Chapter 5 Quiz
The Global Capsule in Chapter 5 says perhaps the best variable to monitor and to use to decide where to begin doing business is what factor?
Gross Domestic Product
What strategy seeks to increase market share for present products or services in present markets through greater marketing efforts?
Market penetration
What strategy may be best under the following conditions? bullet• The organization competes in a highly competitive or a no-growth industry, as indicated by low industry profit margins and returns. bullet• The organization's present channels of distribution can be used to market new products to current customers. bullet• New products have counter-cyclical sales patterns compared with an organization's present products. bullet• The organization's basic industry is experiencing declining annual sales and profits.
Unrelated diversification
Which of the following statements is FALSE? A. Although evidence is mounting that firms should use partnering as a means for achieving strategies, most U.S. firms in many industries—such as financial services, forest products, metals, and retailing—still operate in a merge or acquire mode to obtain growth. B. Value chain analysis and benchmarking are opposite ways to address the management of resources. C. In a global market tied together by the Internet, joint ventures, and partnerships, alliances are proving to be a more effective way to enhance corporate growth than mergers and acquisitions. D. Partnering is not yet taught at most business schools and is often viewed within companies as a financial issue rather than a strategic issue. E. Partnering has become a core competency, a strategic issue of high importance.
Value chain analysis and benchmarking are opposite ways to address the management of resources.
The two general types of diversification strategies are related diversification and unrelated diversification. When are businesses said to be related?
When their value chains possess competitively valuable cross-business strategic fits
VCA is the process whereby a firm determines the value (price minus cost) of each and all activities ______.
that went into producing and marketing a product
The time frame for long-term objectives and strategies should be consistent, usually from ______ to ______ years.
2; 5
Secondary buyouts occur when what happens? INCORRECT
A private equity firm buys a privately held firm
If an organization's present suppliers are especially expensive, unreliable, or incapable of meeting the firm's needs for parts, components, assemblies, or raw materials, what strategy is best?
Backward integration
What type of strategy aims to target a new market where competition is not yet present instead of going where many firms are already competing on price and the gains of one firm are often at the expense of another?
Blue ocean
What are two major types of bankruptcy?
Chapters 7 and 11 (and 12, 13, 14)
According to Michael Porter, strategies allow organizations to gain competitive advantage from two different bases. What are the bases?
Cost leadership and differentiation
According to Porter, strategies allow organizations to gain competitive advantage from two different bases. What are the bases?
Cost leadership and differentiation
When a core competence evolves into a major competitive advantage, what is it called?
Distinctive competence
The largest consumer-products company in the world, Procter & Gamble (P&G), is in the process of selling more than half of its brands (nearly 100) in order to focus on its core brands (about 80). What is this strategy called?
Divestiture
The chapter lists six reasons why many mergers and acquisitions fail, including which of the following?
Inability to achieve synergy
______ is a popular strategy that occurs when two or more companies form a temporary partnership or consortium for the purpose of capitalizing on some opportunity.
Joint venture
When an organization has pursued both a retrenchment strategy and a divestiture strategy and neither has been successful, then perhaps the best strategy is ______.
Liquidation
The old adage, "If it ain't broke, don't fix it" pertains to which of the following?
Managing by extrapolation
Nonprofit organizations are basically just like for-profit companies except for two major differences. What is one of the differences?
Nonprofits do not pay taxes or have shareholders.
What is the name of the strategy that involves selling off land and buildings to raise needed cash, pruning product lines, closing marginal businesses, closing obsolete factories, automating processes, reducing the number of employees, and instituting expense control systems?
Retrenchment
First mover advantages refers to the benefits a firm may achieve by entering a new market or developing a new product or service prior to rival firms. An advantage of being a first mover is ______.
carving out market share and a position that is easy to defend and costly for rival firms to overtake
When an organization splits into two or more parts, this type of strategy is a _____.
divestiture
Gaining ownership or increased control over distributors or retailers is called _____.
forward integration
Objectives should include which of the following characteristics?
Measurable, challenging, and hierarchical
