EXAM 2 MGMT 470

Under which condition would a differentiation strategy be especially effective?

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

Which stage of the strategy-formulation framework includes an IFE Matrix and the Competitive Profile Matrix?

input

Which element in the projected income statement CANNOT be forecasted using the percentage-of-sales method?

interest expense

All of our locations will be open at least two evenings per week until 8:30 p.m." is an example of a(n)

policy

The most common bases for segmenting markets are geographic and demographic.

true

an appropriate strategy when an organization has excess production capacity is market development.

true

What kind of strategy is retrenchment?

A turnaround strategy

What analytical tool has four quadrants based on two dimensions: competitive position and market growth?

Grand Strategy Matrix

A benefit of using projected balance sheets and income statements is that

he impact of various implementation decisions can be forecasted.

Objectives provide direction and allow for organizational synergy.

true

A pasta manufacturer's purchase of some pet food brands is an example of

unrelated diversification

Which of the following is NOT an accepted approach for determining a business's worth?

The Return on Investment Method

Which of the following is a management issue central to strategy implementation?

A) Devising policiesB) Revising reward and incentive plansC) Minimizing resistance to changeD) Developing an effective human resources functionE) All of the above ALL OF THE ABOVE

Which of the following is NOT a reason joint ventures fail?

Venture risk was minimized.

Which strategies aim at improving internal weaknesses by taking advantage of external opportunities?

WO

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

governance.

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

horizontal integration

Subdividing a market into distinct subsets of customers according to their needs and buying habits is known as

market segmentation.

Conflict in an organization is

not always bad

Which of these is NOT a SPACE Matrix quadrant?

offensive

Which of the following is in keeping with the current view of organizational change?

organizational change is a continious process

Which of the following is NOT a management issue central to strategy implementation?

performing an internal audit

What term is used to describe specific guidelines, methods, procedures, rules, forms and administrative practices established to support and encourage work toward stated goals?

policies

Which of the following variables is NOT directly affected by market segmentation?

process

Which strategy generally entails large research and development expenditures?

product development

Which strategy is appropriate when an organization competes in an industry characterized by rapid technological developments?

product development

In the Boston Consulting Group (BCG) Matrix, how would a division with a low relative market share position in a high growth industry be described?

question mark

What action involves reconfiguring or redesigning work, jobs, and processes for the purpose of improving cost, quality, service, and speed?

reenginerring

Which strategy is effective when new, but related, products could be offered at highly competitive prices?

related diversification

Evaluating the worth of a firm

requires both qualitative and quantitative skills.

A positive feature of the Quantitative Strategic Planning Matrix (QSPM) is that sets of strategies can be examined sequentially or simultaneously.

true

Additional capital is often required for successful strategy implementation.

true

An organization's present strategies, objectives, vision, and mission, coupled with the external and internal audit information, provide a basis for generating and evaluating feasible alternative strategies.

true

Annual objectives are key components in the strategic-management process because they dictate how resources will be allocated.

true

First mover advantages refer to the benefits a firm may achieve by entering a new market or developing a new product or service prior to rival firms.

true

Four types of resources that can be used to achieve desired objectives are financial, physical, human, and technological.

true

If a firm incurs a loss during a particular year, or if the firm paid out more in dividends than it had in net income, what happens to the retained earnings (RE) amount?

it decreases

Which term is primarily concerned with shareholder well-being rather than employee well-being?

restructuring

Staples 170 store closings in North America in 2014 is an example of

retrenchment.

Strategy analysis and choice largely involves making ________ decisions based on ________ information.

subjective; objective

Matching which factors would allow factories to produce desirable levels without extra shifts, overtime, or subcontracting?

supply and demand

Which section of the SWOT Matrix involves matching internal strengths with external opportunities?

the SO cell

All of the following are limitations of the Boston Consulting Group (BCG) Matrix EXCEPT

the matrix requires at least three years worth of data.

Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies?

throughput

All of the following are strategic marketing issues or decisions EXCEPT

to use operating leverage

Horizontal integration is seeking ownership or increased control over competitors.

true

Which of these is a limitation of QSPM?

It requires intuitive informed judgments.

Which strategy should be implemented when a division is responsible for an organization's overall poor performance?

Divestiture

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!

Policies

A) let both employees and managers know what is expected of them.B) provide a basis for management control.C) allow coordination across organizational units.D) reduce the amount of time managers spend making decisions.E) all of the above ALL OF THE ABOVE

Reengineering does not usually affect the organizational structure or chart, nor does it imply job loss or employee layoffs.

Answer: TRUE

What are the three categories of approaches for managing and resolving conflict?

Avoidance, defusion, and confrontation

The Boston Consulting Group (BCG) Matrix is designed specifically to enhance which type of firm's efforts to formulate strategies?

Companies with more than one division

After completing an EPS/EBIT analysis, what conclusions would you make if the debt line is above the stock line throughout the range of EBIT on the graph?

Debt appears to be the best financing alternative.

Which of the following is the first step in developing a QSPM?

Make a list of the firm's key external opportunities and threats and internal strengths and weaknesses in the left column of the QSPM.

According to the Grand Strategy Matrix, which strategy is recommended for a firm with rapid market growth and a strong competitive position?

Market penetration

What is a central strategy-implementation technique that allows an organization to examine the expected results of various strategy implementation decisions?

Projected financial statement analysis

Which strategy should an organization use when its products are currently in the declining stage of the product's life cycle?

Related diversification

Under which condition would a cost leadership strategy be especially effective?

When the products of rival sellers are essentially identical and supplies are readily available from any of several eager sellers

Which approach for managing and resolving conflict involves ignoring the problemin hopes that the conflict will resolve itself?

avoidance

In the BCG Matrix, a division with a high relative market share position in a low-growth industry can be described as a

cash cow

Aspects of an existing culture that are antagonistic to a proposed strategy should be

changed

A disagreement between two or more parties on one or more issues is called a(n)

conflict

In low-earning periods, too much ________ in the capital structure of an organization can endanger stockholders' return and jeopardize company survival.

debt

Just-in-time describes

delivering materials just as they are needed.

An area on a perceptual map without ideal points indicates a

demand void

In which situation would horizontal integration be an especially effective strategy?

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

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?

divesiture

Medium-sized firms tend to use which type of structure?

divisional

A firm can usually serve two or more market segments with the same strategy.

false

Effective strategy formulation can usually guarantee successful strategy implementation.

false

Return on Assets is the most widely used technique for determining whether debt, stock, or a combination of debt and stock is the best alternative for raising capital to implement strategies.

false

There are five component variables in the marketing mix: product, place, promotion, price, and people.

false

he four strategies of the SPACE Matrix are aggressive, conservative, offensive and defensive.

false

Amazon's start of rapid delivery services in some U.S. cities is an example of which type of strategy?

forward integration

Which organizational structure is the most widely used?

functional