Strategic Management: Chapter 6

________includes the set of shared values and beliefs that describe a firm

culture

The two positive-rated dimensions on the SPACE matrix are

FP and IP

Market penetration can be classified as either a conservative, aggressive, or competitive strategy

True

Stage 2 in the strategy-formulation framework involves the Quantitative Strategic Planning Matrix

False

Step 1 of a QSPM assigns weights to each key external and internal factor

False

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

True

The act of oversight and direction for an organization is referred to as

governance

Firms located in which quadrant of the Grand strategy matrix are in an excellent strategic position

1

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

Dog

A SWOT matrix is composed of four cells for the four types of strategies it creates

False

A firm should pursue defensive strategies if the coordinates of the SPACE directional vector are (2,3)

False

According to the Grand strategy matrix, quadrant 3 organizations compete in rapid-growth industries and have strong competitive positions

False

Cash cows represent the organization's best long-run opportunities for growth and profitability

False

It is vital that strategists always consider all feasible alternatives that could benefit the firm

False

On the x-axis of the IE matrix, an IFE total weighted score of 2.5 represents a weak internal position

False

One positive feature of QSPM is that it does not require intuitive judgement and educated assumptions

False

Strategy changes may be highly effective and productive if a supportive culture does not exist

False

The BCG Matrix requires more information about the divisions than the IE matrix

False

The Grand Strategy Matrix is based on two evaluative dimensions, market share and market growth

False

The SWOT matrix, if used appropriately, does not have any limitations

False

The first stage of the strategy-formulation framework is the input stage, and it is directly followed by the decision stage

False

The four strategies of the SPACE matrix are aggressive, conservative, offensive and defensive

False

The midpoint on the x-axis of a BCG matrix is typically set at .05

False

The trend in the U.S. is toward larger boards, with an average of 18 members being the norm

False

Total attractiveness scores are defined as the sum of the attractiveness scores in a given column of the QSPM and are computed in the second step of the QSPM

False

Trying to achieve optimal reesults with an unpopular strategy is always better than achieving satisfactory results with a popular strategy

False

When completing the matching stage of the strategy-formulation framework, the SWOT matrix needs to be completed before the SPACE matrix

False

What analytical tool has four quadrants based on two dimensions: competitive position and market growth

Grand Strategy Matrix

In the BCG matrix, when a division of an organization has a high relative market share and is in a fast growing industry is is called a

Star

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

Strategy

What is the highest number of strategies that can be examined at one time with the QSPM

There is no limit

Good intuitive judgement is always needed to determine appropriate weights and ratings in the input stage matrices

True

Having no temporal qualities, the BCG matrix is a snapshot of an organization in a given point in time

True

In a BCG matrix the pie slice indicates the proportion of corporate profits generated by that division

True

One of the steps of the SWOT Matrix is to list the firm's key external opportunities

True

Relative market share position is given on the x-axis of the BCG matrix

True

Shifting focus from specific issues to more general ones may increase strategists options for gaining organizational committment

True

Stars, Question marks, cash cows, and dogs are the four quadrants exhibited by the BCG matrix

True

Strengths-opportunities strategies are based on using a firm's internal strengths to take advantage of external opportunities

True

Successful strategists minimize their own political exposure on issues that are highly controversial and in circumstances where opposition from major power centers is likely

True

The BCG Matrix does not reflect whether or not various divisions or their industries are growing over time

True

The IE matrix can be divided into three major regions that have different strategy implications: grow and build, hold and mantain, and harvest or divest

True

The SP and CP dimension variables in a SPACE matrix are assigned a numerical value rangin from -1 (best) to -7(worst)

True

The SWOT matrix, SPACE Matrix, BCG Matrix, IE matrix, and the Grand strategy matrix are included in stage two of the strategy formulation framework

True

The Sarbanes-Oxley Act put an end to the "country club" atmosphere of most boards and has shifted power from CEOs to directors

True

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

True

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

True

The major benefit of the BCG matrix is that it draws attention to the cash flow, investment characteristic, and needs of an organization's various divisions

True

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)

True

Although Quadrant ________ companies are growing, according to the GSM, 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

2

According to the GSM, organizations in which quadrant have a strong competitive position but are in a slow growth industry

4

How many cells are there in a SWOT matrix

9

The top row of a QSPM consists of alternative strategies derived from all of the following except

CPM matrix

In the BCG Matrix, a division with a high relative market share position in a low growth industry can be described as a

Cash Cow

The BCG matrix is designed specifically to enhance which type of firm's efforts to formulate strategies

Companies with more than one division

The two internal dimensions represented on the axis of the SPACE Matrix are

Competitive position and financial position

what type of strategies would you recommend when a firm's SPACE matrix directional vector is (-2, 3)

Conservative

What type of strategy would divestiture be classified as

Defensive

What are the external dimensions of the SPACE matrix

Industry position and stability position

Which stage of the strategy formulation framework includes an IFE matrix and Competitive Profile matrix

Input

Which stage of the strategy formulation framework contains the IFE matrix

Input stage

Which of the following analytical tools consists of a nine cell matrix

Interna-External matrix (SWOT)

Which of these is a limitation of the QSPM

It requires intuitive judgements and educated assumptions

Which of the following is not one of the steps involved in constructing a SWOT matrix

List the firm's external weaknesses

According to the Grand strategy matrix which strategy is recommended for a firm with rapid market growth and a strong competitive position

Market penetration

Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies

Matching

Which of these is not a SPACE matrix quadrant

Offensive

Today, boards of directors are comprised mostly of

Outsiders

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

QSPM

Which matrix is included in the decision stage of the strategy formulation framework

QSPM

Which strategy formulation technique reveals the relative attractiveness of alternative strategies and thus provides an objective basis for selecting specific strategies

QSPM

In the BCG matrix, how would a division with low relative market share position in a high growth industry be described

Question mark

In the BCG Matrix, which strategy would be most appropriate for a division classified as a dog

Retrenchment

Which strategies use a firm's strengths to avoid or reduce the impact of external threats

ST

An effective way to gain commitment and achieve desired results is to

Shift from specific to general issues and concerns

Which stage of the strategy-formulation framework involves the QSPM

Stage 3

Forward integration would be an appropriate strategy for which of the following types in the BCG Matrix

Star

Which section of the SWOT matrix involves matching internal strengths with external opportunities

The SO Cell

What term is defined as the product of multiplying the weights by the attractiveness scores in each row of the QSPM

Total attractiveness score

A positive feature of QSPM is that sets of strategies can be examined sequentially or simultaneously

True

According to the Grand strategy matrix, when a quadrant 1 firm is too heavily committed to a single product, then related diversification may reduce the risks associated with a narrow product line

True

Alternative strategies don't come out of the blue; they are derived from the firm's vision, mission, and objectives

True

An organization's present strategies, objectives and mission, coupled with the external and internal audit information, provide a basis for generating and evaluating feasible alternative strategies

True

Both IE and BCG matrices are called portfolio matrices

True

Conservative strategies in a SPACE matrix most often include product development, market development, market penetration, and related diversification

True

Culture includes the set of shared values, beliefs, attitudes, customs, norms, personalities heroes that describe a firm

True

The size of the circle in a BCG matrix corresponds to the proportion of corporate revenue generated by that business unit

True

To objectively evaluate feasible alternative strategies identified in stage 2, the QSPM uses input information derived from stage 1

True

Today boards of directors are composed mostly of outsiders who are becoming more involved in an organization's strategic management

True

Viewing every business as either a star, cash cow, dog, or question mark is an oversimplification

True

Whenever two firms merge, it becomes especially important to evaluate and consider culture-strategies linkages

True

Which strategies aim at improving internal weaknesses by taking advantage of external opportunities

WO

Which strategies are defensive tactics directed at reducing internal weaknesses and avoiding external threats

WT

In the SPACE analysis what does a (6,3) strategy profile portray

a strong industry position

All of the following are principles of good organizational governance except

at least three directors are current or former company executives

For companies located in quadrant 3 of the GSM the first strategy recommended is

extensive cost and asset reduction

Each of the nine techniques included in the strategy formulation framework rely on the use of

intuition and analysis

Which of the following is a limitation associated with the SWOT matrix

it is a static assessment in time

Which of the following is the first step in developing a QSPM

make a list of firm's key external opportunities and threats and internal strengths and weaknesses

Which board of director's duty falls under the category of control and oversight over management

select the CEO

Strategy analysis and choice largely involves making _____decisions based on _________ information

subjective, objective

All of the following are limitations of the BCG matrix except

the matrix does not reflect divisional or industry growth over time

In the BCG matrix, which element reporesents the industry growth rate in sales, measured in percentage terms

y-axis