MGMT 309 Test 2 Chapter 8

____ strategy refers to a mid-range strategy that attempts to move into new market areas at a deliberate and carefully planned pace.

Analyzer

GE competes in industries ranging from medical devices to appliances to television networks. GE's mixed strategy is an example of ____ strategy.

corporate-level

Fort Howard Paper Company has a cost-saving manufacturing process that its competitors cannot imitate. Fort Howard Paper enjoys a(n)

sustained competitive advantage.

____ exists when the economic value together is greater than the value of the parts.

synergy

An example of ____ would be when credit card and mortgage divisions of banks often get their customers from the bank's commercial loan customers.

synergy in related diversification

When one disposable shaver maker introduced a three-blade shaver, the other introduced three blades within months. They repeated the process with four blades. This is an example of

tactical imitation

Business-level strategy focuses primarily on

the areas in which the firm may have an advantage and how much various organizational parts enhance each other.

After so many people complimented Robin Hoder's honey mustard, she decided to start a small business called Naples Valley Products to manufacture and market her mustard. At this juncture, Hoder was engaged in

trategic formulation.

Clorox Corporation owns Kingsford charcoal, Matchlight charcoal lighter, Prime Choice steak sauce, and a restaurant chain. This is an example of ____ diversification

unrelated

____ strategies in the Miles and Snow model represent a middle-of-the-road approach to business strategy.

Analyzer

Chaparral Steel is so efficient in its steel production and casting processes that it is the only U.S. steel producer that regularly exports its products to Japan. This is an example of Chaparral Steel's

distinctive competence.

Smart cars are the only cars that can park perpendicular to the curb, which is especially beneficial in cities. This is an example of

distinctive competence.

According to the Miles and Snow model of business strategy, which of these strategies is the most appropriate for use in an unstable environment?

Prospector

For years Dell computers were only available through Dell. Then it contracted with Wal-Mart to sell there too. Dell used a(n) ____ strategy.

analyzer

One characteristic of an SBU classified as a star is

a large amount of short-run cash support.

Assuming an SBU retained its share of the market, how would it be classified if it were a star and its market subsequently became a low-growth market?

A cash cow

The aircraft engine division of General Electric, which competes with Pratt & Whitney, has its own mission and a strategy that often differs considerably from other parts of the corporation. What is a division such as this called?

A strategic business unit

In their book In Search of Excellence, Peters and Waterman found that successful companies "stuck to their knitting." In other words, they concentrated on those things that they do well. To which component of organizational strategy does this idea most directly relate?

Distinctive competence

Texas Instruments got into the watch business as a result of developing a technology that radically changed the nature of wristwatches. Its strategy included the use of new equipment and automation to drive down costs. This example best represents which component of strategy?

Distinctive competence

____ is the component of strategy that indicates what the organization does exceptionally well.

Distinctive competence

Which of the following is NOT an international business strategy?

Intercontinental

The Toyota Prius initially had a waiting list and was excluded from all rebate offers. The Toyota Prius was at which stage of the product life cycle?

Introduction

One action that an organization may take with respect to an SBU classified as a dog is to sell it. It seems odd that one organization would want to buy another's dog. Which of the following might explain such a purchase?

Possible synergistic effects on the buying organization

Which of these is concerned with the changes in the sales volume of a product during its existence?

Product life cycle approach

If the marketing department adopts a strategy calling for substantial test marketing, aggressive advertising campaigns, and inducing consumer product trials, which of the following is most likely the business strategy being used by the company as a whole?

Prospector

Which of the following is an example of one of the Miles and Snow typology classifications for business strategies?

Prospector

Which of the strategy types in the Miles and Snow model avoids long-term commitment to any single technology, is highly decentralized, and has a propensity to take risk?

Prospector

____ are corporate-level strategies for becoming a diversified firm.

a. Internal developments of new products b. Backward vertical integrations c. Mergers d. Acquisitions all the above

____ is the proportion of the market controlled by the product.

Relative market share

Which of the following is NOT one of the strategy types listed in the Miles and Snow typology?

Rescuer

Coca-Cola sells soft drinks, bottled water, and sports drinks. This is an example of

Scope

Food 4 All, Inc. sold its three nonfood businesses and replaced them with firms in the food industry. Which element of corporate strategy does this choice to compete in the food industry specifically address?

Scope

Krispy Kreme sells doughnuts. It markets them primarily to people who want something quick and sweet for breakfast or as a morning snack. This is an example of Krispy Kreme's

Scope

The Culinary Institute of America (CIA) teaches cooking and operates French, Italian, and American restaurants. It also sells cooking supplies. This is an example of CIA's ____.

Scope

Which of the following areas does a well-conceived strategy address?

Scope

Which of the following is NOT an advantage inherent in related diversification?

Scope

Which of the following is NOT an example of a basis of relatedness for implementing related diversification?

Similar human resources

In 1987, Allegis Corporation consisted of United Airlines, Hertz Rent-a-Car, and Westin Hotels. United had purchased and combined these firms into one corporation because it was thought that they could accomplish more joined together than they could operating as separate units. Which advantage of related diversification does this best represent?

Synergy

Kraft Food Inc offered to buy Cadbury, a confection and beverage company. Which advantage of related diversification could result from the merging of these two businesses?

Synergy

____ is a useful framework for managers to use as they plot business strategy over time.

The product life cycle

Which of the following companies is noted primarily for employing an overall cost leadership strategy?

Wal-Mart

The starting point in formulating strategies is usually

a SWOT analysis.

Strategy formulation is

a set of processes involving the organization's strategies.

Forms of diversification include

a. acquisitions. b. vertical integration. c. mergers. d. the internal development of new products. ALL THE ABOVE

An organization implementing a prospector strategy needs to

a. create new opportunity. b. remain flexible. c. respond quickly. d. decentralize decision making. ALL THE ABOVE

When implementing a differentiation strategy it is important to have

a. marketing emphasize high-value distinction. b. control of funds without discouraging creativity. c. manufacturing adjust inventory. d. a culture focused on customer needs. ALL THE ABOVE

The product life cycle

a. shows how sales volume changes over time for products. b. can help managers recognize that strategies need to evolve over time. c. begins when a new product or technology is first introduced. d. generally consists of four stages. ALL THE ABOVE

Effective strategies

align the organization and environment to achieve strategic goals.

Ford once supplied every part to its automobiles, except the rubber (it even tried to grow the trees, to no avail). This is an example of

backward vertical integration.

AOL eliminated fees to some subscribers to try to attract more users. AOL was using a(n) ____ strategy.

defender

Prior to 1990, Campbell Soup Company was languishing near the bottom of the food industry. It was committed to maintaining its current market and was not interested in growth. Then it got a new CEO, David W. Johnson. The company exceeded its growth goals in both 1991 and 1992, and launched 122 new products. Its strategy prior to the hiring of Johnson exemplified a ____ strategy.

defender

The ____ strategy is the most conservative approach in the Miles and Snow classifications of business strategies.

defender

A(n) ____ strategy is a plan chosen and implemented to support specific goals, such as an increase of market share by 5 percent.

deliberate

Reality shows became prevalent on television after CBS introduced the first Survivor series. That type of television show is now in the maturity stage of its product life cycle. This means

demand for the product has reached a plateau.

Abercrombie and Fitch sells young adult clothing with overtly sexual advertising at high prices with poor quality sewing. It uses a(n) ____ strategy

differentiation

Gymboree sells high quality children's clothing at high prices. It uses a(n) ____ strategy.

differentiation

Warsteiner beer has the slogan "Life is too short, to drink cheap beer." This slogan supports a ____ strategy.

differentiation

Toyota is the most successful automaker selling hybrid vehicles. Toyota uses

differentiation.

In the 1980s, if you mentioned Harley-Davidson motorcycles to the average consumer, he or she immediately thought of motorcycle gangsmore specifically, Hell's Angels. Now the price of a Harley can top $20,000, and there are riding clubs like Rubs (Rich urban riders) that include executives, attorneys, and doctors. The club members are attracted to Harleys for their wild and free image. Harley-Davidson's image is a(n) ____ not easily imitated by competitors.

distinctive competence

A(n) ____ strategy is a pattern of action that develops over time in an organization in the absence of missions and goals, or despite missions and goals.

emergent

Don opened a pizza shop. It was successful, so he opened a restaurant; it failed. So he opened a bed and breakfast; it succeeded. He wanted to save a historic building, so he turned it into a retreat center. Don uses a(n) ____ strategy.

emergent

Google bought YouTube even though it operated at a loss. The business strategy for YouTube is ____.

emergent

Fox News covers stories from a right of center political point of view. They use a(n) ____ strategy. All reporters say they have no bias.

focus

Pea-in-the-Pod is a small chain of retailers that sell clothes only to pregnant women and new mothers. Its quality materials, innovative designs, reasonable prices, and ____ strategy create a competitive advantage for the chain.

focus

Porter's generic strategies classify firms by which of the following?

focus

Franke, a Swiss manufacturer of sink and facet systems, sold accessories through retail stores and then added Internet sales. Franke used

forward vertical integration.

The GE business screen is an expansion of the ideas from

he BCG matrix.

The primary concern of strategy implementation is

how the strategy is operationalized and executed.

Using the Boston Consulting Group matrix, SBUs are classified on the basis of

market share and market growth rate

Porsche Automobil Holding and Volkswagen own each others stock. They plan to integrate the companies in 2011. This diversification strategy is ____.

merger

In environmental SWOT analysis, the external organizational position is analyzed according to its

opportunities and threats.

Howard Schultz traveled in Italy and liked the coffee. He founded Starbucks with a plan to introduce American coffee drinkers to this Italian-style drink. This is an example of ____.

organizational opportunity

Network new programs have been losing viewers for years. They all cover stories from left of center in the political spectrum. Fox News saw a(n) ____ and covers stories from right of center. The reporters all say they have no bias.

organizational opportunity

Krispy Kreme has a distribution network that allows fresh doughnuts to be transported to convenience stores, supermarkets, and Krispy Kreme outlets before dawn so that consumers can enjoy them that same day. This is an example of a(n) ____ for the Krispy Kreme organization.

organizational strength

Coca-Cola's success in global marketing is the result of its distribution system and its marketing communications, which are two of the company's

organizational strengths.

The expiration of a pharmaceutical drug patent allows generic drug makers to introduce the same chemical compound under a different name and at lower prices. This is an example of ____ for the developer of the original drug.

organizational threat

AirTran Airlines (formerly ValuJet) has an airplane fleet that is older than those owned by other airlines. This is a potential ____ because it can give the company an image of poor quality or unsafe planes.

organizational weakness

Chelsea Milling Company produces Jiffy Mix and other mixes. The company is the fourth largest baking mix producer, has never spent a cent on advertising, and sells its product for one-half to one-third the cost of its competitors. The company pursues a(n) ____ strategy.

overall cost leadership

3M is a highly innovative firm that is constantly seeking new markets and is oriented toward growth and taking risks. It uses a(n) ____ strategy.

prospector

News Networks operates in a very dynamic environment. Its managers have decided to be on the lookout for new market and product opportunities and to take advantage of them when they arise. In addition, they have organized the firm along bureaucratic lines based on the president's desires. You would probably be safe in predicting that News Networks will be a(n)

prospector.

Kmart has struggled for years competing with Wal-Mart and Target. It tried celebrity labels, but that did not help. It can not lower prices as low as Wal-Mart, because it does not have the cost cutting expertise. This is an example of a(n) ____ strategy.

reactor

Jordache was once a dominant brand in the American blue-jean market, commanding high prices. Now Jordache is sold in Wal-Mart. This strategy is called

reactor.

Reckitt & Colman, Inc. manufactures Spray 'n Wash laundry stain remover, Resolve fabric refresher, and Woolite fabric wash. This is an example of ____ diversification

related

When Turner Broadcasting purchased a movie studio with its vault of old movies, it was an example of a(n) ____ diversification strategy. Turner was able to get a source for movies to show on its various cable television stations.

related

When an airline uses profits from one region to lower prices in another region it is using

resource deployment

Wal-Mart sought approval for an industrial bank charter. This is an example of changing

resource deployment.

For years, the Tabasco Company used a(n) ____ strategy and manufactured only its famous hot sauce.

single-product

Extra funds should be channeled to the ____, which is a product with a high share of a fast-growing market.

star

YouTube has high market share and high market growth rate, which would make it a ____. However it still does not have a profitable business plan.

star

Datril was introduced into the pain-reliever market as a product just like Tylenol. The makers of Datril used ____ to copy Tylenol's distinctive competence.

strategic imitation

In a small community in Michigan, there are two funeral homes. One of them clips all pictures from the local paper, laminates them, and mails them to the person photographed with a brief note. This is an attempt to build positive relations with potential customers during happy times. If the other funeral home chose to make similar customer contact, the competitors would have

strategic imitation

Starstruck Eateries has been very successful over the years by monitoring what successful restaurants in other cities are doing and copying them. This is known as

strategic imitation.

When the CBS network introduced the reality show Survivor, the show was an immediate success for the network. As a result ABC, NBC, and Fox tried to introduce their own reality shows. In this instance, ABC, NBC, and Fox used

strategic imitation.

Siemens corporate research earns on average 20 patents a day. The patents give Siemens a(n) ____.

sustained competitive advantage