Business MidTerm Exam Review

Which of these retailers follows a best-cost strategy? Target Walmart Dollar General TJ Maxx

Target

An organization should have goals. When writing goals which of the following is not needed? The goal must be specific The goal must be something all employees needs The goal must be time bound The goal must be measurable

The goal must be something all employees needs

A focused differentiation strategy requires offering unique features that fulfill the demands of a narrow market.

True

A mission statement should explain to stakeholders why they should support the organization by making clear what important role or purpose the organization plays in society.

True

A strategic plan is a carefully crafted set of steps that a firm intends to follow in order to be successful. Aa business model is part of the strategic plan.

True

Although examining a company's awareness, motivation, and capability is important, the results of a series of moves and countermoves are often difficult to predict, and miscalculations can be costly.

True

Companies that are not able to offer low prices or appealing unique features are referred to as "stuck in the middle."

True

Potential New Entrants are companies that do not currently compete in an industry but might join the industry in the future.

True

SWOT is best viewed as a brainstorming technique for generating creative ideas, not as a rigorous method for selecting strategies.

True

The use of child labor was once commonplace in the United States. Now firms face political scrutiny when using overseas suppliers that use child labor.

True

Using a differentiation strategy means that a company is competing based on uniqueness rather than price and is seeking to attract a broad market.

True

The relative bargaining power between an industry's ______ and its ______ helps shape the profit potential of the industry.

competitors suppliers

A company following a ______ strategy attempts to convince customers to pay a premium price for its good or services by providing unique and desirable features.

differentiation

A ________ ________ is a lower-end brand that a company introduces to try to protect the company's market share without damaging the company's existing brands.

fighting brand

The purpose of ______ ______ ______ is to identify how much profit potential exists in an industry.

five forces analysis

Strategies that involve targeting a relatively narrow niche of potential customers are what type of strategies? direct strategies indirect strategies unconventional strategies focus strategies

focus strategies

Focusing on ______ ______ allows executives to concentrate on the core elements of companies' business-level strategies.

generic strategies

Some observers have suggested that competition in many settings has transformed into _________________ which involves very rapid and unpredictable moves and countermoves that can undermine competitive advantages.

hypercompetition

Michael Porter has noted that strategy is as much about executives deciding what a company is ______ going to do as it is about deciding what the company ______ going to do.

not is

SWOT analysis is a tool that considers a company's ________ and ________ along with the ________ and ________ that exist in the company's environment.

strengths weaknesses opportunities threats

The ______ segment centers on improvements in products and services that are provided by science.

technological

An organization's ______ describes what the organization hopes to become in the future.

vision

Beyond being a positive social change, the widespread acceptance of who into the workforce has created important opportunities for certain organizations? women teenagers men baby boomers

women

The ________ ________ System is the United States' central banking system.

Federal Reserve

Match the Cooperative Move with it's definition. 1. Joint Venture 2. Strategic Alliance 3. Colocation 4. Co-opetition

1. A cooperative arrangement that involves two or more organizations, each contributing to the creation of a new entity. 3. When goods and services offered under different brands are located close to one another. 4. A blending of competition and cooperation between two companies. 2. A cooperative arrangement between two or more organizations that does not involve the creation of a new entity.

Match the theory with the appropriate definition. 1. Enactment 2. Environmental determinism 3. Institutional Theory 4. Transaction Cost Economics

1. A theoretical perspective that contends that an organization can, at least in part, create an environment for itself that is beneficial to the organization by putting strategies in place that reshape competitive conditions in a favorable way. 3. The extent to which companies copy one another's strategies. 2. A theoretical perspective that contends that organizations are limited in their ability to adapt to the conditions around them. 4. A theory that centers on whether it is cheaper for a company to make or to buy the products that it needs.

Put the steps of the Strategic Management process in order.

1. Understanding Strategy and Performance 4. Strategy Implementation 2.Environmental and Internal Scanning 3. Strategy Formulation

Match the word with the definition. 1. The set of external conditions and forces that have the potential to influence the organization. 2. Overall trends and events in society such as social trends, technological trends, demographics, and economic conditions. 3. Multiple organizations that collectively compete with one another by providing similar goods, services, or both. 4. Events and trends that create chances to improve an organization's performance level. 5. Events and trends that may undermine an organization's performance.

1. environment 3. competitive environment 4. opportunities 5. threat 2. general environment

According to Porter, how many competitive dimensions are the keys to business-level strategy? 3 7 2 4

2

Match the generic strategy with it's definition. 1. Cost Leadership 2. Differentiation 3. Focused Cost Leadership 4. Focused Differentiation

3. A generic business strategy that requires competing based on price to target a narrow market. 4. A generic business strategy that requires offering unique features that fulfill the demands of a narrow market. 2. A generic positioning that attempts to convince customers to pay a premium price for its good or services by providing unique and desirable features. 1. Generic strategy that offers products or services with acceptable quality and features to a broad set of customers at a low price.

Substitutes are offerings that differ from the goods and services provided by the competitors in an industry but that fill similar needs to what the industry offers. Match the good or service with an industry substitute. 1. Taxi 2. Brand Name Pharmaceuticals 3. Cable Television 4. Typewriters 5. US Postal Service

3. Netflix 1. Uber 2. Generic Drugs 5. Email 4. Computers

Match the term with the definition. 1. The plan that an organization hopes to execute. 2. An unplanned direction that arises in response to unexpected opportunities and challenges. 3. The plan of action that an organization actually follows. 4. A carefully crafted set of steps that a company intends to follow to be successful. 5. Describes the process through which a company hopes to earn profits.

5. Business Model 1. Intended Strategy 4. Strategic Plan 3. Realized Strategy 2. Emergent Strategy

Match the definition with the word. 1. A theory that contends that the possession of strategic resources can provide an organization with competitive advantages over its rivals. 2. An asset that is valuable, rare, difficult to imitate, and nonsubstitutable. 3. Resources that help a company create strategies that capitalize on opportunities and ward off threat. 4. Resources that exist when competitors cannot find alternative ways to gain the benefits that a resource provides. 5. What the organization can do based on the resources it possesses.

5. Capabilities 2. Strategic resource 4. Nonsubstitutable 3. Valuable 1. Resource based theory

Match the Competitive Move with it's definition. 1. First Mover 2. Disruptive Innovation 3. Foothold 4. Blue Ocean Strategy 5. Bricolage

5. Using whatever materials and resources happen to be available as the inputs into a creative process. 2. An improvement that conflicts with, and threatens to replace, traditional approaches to competing within an industry. 4. Creating a new, untapped market rather than competing with rivals in an existing market. 3. A small position that a company intentionally establishes within a market in which it does not yet compete. 1. An initial entrant into a market.

_____________ is used to make sense of an organization's standing along a performance measure. The corporate mission A performance referent A bench mark The corporate vision

A performance referent

Research indicates that three factors determine the likelihood that a company will respond to a competitive move. What are the three factors?

Answer for blank # 1: Awareness Answer for blank # 2: Motivation Answer for blank # 3: Capability

Name the four generic business level strategies.

Answer for blank # 1: Cost Leadership Answer for blank # 2: Differentiation Answer for blank # 3: Focused Cost Leadership Answer for blank # 4: Focused Differentiation

Five Forces Analysis was introduced over 30 years ago by a Harvard Business School Professor. What was his name?

Answer for blank # 1: Michael Answer for blank # 2: Porter

Identify the 5 P's of strategy.

Answer for blank # 1: Plan Answer for blank # 2: Ploy Answer for blank # 3: Pattern Answer for blank # 4: Position Answer for blank # 5: Perspective

PESTEL reflects the names of the six segments of the general environment. What are those six segments?

Answer for blank # 1: Political Answer for blank # 2: Economic Answer for blank # 3: Social Answer for blank # 4: Technological Answer for blank # 5: Environmental Answer for blank # 6: Legal

he Marketing Mix or the four P's are what companies use to offer customers a coherent and persuasive message. What are the four P's?

Answer for blank # 1: Product Answer for blank # 2: Price Answer for blank # 3: Place Answer for blank # 4: Promotion

Identify the four types of CEO's discussed within the text (Chapter 2).

Answer for blank # 1: Scoundrels Answer for blank # 2: Icons Answer for blank # 3: Silent Killers Answer for blank # 4: Hidden Gems

An organization's vision and mission offer a broad, overall sense of the organization's direction. To work toward achieving these overall aspirations, organizations also need to create goals—narrower aims that should provide clear and tangible guidance to employees as they perform their work on a daily basis. The most effective goals are those that are SMART. Define each of the letters in SMART goals.

Answer for blank # 1: Specific Answer for blank # 2: Measurable Answer for blank # 3: Aggressive Answer for blank # 4: Realistic Answer for blank # 5: Time-Bound

What type of strategy are companies using that are able to offer both low prices and unique features that customers find desirable?

Answer for blank # 1: best-cost Answer for blank # 2: strategy

What is the ability of an organization to protect intangible goods such as movies, software, and video games from piracy?

Answer for blank # 1: intellectual Answer for blank # 2: property Answer for blank # 3: rights

Intellectual property refers to creations of the mind, such as inventions, artistic products, and symbols. What are the four main types of intellectual property?

Answer for blank # 1: patents Answer for blank # 2: trademarks Answer for blank # 3: copyrights Answer for blank # 4: trade secrets

What is the theft of trademark or copyrighted material?

Answer: Piracy

What is a tool that charts the path by which products and services are created and eventually sold to customer?

Answer: Value Chain

Identify the Advantages to differentiation strategy. Check all that apply Price sensitivity Brand loyalty Strong profit margins Little to no Marketing expense

Brand loyalty Strong profit margins

The economic crisis of the late 2000s has had a tremendous positive effect on a vast array of organizations.

False

The presence of a cost leader in an industry tends to encourage new companies to enter the business.

False

Trade secrets are legendary in the soft drink world. Which is actually the original secret soft drink? Dr. Pepper Rootbeer Coke Pepsi

Dr. Pepper

CEOs displaying high levels of relative fame but low levels of reputation. These CEOs are well known, but vilified is known as a hidden gem.

False

Firms that are stuck in the middle generally perform highly because they have a clear market or competitive pricing.

False

It is only necessary to use one performance measurement, such as stock price, to determine how an organization is performing.

False

Strategic management is a relatively new concept that started in the 1960's

False

Tangible resources are quite difficult to see, to touch, or to quantify.

False

What two auto companies provide a well-known example of co-opetition? Their vehicles were produced side by side for many years at the jointly owned New United Motor Manufacturing Incorporated (NUMMI) in Fremont, California. Ford Nissan General Motors Toyata

General Motors Toyata

There are 4 different types of business models for profit businesses. According to the text, which of the following would not fall into this category. Retailer Marketing Distributor Manufacturing Franchising

Marketing

Which of the following is not part of the Balanced Scorecard process? Financial measures Learning and growth measures Customer measures Measuring the performance of the company competitors.

Measuring the performance of the company competitors.

A situation in which a company faces the same rival in more than one market is called what? Fighting Brands Speed of Response Multipoint Competition Mutual Forbearance

Multipoint Competition

The environmental segment includes which factors? Select all that apply. cultural trends natural disasters pollution scientific advances weather patterns

Natural Disasters Pollution Weather Patterns

Which organization is NOT a company considered to be 'stuck in the middle'? Blockbuster Video Arby's Circuit City Netflix

Netflix

When thinking about strategic groups, due to mobility barriers, Subway would not need to worry about competing with what other restaurants? Check all that apply. P.F. Chang's Jimmy Johns Quiznos Ruth's Steak House

P.F. Chang's Ruth's Steak House

Starting rumors about competitors, lying about new product being introduced is an example of a _____________. Ploy All of the above Plan Business model

Ploy

Which are characteristics of cost leaders? Check all that apply. Spend little on Marketing/Advertising Emphasize Efficiency Small Companies Spend a lot on Research and Development

Spend little on Marketing/Advertising Emphasize Efficiency

Wars provide important lessons about strategic management and one of the greatest strategist is Bill Gates General Chow Sun Tzu Marco Polo

Sun Tzu