BUS 450: FINAL EXAM
SWOT Matrix
- assesses firm's key external opportunities and threats -assesses firm's key internal strengths and weaknesses
Conflict-Resolution strategies
- avoidance - defusion - confrontation
business worth
- based on financial facts - measures the impact a business has within its industry of operation
IE Matrix (Internal-External)
- based on two dimensions: IFE (x-axis) and EFE (y-axis) - three regions are grow and build, hold and maintain, and harvest or divest
stages of the strategy-formulation framework :
- develop a vision and mission - external/internal audits - establish long-term objectives - generate, evaluate, and select strategies
potential advantage of conducting international business operations:
- gain new customers - reduce costs - spread economic risks - establishment of low-cost production sites - less competition - reduced tariffs/taxes - favorable political treatment - establishment of joint ventures to increase market share - economies of scale - enhanced power and prestige in domestic markets
Issues central to strategy implementation are:
- matching structure with strategy - choosing the right structure that will dictate how objectives and policies are established and how resources will be allocated
consequences of restructuring:
- reduced employee commitment - reduced creativity - employee layoffs - reduced innovation
USA business culture vs. foreign business cultures:
- to be successful, U.S. managers must be knowledgeable of other cultures, and what motivates them - knowledge of business culture variation across countries is essential for gaining and sustaining competitive advantage
Describe the steps involved in effective contingency planning.
1) Identify both good and bad events that could jeopardize strategies; 2) determine when the good and bad events are likely to occur; 3) determine the expected pros and cons of each contingency event; 4) develop contingency plans for key contingency events; 5) determine early warning trigger points for key contingency events and monitor them.
Using a Grand Strategy Matrix approach, what strategies are recommended for a firm that is a weak competitor in a slow-growing market? Elaborate on what these strategies could mean for a college or university.
A firm that is a weak competitor in a slow-growing market would be located in Quadrant III. Quadrant III strategies include retrenchment, diversification, divestiture, and liquidation. Student answers will vary when elaborating on what these strategies could mean for a college or university. However, students should mention that the college or university could possibly have to be closed. Faculty and/or staff might have to be greatly reduced, which could lead to unhappy students in very large classes.
Discuss a code of business ethics and its role in an organization.
A new wave of ethics issues related to product safety, employee health, sexual harassment, AIDS in the workplace, smoking, Internet fraud, identify theft, affirmative action, waste disposal, etc., has accentuated the need for strategists to develop a clear code of business. Merely having a code of ethics, however, is not sufficient to ensure ethical business behavior. A code of ethics can be viewed as a public relations gimmick. To ensure that a code is read, understood, believed, and remembered periodic ethics workshops are needed to sensitize people to workplace circumstances in which ethics issues may arise. If employees see examples of punishment for violating the code as well as rewards for upholding the code, this reinforces the importance of a firm's code of ethics.
Describe a sustainability report.
An annual report that reveals how the firm's operations impact the natural environment. It may include information about the firm's labor practices, product sourcing, energy efficiency, environmental impact, and business ethics practices. The Global Reporting Initiative recently issued a set of detailed reporting guidelines specifying what information should go into sustainability reports.
Discuss how business ethics, social responsibility, and sustainability are interrelated.
Business ethics, social responsibility, and sustainability are interrelated and impact all areas of the comprehensive strategic-management model. Many people, for example, consider it unethical for a firm to be socially irresponsible. Social responsibility refers to actions an organization takes beyond what is legally required to protect or enhance the well-being of living things. Sustainability refers to the extent that an organization's operations and actions protect, mend, and preserve rather than harm or destroy the natural environment. Polluting the environment, for example, is unethical, irresponsible, and in many cases illegal.
Discuss guidelines used to determine whether a firm should conduct R&D internally or externally.
First, if the rate of technical progress is slow, the rate of market growth is moderate, and there are significant barriers to possible new entrants, then in-house R&D is the preferred solution. Second, if technology is changing rapidly, and the market is growing slowly, then a major in-house effort in R&D may be risky. Third, if technology is changing slowly but the market is growing quickly, there generally is not enough time for in-house development. Finally, if both technical progress and market growth are fast, R&D expertise should be obtained through acquisition of a well-established firm in the industry.
What quantitative criteria are commonly used to evaluate strategies? Give several examples of these criteria.
Quantitative criteria commonly used to evaluate strategies are financial ratios, which strategists use to make three critical comparisons: 1) comparing the firm's performance over different time periods; 2) comparing the firm's performance to that of competitors'; and 3) comparing the firm's performance to industry averages.
conflict defusion is the act of ________
accentuating similarities and common interests in conflicting parties while playing down differences
BCG Matrix
graphically portrays differences among divisions in terms of market share position and growth rate; draws attention to the cash flow, investment characteristics, and needs of an organization's divisions
feasibility is determining whether __________
strategies can be attempted within the physical, human, and financial resources of the firm
consonance allows the firms to determine whether their _______
strategies can be flexible or adapt in response to changes within the firm's environment
advantage is the _________
superiority in one or more of three areas resources, skills, or position
benefits of restructuring:
- cost reduction - rescue firm from global competition - rescue from firm's demise
balanced scorecard approach aims to balance :
- long-term and short-term concerns - financial and non-financial concerns -internal and external concerns
Discuss at least five potential disadvantages to initiating, continuing, and/or expanding international operations.
1) Foreign operations could be seized by nationalistic factions. 2) Firms confront different and often little-understood social, cultural, demographic, environmental, political, governmental, legal, technological, economic, and competitive forces when doing business internationally. This can make communication in the firm difficult. 3) Weaknesses of competitors in foreign lands are often overestimated, and strengths are often underestimated. Keeping informed about the number and nature of competitors is more difficult when doing business internationally. 4) Language, culture, and value systems differ among countries, which can create barriers to communication and problems managing people. 5) Gaining an understanding of regional organizations is difficult but is often required in doing business internationally. 6) Dealing with two or more monetary systems can complicate international business operations.
What are the three particular challenges that strategists face today?
1) deciding whether the process of strategic management should be more of an art or a science; 2) deciding whether strategies should be visible or hidden from stakeholders; 3) deciding whether the process should be more top-down or bottom-up in the firm.
Discuss some contingency plans commonly established by firms.
1) if a major competitor withdraws from particular markets as intelligence reports indicate, what actions should our firm take? 2) If our sales objectives are not reached, what actions should our firm take to avoid profit losses? 3) If demand for our new product exceeds plans, what actions should our firm take to meet the higher demand? 4) If certain disasters occur — such as loss of computer capabilities; a hostile takeover attempt; loss of patent protection — what actions should our firm take? 5) If a new technological advancement makes our new product obsolete sooner than expected, what actions should our firm take?
Explain some of the forces leading companies to pursue international operations.
A primary reason why most domestic firms are engaging in global operations is that growth in demand for goods and services outside the USA is considerably higher than inside. Shareholders and investors expect sustained growth in revenues from firms; satisfactory growth for many firms can only be achieved by capitalizing on demand outside the USA. Fully 95 percent of the world's population lives outside the USA, and this group is growing 70 percent faster than the U.S. population. The lineup of competitors in virtually all industries is global. And while there are a few U.S. industries that are not yet greatly challenged by foreign competitors, like furniture manufacturing and retailing, many products and components within these industries too are now manufactured in foreign countries.
List four major reasons annual objectives are essential for strategy implementation.
Annual objectives are essential for strategy implementation because they: 1) represent the basis for allocating resources; 2) are a primary mechanism for evaluating managers; 3) are the major instrument for monitoring progress toward achieving long-term objectives; and 4) establish organizational, divisional, and departmental priorities.
Discuss some things firms can do to diminish the risk of doing business internationally.
Before entering international markets, firms should scan relevant journals and patent reports, seek the advice of academic and research organizations, participate in international trade fairs, form partnerships, and conduct extensive research to broaden their contacts and diminish the risk of doing business in new markets. Firms can also offset some risks of doing business internationally by obtaining insurance from the U.S. government's Overseas Private Investment Corporation.
What is business analytics and why is it so important in businesses today?
Business analytics is an MIS technique that involves using software to mine huge volumes of data to help executives make decisions. Sometimes called predictive analytics, machine learning, or data mining, this software enables a researcher to assess and use the aggregate experience of an organization, a priceless strategic asset for a firm. The history of a firm's interaction with its customers, suppliers, distributors, employees, rival firms, and more can all be tapped with data mining to generate predictive models. Business analytics is similar to the actuarial methods used by insurance companies to rate customers by the chance of positive or negative outcomes. Therefore, like insurance companies, all businesses can benefit from measuring, tracking, and computing the risk associated with hundreds of strategic and tactical decisions made everyday. Business analytics enables a company to benefit from measuring and managing risk.
Discuss some of the reasons why strategy evaluation is becoming increasingly difficult with the passage of time.
Domestic and world economies were more stable in years past; product life cycles were longer; product development cycles were longer; technological advancement was slower; change occurred less frequently; there were fewer competitors; foreign companies were weak; and there were more regulated industries. Other reasons include the following trends: 1) A dramatic increase in the environment's complexity; 2) The increasing difficulty of predicting the future with accuracy; 3) The increasing number of variables; 4) The rapid rate of obsolescence of even the best plans
Explain the important issues involved in deciding whether to go public, i.e., a private firm considering becoming a public firm. Include cost estimates, advantages and disadvantages.
Going public is not recommended for companies with less than $10 million in sales, because the initial costs can be too high for the firm to generate sufficient cash flow to make going public worthwhile. The average total cost paid to lawyers, accountants, and underwriters when the initial issuance is under $1 million is 25%. For issuances over $20 million this amount drops to 5%. In addition to initial costs, there are costs and obligations associated with reporting and management in a publicly held firm. For firms with more than $10 million in sales, going public can provide major advantages: It can allow the firm to raise capital to develop new products, build plants, expand, grow, and market products and services more effectively.
Explain how awareness of business culture across countries can enhance strategy implementation.
Having awareness of business culture across countries can enhance strategy implementation because as a firm you are able to understand consumers and partners in that geographic region of business and will know how to market and interact with each while maintaining a positive image.
If you construct a SPACE Matrix and the directional vector points to the lower left quadrant, what type of strategies would you recommend? Give several examples.
If the directional vector points to the lower-left quadrant of the SPACE Matrix, students should suggest defensive strategies. Defensive strategies include retrenchment, divestiture, liquidation, and related diversification.
Explain the concept of matching in the strategy formulation framework. Give at least three examples of matching.
Matching external and internal critical success factors is the key to effectively generating feasible alternative strategies. See Table 6-1 for examples of matching.
Compare and contrast business culture in the USA with Mexico.
Mexicans desire harmony rather than conflict; there is a much lower tolerance for adversarial relations or frictions at work in Mexico as compared to the United States. Whereas U.S. business embodies individualism, achievement, competition, curiosity, pragmatism, informality, spontaneity, and doing more than expected on the job, Mexican businesses stress collectivism, continuity, cooperation, belongingness, formality, and doing exactly what you're told. Mexicans do not feel compelled to follow rules that are not associated with a particular person in authority they work for and know well. Thus signs to wear earplugs or safety glasses, or attendance or seniority policies, and even one-way street signs are often ignored. Whereas Americans follow the rules, Mexicans often do not. Life is slower in Mexico than the United States. Tardiness is common everywhere. Meeting times and appointments are not rigid.
What are ideal points on perceptual maps? Explain their relation to market segments and demand voids.
Perceptual maps may display consumers' ideal points. These points reflect ideal combinations of the two dimensions as seen by a consumer. Each dot represents one respondent's ideal combination of the two dimensions. An area where there is a cluster of ideal points indicates a market segment. Areas without ideal points are sometimes referred to as demand voids. A company considering introducing a new product will look for areas with a high density of ideal points. They will also look for areas without competitive rivals (a vacant niche), perhaps best done by placing both the (1) ideal points and (2) competing products on the same map.
Name five examples of finance and accounting decisions that may require policies
Possible answers include: 1) To raise capital with short-term debt, long-term debt, preferred stock, or common stock; 2) To lease or buy fixed assets; 3) To determine an appropriate dividend payout ratio; 4) To use LIFO, FIFO, or a market-value accounting approach; 5) To extend the time of accounts receivable. 6) To establish a certain percentage discount on accounts within a specified period of time; 7) To determine the amount of cash that should be kept on hand.
Name five examples of marketing decisions that may require policies.
Possible answers include: 1) To use exclusive dealerships or multiple channels of distribution; 2) To use heavy, light, or no TV advertising; 3) To limit (or not) the share of business done with a single customer; 4) To be a price leader or a price follower; 5) To offer a complete or limited warranty; 6) To reward salespeople based on straight salary, straight commission, or a combination salary/commission; 7) How to make advertisements more interactive to be more effective;
Within an organization, who is responsible for providing ethics leadership?
Primary responsibility for ensuring ethical behavior rests with a firm's strategists. However, an integral part of the responsibility of all managers is to provide ethics leadership by constant example and demonstration. Managers hold positions that enable them to influence and educate many people. This makes managers responsible for developing and implementing ethical decision making.
In a BCG Matrix, all divisions are classified as either Question Marks, Stars, Cash Cows, or Dogs. Define each of these terms.
Question Marks have a low relative market share position, yet they compete in a high-growth industry. Stars represent the organization's best long-run opportunities for growth and profitability, having a high relative market share and a high industry growth rate. Cash Cows have a high relative market share position but compete in a low-growth industry. Dogs have a low relative market share position and compete in a slow- or no-market-growth industry.
Compare and contrast Ralph Nader's and Milton Friedman's positions on social responsibility. With whose view do you agree?
Ralph Nader proclaims that organizations have tremendous social obligations. Nader points out that ExxonMobil has more assets than most countries, and because of this such firms have an obligation to help society cure its many ills. The economist Milton Friedman asserts that organizations have no obligation to do any more for society than is legally required. Friedman may contend that it is irresponsible for a firm to give monies to charity.
Compare and contrast restructuring and reengineering.
Restructuring involves reducing the size of the firm in terms of number of employees, number of divisions or units, and number of hierarchical levels in the firm's organizational structure. Restructuring is concerned primarily with shareholder well-being rather than employee well-being. In contrast, reengineering is concerned more with employee and customer well-being than shareholder well-being. Reengineering involves reconfiguring or redesigning work, jobs, and processes for the purpose of improving cost, quality, service, and speed. Whereas restructuring is concerned with eliminating or establishing, shrinking or enlarging, and moving organizational departments and divisions, the focus of reengineering is changing the way work is actually carried out. Reengineering is characterized by many tactical decisions, whereas restructuring is characterized by strategic decisions.
Explain why it is important to encourage whistle-blowing in a firm.
Some firms warn managers and employees that failing to report an ethical violation by others could bring discharge. The SEC recently strengthened its whistle-blowing policies, virtually mandating that anyone seeing unethical activity report such behavior. Whistle-blowing refers to policies that require employees to report any unethical violations they discover or see in the firm.
What are five differences between strategy formulation and strategy implementation?
Strategy formulation is positioning forces before the action, whereas strategy implementation is managing forces during the action. Strategy formulation focuses on effectiveness, whereas strategy implementation focuses on efficiency. Strategy formulation is primarily an intellectual process, whereas strategy implementation is primarily an operational process. Strategy formulation requires good intuitive and analytical skills, whereas strategy implementation requires special motivational and leadership skills. Strategy formulation requires coordination among a few individuals, whereas strategy implementation requires coordination among many individuals.
Identify some characteristics of an effective evaluation system.
Strategy-evaluation activities must be economical, meaningful, and timely. Should be designed to provide a true picture of what is happening. Controls need to be action-oriented rather than information-oriented. The strategy-evaluation process should not dominate decisions; it should foster mutual understanding, trust, and common sense. There is no one ideal system; the unique characteristics of a firm should determine the system's final design.
Give five sets of coordinates of SPACE Matrix directional vectors that would suggest conservative strategies to be most appropriate.
Student answers will vary. However, five examples they may suggest are (-1, 1), (-2, 2), (-3, 3), (-4, 4), and (-5, 5). Any pair of coordinates with a negative x-coordinate and a positive y-coordinate is correct, in other words, any pair of coordinates that describe a point in the upper-left quadrant.
Discuss the different perspectives and concerns of the Balanced Scorecard.
The Balanced Scorecard is a process that allows firms to evaluate strategies from four perspectives: financial performance, customer knowledge, internal business processes, and learning and growth. It aims to balance long-term concerns with short-term concerns, financial with non-financial concerns, and internal with external concerns.
Compare and contrast the IE Matrix with the BCG Matrix.
The IE Matrix is similar to the BCG Matrix in that both tools involve plotting organizational divisions in a schematic diagram. Also, the size of each circle represents the percentage sales contribution of each division, and pie slices reveal the percentage profit contribution of each division in both the BCG and IE Matrix. Some important differences between the IE Matrix and the BCG Matrix include: 1) different axes; 2) the IE Matrix requires more information about the divisions than the BCG Matrix; and 3) the strategic implications of each matrix are different.
Describe each of the activities that comprise strategy evaluation.
The activities that comprise strategy evaluation are: 1) reviewing bases of an organization's strategy; 2) measuring organizational performance; 3) taking corrective actions. Step 1 can be achieved by developing a revised EFE Matrix and IFE Matrix. External opportunities and threats and internal strengths and weaknesses that represent the bases of current strategies should continually be monitored for change. Step 2 includes comparing expected results to actual results, investigating deviations from plans, evaluating individual performance, and examining progress being made toward meeting stated objectives. Step 3 requires making changes to competitively reposition a firm for the future. Examples of such action are altering a firm's structure, selling a division, or revising a business mission.
Identify and describe three approaches for determining a business' worth.
The first approach is determining its net worth or stockholders' equity. After calculating net worth, add or subtract an appropriate amount for goodwill, overvalued or undervalued assets, and intangibles. The second approach grows out of the belief that the worth of any business should be based largely on the future benefits its owners may derive through net profits. A conservative rule of thumb is to establish a business' worth as five times the firm's current annual profit. The third approach is called the price-earnings ratio method. It divides the market price of the firm's common stock by the annual earnings per share and multiplies this number by the firm's average net income for the past five years. The fourth method can be called the outstanding shares method. To use this method, simply multiply the number of shares outstanding by the market price per share and add a premium.
What are the advantages and disadvantages of a divisional organizational structure?
The first is that accountability is clear. Also, it creates career development opportunities for managers, allows local control of local situations, leads to a competitive climate within an organization, and allows new businesses and products to be added easily. A divisional structure does have its limitations. A divisional structure is costly because each division requires functional specialists who must be paid, there exists some duplication of staff services, facilities and personnel, and better-qualified individuals require higher salaries. It is also costly because it requires an elaborate headquarters-driven control system. Finally, competition between divisions may become so intense that it is dysfunctional and leads to limited sharing of ideas and resources for the common good of the firm.
There are four basic ways a divisionally structured firm could be organized. What are these four ways? Give an example of each.
The four basic ways a divisionally structured firm could be organized are: 1) by geographic area. An example of this would be any organization with similar branch facilities located in widely dispersed areas, like Hershey; 2) by product or service. General Motors, DuPont, Microsoft, and Procter & Gamble are examples of divisional structure by product; 3) by customer. Book publishing companies often organize their activities around customer groups such as college, secondary schools, and private commercial schools; 4) by process. An example of this is a manufacturing business organized into six divisions: electrical work, glass cutting, welding, grinding, painting and foundry work. Each division would be responsible for generating revenues and profits.
Explain the benefits and limitations of developing a Boston Consulting Group Matrix.
The major benefit of the BCG Matrix is that it draws attention to the cash flow, investment characteristics, and needs of an organization's various divisions. The BCG Matrix has some limitations: 1) Viewing every business as either a Star, Cash Cow, Dog or Question Mark is an oversimplification; many businesses fall right in the middle of the BCG Matrix and thus are not easily classified; 2) the BCG Matrix does not reflect whether or not various divisions or their industries are growing over time; that is, the matrix has no temporal qualities, but rather it is a snapshot of an organization at a given point in time; 3) other variables besides relative market share position and industry growth rate in sales are important in making strategic decisions about various divisions.
Explain how to perform a projected financial analysis.
The steps to performing a projected financial analysis are as follows: 1) prepare the projected income statement before the balance sheet and start by forecasting sales as accurately as possible; 2) use the percentage-of-sales method to project CGS and the expense items in the income statement; 3) calculate the projected net income; 4) subtract from the net income any dividends to be paid for that year and bring this retained earnings amount over to the balance sheet by adding it to the prior year's RE shown on the balance sheet; 5) project the balance sheet items, beginning with retained earnings and then forecasting stockholders' equity, long-term liabilities, current liabilities, total liabilities, total assets, fixed assets, and current assets—in that order; and 6) list comments on the projected statements.
Describe the positive features and limitations of QSPM.
There are three positive features of QSPM: 1) Sets of strategies can be examined sequentially or simultaneously; 2) there is no limit to the number of strategies that can be evaluated or the number of sets of strategies that can be examined at once using the QSPM; 3) the last positive feature is that it requires strategists to integrate pertinent external and internal factors into the decision process. The QSPM is not without some limitations: 1) It always requires intuitive judgments and educated assumptions; 2) The ratings and attractiveness scores require judgmental decisions, even though they should be based on objective information; 3) it can be only as good as the prerequisite information and matching analyses upon which it is based.
What are the three commonly used strategies or approaches for implementing changes in an organization? Give an advantage and/or disadvantage for each type of approach.
Three commonly used strategies are a force change strategy, an educative change strategy, and a rational or self-interest change strategy. A force change strategy involves giving orders and enforcing those orders; this strategy has the advantage of being fast, but low commitment and high resistance plague it. An educative change strategy is one that presents information to convince people of the need for change; the disadvantage of an educative change strategy is that implementation becomes slow and difficult. However, this type of strategy evokes greater commitment and less resistance than does the force change strategy. Finally, a rational or self-interest change strategy is one that attempts to convince individuals the change is to their personal advantage. When this appeal is successful, strategy implementation can be relatively easy.
Describe how organizations can create an ethics "culture."
To create an ethics culture, many organizations have developed a code-of-conduct manual outlining ethical expectations and giving examples of situations that commonly arise in their business. Citicorp even developed a business ethics board game, played by thousands of employees worldwide, that gives players the opportunity to react to hypothetical ethical situations. Ethics training programs should include messages from the CEO or business owners emphasizing ethical business practices, the development and discussion of codes of ethics, and procedures for discussing and reporting unethical behavior. Firms can align ethical and strategic decision making by incorporating ethical considerations into longer-term planning, by integrating ethical decision making in the performance appraisal process, by encouraging whistle-blowing, and by monitoring departmental and corporate performance regarding ethical issues.
code of business ethics:
To ensure that the code of ethics is read, understood, believed, and remembered, periodic ethics workshops are needed to sensitize people to workplace circumstances in which ethics issues may arise
Explain why strategy evaluation can be a complex and sensitive undertaking.
Too much emphasis on evaluating strategies may be expensive and counterproductive. No one likes to be evaluated too closely! The more managers attempt to evaluate the behavior of others, the less control they have. Yet too little or no evaluation can create even worse problems. Strategy evaluation is essential to ensure that stated objectives are being achieved.
Although there are many marketing variables that impact the success or failure of strategy-implementation efforts, two variables are central to the process. What are these variables? Discuss why they are so important.
Two variables of central importance to strategy implementation are market segmentation and product positioning. Segmentation is important because it is a key to matching supply and demand, which is one of the thorniest problems in customer service. Segmentation often reveals that large, random fluctuations in demand actually consist of several small, predictable and manageable patterns. Product positioning is important because it is a severe mistake to assume the firm knows what customers want and expect. Many firms have become successful by filling the gap between what customers and producers see as good service. What the customer believes is good service is paramount, not what the producer believes service should be.
There are three major approaches for managing and resolving conflict in an organization. Define these three approaches and give an example of each.
Various approaches for managing and resolving conflict can be classified into three categories: avoidance, defusion, and confrontation. Avoidance includes such actions as ignoring the problem in hopes the conflict will resolve itself, or physically separating the conflicting individuals. Defusion can include playing down differences between conflicting parties while accentuating similarities and common interests, compromising so there is neither a clear winner nor loser, resorting to majority rule, appealing to a higher authority, or redesigning present positions. Confrontation is exemplified by exchanging members of conflicting parties so each can gain an appreciation of the other's point of view, or holding a meeting at which conflicting parties present their views and work through their differences.
Why should companies have policies addressing workplace romance?
Workplace romance between two consenting employees simply happens, so the question is how best to manage the phenomena. Organizations should establish guidelines or policies that address workplace romance for at least 6 reasons: 1) Guidelines can enable the firm to better defend itself against and avoid sexual harassment or discrimination charges; 2) Guidelines can specify reasons why workplace romance may not be a good idea; 3) Guidelines can specify resultant penalties for romancing partners if problems arise; 4) Guidelines can promote a professional and fair work atmosphere; 5) Guidelines can help assure compliance with federal, state, and local laws and recent court cases; 6) Lack of any guidelines sends a lackadaisical message throughout the firm.
conflict avoidance includes the _________
action to ignore a problem in hopes of it resolving itself or separating the conflicting individuals
social responsibility are
actions a firm does beyond what it is legally required to protect/enhance the well-being of living things
Market Segmentation ______________
allows a firm to operate with limited resources because the markets are subdivided by buyers needs and buying habits
contingency planning is the act of creating an ___________
alternative plan that can be put into effect if certain key events do not occur as expected
consonance and advantage are :
based on a firm's external assessment
consistency and feasibility are :
based on an internal assessment
Grand Strategy Matrix
based on evaluative dimensions of competitive position and market growth
Product Positioning __________________
compares your products/services vs those of competitors
benchmarking is the process of __________
comparing one's firm to those of successful firms to see what can be changed for better
Dogs (BCG matrix)
compete in slow or no-market growth industry where businesses are often liquidated, divested, or trimmed through retrenchment
Question Marks (BCG matrix)
decide whether to strengthen by pursuing an intensive strategy
Financial budgets
details how funds will be obtained and spent for specified period of time
SPACE Matrix
four-quadrant framework indicates whether aggressive, conservative, defensive, or competitive strategies are most appropriate for a given organization
Cash Cows (BCG matrix)
generate cash in excess of needs
conflict confrontation includes the act of ____________
holding a meeting where conflicting parties present their view and work through their differences
consistency is the ability of a firm to ___________
maintain operational or financial success without setbacks
business ethics
principles of conduct within a firm that guides behavior and decision making
Explain the concept of protectionism.
refers to countries imposing tariffs, taxes, and regulations on firms outside the country to favor their own companies and people. Many countries became more protectionist during the recent global economic recession. Most economists argue that it harms the world economy because it inhibits trade among countries and invites retaliation.
Stars (BCG matrix)
represent organization's best opportunities for growth and profitability
QSPM Matrix (quantitative strategic planning)
reveals the relative attractiveness of alternative strategies
earnings per share/ earnings before interest and taxes is __________
technique used to determine whether debt, stock, or a combination of debt and stock is best alternative to raise capital to implement strategies
sustainability means :
that an organizations action protect, mend, and preserve the natural environment