MGMT 481 test 1

The three original broadcast networks captured about ________ of the prime-time audience in 1978, but today their combined market share is less than ________. A) 75%/40% B) 75%/25% C) 90%/50% D) 90%/25% E) 100%/40%

90%/50%

Mission

A company's primary purpose that often specifies the business in which the firm intends to compete - or the customers it intends to serve

Substitute

A product that is fundamentally different yet serves the same function or purpose as another product

Strategy Vehicles

Activities and strategic choices - such as make versus buy, acquisitions, and strategic alliances - that influence a firm's ability to enter particular markets, deliver unique value to customers, or create barriers to imitating its product

Resources

All assets, capabilities, organizational processes, firm attributes, information, knowledge, and so on, controlled by a firm that enable the firm to conceive of and implement strategies that improve its efficiency and effectiveness

How do line managers become "owners" of the strategy? A) By attending top manager meetings B) By executing plans formulated by other people C) By involvement in the strategic-management process D) By becoming a shareholder of the firm E) By buying off top managers

By involvement in the strategic-management process

Rivalry

Competition among firms within an industry typically this involves firms putting pressure on each other and limiting each other's profit potential by attempting to steal profits and/or market shares.

Functional Strategy

Decisions about how to effectively implement the business unit strategy within functional areas like finance, product development, operations, information technology, sales and marketing, and customer service.

Business Unit Strategy

Decisions about how to gain and sustain advantage, made at the manager level for each standalone business unit within a company

Corporate Strategy

Decisions about what markets to compete in, made by executives at the corporate level of an organization.

Segmentation Analysis

Dividing up customers into groups or segments based on similar needs or wants

________ allows firms to sell products, advertise, purchase supplies, bypass intermediaries, track inventory, and eliminate paperwork. A) Social networking B) E-commerce C) Blogging D) Video sites E) None of the above

E-commerce

________ and ________ are external forces transforming business and society today. A) E-commerce; strategy B) E-commerce; globalization C) Strategy; globalization D) Corporate culture; stakeholders E) Stakeholders; strategy

E-commerce; globalization

During what stage of strategic management are a firm's specific internal strengths and weaknesses determined? A) Formulation B) Implementation C) Evaluation D) Feedback E) Goal-setting

Formulation

What step in the strategic development process involves mobilizing employees and managers to put strategies into action? A) Formulating strategy B) Strategy evaluation C) Implementing strategy D) Strategic advantage E) Competitive advantage

Implementing strategy

What types of skills are especially critical for successful strategy implementation? A) Interpersonal B) Marketing C) Technical D) Conceptual E) Thinking

Interpersonal

Distinctive Competence

Is a competitively valuable activity that a firm performs better than its rivals

Which statement best describes intuition? A) It represents the marginal factor in decision-making. B) It represents a minor factor in decision-making integrated with analysis. C) It should be coupled with analysis in decision-making. D) It is better than analysis in decision-making. E) It is management by ignorance.

It should be coupled with analysis in decision-making.

Shareholders

Owners of a company

What can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives? A) Strategy formulation B) Strategy evaluation C) Strategy implementation D) Strategic management E) Strategic leading

Strategic management

________ is used to refer to strategic formulation, implementation and evaluation, with ________ referring only to strategic formulation. A) Strategic planning; strategic management B) Strategic planning; strategic processing C) Strategic management; strategic planning D) Strategic management; strategic processing E) Strategic implementation; strategic focus

Strategic management; strategic planning

SWOT Analysis

Strategic planning method used to evaluate the strengths, weaknesses, opportunities, and threats involved in a business.

Which phase of strategic management is called the action phase? A) Strategy formulation B) Strategy implementation C) Strategy evaluation D) Allocating resources E) Measuring performance

Strategy implementation

________ is not a strategy-implementation activity. A) Taking corrective actions B) Establishing annual objectives C) Devising policies D) Allocating resources E) Motivating employees

Taking corrective actions

Unique Value

The reason a firm wins with customers or the value proposition it offers to customers, such as a low cost advantage or differentiation advantage.

Strategy Implementation

The translation of a chosen strategy into organizational action so as to effectively implement the activities required to achieve strategic goals and objectives

Stakeholders

Those who have a share or an interest in the activities and performance of an organization

Rarity

To be uncommon, or not available to other competitors

What is not a reason given for poor or no strategic planning in organizations? A) Waste of time B) Being content with success C) Firefighting D) Poor reward structure E) Trust of management

Trust of management

(1) markets to compete in; (2) unique value the firm will offer in those markets; (3) the resources and capabilities required to offer that unique value better than competitors; and (4) ways to sustain the advantage by preventing imitation

What are the four strategic choices?

Virtuous Circle

When more sellers attract more buyers, who, in turn, attract more sellers.

Positive network Externalities

When the value of a product increases with the number of users

Value

Worth or utility

The goal of strategic management is to A) achieve competitive advantage. B) maintain competitive advantage. C) achieve and maintain competitive advantage. D) eliminate competitive advantage E) eliminate and abolish competitive advantage.

achieve and maintain competitive advantage.

Both business and military organizations must ________ and ________ to be successful. A) be impervious to change; continually improve B) adapt to change; continually improve C) shun change; stay the course D) be impervious to change; stay the course E) none of the above

adapt to change; continually improve

Strategic management focuses on integrating management, ________, and information systems to achieve organizational success. A) marketing B) finance/accounting C) production/operations D) research and development E) all of the above

all of the above

The strategic-management process is becoming more widely used by A) small firms. B) nonprofit institutions. C) governmental organizations. D) multinational conglomerates. E) all of the above

all of the above

Strategic management enables an organization to ________, instead of just responding to threats in its business environment. A) be proactive B) determine when the threat will subside C) avoid the threats D) defeat their competitors E) foresee into the future

be proactive

Superior strategy formulation and implementation ________ an opponent's superiority in numbers and resources. A) are irrelevant to B) are not enough to surmount C) can overcome D) can lead to E) unite

can overcome

Anything that a firm does especially well compared to rival firms is referred to as A) competitive advantage. B) comparative advantage. C) opportunity cost. D) sustainable advantage. E) an external opportunity.

competitive advantage.

The first step in strategic planning is generally A) developing a vision statement. B) establishing goals and objectives. C) making a profit. D) developing a mission statement. E) determining opportunities and threats.

developing a vision statement.

Strategy evaluation is necessary because A) internal and external factors are constantly changing. B) the SEC requires strategy evaluation. C) success today is a guarantee of success tomorrow. D) the IRS requires strategy evaluation. E) firms have limited resources.

internal and external factors are constantly changing.

The strategic-management process A) occurs once a year. B) is a sequential process. C) is a continuous process. D) applies mostly to companies with sales greater than $100 million. E) applies mostly to small businesses.

is a continuous process.

According to Greenley, strategic management offers all of these benefits except: A) it provides an objective view of management problems. B) it creates a framework for internal communication among personnel. C) it encourages a favorable attitude toward change. D) it maximizes the effects of adverse conditions and changes. E) it gives a degree of discipline and formality to the management of a business.

it maximizes the effects of adverse conditions and changes.

The strategic-management process represents a(n) ________, ________, and ________ approach for determining an enterprise's future direction. A) logical; systematic; subjective B) intuitive; disorganized; subjective C) logical; systematic; objective D) intuitive; disorganized; objective E) intuitive; systematic; subjectiv

logical; systematic; objective

A strong ________ heritage underlies the study of strategic management. A) military B) government C) political D) social E) cultural

military

According to Webster's New World Dictionary, ________ is "the science of planning and directing large-scale military operations, of maneuvering forces into the most advantageous position prior to actual engagement with the enemy." A) competitive advantage B) war C) strategy D) formulation E) business

strategy

An important activity in ________ is taking corrective action. A) strategy evaluation B) strategy implementation C) strategy formulation D) strategy leadership E) all of the above

strategy evaluation

Internal ________ are activities in an organization that are performed especially well. A) opportunities B) competencies C) strengths D) management E) factors

strengths

Usually, external opportunities and threats are A) uncontrollable by a single organization. B) controlled by governments. C) not as important as internal strengths and weaknesses. D) key functions in strategy implementation. E) key functions in strategy exploitation.

uncontrollable by a single organization.

Cost Advantage

An advantage that a firm has over its competitors in the activities associated with producing a product or service, thereby allowing it to produce the same product at lower cost.

Resource-Based Review of Firm

Determining the strategic resources available to a company.

Market

The industry and geographic area that a company competes in

Organizations should take a(n) ________ approach in their industry. A) adversarial rather than a collegial B) collegial rather than an adversarial C) reactive rather than a proactive D) proactive rather than a reactive E) cooperative rather than a competitive

proactive rather than a reactive

Business or military success is A) generally the happy result of accidental strategies. B) undermined by the element of surprise. C) the product of both attention to changing external and internal conditions and the insightful adaptations to those conditions. D) unrelated to external conditions. E) none of the above.

the product of both attention to changing external and internal conditions and the insightful adaptations to those conditions.

Forward Integration

A firm goes into the business of its former buyers, rather than continuing to sell to them.

Backward Integration

A firm purchases one or more of its suppliers in order to make a product itself rather than buying it from another firm

Supplier

A firm that provides products that are inputs to another firm's production process

Priorities

A firm's values and rankings of what is most important

Emergent Strategy

A plan or pattern of action that develops and emerges over time in an organization despite a mission or goals

Deliberate Strategy

A plan or pattern of action that is formulated through a deliberate planning process that is then carried out to achieve the mission or goals of an organization

Business Strategy

A plan to achieve competitive advantage that involves making four strategic choices: (1) markets to compete in; (2) unique value the firm will offer in those markets; (3) the resources and capabilities required to offer that unique value better than competitors; and (4) ways to sustain the advantage by preventing imitation

Value Chain

A visual description of the steps required to turn raw materials into finished products and/or services. The value chain also describes key functions of the firm linked to each stage and functions that span the productive activities of the firm

Differentiation Advantage

An advantage a firm has over its competitors by making a product more attractive by offering unique qualities in the form of features, reliability, and convenience that distinguishes it from competing products

Inimitability

An attribute of a resource that describes the degree of difficulty a competitor would face in copying, imitating, or mimicking the value of that resource

________ can best be described as short-term in nature. A) Mission statements B) Tenure C) Annual objectives D) Strategies E) Management

Annual objectives

Switching Costs

Barriers that help keep buyers using the same supplier by imposing extra costs for switching suppliers.

Threats

Conditions in the competitive environment that endanger the profitability of a firm.

Which of the following statements is false? A) No organization can pursue all the strategies that potentially could benefit the firm. B) Most organizations today recognize that strategic-management concepts and techniques can enhance the effectiveness of decisions. C) A key role of strategists is to facilitate continuous organizational learning and change. D) Effective strategic planning should accept the assumptions underlying the current corporate strategy. E) Even the most technically perfect strategic plan will serve little purpose if it is not implemented.

Effective strategic planning should accept the assumptions underlying the current corporate strategy.

External Analysis

Examining the forces that influence industry attractiveness, including opportunities and threats that exist in the environment.

Network Effects

Growth in demand for a firm's product that results from a growth in the number of existing customers.

In which phase of strategic management are annual objectives especially important? A) Formulation B) Control C) Evaluation D) Implementation E) Management

Implementation

The changes that occurred when Robert Iger took over the reigns at Disney demonstrate which current trend in organizations? A) Increased formalization of the strategic management process B) Increased structuring of strategic management C) Increased decentralizing of strategic management D) Increased emphasis on strategic planning E) Increased central planning of the strategic management process

Increased decentralizing of strategic management

) What is not a pitfall an organization should avoid in strategic planning? A) Failing to communicate the plan to employees B) Involving all managers rather than delegating planning to a "planner" C) Top managers not actively supporting the strategic planning process D) Doing strategic planning only to satisfy accreditation or regulatory requirements E) Failing to create a collaborative climate supportive of change

Involving all managers rather than delegating planning to a "planner"

Core Competence

Is a proficiently performed internal activity that is central to a firm's strategy and competitiveness

Competence

Is an activity that a firm has learned to perform with proficiency—a capability

What is not a guideline given for effective strategic planning? A) Continually strengthen the "good ethics is good business" policy. B) It should not include jargon or arcane planning language. C) It should not be too formal, predictable, or rigid. D) It should welcome bad news. E) It should be controlled by "technicians."

It should be controlled by "technicians."

What are enduring statements of purpose that distinguish one business from other similar firms? A) Policies B) Mission statements C) Objectives D) Rules E) Employee conduct guidelines

Mission statements

The trends in newspaper circulation in the United States provide support for which statement? A) Sustainable competitive advantage is easy to maintain. B) Several firms can have similar competitive advantages. C) Some products are relatively immune to changes in the external environment. D) Most competitive advantages are hard to sustain. E) Competition is generally good for companies and consumers.

Most competitive advantages are hard to sustain.

Strategic Leaders

Organizational leaders charged with formulating and implementing a strategy with the objective of ensuring the survival and success of an organization

Which of the following is not included in the strategic management model? A) Measure and evaluate performance B) Perform internal research to identify customers C) Establish long-term objectives D) Implement strategies E) Develop mission and vision statements

Perform internal research to identify customers

What are guides to decision making? A) Laws B) Rules C) Policies D) Objectives E) Goals

Policies

Dynamic Capabilities

Procedures, processes, and routines that continuously expand existing resources or improve operating capabilities.

Operating Capabilities

Procedures, processes, or routines for delivering value to customers, employees, suppliers, or investors

Complementary Products or Services

Products or services that can be used in tandem with those from another industry

Sustainable Competitive Advantage

Requires giving buyers lasting reasons to prefer a firm's products or services over those of its competitors

Above-Average Profits

Returns in excess of what an investor expects from other investments with a similar amount of risk.

Which of the following statements is false? A) Open-mindedness is an important guideline for effective strategic management. B) Strategic management must become a self-perpetuating socialist mechanism. C) No organization has unlimited resources. D) Strategic decisions require trade-offs. E) Strategic management must be a self-reflective learning process.

Strategic management must become a self-perpetuating socialist mechanism.

What are the means by which long-term objectives will be achieved? A) Strategies B) Strengths C) Weaknesses D) Policies E) Opportunities

Strategies

Which individuals are most responsible for the success and failure of an organization? A) Strategists B) Financial planners C) Personnel directors D) Stakeholders E) Human resource managers

Strategists

Assets

Tangible or intangible resources or factors of production that create economic value for the firm when employed. This chapter focuses on physical, financial, human, and intangible assets.

Internal Analysis

The analysis of a firm's resources and capabilities to assess how effectively the firm is able to deliver the unique value (value proposition) that it hopes to provide to customers.

Attractiveness of an Industry

The degree to which an average firm in the industry can earn good profits

Organized to Exploit

The degree to which the legal, administrative, and operating structure of the firm allows it to capture the rents generated by resources

Price Sensitivity

The degree to which the price of a product or service affects consumers' willingness to purchase the product or service

Capabilities

The procedures, processes, and routines firms employ in their activities

Strategic Management Process

The process by which organizations formulate a plan and allocate resources to achieve competitive advantage that involves making four strategic choices;

Barriers to Entry

The way organizations make it more difficult for potential entrants to get a foothold in the industry.

Opportunities

Ways of taking advantage of conditions in the environment to become more profitable.

Competitive Parity

When a company survives but has no real competitive advantage over rivals

Competitive Advantage

When a firm generates higher profits compared to its competitors.

Sustained Competitive Advantage

When firms combine the legal elements, intellectual property rights, administrative elements, and cultural elements, allowing them to capture high profits that come from their valuable, rare, and inimitable resources, capabilities, or priorities.

Competitive Failure

When firms that can't create value for their stakeholders don't survive

An organization's vision statement A) is a constant reminder to its employees of why the organization exists. B) broadly charts the future direction of an organization. C) addresses the basic question: "What is our business?" D) answers the question: "What do we want to become?" E) none of the above

answers the question: "What do we want to become?"

The Internet has transferred power from ________ to ________. A) businesses, individuals B) governments, businesses C) individuals, businesses D) businesses, governments E) individuals, governments

businesses, individuals

Military strategy is based on an assumption of ________, whereas business strategy is based on an assumption of ________. A) conflict; cooperation B) conflict; competition C) cooperation; conflict D) competition; conflict E) cooperation; competition

conflict; competition

Long-term objectives should be all of the following except A) measurable. B) continually changing. C) reasonable. D) challenging. E) consistent.

continually changing.

The act of strengthening employees' sense of effectiveness by encouraging and rewarding them for participating in decision-making and exercising initiative and imagination is referred to as A) authoritarianism. B) proaction. C) empowerment. D) transformation. E) delegation.

empowerment.

The fact that Apple has no manufacturing facilities of its own A) has caused it to build up massive debt on its balance sheet. B) has enabled it to remain financially lean with virtually no long-term debt. C) has been problematic for Apple in terms of debt. D) illustrates that having more fixed assets than rival firms can provide major competitive advantages in a global recession. E) means that it is in the same position as Sony.

has enabled it to remain financially lean with virtually no long-term debt.

All of the following are guidelines for effective strategic planning except: A) it should be simple and nonroutine. B) it should be a learning process for all managers and employees. C) it should be a paper process more than a people process. D) it should not disregard qualitative information. E) it should not be a formal system for control.

it should be a paper process more than a people process.

According to research, organizations using strategic management are ________ than those that do not. A) more profitable B) more complex C) less profitable D) less static E) less complex

more profitable

) Specific results an organization seeks to achieve in pursuing its basic mission are A) strategies. B) rules. C) objectives. D) policies. E) tenets.

objectives.

Terms such as objectives, mission, strengths, and weaknesses were first formulated to address problems A) on the battlefield. B) in the boardroom. C) on the trading floor. D) in the military hierarchy. E) in interpersonal relationships.

on the battlefield.

The one factor that has most significantly impacted the nature and core of buying and selling in nearly all industries has been A) the Internet. B) political borders. C) corporate greed. D) customer and employee focus. E) the government.

the Internet.

All of these are pitfalls an organization should avoid in strategic planning except: A) using plans as a standard for measuring performance. B) using strategic planning to gain control over decisions and resources. C) failing to involve key employees in all phases of planning. D) too hastily moving from mission development to strategy formulation. E) being so formal in planning that flexibility and creativity are stifled.

using plans as a standard for measuring performance.