MGT ch 8
True or false: Scenario planning helps managers cope with the inherent unpredictability of the future.
True
Francine's Bagels and Giovanni's Pastries both want to expand into Asia, but the costs of entering the market are high. They formed a strategic alliance to establish a new company and share the ownership, and thus the costs. This is called
a joint venture.
collect and use all available information
accuracy
With a differentiation strategy, companies can distinguish their products using: (Choose all that apply.)
after-sales service. quality. product design.
Henri Fayol believed that, if the situation changes, plans can be ______.
altered and changed
A plan to gain a competitive advantage in a particular market or industry is a ______ strategy.
business-level
The cell phone division of a multinational corporation has granted its research and development department funds to create new technologies to ensure the organization stays ahead of its competitors in the market. This decision by the cell phone division is an example of the organization's ________ strategy.
business-level
An automobile manufacturing company decides not to reduce the prices of its sedans despite a fall in prices of sedans across the automobile industry. This is because the company offers a higher mileage on its sedans when compared to its competitors. The company is applying a _____ strategy.
differentiation
alter or change plans when necessary
flexibility
When an organization markets its product in one or a few markets, where the product is sure to stand out from its competitors, the organization is using a ______ strategy.
focused differentiation
Companies that try to specialize in one segment of the market and undercut the prices of the other sellers in the market are using a ______ strategy.
focused low-cost
Akira Chinese restaurant sales had peeked, so it started selling frozen dinners in grocery stores under the Akira Chinese name. This is an example of ________ integration.
forward vertical
Licensing allows a foreign organization to take charge of both manufacturing and distribution, whereas ______ sells rights to foreign organizations to use a brand name.
franchising
A multinational organization is extremely confident about its latest product and releases a single version of the product across the world. The organization is adopting a(n) ________ strategy with its new product.
global
A corporate-level strategy is a plan of action that involves choosing in which industries and countries a company should invest its resources to achieve its: (Choose all that apply.)
goals. mission.
With the continuing threat of Internet hacking, cybersecurity has become an enormous industry, with companies vying to convince the large, global companies that they can provide the best strategies for protection. This industry is characterized by permanent ongoing intense rivalry that has resulted from advanced technology. These conditions indicate ______________ in this industry.
hypercompetition
A company intends to expand internationally but wants the lowest possible risk or uncertainty. The organization is most likely to pursue its global operations through
importing and exporting.
Time horizons of one to five years make up ______-term plans, and time horizons of one year or less make up ______-term plans.
intermediate; short
When managers make the decision to price their products below that of their competitors, they are using a ______ strategy.
low-cost
Using valuable skills among cooperating divisions to add value results from ______ diversification; using current strengths to turn around poorly performing companies in other industries can result from ______ diversification.
related; unrelated
Projects and programs, both of which are specific action plans created to handle nonprogrammed decision making in unusual or one-of-a-kind situations, are types of ________ plans.
single-use
A cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals is a(n) ______.
strategy
When the owner of a small business started the company, she spent time identifying goals, managing resources, and determining the actions leading to the achievement of the goals. This describes making decisions about
strategy
Henri Fayol theory to have only one guiding plan or one central operation to achieve an organizational goal at any given time is called
unity
Strategy
_ implementation is a five-step process.
What is the time frame for a long-term plan?
5+ years
Planning takes place at three distinct levels.
Business-level plan Corporate-level plan Functional-level plan
Identify the first step of the planning process.
Determining the organization's mission and goals
Which of the following are steps in the planning process of an organization? (Check all that apply.)
Determining the organization's mission and goals Formulating strategies to achieve the goals Selecting the most effective way to implement organizational strategy
Mission statements accomplish which of the following tasks? (Choose all that apply.)
Differentiate the company from its competitors Identify a company's products and customers State the broad purpose of the organization
________ is a corporate-level strategy that involves a company entering an industry it was previously not associated with in order to produce and distribute new kinds of goods and services.
Diversification
The planning process is designed solely to identify effective strategies.
False
True or false: Managers only need to identify their customers when defining a business.
False
Entering into a new industry that uses, distributes, and sells company products
Forward vertical integration
A fast-food chain is looking to expand its business on a global scale by allowing interested parties in different parts of the world to open fast-food restaurants under its brand name. These interested parties must pay an initial fee to the owner of the fast-food chain and additionally pay a portion of profits on a monthly basis. This is an example of a(n)
Franchise
Which of the following would be a potential strength for an organization in accordance with its SWOT analysis?
High brand loyalty among its customers
________ is the permanent, ongoing, intense competition brought about in an industry by advancing technology or changing customer tastes.
Hypercompetition
Which of the following are functions of successful business-level strategies? (Check all that apply.)
It increases profits. It increases brand loyalty.
How do managers typically distinguish time horizons?
Long-term plans, intermediate-term plans, and short-term plans
What type of strategy allows a company to sell a product for less than their competitors and still make a profit?
Low-cost
The overriding purpose of an organization is specified by its ______.
Mission
A _________ is a broad declaration of an organization's purpose that identifies the organization's products and customers and distinguishes the organization from its competitors.
Mission Statement
________ plans are essential because they allow managers to make changes to their plan should the environment warrant it without losing sight of the need to plan for the long term.
Rolling
Which of the following factors does Michael Porter's Five Forces model address?
Threats
From a managerial perspective, what is the purpose of formulating a set of corporate strategies?
To help them achieve the corporation's mission
True or false: The low-cost strategy drives down an organization's costs below those of its competitors. This strategy is aimed at serving a broad market.
True
Managers need to decide to what extent the organization should customize its products for different national conditions. The product can be standardized in all markets in which the organization competes; this is called a ______ strategy. If the company customizes its products and marketing tactics to different national conditions, it is called a ______ strategy.
global; multidomestic
The five forces model identifies the factors as major threats because they affect ______.
how much profit competitors within the same industry can expect to earn
Successful business-level strategies are designed to result in: (Choose all that apply.)
increased profits. increased brand loyalty.
One major difference between the SWOT analysis and Porter's Five Forces model is that the SWOT analysis examines the ______, and the Five Forces examines ______.
internal and external environment; only the external environment
Principal corporate-level strategies include: (Choose all that apply.)
international expansion. concentration on a single industry. vertical integration. diversification.
When two or more companies form a strategic alliance to to jointly establish and share the ownership of a new business, it is a(n) ______.
joint venture
Typically, corporate- and business-level goals and strategies require ______ plans; functional-level goals and strategies require ______ plans.
long- and intermediate-term; intermediate-and short-term
In a(n) ________ strategy, managers try to gain a competitive advantage by focusing the energy of all the organization's departments or functions on driving the company's expenses down below the expenses of its industry rivals.
low cost
A broad declaration of an organization's purpose and the company's products and customers is identified in the company's ______.
mission statement
A strategy that is customized and marketed to accommodate particular national conditions is a ____________ OR when a company customizes its products and marketing to fit specific national conditions, it is following a ________ strategy OR When adopting a ________ strategy, an organization customizes products and marketing strategies to specific national conditions. OR When a company customizes its products and marketing to fit specific national conditions, it is following a ______ strategy.
multidomestic
The term hypercompetition applies to industries that are characterized by ______ competition. (Choose all that apply.)
permanent intense ongoing
Types of standing plans include: (Choose all that apply.)
policies. standard operating procedures (SOPs). rules.
Examples of a single-use plan include: (Choose all that apply.)
programs. projects.
After defining effective strategies to attain an organization's mission and goals, managers are confronted with challenges of
putting the strategies into action.
The strategy of entering of entering a new industry to create competitive advantage in one or more of the company's existing divisions is known as ______________ diversification
related
When a company decides to enter a new industry to gain a competitive advantage within one or more of the company's existing divisions, this is called ______.
related diversification
When an organization enters into a strategic alliance with a foreign company, they share ______.
risks and rewards
Because the future is unpredictable, managers should engage in ______ planning.
scenario
When faced with an oncoming hurricane, Jonah's group came up with a plan for what to do if it caused a lot of damage to the offices, and what to do if their suppliers sustained damage. They also discussed what to do if the damage to the company was minor but employees' homes were damaged. They were engaging in ________ planning.
scenario
The generation of multiple forecasts of future conditions followed by an analysis of how to respond effectively to each of those conditions is ______.
scenario planning
When the same situation occurs repeatedly, ______ plans are used.
standing
Henri Fayol emphasized that managers must not be bound to a ______ plan.
static
An agreement in which managers share their organization's resources knowledge, and skills with a foreign company is a(n) ______.
strategic alliance
The CEO and top managers use ______ to communicate to their managers and other employees a compelling vision of what they want the organization to accomplish.
strategic leadership
The CEO of a large chain of hair salons gave an annual speech to the employees via Skype in which she enthusiastically discussed what she wanted to achieve and why the employees were integral to achieving those goals. The CEO was using ________ to motivate her employees.
strategic leadership
When the CEO and other top managers communicate their vision for the company to the rest of the managerial staff, this is referred to as ______.
strategic leadership
To achieve organizational goals, managers use ______ to launch courses of action that will move them towards their goals.
strategies
The development of a set of corporate, business, and functional strategies that allow an organization to accomplish its mission and achieve its goals is known as ______.
strategy formulation
Strategy formulation begins with managers' systematically analyzing: (Choose all that apply.)
the factors or forces inside an organization. the factors or forces outside in the global environment.
Kruger Company was considering adding extra stores in a minor metro area, but it determined that its main competitor already had several locations there so it decided to put its stores elsewhere. According to Michael Porter, which threat impacted Kruger's decision?
the level of rivalry among organizations in the industry
Managers pursuing a focused differentiation strategy aim to make their company ______.
the most diversified company serving its market segment
According to SWOT analysis, an increase in local competition or labor costs, or an economic downturn are all potential ________ to an organization.
threats
The SWOT analysis components that are used to anticipate potential problems or opportunities for business growth outside an organization are ______, and for internal problems or assets of an organization are ______.
threats and opportunities; weaknesses and strengths
In large organizations, planning usually takes place at ______ level(s) of management.
three
Goals that are effective should be: (Choose all that apply.)
time-limited. realistic. challenging.
Managers of any organization that needs to sell its products abroad should ask ______.
to what extent should the organization customize its products to different national conditions?
Fayol stated that effective plans should have four essential qualities, including ______.
unity, continuity, accuracy, and flexibility
Challenging goals give managers at all levels an incentive to look for ______.
ways to improve organizational performance
To perform the planning task, managers must first ______.
establish where the organization is at the present time
The corporate-level strategy of related diversification means companies enter an industry that creates a competitive advantage for an organization's ______.
existing division or business
The model that helps managers focus on the most important competitive forces in the external environment is the ______.
five forces model
Managers pursuing a ______ strategy serve one or a few segments of the overall market and aim to make their organization the lowest-cost company serving that segment.
focused low-cost
Planning necessary to increase the efficiency and effectiveness of their particular department
functional
In large organizations, planning usually takes place at three levels of management. They are _____, ______, and ______. (Choose all appropriate responses.)
functional business corporate
A(n) ________ plan pertains to the goals that a department's manager proposes to pursue to help the division attain its business-level goals.
functional-level
While defining a business and answering questions about their company's products, managers can identify: (Choose all that apply.)
future customer needs. present customer needs. who their true competitors are.
Michael Porter suggests that when managers choose a business-level strategy, their organization should ______ in a particular market.
gain a competitive advantage
Companies concentrate on a single industry to ______.
gain entry into an industry
Responsible for planning and strategy making for the organization as a whole
corporate
The ability to charge a premium price to distinguish its product is one outcome of a(n) ______ strategy.
differentiation
The highest level of decision making, which involves decisions by the members of the top management concerning the organization's goals, overall strategy, and structure, is the _____ plan.
corporate-level
The purpose of strategy formulation is to ______.
develop a set of strategies that will allow an organization to accomplish its mission
The mission statement ______ its competitors. (Choose all that apply.)
differentiates an organization from distinguishes an organization from
Distinguishing an organization's products from the products of competitors on dimensions such as product design, quality, or after-sales service is an example of a ______ strategy.
differentiation
Managers use a ______ strategy to distinguish their products from those of their competitors by focusing on characteristics such as design, quality, and after-sale service.
differentiation
Expanding a company's operations into an industry that produces inputs for its products is ______ vertical integration.
backward
Planning and strategy for their particular business division or unit
business
The third step in the planning process is ______.
choosing the most effective way to put strategies into action
One reason that few risks are associated with exporting is that ______.
companies do not have to build manufacturing companies abroad
People would come from all over the greater city lines for Sami's Sushi until the owner of Sami's decided to expand to some of the well-populated suburbs. This decision was a corporate-level strategy referred to as ______.
concentration on a single industry
When a company reinvests its profits to strengthen its competitive position in its current industry, it is utilizing a(n) ______ strategy.
concentration on a single industry
build and refine previous plans on an ongoing basis
continuity
Strengths, weaknesses, opportunities, and threats are components of a ______. OR a planning exercise that analyzes the internal strengths and weaknesses as well as the external opportunities and threats of the external environment is referred to as _______
SWOT
Jeremy forecasts what might happen if his company were to launch their new product into the market according to different schedules, prices, and features. He's thinking of making decisions to customize based on what he knows of his competitors' schedules and features. Jeremy is engaging in ______ planning.
Scenario
Entering into a new industry that produces raw materials for the company's products. OR If a brewery decides to expand by buying the farms that produce the ingredients, this is an example of ______ .
Backward vertical integration
What should be the first critical component that the manager must define when determining an organization's mission?
Business
Single-use plans are designed to handle which of the following situations? (Choose all that apply.)
One-of-a-kind Unusual
Which of the following are principal corporate-level strategies? (Check all that apply.)
Diversification Vertical integration Concentration on a single industry International expansion
Which of the following is not a step in strategy implementation?
Establishing a long-term timeframe for implementation that only includes broad, general goals