Chapter 6-Strategic Management

Which stage of the strategy-formulation framework involves the Quantitative Strategic Planning Matrix? A) Stage 1 B) Stage 2 C) Stage 3 D) Stage 4 E) Stage 5

C) Stage 3

What is the highest number of strategies that can be examined at one time with the QSPM? A) 1 B) 2 C) 5 D) 10 E) There is no limit.

E) There is no limit.

Firms located in which quadrant of the Grand Strategy Matrix are in an excellent strategic position? A) I B) II C) III D) IV E) V

A) I

Which stage of the strategy-formulation framework includes an IFE Matrix and a Competitive Profile Matrix? A) Input B) Matching C) Decision D) Penetration E) Research

A) Input

Which stage of the strategy-formulation framework contains the IFE Matrix? A) Input stage B) Analysis stage C) Matching stage D) Decision stage E) Output stage

A) Input stage

________ includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes and heroines that describe a firm. A) Strategy B) Culture C) Mission D) Objectives E) QSPM

B) Culture

According to the Grand Strategy Matrix, organizations in which quadrant have a strong competitive position but are in a slow-growth industry? A) I B) II C) III D) IV E) V

D) IV

Which strategies aim at improving internal weaknesses by taking advantage of external opportunities? A) SO B) WO C) SW D) ST E) WT

B) WO

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) A strong industry position

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) Market penetration

In the BCG Matrix, how would a division with a low relative market share position in a high growth industry be described? A) Question Mark B) Cash Cow C) Star D) Stuck-in-the-middle E) Dog

A) Question Mark

What term is defined as the product of multiplying the weights by the Attractiveness Scores in each row of the QSPM? A) Total Attractiveness Scores B) Sum Total Scores C) Weighted Scores D) Total Weighted Scores E) Factors

A) Total Attractiveness Scores

In the BCG Matrix, a division with a high relative market share position in a low-growth industry can be described as a A) Star. B) Cash Cow. C) Question Mark. D) Dog. E) Failure.

B) Cash Cow.

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) Conservative

What type of strategy would divestiture be classified as? A) Aggressive B) Defensive C) Competitive D) Offensive E) Conservative

B) Defensive

Although Quadrant ________ companies are growing, according to the Grand Strategy Matrix they are unable to compete effectively, and they need to determine why the firm's current approach is ineffective and how the company can best change to improve its competitiveness. A) I B) II C) III D) IV E) V

B) II

An effective way to gain commitment and achieve desired results is to A) emphasize that imposing a particular method is more important than achieving desired results. B) shift from specific to general issues and concerns. C) eliminate middle level managers from strategic decisions. D) switch from long-term to short-term issues and concerns. E) realize that it's better to achieve optimal results with an unpopular strategy than to achieve satisfactory results with a popular strategy.

B) shift from specific to general issues and concerns.

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) subjective; objective

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) FP and IP.

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) It is a static assessment in time.

Which board of director's duty falls under the category of control and oversight over management? A) select new directors B) pass bylaws and related resolutions C) select the CEO D) maintain good public image E) ensure equitable stockholder representation

C) select the CEO

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) strategy.

The top row of a QSPM consists of alternative strategies derived from all of the following EXCEPT A) Grand Strategy Matrix. B) BCG Matrix. C) SPACE Matrix. D) CPM Matrix E) IE Matrix.

D) CPM Matrix

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

D) List the firm's external weaknesses.

Which of these is NOT a SPACE Matrix quadrant? A) Aggressive B) Defensive C) Competitive D) Offensive E) Conservative

D) Offensive

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) at least three directors are current or former company executives.

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) competitive position and financial position.

Which of the following analytical tools consists of a nine-cell matrix? A) BCG Matrix B) Competitive Profile Matrix C) SPACE Matrix D) Grand Strategy Matrix E) Internal-External Matrix

E) Internal-External Matrix

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) Make a list of the firm's key external opportunities and threats and internal strengths and weaknesses in the left column of the QSPM.

Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies? A) Input B) Output C) Decision D) Throughput E) Matching

E) Matching

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

E) Nine

The BCG Matrix is designed specifically to enhance which type of firm's efforts to formulate strategies? A) Companies with more than one division B) Large companies C) Companies with annual sales greater than $1 million D) Companies with annual sales of less than $1 million E) All companies

A) Companies with more than one division

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) Stability position and industry position

In the BCG Matrix, when a division of an organization has a high relative market share and is in a fast-growing industry, it is called a A) Star. B) Cash Cow. C) Cat. D) Question Mark. E) Dog.

A) Star.

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) extensive cost and asset reduction.

Today, boards of directors are composed mostly of A) outsiders. B) management. C) union members. D) company employees. E) past executives.

A) outsiders.

Which matrix is included in the decision stage of the strategy formulation framework? A) Internal Factor Evaluation Matrix B) Quantitative Strategic Planning Matrix C) Boston Consulting Group Matrix D) Grand Strategy Matrix E) Strategic Position and Action Evaluation Matrix

B) Quantitative Strategic Planning Matrix

All of the following are limitations of the 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) the Matrix requires at least three years worth of data.

In the 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) y-axis

Which of these is a limitation of QSPM? A) Only a few strategies can be evaluated at once. B) It is prohibitively expensive. C) It requires intuitive judgments and educated assumptions. D) Strategies cannot be examined sequentially. E) It makes it more likely that key factors will be overlooked or weighted inappropriately.

C) It requires intuitive judgments and educated assumptions.

In the 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) Retrenchment

Which strategies use a firm's strengths to avoid or reduce the impact of external threats? A) SO B) WO C) SW D) ST E) WT

D) ST

Which analytical tool determines the relative attractiveness of various strategies based on the extent to which key external and internal critical success factors are capitalized upon or improved? A) BCG Matrix B) SPACE Matrix C) SWOT Matrix D) IE Matrix E) QSPM

E) QSPM

Forward integration would be an appropriate strategy for which of the following types of divisions in the BCG Matrix? A) Dogs B) Failures C) Question Marks D) Cat E) Star

E) Star

Which section of the SWOT Matrix involves matching internal strengths with external opportunities? A) The WT cell B) The SW cell C) The WO cell D) The ST cell E) The SO cell

E) The SO cell

The act of oversight and direction for an organization is referred to as A) corporate lawmaking. B) centralized control. C) organizational direction. D) establishing norms. E) governance.

E) governance.

In the BCG Matrix, a division that has a low relative market share position and competes in a slow-growth industry is referred to as a A) Dog. B) Question Mark. C) Star. D) Cash Cow. E) Cowboy.

A) Dog.

Which strategy-formulation technique reveals the relative attractiveness of alternative strategies and thus provides an objective basis for selecting specific strategies? A) SWOT B) SPACE C) QSPM D) IFE E) CPM

C) QSPM

What analytical tool has four quadrants based on two dimensions: competitive position and market growth? A) Competitive Profile Matrix B) Internal-External Matrix C) SPACE Matrix D) Grand Strategy Matrix E) QSPM

D) Grand Strategy Matrix

Each of the nine techniques included in the strategy formulation framework rely on the use of A) strictly factual data. B) luck. C) financial formulas and statistics. D) intuition and analysis. E) synergy.

D) intuition and analysis.

Which strategies are defensive tactics directed at reducing internal weaknesses and avoiding external threats? A) SO B) WO C) SW D) ST E) WT

E) WT