Chapter 6 Smartbook

What two things does the BCG matrix evaluate?

1. Business growth rate 2. Market share

What are Porter's four competitive strategies?

1. cost-leadership 2. differentiation 3. cost-focus 4. focused-differentiation

According to Bryan Barry, which of these are things a manager can do to keep a strategic plan on track?

1. engage people 2. keep it simple 3. stay focused 4. keep moving

Corporate-level strategy:

1. involves senior executives in planning 2.answers questions such as "what business are we in?" and "what products and services shall we offer?" 3. focuses on the organization as a whole

What are the four activities for developing strategic thinking identified in the text?

1. understand the business 2. broaden you task & functional knowledge 3. set aside time to reflect 4. engage in lateral thinking

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

1.people 2. strategy 3. operations

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

?????

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

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

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(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 1

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

What four characteristics are being addressed in a VRIO analysis?

Value, Rarity, Imitability, Organization

Before introducing the new software, Star Software Inc., conducted benchmark activities to assess how popular the product would be in the marketplace. Which stage of the strategic management process is being used in this situation?

assess the current reality

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

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 two of Porter's competitive strategies are appropriate when addressing a narrow market?

cost-focus focused-differentiation

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

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

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

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

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

growth

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

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?

opportunity

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 ______.

opportunties

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

outside

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(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

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

strategic positioning

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.

supplier

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

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

threats

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?

threats of new entrants

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

true

True or false: According to the text, setting aside time to reflect is one way to develop strategic thinking.

true

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