engage in strategic management, the formulation, implementation, and evaluation of strategy activities occur at three hierarchical levels: corporate; divisional or strategic business unit; and functional.

true

Laser eye surgery would be considered a substitute product for eyeglasses and contact lenses.

true

Some of the benefits of strategic management are increased discipline, enhanced communication, and more effective allocation of time and resources.

true

Generally, external opportunities and threats are

uncontrollable by a single organization.

Good mission statements identify the ______ of a firm's products to its customers.

utility

All of the following are basic functions of marketing EXCEPT

value chain analysis.