Capstone Chap.6 Strategy Analysis and Choice

23) For companies located in Quadrant III of the Grand Strategy Matrix, the first strategy recommended is A) extensive cost and asset reduction. B) asset expansion. C) employee expansion. D) immediate liquidation of assets. E) divestiture.

A

24) When a firm located in Quadrant I of the Grand Strategy Matrix is too heavily committed to a single product, related diversification may be appropriate to reduce the risks associated with a narrow product line.

A

7) The purpose of matching key factors is to generate feasible alternative strategies.

A

15) The firm should pursue conservative strategies if the coordinates of a SPACE directional vector are (-1, +4).

A

9) What are the two external dimensions of the SPACE Matrix? A) Stability position and industry position B) Stability position and competitive position C) Industry position and competitive position D) Competitive position and financial position E) Financial position and industry position

A

1) Strategy analysis and choice largely involves making ________ decisions based on ________ information. A) long-term; short-term B) subjective; objective C) short-term; long-term D) subjective; short-term E) objective; subjective

B

11) What type of strategies would you recommend when a firm's SPACE Matrix directional vector has the coordinates (-2, +3)? A) Aggressive B) Conservative C) Competitive D) Defensive E) Integrative

B

17) In the Boston Consulting Group (BCG) Matrix, which element represents the industry growth rate in sales, measured in percentage terms? A) X-axis B) Y-axis C) First quadrant D) Second quadrant E) Third quadrant

B

10) The two positive-rated dimensions on the SPACE Matrix are A) FP and CP. B) CP and SP. C) FP and IP. D) IP and SP. E) FP and SP.

C

3) The match an organization makes between its internal resources and skills and the opportunities and risks created by its external factors can be defined as A) input. B) concept formulation. C) strategy. D) SWOT. E) weakness.

C

6) Which of the following is a limitation associated with a SWOT Matrix? A) Viewing every business as a Star, Cash Cow, Dog, or Question Mark is an oversimplification. B) Many businesses fall right in the middle of the matrix. C) It is a static assessment in time. D) Other variables besides relative market share position and industry growth rate in sales need to be considered. E) The matrix does not reflect whether or not various divisions or their industry are growing over time.

C

18) In the Boston Consulting Group (BCG) Matrix, which strategy would be most appropriate for a division classified as a Dog? A) Market penetration B) Market development C) Product development D) Retrenchment E) Forward integration

D

21) What analytical tool has four quadrants based on two dimensions: competitive position and market growth? A) Competitive Profile Matrix (CPM) B) Internal-External (IE) Matrix C) Strategic Position and Action Evaluation (SPACE) Matrix D) Grand Strategy Matrix E) Quantitative Strategic Planning Matrix (QSPM)

D

26) All of the following are principles of good organizational governance, as established by BusinessWeek, EXCEPT A) each director attends at least 75 percent of all meetings. B) the audit, compensation and nominating committees are made up solely of outside directors. C) each director owns a large equity stake in the company. D) at least three directors are current or former company executives. E) the CEO is not also the Chairperson of the Board.

D

5) 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 strengths with external threats, and record the resultant ST strategies. D) List the firm's external weaknesses. E) List the firm's external opportunities.

D

8) The two internal dimensions represented on the axes of the SPACE Matrix are A) stability position and industry position. B) industry position and internationalization. C) internationalization and competitive position. D) competitive position and financial position. E) financial position and stability position.

D

20) Which of the following analytical tools consists of a nine-cell matrix? A) Boston Consulting Group (BCG) Matrix B) Competitive Profile Matrix (CPM) C) Strategic Position and Action Evaluation (SPACE) Matrix D) Grand Strategy Matrix E) Internal-External (IE) Matrix

E

25) Which of the following is the first step in developing a QSPM? A) Compute the Total Attractiveness Scores. B) Examine the Stage 2 matrices and identify alternative strategies the organization should consider implementing. C) Assign weights to each key external and internal factor. D) Determine the Attractiveness Scores. E) Make a list of the firm's key external opportunities and threats and internal strengths and weaknesses in the left column of the QSPM

E

12) In the SPACE analysis, what does a (+6, +3) strategy profile portray? A) A strong industry position B) An unstable environment C) A stable environment D) A weak industry position E) A weak financial position

A

13) The most important determinants of an organization's overall strategic position are considered to be the two internal dimensions, financial position (FP) and competitive position (CP), and the two external dimensions, industry position (IP) and stability position (SP).

A

14) Market penetration can be classified as either a conservative, aggressive, or competitive strategy when using the Strategic Position and Action Evaluation (SPACE) Matrix.

A

16) The firm should pursue aggressive strategies if the coordinates of a SPACE directional vector are (+5, +4).

A

22) According to the Grand Strategy Matrix, which strategy is recommended for a firm with rapid market growth and a strong competitive position? A) Market penetration B) Unrelated diversification C) Joint venture D) Retrenchment E) Liquidation

A

19) All of the following are limitations of the Boston Consulting Group (BCG) Matrix EXCEPT A) viewing every business as a star, cash cow, dog or question mark can be an oversimplification. B) the matrix requires at least three years worth of data. C) the matrix does not reflect divisional or industry growth over time. D) the matrix does not allow a company to be classified as somewhere in between two categories. E) variables such as size of market and competitive advantages are not considered in the Matrix.

B

2) An organization's present strategies, objectives, vision, and mission, coupled with the external and internal audit information, provide a basis for A) generating structural strategies, but not evaluating those strategies. B) evaluating structural strategies, but not generating those strategies. C) generating feasible alternative strategies, but not evaluating those strategies. D) evaluating feasible alternative strategies, but not generating those strategies. E) generating and evaluating feasible alternative strategies.

B

4) How many cells are in a SWOT Matrix? A) Two B) Four C) Six D) Eight E) Nine

E