MGT 413 Final Exam

actions an organization takes beyond what is legally required to protect or enhance the well-being of living things

Social responsibility

The process whereby a firm determines the value (price minus cost) of each and all activities that went into producing and marketing a product, from purchasing raw materials to manufacturing, distributing, and marketing those products.

Value Chain Analysis

PorkPride Foods produces hams and other meat products. It owns hog raising operations. This is an example of a ____ business. a. de-integrated b. vertically integrated c. totally integrated d. horizontally integrated

Vertically integrated

What is the cornerstone of effective strategy evaluation?

adequate and timely feedback

The purpose of a mission statement is to declare all of these EXCEPT a. a reason for being b. an annual financial plan c. a statement of purpose d. a statement of beliefs e. whom an organization wants to serve

b. an annual financial plan

corrective action should do all of the following except: a. capitalize upon internal strengths b. avoid external opportunities c. avoid, reduce, or mitigate external threats d. improve internal weaknesses e. strengthen an organization's competitive position

b. avoid external opportunities

which of the following industries is likely to be the most profitable: a. high threat of substitutes, high rivalry b. high entry barriers, little competition c. high buyer power, high supplier power d. high supplier power, high threat of entry

b. high entry barriers, little competition

Financial objectives involve all of the following except: a. growth in revenues b. larger market share c. higher dividends d. greater return on investment e. a rising stock price

b. larger market share

if rivalry and buyer power on the online dating industry are going to increase in the future, which of the following statements is the most accurate? a. the competitive environment for Match.com will remain unchanged b. online dating industry will be less attractive to potential entrants c. online dating industry will be more attractive to potential entrants d. online dating industry will have more opportunities than threats in the future

b. online dating industry will be less attractive to potential entrants

the ______ design is the allocation and reallocation of capital and resources to projects, assets, and divisions of an organization

investment

the strategic management process

is a continuous process

intensity of competition _________ in lower-return industries

is highest

if economies of scale are an industry's primary entry barrier, a new entrant's major risk is:

its inability to produce in sufficient volume to match the cost advantages of established producers

when a domestic company first begins to export to India, it is an example of

market development

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

market penetration

pricing is one of the basic functions of

marketing

organizations using strategic management are generally ________ than those that do not

more profitable

which of the following is the process of influencing people to accomplish specific objectives

motivating

strategy-evaluation activities should ideally be performed

on a continuous basis

a pattern of behavior developed by an organization as it learns to cope with its problems of external adaption and internal integration, and that has worked well enough to be considered valid and to be taught to new members as the correct way to perceive, think, and feel is called

organizational culture

which function of management includes areas such as job design, job specifications, job analysis, and unity of command?

organizing

what is the essential bridge between the present and the future that increases the likelihood of achieving desired results?

planning

when an industry relies heavily on government contracts, which forecasts can be the most important part of an external audit?

political

which strategy generally entails large research and development expenditures

product development

which barrier to entry do corporations such as P&G use to force new entrants to spend heavily to overcome existing customer loyalty?

product differentiation

what category of ratios includes return on total assets and return on stockholders' equity?

profitability

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

related diversification

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

rivalry among competing forces

consider the video games industry. Sony makes the "Playstation 2" video game system. Sega used to make the competing "Dreamcast" video game system. At the same time, Sega made games that people could buy to play on their Playstation 2. This means that Sony and Sega were

rivals and complementors

culture and ______ must work together

strategy

Collecting and evaluating information on competitors is essential for successful

strategy formulation

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

strengths

the extent that an organization's operations and actions protect, mend, and preserve rather than harm or destroy the natural environment

sustainability

since __________ resources can more easily be bought and sold, _______ resources are often more important for gaining and sustaining competitive advantages

tangible; intangible

The emergence of 3D printing is an example of a(n) ________ force that impacts organizations.

technological

which ratio is calculated by dividing profits before interest and taxes by the total interest charges?

times-interest-earned ratio

True or False: Porter's Five-Forces model helps to determine both the nature of competition in an industry and the industry's profit potential

true

True or false: horizontal integration is seeking ownership or increased control over competitors

true

True or false: laser eye surgery would be considered a substitute product for eyeglasses and contact lenses

true

True or false: porter's five-forces model helps to determine both the nature of competition in an industry and the industry's profit potential

true

true or false: external audits to identify key variables that offer actionable responses

true

true or false: significant barriers to entry are not always sufficient to keep some new firms from entering industries with higher-quality products, lower prices, and substantial marketing resources

true

true or false: the IFE matrix is an evaluation of the effectiveness of the firm's current strategies, not taking into account opportunities and threats

true

true or false: the process of performing an internal audit, compared to the external audit, provides more opportunity for participants to understand how their jobs, departments, and divisions fit into the whole organization

true

Responsibility for encouraging ethical decision making and ensuring ethical behavior in a firm lies

with both a firm's strategies and its managers

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

distinctive competencies

strategy evaluation is necessary because

internal and external factors are constantly changing

the maximum weight for a factor in the IFE Matrix is

1

what is the range for a firm's total weighted score in an External Factor Evaluation Matrix

1 to 4

a total weighted score of ________ in an External Factor Evaluation (EFE) Matrix indicates that an organization is responding in an outstanding way to existing opportunities and threats in its industry

4.0

Entails examination of value chain activities across an industry to determine "best practices" among competing firms; firms engage in benchmarking for the purpose of duplicating or improving on those best practices.

Benchmarking

principles of conduct within organizations that guide decision making and behavior

Business Ethics

one difference between a Competitive Profile Matrix (CPM) and an External Factor Evaluation (EFE) is that

CPM includes both internal and external issues

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

intel and AMD supply more than 90% of the microprocessors in all PCs sold today. Therefore, the microprocessor market is _______ and bargaining power of buyers. PC manufacturers, over Intel and AMD is _________.

Consolidated, Low

Which of the following is NOT included in measuring organizational performance: a. comparing results to competitors' expectations b. examining progress being made toward meeting stated objectives c. investigating deviations from plans d. evaluating individual performance e. comparing expected results to actual results

a. comparing results to competitors' expectations

which of the following industries is likely to be the least profitable: a. high threat of substitutes, high rivalry b. high entry barriers, little competition c. high buyer power, low supplier power d. high supplier power, high entry barriers

a. high threat of substitutes, high rivalry

an effective mission statement should do all of the following EXCEPT: a. include monetary amounts, numbers, percentages, and ratios b. be inspiring c. revel that the firm is environmentally responsible d. identify the utility of a firm's products e. be reconciliatory

a. include monetary amounts, numbers, percentages, and ratios

Which of the following statements is NOT true about strategic groups: a. rivalry within the same strategic group tends to be lower than rivalry between different strategic groups b. profitability varies between different strategic groups c. it is possible to have multiple strategic groups within the same industry d. companies within the same strategic group use similar strategies to compete against each other

a. rivalry within the same strategic group tends to be lower than rivalry between different strategic groups

which of the following is NOT one of the perspectives from which the Balanced Scorecard allows firms to evaluate strategies a. social responsibility b. financial performance c. customer knowledge d. internal business processes e. learning and growth

a. social responsibility

which of the following not descriptive of a high level of bargaining power of suppliers: a. substitutes are readily available b. the products or services is unique c. the supplier industry is dominated by a few companies but sells too many d. the purchasing industry buys only a small portion of the supplier group's goods and services e. suppliers are able to integrate forward and compete directly with their present customers

a. substitutes are readily available

all of the following are basic functions of marketing except: a. value chain analysis b. product planning c. promoting products d. pricing products e. distributing products

a. value chain analysis

In which situation would horizontal integration be an especially effective strategy? a. when an organization competes in a slowing industry b. when an organization can gain monopolistic characteristics in a particular area or region without being challenged by the federal government for "tending sustainability" to reduce competition c. when decreased economies of scale provide major competitive advantages d. when an organization has neither the capital nor human talent needed to successfully manage an expanded organization e. when competitors are succeeding due to managerial expertise or having particular resources an organization possesses

b. when an organization can gain monopolistic characteristics in a particular area or region without being challenged by the federal government for "tending sustainability" to reduce competition

if suppliers are unreliable or too costly, which of these strategies may be appropriate?

backward integration

which of the strategies is effective when the number of suppliers is small and the number of competitors is large

backward integration

a strategy evaluation and control technique

balanced scorecard

a group of individuals at the top of an organization with oversight and guidance over management and who look out for shareholders interest

board of directors

what is NOT one of Micheal Porter's five competitive forces: a. potential entry of new competitors b. rivalry among competing firms c. bargaining power of unions d. bargaining power of suppliers e. bargaining power of consumers

c. bargaining power of unions

all of the following are basic activities of management EXCEPT: a. planning b. staffing c. consolidating d. organizing e. motivating

c. consolidating

____________ is NOT a basic mission of a competitive intelligence program a. providing a general understanding of an industry b. providing a general understanding of a company's competitors c. identifying industry executives who could be hired by the firm d. identifying areas in which competitors are vulnerable and assessing the impact strategic actions would have on competitors e. identifying potential moves a competitor might make that would endanger a firm's position in the market

c. identifying industry executives who could be hired by the firm

which of the following is the last step in developing an IFE Matrix: a. determining the organization's structure b. summing the weighted scores for each variable c. obtain total weighted score d. identifying the organization's functions of business e. assigning a wight to each factor

c. obtain total weighted score

which of the following is NOT an external force that must be examined in formulating strategies? a. economic b. social c. organizational d. cultural e. environmental

c. organizational

when using the External Factor Evaluation (EFE) Matrix, what is done after multiplying each factor's weight by its rating to determine a weighted score? a. identifying key external factors b. summing the weighted score for each competitor c. summing the weighted scores for each variable to determine the total weighted score for the organization d. drawing the horizontal and vertical lines for the matrix e. determining the preferred strategic factors

c. summing the weighted scores for each variable to determine the total weighted score for the organization

which function of management includes all of those activities undertaken to ensure actual operations conform to planned operations?

controlling

under which strategy would you offer products or services to a wide range of customers at the lowest price available on the market?

cost leadership - low cost

the goal of strategic management is to

create and sustain competitive advantage

As indicated in the strategic-management model, a clear ________ is needed before long-term objectives can be established. A) short-term objective B) implementation plan C) audit policy D) mission statement E) evaluation strategy

d) mission statement

which of the following is NOT one of the steps involved in constructing a SWOT Matrix? a. list the firm's key external threats b. match internal strengths with external opportunities, and record the resultant SO strategies in the appropriate cell c. match internal strategies with external threats, and record the resultant ST strategies d. list the firm's external weaknesses e. list the firm's external opportunities

d. list the firm's external weaknesses

Which statement is TRUE? a. companies must choose between having a mission statement or a vision statement b. a company can't have a mission statement unless it has a vision statement c. a vision statement cannot be established until a company has developed its mission statement d. the vision statement should be established before the mission statement e. companies are required by law to have both mission and vision statements

d. the vision statement should be established before the mission statement

the initial step in developing an IFE matrix is

developing a full and narrow list of key internal factors

the global airline industry has high-intensity of rivalry because _______ a. there are many airlines in the industry b. airlines provide similar services. It is very hard for them to differentiate themselves c. switching costs are low for customers d. a and b, but not c e. a, b, and c

e. a, b, and c

which of the following is NOT a key question that can reveal internal strengths and weaknesses regarding a firm's marketing function: a. does the firm have an effective sales organization b. has the firm's market share been increasing c. are markets segmented effectively d. are the firm's products and services priced appropriately e. does the firm have good liquidity

e. does the firm have good liquidity

all of the following are political, governmental, and legal variables that can represent key opportunities or threats to organizations EXCEPT: a. tariffs b. environmental regulations c. level of defense expenditures d. legislation on equal employment e. population changes by race, sex, and level of affluence

e. population changes by race, sex, and level of affluence

The shift to a service economy is an example of a(n) ________ force.

economic

the acronym SCDE stands for social, cultural, demographic, and _______ forces

environment

True or False: the Porter's five-forces model framework is a tool that is used to determine why some firms consistently outperform other firms in the same industry

false

True or false: organizations should prepare contingency plans just for unfavorable events

false

True or false: Rivalry is most intense when there are high exit barriers and high industry growth

false

True or false: a differentiation strategy can only be achieved with a large target market

false

True or false: a vision statement commonly answers the question, "What is our business?" whereas a mission statement is more likely to answer the question "What do we want to become"

false

True or false: once an effective strategy is designed, modifications are rarely required

false

true or false: an external audit focuses on identifying and evaluating trends and events within the control of management

false

true or false: regardless of the number of key opportunities and threats included in an External Factor Evaluation Matrix, the highest possible total weighted score for an organization is 4.0, and the lowest possible total weighted score is 0.0

false

true or false: a forward integration strategy is used by firms to gain control or ownership of suppliers

false

true or false: allocating resources is one of the four basic activities (functions) performed by managers

false

true or false: proponents of the resource-based view argue that external factors are more important than internal factors for a firm in achieving and sustaining competitive advantage

false

threat of substitute products come from

firms in other industries that produce products or services that satisfy the same customer need

_______ 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

first mover

An independent group of suppliers, such as farmers, gather to form a cooperative to sell their products to buyers directly, replacing their former distributor. This is an example of

forward integration

Theory says that ________ industries have a ______ concentration ratio and therefore have a _________ intensity of rivalry

fragmented; low; high

to perform an external audit, a company first must

gather competitive intelligence and information about external trends

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

the united states population is

getting older and less white

when the products being purchased are standard or undifferentiated, it results in _______ bargaining power of consumers

higher

without assumptions, planning would be

impossible

if a firm has a bad sustainability record this will

increase investor scrutiny of the firm