Strategic Management: Chapter 5
The Family Farmer Bankruptcy Act of 1986 created which type of bankruptcy
Chapter 12
The form of bankruptcy in which all the organizations assets are sold in parts for their tangible worth is
Chapter 7
Which chapter of bankruptcy code applies to municipalities
Chapter 9
"If it ain't broke, don't fix it" refers to managing by crisis
False
A chief executive officer is located in the divisional level of a large firm
False
A differentiation strategy can be especially attractive when the industry has many different niches and segments, thereby allowing a focuser to pick a competitvely attractive niche suited to its own resources
False
A growing trend is for franchisers to buy out their part of the business from their franchisees
False
A low-cost focus strategy can be especially attractive when the target market niche is small
False
According to porter, strategies allow organizations to gain competitive advantage from three different bases: cost leadership, differentiation, and decentralization
False
Although bankruptcy can be an effective type of retrenchment, it does not allow firms to avoid major debt obligations and void union contracts
False
Chapter 13 bankruptcy is similar to Chapter 11, but available only to large corporations
False
Deutsche Bank's entrance into the casino business in Las Vegas is an example of related diversification
False
Differentiation guarantees competitive advantage
False
Diversification strategies are becoming more popular as organizations are finding it easier to manage diverse business activities
False
Divestiture is selling all of a company's assets, in parts, for their tangible worth
False
Divestiture would be an appropriate strategy when a need exists to introduce a new technology quickly
False
Horizontal integration is an appropriate strategy when the competitors of an organization are doing poorly
False
Jiffy Lube international would be a good example of a firm seeking the best-value focus strategy
False
Secondary buyouts decreased substantially from 2011 to 2012
False
Strategists in governmental organizations operate with far more strategic autonomy than than their counter parts in private firms
False
There are four basic types of diversification: concentric, conglomerate, forward, and backward
False
Unrelated Diversification may be an especially effective strategy when an organization's basic industry is experiencing increasing annual sales and profits
False
When the correlation between dollar sales and dollar marketing expenditures has historically been low, market penetration is an appropriate strategy
False
While outsourcing manufacturing, tech support, and back-office work is quite common, it is still unheard of for companies to outsource product design
False
a differentiation strategy can only be achieved with a large target market
False
Mergers and acquisitions are created for all reasons excepts
To increase the number of employees
A best-value strategy offers products or services to a wide range of customers at the best price-value available on the market
True
A leveraged buyout occurs when a firm's management and other private investors use borrowed funds to buy out the firm's shareholders
True
A strategy or seeking ownership or increased control of a firm's suppliers is backward integration
True
An acquisition occurs when a large organization purchases a smaller one or vice versa
True
An appropriate strategy when an organization has excess production capacity is market development
True
Chapter 7 bankruptcy is a liquidation procedure used only when a firm sees no hope of being able to operate successfully or to obtain necessary creditor agreement
True
Chapter 9 bankruptcy applies to municipalities
True
Cooperative arrangements and joint ventures are being used increasingly
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
For consumers who are price-sensitive, cost leadership emphasizes producing standardized products at a very low per-unit cost
True
Forward integration strategy is especially effective when the availability of quality distributors is so limited as to offer a competitive advantage to those firms that integrate forward
True
Franchising is an effective means of implementing forward integration
True
Gaining ownership or increased control over distributors or retailers is called forward integration strategy
True
Horizontal integration is seeking ownership or increased control over competitors
True
In a turbulent, high velocity market, a lead-change strategy is best whenever the firm has the resources to purse this approach
True
Joint ventures tend to fail when managers who must collaborate daily in operating the venture are not involved in forming or shaping the venture
True
Liquidation is often appropriate when retrenchment and divestiture have failed
True
Long-Term objectives represent the results expected from pursuing certain strategies
True
Market development includes introducing present products into new geographic areas
True
McDonalds currently owns more than 50 percent of its restaurants
True
Most companies favor related diversification strategies in order to exploit common use of a well-known brand name
True
Objectives provide direction and allow for organizational synergy
True
Product Development is a strategy that seeks increased sales by improving or modifying present products or services
True
Product Development is an appropriate strategy when an organization has successful products that are in the maturity stage of the product life cycle
True
Public enterprises generally cannot diversify into unrelated businesses or merge with other firms
True
Selling a division or part of an organization is called divestiture
True
Stockton, a city in California, declared chapter 9 bankruptcy in 2012 to avoid having to close key functions such as their police and fire departments
True
Strategic objectives include larger market share, quicker on-time delivery than rivals, shorter design-to-market times than rivals, lower costs than rivals, and wider geographic coverage than rivals
True
The acquisition of human-resources software and consulting services company Kenexa by IBM is an example of related diversification
True
The most effective differentiation bases are those that are hard or expensive for rivals to duplicate
True
The nonprofit sector is America's largest employer
True
The practice of a firm borrowing money to fund dividend payouts to itself is known as dividend recapitalization
True
The strategic management process is just as vital for small companies as for large companies
True
Unrelated diversification is an appropriate strategy when an organization's present channels of distribution can be used to market the new products to current customers
True
When an acquisition or merger is not desired by both parties, it can be called a takeover or a hostile takeover
True
White knight is a term that refers to a firm that agrees to acquire another firm when the other firm is facing a hostile take over by a different company
True
market penetration, market development, and product development are intensive strategies
True
the number of hostile takeovers is on the rise
True
Many more firms have failed at ________ than have succeeded due to the immense challenge of managing businesses in many industries rather than a single industry
Unrelated diversificaiton
Fedex entering the computer repair business offering major companies overnight computer repair is an example of
Unrelated diversification
Integration strategies are sometimes collectively referred to as which of the following categories of strategies
Vertical integration
under which condition would a differentiation strategy be especially effective
When technological change is fast paced and competition revolves around rapidly evolving product features
What is a serious obstacle for many small business owners
a lack of strategic management knowledge
When the PE firm Clayton, dubilier & Rice bought David's bridal from the PE firm Leonard Green & Partner LP this was an example of
a secondary buyout
What kind of strategy is retrenchment
a turnaround strategy
Bankruptcy
can be an effective retrenchment strategy
Retrenchment would be an effective strategy when an organization
is plagued by inefficiency and low profitability
Financial objectives involve all of the following except
larger market share
Selling all of a company's assets, in parts, for their tangible worth is called
liquidation
Which strategy would be effective when the stockholders of a firm can minimize their losses by selling the organization's assets
liquidation
What principle is based on the belief that the true measure of a really good strategist is the ability to solve problems
managing by crisis
what is not an example of a cooperative arrangement
marketing plans
What situation is not conducive to market development
new channels of distribution are expensive or unreliable
Which strategy should an organization use when its products are currently in the declining stage of the products life cycle
related diversification
Research shows strategic management in small firms is more formal than in large firms
False
Diversification Strategies
Related Unrelated
A low-cost focus strategy offers products or services to a small range of customers at the lowest price available on the market
True
Retrenchment and turnaround are the same strategy
True
Porter's 5 Generic Strategies
Basic: Cost leadership Differentiation Focus Advanced: Cost Leadership- low cost Cost leadership- best value
Divestiture has become a popular strategy for firms to focus on their core business and become more diversified
False
Since a combination strategy bears no risk, many organizations pursue a combination of two or more strategies simultaneously
False
Strategic objectives include those associated with growth in revenues, growth in earnings, higher dividends, larger profit margins, and improved cash flow
False
if a firm's present suppliers are expensive and unreliable in meeting the firm's needs for parts, components, and/or raw materials, the firm should pursue a horizontal integration strategy
False
IKEA group investing 1.9 billion in India to open 25 new stores between 2013 and 2018 is an example of which type of strategy
Market Development
Which strategy seeks to increase market share for present products or services in present markets through greater marketing efforts
Market Penetration
Intensive strategies
Market penetration Market development Product development
When companies take over functional operations of other firms this is called
Outsourcing
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
Revlon closing its manufacturing plant in France and laying off 5 percent of its workforce is an example of
Retrenchment
A cost leadership strategy can be especially effective when most buyers use the product in the same ways
True
Which strategy should be implemented when a division is responsible for an organizations overall poor performance
divestiture
Which level of strategy is most likely not present in small firms
divisional
Backward integration is not effective when
the advantages of stable prices are not important
In which situation would horizontal integration be an effective strategy
when an organization can gain monopolistic characteristics
What is not a guideline for when an organization should use unrelated diversification
when existing markets for an organization's present products are not yet saturated
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 strategy is effective when new, but related, products could be offered at highly competitive prices
Related diversification
What is not a reason that joint ventures fail
Stakeholders from both partners are equally satisfied
There are more than 10,000 mergers in the United states annually that total more than
$700 billion
Today McDonalds owns about _________ percent of its restaurants
67
Types of bankruptcy
7 9 11 12 13
What occurs when two or more companies form a temporary partnership for the purpose of capitalizing on an opportunity
A joint venture
When two organizations of about equal size unite to form one enterprise, which of these occurs
A merger
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
Liberty Media Corp. selling its Starz television network is an example of which type of strategy
Divestiture
Which term refers to selling a division of an organization
Divestiture
The controversial practice of a company borrowing money simply to fund dividend payouts to itself is known as
Dividend recapitalization
According to Porter, which strategy offers products or services to a niche group of customers at the lower price available on the market
Focus-low cost
3 Integrative Strategies
Forward Backward Horizontal
Amazon installing "Amazon lockers" in order to combat issues with missing deliveries or having packages stolen, is an example of what strategy
Forward integration
Websites that sell products directly to consumers are examples of which type of strategy
Forward integration
What refers to a strategy of seeking ownership of, or increased control over a firm's competitors
Horizontal integration
Which strategy would be most appropriate when the distinctive competencies of two or more firms complement eachother especially well
Joint Venture
What principle is built on the idea that there is no general plan for which way to go an what to do
Managing by subjectives
When a domestic company first begins to export to India, it is an example of
Market development
Long term objectives are needed at which level(s) in an organization
Corporate, divisional and functional (all of the above)
Companies are avoiding outsourcing more and more because it is more expensive than traditional methods and it does not allow a firm to concentrate on core competencies
False
Which of these strategies is effective when the number of suppliers is small and the number of competitors is large
Backward integration
