Strategic Management

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The range of total weighted scores in a CPM Matrix is ______. A. 1.0 to 4.0 B. 0.0 to 5.0 C. 0.0 to 4.0 D. 1.0 to 6.0 E. 1.0 to 5.0

Sales/Account Receivable The average length of time it takes a firm to collect credit sales (in percentage terms)

Accounts Receivable Turnover

Accounts Receivable/Total Credit Sales/365 Days The average length of time it takes a firm to collect on credit sales (in days)

Average Collection Period

To survive and prosper, a business must gain and sustain ______ major competitive advantages over rival firms. A. one B. at least several C. at least fifteen D. two E. as many as one hundred

To the extent possible, internal strength/weakness factors should meet the four AQCD criteria. Two of these criteria are _____. A. divisional and comprehensive B. actionable and comparative C. actionable and comprehensive D. appropriate and decisive E. quantitative and decisive

Which two management functions are most important at the strategic-management process stage of strategy implementation? A. organizing and controlling B. organizing and motivating C. planning and organizing D. motivating and controlling E. planning and motivating

Any activity a firm does especially well compared to activities done abby rival firms Any resource a firm possesses that rival firms desire

Competitive Advantage

One of four dimensions/axes of the SPACE Matrix; determines an organization's competitiveness, using such factors as market share, product quality, product life cycle, customer loyalty, capacity utilization, technological know-how, and control over suppliers and distributors.

Competitive Position

_____________ refers to all managerial activities that compare actual results with planned results, such as quality control, financial control, inventory control, expense control, analysis of variances, rewards, and sanctions.

Controlling

Current assets/Current Liabilities The extent to which a firm can meet its short-term obligations

Current Ratio

The time frame for long-term objectives and strategies should be consistent, usually from ______ to ______ years. A. 1; 15 B. 2; 10 C. 1; 10 D. 2; 5 E. 1; 5

What does the y-axis of the IE matrix represent? A. the IFE weighted scores B. profitability C. industry growth rate D. the EFE total weighted scores E. relative market share

Total Debt/Total Stockholder's Equity The percentage of total funds provided by creditors versus by owners

Debt to Equity Ratio

Total Debt/Total Assets The percentage of total funds provided by creditors

Debt to Total Assets Ratio

An industry can be stable or unstable on SP, yet high or low on IP. The smartphone industry, for instance, would be unstable (_____) on SP yet high-growth on IP, whereas the canned food industry would be stable (_____) on SP yet low-growth on IP. A. -2; -2 B. -3; -3 C. -2; -6 D. -6; -6 E. -6; -2

The two general types of diversification strategies are related diversification and unrelated diversification. When are businesses said to be related? A. When they compete in the same SIC code industry B. When they are about the same size C. When they compete in about the same areas D. When their objectives and strategies are about the same E. When their value chains possess competitively valuable cross-business strategic fits

What are the two dimensions used by the Grand Strategy Matrix? A. Market growth and market share B. Internal weaknesses and threats C. Market share and competitive position D. Internal strengths and opportunities E. Market growth and competitive position

What strategy seeks to increase market share for present products or services in present markets through greater marketing efforts? A. Reshoring B. Forward integration C. Market development D. Market saturation E. Market penetration

A widely used strategic planning analytical tool designed to summarize and evaluate economic, social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive information.

EFE Matrix

Annual percentage growth in EPS Firm's growth rate in EPS

Earnings Per Share

Process of conducting research and gathering and assimilating external information; also referred to as external audit.

Environmental Scanning

Economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive trends/events/facts that could significantly benefit an organization in the future.

External Opportunities

One of four dimensions/axes of the SPACE Matrix that determines an organization's financial strength, considering such factors as return on investment, leverage, liquidity, working capital, and cash flow.

Financial Position

A four-quadrant, two-axis tool for formulating alternative strategies. All organizations can be positioned in one of this matrix's four strategy quadrants, based on their position on two evaluative dimensions: competitive position and market (industry) growth. Strategy suggestions ensue depending on which quadrant the firm is located.

Grand Strategy Matrix

Includes market development, market penetration, and product development.

Intensive Strategies

Earning Before Interest and Taxes EBIT/Sales Profitability without concern for taxes and interest

Operating Profit Margin

Market Price Per Share/Earnings Per Share Attractiveness of firm on equity markets

Price Earnings Ratio

The art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives.

Strategic Management

Stage 2 of the strategic-management process. Activities include establishing annual objectives, devising policies, motivating employees, allocating resources, developing a strategy-supportive culture, creating an effective organizational structure, redirecting marketing efforts, preparing budgets, developing and utilizing information systems, and linking employee compensation to organizational performance.

Strategy Implementation

Maintaining what a firm does especially well, compared to rival firms—by (1) continually adapting to changes in external trends and events and internal capabilities, competencies, and resources; and (2) effectively formulating, implementing, and evaluating strategies that capitalize upon those factors.

Sustained Competitive Advantage

A ________ __________ answers the question "What do we want to become?"

Vision Statement

A one-sentence statement that answers the question, "What do we want to become?

Vision Statement

A one-sentence statement that answers the question, "What do we want to become?"

Vision Statement

Should be short, preferably one sentence, and as many managers as possible should have input into developing the statement Should reveal the type of business the firm engages Dr Pepper Snapple: to be the best beverage business globally; our brands are synonymous with refreshment, fun, and flavor today and tomorrow Starbucks: to be the premier purveyor of the finest coffee in the world while maintaining uncompromising principles as we steadily grow.

Vision Statement

Based on past experiences, judgment, and feelings, most people recognize that __________ is essential to making good strategic decisions.

intuition

What are 10 benefits of having a clear mission and vision statement?

1. Achieve clarity of purpose among all managers and employees. 2. Provide a basis for all other strategic planning activities, including internal and external assessment, establishing objectives, developing strategies, choosing among alternative strategies, devising policies, establishing organizational structure, allocating resources, and evaluating performance. 3. Provide direction 4. Provide a focal point for all stakeholders of the firm 5. Resolve divergent views among managers 6. Promote a sense of shared expectations among all managers and employees 7. Project a sense of worth and intent to all stakeholders 8. Project an organized, motivated organization worthy of support 9. Achieve higher organizational performance 10. Achieve synergy among all mangers and employees

What are the characteristics of a mission statement?

1. Broad in scope; does not include monetary amounts, numbers, percentages, ratios, or objectives 2. Fewer than 150 words in length 3. Inspiring 4. Identifies the utility of a firm's products 5. Reveals that the firm is socially responsible 6. Reveals that the firm is environmentally responsible 7. Includes nine components; customers, products or services, markets, technology, concern for survival/growth/profits, philosophy, self-concept, concern for public image, concern for employees 8. Reconciliatory 9. Enduring

What two evaluative dimensions is the Grand Strategy Matrix based on?

1. Competitive position on the x-axis 2. Market (industry) growth on the y-axis

What ratios are in liquidity ratios?

1. Current 2. Quick

What are some components of mission statements?

1. Customers 2. Products or Services 3. Markets 4. Technology 5. Survival, growth, and profitability 6. Philosophy 7. Distinctive Competence 8. Public Image 9. Employees

What ratios are in leverage ratios?

1. Debt to Total Assets 2. Debt to Equity 3. Long Term Debt to Equity 4. Times Interest Earned

What are the steps for an EFE Matrix?

1. Develop a Full and Narrow List of Key External Factors 2. Assign Weights to Key External Factors 3. Assign Ratings to Key External Factors 4. Obtain Weighted Scores 5. Obtain Total Weighted Score

What are the steps for an IFE Matrix?

1. Develop a Full and Narrow List of Key Internal Factors 2. Assign Weights to Key Internal Factors 3. Assign Ratings to Key Internal Factors 4. Obtain Weighted Scores 5. Obtain Total Weighted Score

What are the 5 external forces?

1. Economic Forces 2. Social, Cultural, Demographic, and Environmental (SCDE) Forces 3. Political, Governmental, and Legal Forces 4. Technological Forces 5. Competitive Forces

What are the non financial benefits of strategic management?

1. Enhanced awareness of external threats 2. Improved understanding of competitors' strategies 3. Increased employee productivity 4. Reduced resistance to change 5. Clearer understanding of performance-reward relationships

What are the four dimensions within a SPACE Matrix?

1. Financial Position 2. Competitive Position 3. Stability Position 4. Industry Position

What ratios are in profitability ratios?

1. Gross Profit Margin 2. Operating Profit Margin 3. Net Profit Margin 4. Return on Total Assets 5. Return on Stockholder's Equity 6. Earnings Per Share 7. Price Earnings

What ratios are in action ratios?

1. Inventory Turnover 2. Fixed Assets Turnover 3. Total Assets Turnover 4. Accounts Receivable Turnover 5. Average Collection Period

What are the 5 categories of financial ratios?

1. Liquidity 2. Leverage 3. Activity 4. Profitability 5. Growth

What are the 5 Marketing basic activities?

1. Marketing Research and Target Market Analysis 2. Product Planning 3. Pricing Products 4. Promoting Products 5. Placing or Distributing Products

Why do some firms not do strategic planning?

1. No formal training in strategic management 2. No understanding of or appreciation for the benefits of planning 3. No monetary rewards for doing planning 4. No punishment for not planning 5. Too busy "firefighting" (resolving internal crises) to plan ahead 6. View planning as a waste of time, since no product/service is made 7. Laziness; effective planning takes time and effort; time is money 8. Content with current success; failure to realize that success today is no guarantee for success tomorrow 9. Overconfidence 10. Prior bad experience with strategic planning done sometime/somewhere

What are some financial benefits of using strategic management?

1. Organizations using strategic-management concepts show significant improvement in sales, profitability, and productivity compared to firms without systematic planning activities. 2. High-performing firms tend to do systematic planning to prepare for future fluctuations in their external and internal environments.

What are the 3 fundamental activities of strategy evaluation?

1. Reviewing external and internal factors that are the bases for current strategies 2. Measuring performance 3. Taking corrective actions

What are Porter's Five Competitive Forces?

1. Rivalry among competing firms 2. Potential entry of new competitors 3. Potential development of substitute products 4. Bargaining power of suppliers 5. Bargaining power of consumers

What ratios are in growth ratios?

1. Sales 2. Net Income 3. Earnings Per Share 4. Dividends Per Share

How do you develop vision and mission statements?

1. Select several articles about these statements and ask all managers to read these as background information 2. Ask managers themselves to prepare a vision and mission statement for the organization 3. A facilitator or committee of top managers should then merge these statements into a single document and distribute the draft statements to all managers 4. A request for modifications, additions, and deletions is needed next, along with a meeting to revise the document

What are the benefits of strategic Management?

1. Strategic management allows an organization to be more proactive than reactive in shaping its own future. 2. It allows an organization to initiate and influence (rather than just respond to) activities-and thus to exert control over its own destiny.

What are the 3 stages of strategic management?

1. Strategy Formulation 2. Strategy Implementation 3. Strategy Evaluation

What is the purpose of an external audit?

1. The external audit is aimed at identifying key variables that offer actionable responses 2. Firms should be able to respond either offensively or defensively to the factors by formulating strategies that take advantage of external opportunities or that minimize the impact of potential threats

What is the importance of vision and mission statements?

1. To make sure all employees/managers understand the firm's purpose or reason for being 2. To provide a basis for prioritization of key internal and external factors utilized to formulate feasible strategies 3. To provide a basis for the allocation of resources 4. To provide a basis for organizing work, departments, activities, and segments around a common purpose.

What are some pitfalls in strategic planning?

1. Using strategic planning to gain control over decisions and resources 2. Doing strategic planning only to satisfy accreditation or regulatory requirements 3. Too hastily moving from mission development to strategy formulation 4. Not communicating the plan to employees, who continue working in the dark 5. Top managers making many intuitive decisions that conflict with the formal plan 6. No tasing plans as a standard for measuring performance 7. Delegating planning to a "planner" rather than involving all managers 8. Not involving key employees in all phases of planning 9. Not creating a collaborative climate supportive of change 10. Viewing planning as unnecessary or unimportant 11. Viewing planning activities as silos comprised of independent parts 12. Becoming so engrossed in current problems that insufficient or no planning is done 13. Being so formal in planning that flexibility and creativity are stifled

According to Michael Porter, the nature of competitiveness in a given industry can be viewed as a composite of the forces. Which force is usually the most powerful? A. Rivalry among competing firms B. Potential development of substitute products C. Bargaining power of consumers D. Bargaining power of suppliers E. Potential entry of new competitors

According to the authors of the text, what is the most important component of a mission statement? A. Distinctive competence B. Technology C. Philosophy D. Customers E. Employees

According to Porter, strategies allow organizations to gain competitive advantage from two different bases. What are the bases? A. Cost leadership and differentiation B. Initiator and differentiation C. Differentiation and being a first-mover D. Being a first-mover, being a late-follower, and differentiation E. Cost leadership and initiator

An effective means of implementing forward integration is ______. A. franchising. B. divestiture. C. unrelated diversification. D. liquidation. E. product development.

Any industry whose annual growth in sales exceeds ______ percent could be considered to have rapid growth. A. 5 B. 15 C. 10 D. 20 E. 25

Building four new manufacturing plants in Europe is an example of a(n) ______. A. strategy B. threat C. opportunity D. strength E. weakness

Business strategy is based on the assumption of competition. Upon which assumption is military strategy based? A. Conflict B. Collaboration C. Comparison D. Competition E. Communication

Divestiture could be an effective strategy under which of the following conditions? A. A division is responsible for an organization's overall poor performance. B. There is no threat of government antitrust actions. C. The organization has a large amount of cash that is readily available. D. The organization has engaged in a successful retrenchment strategy. E. The organization is not willing to try a retrenchment strategy first.

In a QSPM analysis, would it ever be appropriate or useful for a company not to include a weight column at all, but rather total the AS columns to determine the relative attractiveness of six strategies? A. Yes B. Yes but only for small firms C. Yes but only for multi-divisional companies D. No E. Yes but only for nonprofit organizations

In an IFE Matrix, the weights of all factors included must add up to ______. A. 1.0 B. 2.0 C. 5.0 D. 4.0 E. 10.0

In conducting a marketing audit, which of the following would NOT be a question to ask? A. Is the organization's structure appropriate? B. Is the firm's Internet presence excellent as compared to rivals? C. Is the organization positioned well among competitors? D. Does the firm have an effective promotional strategy? E. Are markets segmented effectively?

In terms of growing globally by adding new customers, what company does the global Capsule 3 suggest may be the fastest growing company? A. Netflix B. Walmart C. Walt Disney D. Priceline E. Amazon

Lorsch found that executives in successful companies are emotionally committed to the firm's culture, but he concluded that culture can inhibit strategic management in the following way: A. Managers frequently miss the significance of changing external conditions because they are blinded by strongly held beliefs. B. When a particular culture has been effective in the past, the natural response is to change the culture going forward. C. Employees can get so attached to cultural products that they ignore strategies and tactics. D. Culture is more important to executives than to employees. E. Employees oftentimes ignore culture.

One benefit of strategic planning is that it allows a firm to be _______ in shaping its own future. A. proactive B. passive C. successful D. reactive E. unconcerned

One difference between a Competitive Profile Matrix and an EFE is that critical success factors ______. A. in a CPM include both internal and external issues B. in a CPM include only internal issues C. are excluded from a CPM D. in a CPM are not tailored to an industry E. in a CPM are related to service industries while an EFE is related to manufacturing

One specific skill students can gain from this course is ________. A. Formulating strategies using a SWOT analysis B. Improving data literacy C. Thinking officially D. Understanding business ethics E. Collaborating

Recent research by Rose and Cray examined the strategic-management process and concluded that perhaps the most important "activity" is what? A. The feedback loop B. Deciding upon long-term and annual objectives C. Developing vision and mission statements D. Deciding upon internal strengths and weaknesses E. Deciding upon external opportunities and threats

Regarding the AQCD criteria, strive to include all high quality factors in an external assessment for a firm. A high quality factor will meet ______ of the AQCD criteria; a low quality factor will meet ______ of the AQCD criteria. A. 3 or 4; 2 or fewer B. 4; 0 C. 3; 1 D. All; none E. 3 or 4; 0

Retrenchment may be an especially effective strategy to pursue under which of the following conditions? A. The organization is being pressured by stockholders to improve performance. B. The organization has high-profitability. C. Employee morale is high. D. The organization is successfully managing its growth. E. The organization is efficient.

Spending on digital advertising recently surpassed television advertising and is expected to reach nearly ______ billion dollars in 2020. A. 280 B. 380 C. 480 D. 180 E. 580

Strategists use ______ to provide a firm with proprietary business intelligence. A. business analytics B. data diving C. forecasts D. intuition E. risk mining

The AQCD test refers to the need for key external factors to exhibit what attributes? A. Quantitative and divisional B. Actionable and commonality C. Decisive and comparative D. Actionable and decisive E. Algebraic and decisive

The EFE Matrix provides an empirical assessment of how well a firm is handling ______. A. external factors overall B. only external threats C. internal weaknesses D. internal strengths E. only external opportunities

The Industrial Organization view of strategic planning advocates that external (industry) factors are more important than internal ones for gaining and sustaining competitive advantage. Do the authors agree? A. No. Matching key external opportunities and threats with key internal strengths and weaknesses provides the basis for successful strategy formulation. B. No. Internal factors (strengths and weaknesses) are more important. C. No. Internal factors are controllable and external factors are not. D. Yes. Michael Porter is correct. E. Yes. It is like an ocean tide rising or falling: no one can stop that flow.

The dollar amounts of alternative strategies should all be added to reveal a total amount of new capital needed over what time period? A. Three years B. Five years C. One year D. Six months E. Ten years

The extent to which a manufacturing plant's output reaches its potential output is called ______, a key strategic variable. A. capacity utilization B. maximum utilization C. maximum capacity D. min-to-max capacity E. capacity maximum

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? A. Divestiture B. Declassification C. Reengineering D. Bankruptcy E. Retrenchment

The management function of _______ is particularly important for strategy evaluation. A. controlling B. HRM C. leading D. organizing E. planning

The old adage, "If it ain't broke, don't fix it" pertains to which of the following? A. Managing by extrapolation B. Managing by hope C. Managing by subjectives D. Managing by continuity E. Managing by crisis

The "markets" component of mission statements refers to the_____. A. regions in which the company operates B. industries in which the company operates C. segments in which the company operates D. sectors in which the company operates E. supplier and distributor network of the firm

The strategy-formulation analytical framework consists of how many stages and how many matrices? A. 3 and 9 B. 3 and 8 C. 3 and 6 D. 2 and 8 E. 4 and 10

Unskilled leaders work out their conflicts in courtrooms and battlefields. Brilliant strategists rarely go to battle or to court. How do they usually achieve their objectives? A. Through tactical positioning well in advance of any confrontation B. Through negotiation and compromise C. Through communication with the rival's leaders D. By amassing superior forces against a rival's weak areas E. Through an all-out assault on the rival

What are the four basic activities that comprise management? A. Planning, organizing, motivating, and controlling B. Planning, organizing, motivating, and strategizing C. Planning, organizing, leading, and controlling D. Planning, organizing, strategizing, and controlling E. Planning, organizing, staffing, and leading

What is the difference between the Type 3 and Type 4 levels of a differentiation strategy? A. Type 3 has a broad target market and Type 4 has a narrow target market. B. Type 3 is used for domestic markets and Type 4 is used for global markets. C. Type 3 has a narrow target market and Type 4 has a broad target market. D. Type 3 is an outdated strategy which has been replaced by Type 4. E. Type 3 is a strategy unique to the firm while Type 4 copies competitor's strategies.

What strategy may be best under the following conditions? The organization competes in a highly competitive or a no-growth industry, as indicated by low industry profit margins and returns. The organization's present channels of distribution can be used to market new products to current customers. New products have countercyclical sales patterns compared with an organization's present products. The organization's basic industry is experiencing declining annual sales and profits. A. Unrelated diversification B. Retrenchment C. Divestiture D. Related diversification E. Vertical integration

When a firm sells a division of the organization, it is utilizing which strategy? A. Divestiture B. Backward integration C. Horizontal integration D. Retrenchment E. Liquidation

When an organization has pursued both a retrenchment strategy and a divestiture strategy and neither has been successful, then perhaps the best strategy is ______. A. Liquidation B. Restructuring C. Chapter 8 bankruptcy D. Chapter 9 bankruptcy E. Discontinuation

When comparing mission statements of rival firms, perhaps the most important component to examine is what? A. Distinctive competence B. Employees C. Philosophy D. Markets E. Customers

Which of the following is NOT a benefit of being a first mover? A. Secure access to widely available resources B. Obtain early patent protection C. Acquire new knowledge of critical success factors D. Gain market share in the best locations E. Build customer loyalty

Which of the following is NOT a benefit of establishing clear objectives? A. Clear objectives provide the basis for creativity. B. Clear objectives minimize conflict. C. Clear objectives aid in allocation of resources. D. Clear objectives allow synergy. E. Clear objectives reduce uncertainty.

Which of the following is NOT identified as a component of mission statements? A. Stock price B. Public image C. Customers D. Markets E. Profitability

Which of the following is a reason for a firm to initiate a leveraged buyout (LBO)? A. To avoid a hostile takeover B. To form a joint venture C. To convert a private company into a public company D. To pursue organic growth E. To pursue a Blue Ocean Strategy

Which of the following statements is TRUE? A. If a firm possesses many highly-weighted strengths, this is likely the result of effective strategies, so higher ratings in general are warranted for strengths. B. If a firm possesses many highly-weighted strengths, this is likely the result of effective strategies, so higher ratings in general are warranted for strengths and weaknesses. C. If a firm possesses many highly-weighted weaknesses, this is likely the result of effective strategies, so higher ratings in general are warranted for strengths. D. If a firm possesses many highly-weighted weaknesses, this is likely the result of effective strategies, so higher ratings in general are warranted for both strengths and weaknesses. E. If a firm possesses many highly-weighted weaknesses, this is likely the result of effective strategies, so higher ratings in general are warranted for weaknesses.

Which of the following statements is TRUE? A. Wild guesses should never be made in formulating strategies, but reasonable assumptions based on available information must always be made. B. Wild guesses should sometimes be made in formulating strategies, and reasonable assumptions based on available information must sometimes be made. C. Wild guesses should never be made in formulating strategies, but reasonable assumptions based on available information must oftentimes be made. D. Wild guesses should rarely be made in formulating strategies, but reasonable assumptions based on available information must usually be made. E. Wild guesses oftentimes must be made in formulating strategies, but reasonable assumptions based on available information must always be made.

Which statement below is FALSE? A. In a QSPM, the range for Total Attractiveness Scores is 1equals=not attractive, 2equals=somewhat attractive, 3equals=reasonably attractive, and 4equals=highly attractive. B. There is no limit to the number of strategies that can be evaluated or the number of sets of strategies that can be examined at once using the QSPM. C. The magnitude of the difference between the STAS in a given set of QSPM strategic alternatives indicates the relative desirability of one strategy over another. D. Work row by row in developing a QSPM. E. The QSPM weights are identical to those in the EFE Matrix and IFE Matrix.

Which statement is a limitation of the SWOT? A. SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself. B. SWOT analysis should be performed before financial statement analysis. C. SWOT analysis should be performed before BCG analysis. D. SWOT analysis may lead the firm to avoid engaging in benchmarking. E. SWOT analysis uses numbers to estimate factors.

______ 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. A. Joint venture B. Alliancing C. Joint alliance D. Coordinating E. Combining

______ is the unique way an organization does business. It is the human dimension that creates solidarity and meaning, and it inspires commitment and productivity in an organization when strategy changes are made. A. Culture B. Synergy C. Accountability D. Humanity E. Management

Short-term milestones that organizations must achieve to reach long-term objectives Should be measurable, quantitative, challenging, realistic, consistent, and prioritized Should be established at the corporate, divisional, and functional levels in a large organization

Annual Objectives

Short-term milestones that organizations must achieve to reach long-term objectives.

Annual Objectives

A defensive strategy of the SWOT Matrix directed at reducing internal weaknesses and avoiding external threats is ______. A. WO B. WT C. SO D. ST E. SW

A mission statement should be written ______. A. so it never needs to be changed B. from a customer perspective C. only by senior management D. to replace a vision statement E. as an internal tool not to be made public

A mission statement should include the following components: A. Customers, products/services, markets, and competitors B. Survival/growth/profitability, philosophy, self-concept, and public image C. Enduring, inspiring, and reconciliatory D. Clear, concise, consistent E. Proactive and probiotic

Four companieslong dash—A, B, C, and Dlong dash—have revenues of 1, 2, 3, and 4, respectively. Company C develops a BCG Matrix. What would the RMSP be for company C if all four firms have the same net income? A. 0.25 B. 0.75 C. 0.20 D. 0.40 E. 0.50

Human resource (HR) management includes activities such as: A. Analyzing competitors B. Disciplining, promoting, transferring, and demoting C. Recruiting, interviewing, testing, selecting, and responding to bank loan arrangements D. Preparing projected financial statements E. Training and developing employees and their families

In Step 1 of developing an EFE Matrix, how many opportunities and threats should be included in the full and narrow lists, respectively? A. 100, 10 B. 100, 20 C. 50, 10 D. 200, 10 E. 200, 20

In developing an IFE Matrix, do not allow more than 30 percent of the key factors to be financial ratios. Why? A. Because financial ratios can be misleading B. Since financial ratios are generally the result of many factors, knowing what particular strategies should be considered based on financial ratios is difficult. C. Because financial ratios have limitations such as firms using different accounting methods D. Because finance is only one part of an organization's business operations E. Because financial ratios can vary from industry to industry

Internal politics ______. A. seldom divert human energy B. affect the choice of strategies in all organizations C. cannot be managed D. are seldom found in organizations E. are of little concern to strategies

King and Cleland recommend that organizations carefully develop a written mission statement in order to reap which benefit? A. To provide a basis for organizing work, departments, activities, and segments around industry standards B. To provide a basis for the allocation of resources C. To assure excellent financial management of resources D. To provide a basis for prioritization of key external factors utilized to formulate contingency plans E. To make sure all employees/managers understand the firm's history

Most practitioners and academicians of strategic management feel that an effective statement should include ______ mission statement components. A. 15 B. 9 C. 6 D. 12 E. 3

Nonprofit organizations are basically just like for-profit companies except for two major differences. What is one of the differences? A. Nonprofits do no benchmarking or reshoring. B. Nonprofits do not pay taxes or have shareholders. C. Nonprofits do not have shareholders to provide capital. D. Nonprofits have no net income or retained earnings. E. Nonprofits have no cash budgets or financial statements.

Objectives should include which of the following characteristics? A. Measurable, realistic, and holistic B. Measurable, challenging, and hierarchical C. Qualitative, obtainable, congruent among organizational units, and associated with a timeline D. Qualitative and actionable E. Divisional and actionable

Official business failure calculations include _____. A. reverse mortgages and buyouts B. liquidations and court-mandated receiverships C. divested assets D. defunct assets E. bankruptcies and bank loans

One broad skill students can gain by taking this course is ______. A. to develop and use value chain analysis, balance scorecards, and financial ratio analysis B. to define and solve problems and make decisions about a particular situation C. to develop a three-year strategic plan for any for-profit or nonprofit company or organization D. to write and evaluate vision and mission statements E. to use a popular corporate strategic planning Excel template

Strengths that cannot be easily matched or imitated by competitors are called _____. A. RBVs B. distinctive competencies C. empirical indicators D. resources E. internal advantages

Target recently joined Best Buy in offering to match online prices of rival retailers. Both companies are seeking to combat ______ by shoppers who check out products in their stores but buy them on rival's websites. A. price hopping B. showrooming C. price shopping D. price comparing E. price checking

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? A. Population growth B. Gross Domestic Product C. National crime rate D. Internet penetration E. Interest rates

The bargaining power of consumers can be the most important force affecting competitive advantage. Consumers gain increasing bargaining power under the following circumstance: A. If switching to competing brands or substitutes is expensive B. If consumers are particularly important to the seller C. If consumers are knowledgeable of firms' strategic plans D. If consumers are informed about products, prices, and costs across countries E. If consumer demand is rising

The recommended length of a mission statement is fewer than _____ words. A. 25 B. 100 C. 300 D. 75 E. 500

The term strategic planning is used synonymously in this text with what other term? A. Strategy formulation B. Strategic management C. Strategy implementation D. Long-range planning E. Scenario planning

The weight column in an EFE Matrix must add up to what number? A. 4.0 B. 1.0 C. The sum may vary between 1.0 and 5.0. D. 3.0 E. 2.0

The strategic-management process can be described as an objective, logical, systematic approach for making major decisions in an organization. However, it is generally recognized that ______ is essential to making good strategic decisions. A. ignoring intuition B. intuition C. ignorance D. ignoring change E. undisciplined intuition

Under which condition can consumers gain increasing bargaining power? A. If they are not informed about the seller's products, prices, and costs B. If they can inexpensively switch to a substitute C. If they do not have discretion as to when they purchase the product D. If they are not important to the seller E. If sellers are experiencing increasing consumer demand

What are the four types of strategies generated by a SWOT analysis? A. WO, WT, WS, and SS B. SO, WO, ST, and WT C. SO, SW, ST, and WW D. SW, ST, WO, and WT E. SO, ST, SW, and SS

What are the two dimensions represented on the BCG matrix axes? A. Costs and revenues B. Relative market share and industry growth rate C. Industry growth rate and degree of competition D. Internal competencies and external competencies E. Relative market share and the firm's position in those markets

What element of strategic management answers the question "What do we want to become?" A. A mission statement B. A vision statement C. Specific long-term objectives D. Environmental scanning E. A SWOT

What is a major limitation of the BCG Matrix? A. Many businesses fall outside of the BCG Matrix and thus are not easily classified. B. The BCG Matrix does not reflect whether various divisions or their industries are growing over time. C. The BCG Matrix should be developed before a SWOT analysis. D. The BCG Matrix should be developed before financial statement analysis. E. The BCG Matrix should be developed before benchmarking analyses.

What is the most important part of an external audit? A. To identify three opportunities that could benefit the organization B. To develop a finite list of opportunities that could benefit a firm as well as threats that should be avoided or mitigated C. To develop an exhaustive list of possibilities for the business D. To identify economic forces that threaten the business E. To develop an exhaustive list of threats in the external environment to avoid

What source provides excellent online information and advice on approximately 1,700 stocks, more than 90 industries, the stock market, and the economy, including company income statements and balance sheets? A. Mergent Online B. Value Line Investment Survey C. Standard & Poor's NetAdvantage D. Lexis-Nexis Academic E. IBISWorld

When a core competence evolves into a major competitive advantage, what is it called? A. Strength B. Distinctive competence C. Objective achieved D. Empirical indicator E. Mission accomplished

When is it especially important to evaluate and consider culture-strategy linkages? A. When top management is not involved in the process B. When two firms merge C. When the firm has few alternatives D. When employee morale is low E. When strategic changes will not impact culture

When should a vision statement reveal the type of business in which the firm engages? A. When the firm has diverse businesses B. Always C. When the firm is a monopoly or oligopoly D. When the firm also has a mission statement E. It depends on the preferences of the firm's top strategists

Which matrix determines the relative attractiveness of feasible alternative strategies? A. IFE Matrix B. QSPM C. IE Matrix D. SWOT Matrix E. BCG Matrix

Which of the following is NOT true of the SPACE Matrix? A. The SPACE Matrix is a matching tool. B. The axes represent four internal dimensions. C. Factors included in the firm's EFE and IFE Matrices should be considered in developing a SPACE Matrix. D. The SPACE Matrix is a Stage 2 tool. E. The SP axis refers to the volatility of profits and revenues for firms in a given industry.

Which of the following is a condition that leads firms to "borrow" capabilities through joint ventures or strategic alliances? A. The firm wishes to grow by acquiring another firm. B. The costs and risks of merging are too high. C. The firm can develop the necessary resources internally. D. There is little risk to merging. E. The firm aims to grow organically.

Which of the following is a pitfall of strategic planning? A. Involving key employees in all phases of the planning B. Being so formal in planning that flexibility and creativity are stifled C. Communicating the plan to employees D. Using plans as standards for measuring performance E. Obtaining support of the process by top managers

Which of the following is listed in the chapter as a reason often given for poor or no strategic planning in a firm? A. Substantial monetary rewards for doing planning B. Laziness C. Benchmarking D. Adequate formal training in strategic management E. Reshoring

Which of the following statements is FALSE? A. Critical success factors in a CPM include both internal and external issues; therefore, the ratings refer to strengths and weaknesses, where 4 = major strength, 3 = minor strength, 2 = minor weakness, and 1 = major weakness. B. You may assign the same rating to firms included in a CPM analysis if the firms are similar on the respective factor. C. Regarding weights in a CPM or EFE Matrix, be mindful that 0.08 is mathematically 33 percent higher than 0.06, so even small differences can reveal important perceptions regarding the relative importance of various factors. D. The weights and total weighted scores in both a CPM and an EFE have the same meaning. E. The ratings in a CPM refer to strengths and weaknesses, where 4 = major strength, 3 = minor strength, 2 = minor weakness, and 1 = major weakness.

Which of the following statements is TRUE? A. When assigning weights and ratings in developing an IFE Matrix, focus on a narrow industry perspective for strengths and a broad industry perspective for weaknesses. B. When assigning weights and ratings in developing an IFE Matrix, focus on a narrow industry perspective. C. When assigning weights and ratings in developing an IFE Matrix, focus on the top three competitors in the industry. D. When assigning weights and ratings in developing and IFE Matrix, focus on a broad industry perspective. E. When assigning weights and ratings in developing an IFE Matrix, focus on all competitors in the industry.

Which region of the IE matrix would prescribe a hold and maintain strategy? A. Region 5 B. Region 2 C. Region 1 D. Region 3 E. Region 4

Which statement below is FALSE? A. If you have more than one strategy in the QSPM, then let the AS scores range from 1 to "the number of strategies being compared." B. QSPM analysis should be performed after EPS/EBIT analysis. C. In a QSPM, never assign duplicate AS scores across a row. D. In a QSPM, if you assign an AS score to one strategy, then assign an AS score(s) to the other; in other words, if one strategy receives a dash, then all others must receive a dash in a given row. E. In a QSPM, an AS value of 4 is 33 percent more important than a 3.

Which statement is FALSE? A. Some companies develop mission statements simply because owners or top management believe it is fashionable to do so rather than out of any real commitment. B. Vision statements are more important than mission statements. C. Managers at Johnson & Johnson (J&J) meet regularly with employees to review, reword, and reaffirm the firm's vision and mission. D. Some strategists spend almost every moment of every day on administrative and tactical concerns, ignoring the importance of a clear mission. E. Firms establish their vision and mission before their objectives in doing strategic planning.

A mission statement reveals ______. A. against whom an organization wants to compete and how it will do so B. how an organization will compete in its industry and its profit goals C. what an organization wants to be and whom it wants to serve D. what an organization wants to be and how it will compete in its industry E. an organization's revenue and profit goals

According to Chapter 1, ______ may be the most important word in management. A. strategy B. implementation C. communication D. planning E. strategist

According to Michael Porter, strategies allow organizations to gain competitive advantage from two different bases. What are the bases? A. Cost containment and price B. Price and Quality C. Cost leadership and differentiation D. Value and procurement E. Differentiation and quality

According to Vern McGinnis, a mission statement should do what? A. Define what the organization is and what the organization has been B. Provide the basis for contingency plans C. Be limited enough to exclude some ventures and broad enough to allow for creative growth D. Serve as a framework for evaluating past, current, and future promotions E. Distinguish an organization from not-for-profit organizations

According to the BCG Matrix, forward, backward, and horizontal integration; market penetration; market development; and product development are appropriate strategies to consider for ______. A. dogs B. question marks C. stars D. cash cows E. sleepers

Amazon.com is planning to enter the $412 billion pharmacy business. Which type of diversification does this represent? A. Market penetration B. Divestiture C. Unrelated diversification D. Market development E. Related diversification

An excellent source of industry information, including industry profiles and trade statistics for many industries, is provided at what website? A. www.google.industries.com B. www.finance.yahoo.com C. http://globaledge.msu.edu/industries/ D. www.hoovers.industries.com E. www.finance.aol.com

Are the interpretations of the weights in a CPM and EFE Matrix the same? A. Sometimes B. No C. Yes D. Usually E. Never

A meta-analysis of 20 years of empirical research on mission statements came to what conclusion? A. There is no relationship between mission statements and measures of financial organizational performance. B. There is a large negative relationship between mission statements and measures of financial organizational performance. C. There is a positive relationship between mission statements and measures of financial organizational performance. D. There is a small negative relationship between mission statements and measures of financial organizational performance. E. Strategic planning is more helpful to large businesses than small businesses

Being a(n) _______ can be an effective strategy in industries where technology is rapidly advancing. A. middle mover B. first mover C. fast follower D. early mover E. slow follower

External forces can be divided into five broad categories and ten subareas EXCEPT in which of the following? A. Demographic B. Economic C. Marketing D. Technology E. Governmental

Financial ratio analysis should be conducted on three separate fronts, which include ______. A. change over time, future forecasts, and current situation B. comparison to industry norms, comparison to key competitors, and comparison to other industries C. change over time, comparison to industry norms, and comparison to key competitors D. change over time, comparison to other countries, and comparison to future goals E. ratios for non-profits, ratios for service firms, and ratios for manufacturers

Firms should use Value Chain Analysis (VCA) to develop and nurture a ______ competence and convert that into a distinctive competence. A. tangential B. profitable C. core D. competitive E. unique

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 ______. A. reengineering B. reshoring C. carving out market share and a position that is easy to defend and costly for rival firms to overtake D. benchmarking E. retrenchment

For nonprofit and governmental organizations, strategic management is an important means to develop and justify requests for needed ______. A. mergers and acquisitions B. investment from shareholders C. financial support D. first-mover initiatives E. tax reductions

Gaining ownership or increased control over distributors or retailers is called _____. A. backward integration B. market development C. forward integration D. vertical integration E. market penetration

Historically, where did strategic planning originate? A. Game play B. Non-profits C. The military D. Business E. Greek mythology

Hobby Lobby CEO David Green says, "The secret to being a great manager is to manage by the book." To what book is he referring? A. Strategic Planning for Dummies B. This strategic management textbook you are studying C. The Bible D. Art of War E. A strategic management textbook written by Dr. Ken Thurston

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? A. Market development B. Horizontal diversification C. Backward integration D. Divestiture E. Vertical integration

If a corporation's profits are $120, and its three divisions have $30, $80, and $10 of profits respectively, and equal revenues, what percent is the pie slice in Division 3? A. 8.33 B. 25.0 C. 33.3 D. 40 E. 12.5

In an EFE Matrix, how much more important is a rating of 4 than a rating of 3? A. 66% B. 50% C. 33% D. 20% E. 25%

In an EFE Matrix, the average total weighted score is: A. 4.0 B. 3.5 C. 2.5 D. 3.0 E. 2.0

In both the BCG and IE Matrices, the size of each circle represents the percentage of _______ contribution of each division, and pie slices reveal the percentage of _____ contributed of each division to the company. A. sales; EBIT B. revenues; total assets C. revenues; operating profits D. sales; current assets E. sales; loses

In developing an IFE Matrix, what is an important guideline? A. Include at least 20 factors. B. Never assign a weight of more than 1.0 for a factor. C. Include factors that are actionable, quantitative, comparative, and divisional (AQCD) to the extent possible. D. Never assign a rating of more than 4.0 for a factor. E. Assign higher weights for factors that have higher ratings.

Is the following statement TRUE? A benefit of developing a comprehensive mission statement is that divergent views among managers can be revealed and resolved through the process. A. Sometimes B. Never C. Yes D. Yes, when diversity among top managers is high E. No, unless management agrees

Limitations of financial ratio analysis include all but which one of the following statements? A. Financial ratios are not very "actionable" in terms of revealing potential strategies needed (because they generally are based on performance of the overall firm). B. Financial ratios are based on accounting data, and firms differ in their treatment of such items as depreciation, inventory valuation, R&D expenditures, pension plan costs, mergers, and taxes. C. Financial ratios are estimates of financial condition. D. Departures from industry average financial ratios do not always indicate that a firm is doing especially well or badly. E. Seasonal factors can influence comparative financial ratios.

Marketers can best use their strategic toolbox to ensure that their firm's offering delivers value to target customers when there is ______. A. no competition B. no need for the marketing mix C. a clearly defined target market D. no need for marketing research E. a broadly defined target market

Some firms view planning as a waste of time because ______. A. the process is never-ending B. the return on investment is too low C. no product or service is produced D. the process is too long E. it is not proven not be successful

Strengths that cannot be easily matched or imitated by competitors are called ______. A. valuable resources B. competitive advantages C. distinctive competencies D. synergies E. distinctive advantages

The CEO of LinkedIn is Jeff Weiner, a highly respected corporate leader. What does Weiner say is the most important philosophy of a great leader? A. Use strategic planning to guide corporate decision-making. B. Do unto others as you would have them do unto you. C. Be clear about the organization's vision. D. Be clear about the organization's mission. E. Be clear about the firm's core values.

The basic activities that comprise marketing include the following: A. Cost/benefit analysis B. Benchmarking C. Marketing research and target market analysis D. Pricing, distribution, and human resource management (HRM) E. Financial ratio analysis

The principal benefit of vision and mission statements as tools of strategic management is derived from ______. A. their quantitative outlines for profitability B. removing the need for strategic management C. their specification of the ultimate aims of a firm D. their focus on company performance E. removing the need for the firm to focus on ethics

To examine the value chain activities across an industry to determine "best practices" among competing firms, an organization would use an analytic tool known as ______. A. retrenchment B. value chain analysis C. benchmarking D. competitor analysis E. cost analysis

What are two major types of bankruptcy? A. Chapters 3 and 11 B. Chapters 2 and 4 C. Chapters 7 and 11 D. Chapters 5 and 15 E. Chapters 3 and 9

What is the most widely used method for determining an organization's strengths and weaknesses in the investment, financing, and dividend areas? A. Inventory turnover analysis B. Profit margin analysis C. Financial ratio analysis D. Historical trend analysis E. Capital budgeting

What is Rudin's Law? A. When a crisis forces choosing among alternatives, most people panic. B. When a crisis forces choosing among alternatives, most people guess at the best option. C. When a crisis forces choosing among alternatives, most people choose the worst possible one. D. When a crisis forces choosing among alternatives, most people choose a bad option. E. When a crisis forces choosing among alternatives, most people do not choose the best option.

What should a vision statement reveal? A. The firm's core values B. The firm's mission C. The type of business a firm conducts D. Where the firm wants to be in ten years E. A concise history of the firm

Which of the following is NOT a risk of pursuing a cost leadership strategy? A. Technological breakthroughs may make the strategy ineffective. B. Competitors may imitate the strategy. C. The unique product may not be valued highly enough by customers to justify the higher price. D. Buyer interest may swing to other differentiating features. E. Overall industry profits may be driven down.

Which of the following is NOT one of Porter's five forces? A. Potential entry of new competitors B. Rivalry among competing firms C. Barriers to entry D. Bargaining power of suppliers E. Potential development of substitute products

Which of the following is NOT true concerning forecasts? A. Individuals make implicit forecasts throughout their lives. B. Forecasting is a complex endeavor. C. Sometimes, wild guesses are acceptable as forecasts. D. Forecasts are educated assumptions about future trends. E. Forecasting is critical to the strategic-management process.

Which of the following is a good guideline for indicating when market development may be an especially effective strategy? A. The organization does not have the human resources needed to manage expanded operations. B. The organization is not good at what it does. C. New channels of distribution are available that are reliable, inexpensive, and of good quality. D. The organization does not have the capital needed to manage expanded operations. E. Unsaturated markets do not exist.

Which of the following is a guideline for indicating that product development may be an effective strategy? A. An organization has many successful new products. B. Major competitors offer better-quality products at lower prices. C. An organization competes in a high-growth industry. D. The organization's industry is stable with slow changes in technology. E. The organization is weak at research and development.

Which of the following is considered a published source for external information? A. Interviews B. Market surveys C. Directories D. Television programs E. Customer surveys

Which of the following statements is TRUE? A. Just because one firm receives a 3.20 overall rating and another receives a 2.80 in a CPM, it does not necessarily follow that the first firm is precisely 14.3% better than the second, but it does suggest that the first firm is much better in many areas. B. Just because one firm receives a 3.20 overall rating and another receives a 2.80 in a CPM, it follows that the first firm is precisely 12.5% better than the second, and that the first firm is better in some areas. C. Just because one firm receives a 3.20 overall rating and another receives a 2.80 in a CPM, it does not necessarily follow that the first firm is precisely 14.3% better than the second, but it does suggest that the first firm is better in some areas. D. When one firm receives a 3.20 overall rating and another receives a 2.80 in a CPM, it follows that the first firm is precisely 14.3% better than the second. E. Just because one firm receives a 3.20 overall rating and another receives a 2.80 in a CPM, it does not necessarily follow that the first firm is precisely 12.5% better than the second, but it does suggest that the first firm is better in some areas.

Why are both profit and vision needed to motivate a workforce effectively? A. Vision is viewed negatively by some stakeholders of a firm. B. Top executive bonuses are oftentimes based on accomplishing a mission and vision. C. Profit is viewed negatively by some stakeholders of a firm. D. Manager and employee bonuses are usually based on profit. E. Profit and vision statements are usually found in an annual report.

______ is the act of strengthening employees' sense of effectiveness by encouraging them to participate in decision making and to exercise initiative and imagination, and then rewarding them for doing so. A. Motivation B. Leadership C. Empowerment D. Involvement E. Encouragement

A widely used strategic planning analytical tool designed to identify a firm's major competitors and its particular strengths and weaknesses in relation to a sample firm's strategic position.

CPM

A fundamental difference between military and business strategy is that business strategy is formulated, implemented, and evaluated with an assumption of ________, whereas military strategy is based on an assumption of ________. Both business and military organizations must adapt to ________ and constantly _______ to be successful

Competition Conflict Change Improve

Anything a firm does especially well, compared to rival firms. For example, when a firm can do something that rival firms cannot do, or owns something that rival firms desire, that can represent a competitive advantage.

Competitive Advantage

A component of the mission statement; are employees a valuable asset to the firm?

Concern for Employees

A component of the mission statement; is the firm responsive to social, community, and environmental concerns?

Concern for Public Image

A component of the mission statement; does the firm strive to survive, grow, and (if for-profit) be profitable?

Concern for Survival, Growth, and Profitability

Specifies a firm's commitment to integrity, fairness, discipline, equal employment opportunity, teamwork, accountability, continuous improvement, or other such exemplary attributes.

Core Values Statement

A classic study of strategic management found that successful strategists ______. A. did little chatting and informal questioning B. dictated strategy C. announced many decisions D. kept a low political profile on unacceptable proposals E. gave many orders

A firm can achieve sustained competitive advantage by _____. A. taking corrective actions B. monitoring employees quarterly C. periodically adapting to changes in external trends and events and internal capabilities, competencies, and resources D. effectively formulating, implementing, and evaluating strategies that capitalize on changes in trends and internal capabilities E. measuring performance and analyzing variances

According to James Van Horne, the basic activities of finance/accounting consist of three decisions. What are the three? A. The investment decision, the financing decision, and the leverage decision B. The liquidity decision, the financing decision, and the dividend decision C. The investment decision, the liquidity decision, and the dividend decision D. The investment decision, the financing decision, and the dividend decision E. The investment decision, the financing decision, and the treasury stock decision

An effective vision statement should exhibit 5 characteristics. What are they? A. Clear, current, concise, unique, inspiring B. Clear, futuristic, expansive, unique, inspiring C. Clear, current, expansive, creative, adaptable D. Clear, futuristic, concise, unique, inspiring E. Clear, futuristic, concise, creative, adaptable

An example of an economic variable is "value of the dollar"long dash—which is currently highlong dash—compared with the Yen, Euro, and the Australian dollar. The high dollar results in what economic factor(s)? A. The high value of the dollar spurs small business growth and reshoring. B. The high dollar makes travel to the United States cheaper for foreigners. C. The high dollar makes traveling abroad expensive for Americans. D. The high dollar makes U.S. goods more expensive in overseas markets. E. The high dollar has no direct effect on the U.S. trade deficit.

Aspects of organizational culture listed in Table 4-4 include all but which of the following? A. Formal versus informal dress B. Socialize together outside of work C. Strong work ethic, arrive early, and leave late D. Analyze interest rate trends E. High ethical beliefs

Backward integration can be an especially effective strategy under which of the following conditions? A. Stable prices of raw materials is not a concern. B. The organization competes in a mature industry that is not growing. C. Present suppliers have low profit-margins. D. The number of suppliers is small and the number of competitors is large. E. The number of competitors is small and the number of suppliers is large.

Does including the word "customer" in a mission statement ensure the statement includes the customer component? A. You should not include the word customer in your mission statement. B. As long as it is first C. Yes D. No E. As long as it is last

Empirical indicators, or characteristics of resources that enable a firm to implement strategies, include ______. A. rare and compatible B. global and liquid C. scarce and unique D. not easily substitutable E. transparent

For industries and firms that depend heavily on government contracts or subsidies, which forecasts can be the most important part of an external audit? A. Economic B. Social C. Technological D. Political E. Competitive

In an EFE Matrix, how much more important is a weight of 0.20 than a weight of 0.15? A. 5.0% B. 50% C. .05% D. 33% E. 25%

In developing a SPACE Matrix, what term (axis) refers to the volatility of profits and revenues for firms in a given industry? A. IP B. OP C. FP D. SP E. CP

In generating the list of critical success factors in a CPM, a firm should strive to include factors that ______. A. were not used in past analysis B. ignore points of competitive advantage C. are common only to the firm doing the analysis D. differentiate firms within the industry E. can be used for any industry

In 2018, global data analytics software is expected to reach ______ billion, a ______ percent increase from 2012. A. $50; 50 B. $2.17; 6.4 C. $217; 640 D. $21.7; 64 E. $.217; .64

It is important that both the internal and external factors and the SO, ST, WO, and WT strategies are stated in ______ terms. A. non-actionable B. numerical C. theoretical D. specific E. abstract

Research indicates that strategic management in small firms is most likely ______. A. more formal than in large firms B. not related to performance C. not as vital as it is for large firms D. less formal than in large firms. E. always the same as large firms

The chapter lists six reasons why many mergers and acquisitions fail, including which of the following? A. Lack of diversitures B. Lack of reshoring C. Lack of reengineering D. Inability to achieve synergy E. Too small an acquisition

The decision stage of the strategy-formulation analytical framework ______. A. summarizes the basic input information needed to formulate strategies B. includes the BCG Matrix C. is Stage 2 D. involves a single technique, the QSPM E. focuses on generating feasible alternative strategies by aligning key external and internal factors

The process of generating and selecting strategies should include which of the following? A. Top management only B. A team of outside consultants C. All feasible strategies that could benefit the firm D. A manageable set of the most attractive strategies E. Ideas that come from "the wild blue yonder"

The text states that perhaps the most important page in a student's strategic planning case project is his/her Recommendations Page. Why is this? A. Because student recommendations are usually correct B. Because it is the final section of the report C. Because it maps the costs (or savings) of an alternative over a six-month period D. Because the recommendations page will include the estimated dollar amount of the costs (or savings) of each alternative E. Because this can be used as a benchmark for other companies

There are four important differences between the BCG Matrix and the IE Matrix. Which statement below is NOT a difference between the two matrices? A. The strategic implications of each matrix are different. B. The IE Matrix has nine quadrants versus four in a BCG Matrix. C. The x and y axes are different. D. The sizes of the circles and pie slices can vary. E. The IE Matrix requires more information about the divisions than does the BCG Matrix.

The strategy-formulation tool that summarizes and evaluates the major strengths and weaknesses in the functional areas of a business is ______. A. the Competitive Profile Matrix B. Porter's Five Forces Model C. external environmental scanning D. the Internal Factor Evaluation Matrix E. the External Factor Evaluation Matrix

VCA is the process whereby a firm determines the value (price minus cost) of each and all activities ______. A. performed by suppliers and distributors B. performed by employees C. performed by managers D. that went into producing and marketing a product E. performed within all organizational levels of the firm

What do strategy analysis and choice seek to determine? A. A new mission statement B. The cost structure of the firm C. Alternative objectives D. Alternative courses of action E. An internal and external audit

What question does a mission statement answer? A. What is our vision? B. What are our long-range objectives? C. What are our core values? D. What is our business or reason for being? E. Where do we want to be in five years?

What would be an appropriate SP axis number for Apple Inc.? A. + or - 7 B. + 6 C. - 1 D. -6 E. + 1

What characteristic(s) are included among the 5 out of 5 test for vision statements to be exemplary? A. Congruent and congenial B. Clear and unique C. Futuristic and objective D. Consistent and competitive E. Inspiring and complacent

When an organization splits into two or more parts, this type of strategy is a _____. A. retrenchment B. liquidation C. splitation D. divestiture E. de-integration

When identifying and prioritizing key external factors in strategic planning, four criteria should be met to the extent possible. What are these four criteria? A. actionable, quantitative, static, and prescriptive B. actionable, quantitative, static, and divisional C. actionable, qualitative, comparative, and divisional D. actionable, quantitative, comparative, and divisional E. quantitative, qualitative, prescriptive, and definable

Which matrix is based on the two evaluative dimensions of competitive position and market (industry) growth? A. The SWOT Matrix B. The IE Matrix C. The BCG Matrix D. The Grand Strategy Matrix E. The QSPM

Which of the following EFE scores indicates that a firm is weak at responding to external factors? A. 4.0 B. 0 C. -2.5 D. 1.2 E. 2.5

Which of the following are the 5 characteristics of objectives? A. quantitative, understandable, challenging, compatible, qualitative B. quantitative, understandable, challenging, clear, obtainable C. quantitative, understandable, realistic, compatible, obtainable D. quantitative, understandable, challenging, compatible, obtainable E. qualitative, understandable, challenging, compatible, obtainable

Which of the following is considered an unpublished source for external information? A. Books B. Periodicals C. Newspapers D. Customer surveys E. Government documents

Which of the following statements is FALSE? A. 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. B. Partnering has become a core competency, a strategic issue of high importance. C. Although evidence is mounting that firms should use partnering as a means for achieving strategies, most U.S. firms in many industrieslong dash—such as financial services, forest products, metals, and retailinglong dash—still operate in a merge or acquire mode to obtain growth. D. Value chain analysis and benchmarking are opposite ways to address the management of resources. E. Partnering is not yet taught at most business schools and is often viewed within companies as a financial issue rather than a strategic issue.

Which of the following statements is FALSE? A. The ratings in a CPM refer to strengths and weaknesses, where 4 = major strength, 3 = minor strength, 2 = minor weakness, and 1 = major weakness. B. Avoid assigning the same rating to firms included in a CPM analysis. C. Critical success factors in a CPM include both internal and external issues; therefore, the ratings refer to strengths and weaknesses, where 4 = major strength, 3 = minor strength, 2 = minor weakness, and 1 = major weakness. D. Regarding weights in a CPM or EFE Matrix, be mindful that 0.08 is mathematically 25 percent higher than 0.06, so even small differences can reveal important perceptions regarding the relative importance of various factors. E. The weights and total weighted scores in both a CPM and an EFE have the same meaning.

Which of the following statements is TRUE? A. Mission statements should be employee-oriented first and foremost and shareholder-oriented secondarily. B. A single-division organization could have several mission statements for different purposes. C. Mission statements should not be published for competitors to see. D. There is no one best mission statement for a particular organization. E. An effective mission statement paves the way for an effective vision statement.

Which of the following statements is TRUE? A. Regardless of the number of key opportunities and threats included in an EFE Matrix, the highest possible total weighted score for an organization is 8.0 and the lowest possible total weighted score is 1.0. B. Regardless of the number of key opportunities and threats included in an EFE Matrix, the highest possible total weighted score for an organization is 10.0 and the lowest possible total weighted score is 0.0. C. Regardless of the number of key opportunities and threats included in an EFE Matrix, the highest possible total weighted score for an organization is 4.0 and the lowest possible total weighted score is 0.0. D. Regardless of the number of key opportunities and threats included in an EFE Matrix, the highest possible total weighted score for an organization is 4.0 and the lowest possible total weighted score is 1.0. E. Opportunities and threats can be external or internal.

Which statement below is FALSE? A. Companies today are aggressively boosting their dividends paid to shareholders. B. Dividends are sometimes paid out even if the funds could be better reinvested in the business, and/or even if the firm has to obtain outside sources of capital to pay for the dividends. C. The benefits of paying dividends to investors must be balanced against the benefits of internally retaining funds, and there is no set formula on how to balance this trade-off. D. Companies should pay dividends regardless of changes in their revenue. E. Dividends are sometimes paid out even when the firm has incurred a negative annual net income.

Why is it important to consider a firm's culture in strategy and choice analysis? A. Because a firm's culture will be common to all firms in the industry. B. Because new strategies always result in cultural changes. C. Because culture is the underlying basis of the strategy. D. Because success can rest on the degree of support received from the firm's culture. E. It is not important. Strategy has no impact on a firm's culture.

Boeing's decision to build 80% of its wing flap motors in-house is an example of which strategy? A. Market penetration B. Forward integration C. Unrelated diversification D. Backward integration E. Product development

______ is the process by which a person determines whether to attempt a task, works out the most effective way of reaching desired objectives, and prepares to overcome unexpected difficulties with adequate resources. A. Controlling B. Organizing C. Strategizing D. Planning E. Leading

Annual percentage growth in dividends per share Firm's growth rate in dividends per share

Dividends Per Share

According to Michael Porter, the nature of competitiveness in a given industry includes what force? A. Rivalry among competing firms and potential banks to borrow money from B. Bargaining power of suppliers, distributors, and creditors C. Bargaining power of suppliers, vendors, and customers D. A comparative financial ratio analysis across competitors E. Potential development of substitute products and bargaining power of consumers

An advantage of a strong dollar includes which of the following item(s)? A. A strong dollar gives U.S. companies less firepower for international acquisitions. B. The advantages offset the disadvantages for nonprofit firms. C. All American firms benefit from a rising value of the dollar. D. Companies with substantial outside-U.S. operations see their overseas expenses, like salaries paid in Euros, become more expensive. E. Companies importing goods have greater buying power because their dollars now go further overseas.

As common positions in firms today, chief information officers (CIOs) reflect the growing importance of the impact of which external force? A. Competitive B. Economic C. Social D. Political E. Technological

Going clockwise beginning with the top axis, what are the four axes of a SPACE Matrix? A. SP, CP, FP, and IP B. CP, FP, IP, and SP C. IP, SP, CP, and FP D. AP, BP, CP, and DP E. FP, IP, SP, and CP

How many key external factors should be included in an EFE Matrix? A. 25 B. 30 C. 10 D. 15 E. 20

If a company has high customer loyalty (like Harley-Davidson does), what rating would be appropriate for that factor in a SPACE Matrix? A. -1 on SP axis B. +1 on CP axis C. -7 on SP axis D. +7 on CP axis E. -1 on CP axis

In a BCG Matrix, ______ is defined as the ratio of a division's own market share (or revenues) in a particular industry to the market share (or revenues) held by the largest rival firm in that industry. A. rival market share B. market share C. rival market share position D. market share position E. relative market share position

In a BCG Matrix, divisions in Quadrant III (lower left) have a high relative market share position but compete in a low-growth industry. They are called ______. A. laggards B. stars C. question marks D. dogs E. cash cows

In an IFE Matrix, how much more important is a weight of 0.16 than a weight of 0.07? A. 12.9 percent B. 56 percent C. 90 percent D. 5.6 percent E. 129 percent

In developing an IFE Matrix, when can both internal and external factors be included? A. For firms in specifuc industries, such as utility companies B. Sometimes C. Whenever a firm does not develop or have an EFE Matrix D. Anytime E. Never

In multidivisional organizations, should divisional units perform strategic-management tasks, including the development of their own statement of vision and mission? A. Yes, when the board of directors approves B. No, unless an exception is granted C. Sometimes D. Never E. Yes

In forecasting, strategists identify future occurrences that could have a major effect on the firm, and, based on that make __________. A. uneducated assumptions B. perfect forecasts C. wild guesses D. accurate predictions E. reasonable assumptions

Related diversification may be an effective strategy when ______. A. an organization's products are in a growth stage B. new but related products do not counterbalance an organization's existing peaks and valleys C. new but related products could not be offered at competitive prices D. an organization has a weak management team E. an organization competes in a no-growth or slow-growth industry

Secondary buyouts occur when what happens? A. A private equity firm buys a privately held firm B. A private equity firm buys a publically held firm C. A company buys a firm and then sells the firm within a year D. A company buys a firm and then itself is purchased by another company E. A private equity firm buys a firm from another private equity firm

The IFE Matrix is an evaluation of the effectiveness of a firm's current strategies, but it does not take into account ______. A. strengths and weaknesses B. the functional areas of a business C. the overall strength of the firm's internal position D. the value of strengths and weaknesses E. opportunities and threats

The input stage of the strategy-formulation analytical framework includes the ______Matrix. A. SPACE B. Grand Strategy C. SWOT D. IE E. EFE

The ______ Matrix determines the relative attractiveness of various strategies based on the extent that key external and internal factors are capitalized on or improved. A. SPACE B. SWOT C. Internal-External (IE) D. GRAND Strategy E. QSPM

The resource-based view emphasizes the importance of ______. A. external resources B. external opportunities C. financial performance D. competitive analysis E. internal resources

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? A. Reshoring B. Reengineering C. Bankruptcy D. Divestiture E. Retrenchment

What ties all business functions together and provides the basis for all managerial decisions? A. The CEO B. Technology C. The CIO D. Human resources E. Information

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? A. Red river B. Blue river C. Open ocean D. Red ocean E. Blue ocean

Which SPACE Matrix quadrant implies staying close to the firm's basic competencies and not taking excessive risks? A. Aggressive B. Competitive C. Cooperative D. Defensive E. Conservative

Which of the following best describes the vision, "To become the best retailing firm in the USA"? A. Admirable B. Weak C. Too short D. Excellent E. Much too broad

Which of the following is an example of an appropriately stated alternative strategy in a QSPM? A. Expand globally. B. Open new stores in Asia. C. Open new stores. D. Expand. E. Open 250 new stores in China.

Which of the following statements is FALSE? A. The resource-based view (RBV) approach to competitive advantage contends that internal resources are more important for a firm than external factors in achieving and sustaining competitive advantage. B. In contrast to the Industrial Organization (I/O) theory presented in the previous chapter, proponents of the RBV view/theory contend that organizational performance is primarily determined by internal resources. C. Resource-based view theory asserts that resources are actually what helps a firm exploit opportunities and neutralize threats. D. Empirical research by Neffke reveals that more than any other variable in the firm's value chain, it is the nature of a firm's human capital that impacts that firm's choice of diversification targets. Specifically, firms select acquisition targets that offer opportunities to leverage existing human resources. E. The resource-based view (RBV) approach to competitive advantage contends that internal resources are equally important for a firm as external factors in achieving and sustaining competitive advantage.

Which statement below is FALSE? A. IFE ratings are company-based whereas weights are industry-based B. Always sequence factors in an IFE Matrix from highest to lowest weight. C. In an IFE Matrix, the number of factors has no effect on the range of total weighted scores because the weights always add up to 1.0. D. When a key internal factor is both a strength and a weakness, the factor may be included twice in the IFE Matrix with a weight and rating assigned to each statement. E. The average IFE Matrix score is 2.0.

Which statement below is FALSE? A. Successful strategists do a lot of chatting and informal questioning to stay abreast of how things are progressing and to know when to intervene. B. Successful strategists lead strategy but do not dictate it. They give few orders, announce few decisions, depend heavily on informal questioning, and probe and clarify until a consensus emerges. C. Successful strategists ensure that all major power bases within an organization are represented in, or have access to, top management. D. Successful strategists may be small business owners or college presidents. E. Successful strategists are commonly difficult to get along with in social settings.

Which statement below is FALSE? A. Successful strategists let weakly supported ideas and proposals die through inaction. B. Successful strategists establish additional hurdles or tests for strongly supported ideas considered unacceptable but not openly opposed. C. Successful strategists keep a low political profile on unacceptable proposals and strive to let most negative decisions come from subordinates or a group consensus. D. Successful strategists commonly have the title chief executive officer or president. E. Successful strategists are generally iridescent.

Net Income/Number of Shares of Common Stock Outstanding Earnings available to the owners of common stock

Earnings Per Share

The act of strengthening employees' sense of shared ownership by encouraging them to participate in decision making and rewarding them for doing so.

Empowerment

Focuses on identifying and evaluating trends and events beyond the control of a single firm Reveals key opportunities and threats confronting an organization so that managers can formulate strategies to take advantage of the opportunities and avoid or reduce the impact of threats

External Audit

Economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive trends and events that could significantly benefit or harm an organization.

External Opportunities and Threats

Economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive trends/events/facts that could significantly harm an organization in the future.

External Threats

Quantitative calculations that reveal the financial condition of a firm and exemplify the complexity of relationships among the functional areas of business. For example, a declining return on investment or profit margin ratio could be the result of ineffective marketing, poor management policies, research and development errors, or a weak management information system. Ratios are usually compared to industry averages, or to prior time periods, or to rival firms.

Financial Ratio Analysis

Sales/Fixed Assets Sales productivity and plant and equipment utilization

Fixed Assets Turnover

Gross Profit/Sales The total margin available to cover operating expenses and yield a profit

Gross Profit Margin

One of four dimensions/axes of the SPACE Matrix that determines how strong/weak a firm's industry is, considering such factors as growth potential, profit potential, financial stability, extent leveraged, resource utilization, ease of entry into market, productivity and capacity utilization.

Industry Position

An organization's controllable activities that are performed especially well, such as in areas that include finance, marketing, management, accounting, and MIS, across a firm's products/regions/stores/facilities.

Internal Strengths

An organization's controllable activities that are preformed especially well or poorly Determined relative to competitors

Internal Strengths and Internal Weaknesses

An organization's controllable activities that are performed especially poorly, such as in areas that include finance, marketing, management, accounting, and MIS, across a firm's products/regions/stores/facilities

Internal Weakness

COGS/Inventory Whether a firm holds excessive stocks of inventories and whether a firm is slowly selling its inventories compared to the industry average

Inventory Turnover

Deciding on future actions/objectives/policies with the aim to optimize for tomorrow the trends of today; less effective and comprehensive than strategic planning.

Long-Range Planning

Long-Term Debt/Stockholder's Equity The balance between debt and equity in a firm's long-term capital structure

Long-Term Debt Equity Ratio

Specific results that an organization seeks to achieve (in more than one year) in pursuing its basic vision/mission/strategy.

Long-Term Objectives

Specific results that an organization seeks to achieve in pursuing its basic mission. Means more than one year. Should be challenging, measurable, consistent, reasonable, and clear.

Long-Term Objectives

A _________ __________ answers the question "What is our business?"

Mission Statement

A declaration of an organization's "reason for being." It answers the pivotal question "What is our business?" It is essential for effectively establishing objectives and formulating strategies It reveals what an organization wants to be and whom it wants to serve It is also called a creed statement, a statement of purpose, a statement of philosophy, a statement of beliefs, and a statement of business principles A good __________ ____________ allows for the generation and consideration of a range of feasible alternative objectives and strategies without unduly stifling management creativity A ________ ________ needs to be broad to reconcile differences effectively among, and appeal to, an organization's diverse stakeholders.

Mission Statement

Annual percentage growth in profits Firm's growth rate in profits

Net Income

Net Income/Sales After-tax profits per dollar of sales

Net Profit Margin

The means by which annual objectives will be achieved

Policies

The means by which annual objectives will be achieved. Policies include guidelines, rules, and procedures established to support efforts to achieve stated objectives. Policies are guides to decision making and address repetitive or recurring situations.

Policies

A theoretical model devised by Michael Porter, who suggests that the nature of competitiveness in a given industry can be viewed as a composite of five forces: (1) rivalry among competing firms, (2) potential entry of new competitors, (3) potential development of substitute products, (4) bargaining power of suppliers, and (5) bargaining power of consumers.

Porter's Five Competitive Forces

Current Assets Minus Inventory/Current Liabilities The extent to which a firm can meet its short-term obligations without relying on the sale of its inventories

Quick Ratio

An approach that suggests internal resources to be more important for a firm than external factors in achieving and sustaining competitive advantage.

Resource Based View

Formal meetings commonly held off-premises to discuss and update a firm's strategic plan; done away from the work site to encourage more creativity and candor from participants.

Retreats

Net Income/Total Stockholder's Equity After-tax profits per dollar of stockholders' investment in the firm

Return on Stockholder's Equity

Net Income/Total Assets After-tax profits per dollar of assets; this ratio is also called return on investment (ROI)

Return on Total Assets

Strategies that result from matching a firm's internal strengths with its external opportunities.

SO Strategies

Indicates whether aggressive, conservative, defensive, or competitive strategies are most appropriate for a given organization. The axes of this matrix represent two internal dimensions (financial position [FP] and competitive position [CP]) and two external dimensions (stability position [SP] and industry position [IP]). These four factors are perhaps the most important determinants of an organization's overall strategic position.

SPACE Matrix

Strategies that result from matching a firm's internal strengths with its external threats.

ST Strategies

The most widely used of all strategic-planning matrices; matches a firm's internal strengths/weaknesses with its external opportunities/threats to generate four types of strategies: SO (strengths-opportunities) Strategies, WO (weaknesses-opportunities) Strategies, ST (strengths-threats) Strategies, and WT (weaknesses-threats) Strategies.

SWOT

Annual percentage growth in total sales Firm's growth rate in sales

Sales

One of four dimensions/axes of the SPACE Matrix that determines how stable/unstable a firm's industry is, considering such factors as technological changes, rate of inflation, demand of variability, price range of competing products, barriers to entry into market, competitive pressure, ease of exit from market, price elasticity of demand, and risk involved in business.

Stability Position

Include employees, managers, stockholders, boards of directors, customers, suppliers, distributors, creditors, governments (local, state, federal, and foreign), unions, competitors, environmental groups, and the general public.

Stakeholders

The art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives. __________ __________ is used synonymously with the term strategic planning. Sometimes the term ________ _________ is used to refer to strategy formulation, implementation, and evaluation, with strategic planning referring only to strategy formulation. A strategic plan is a company's game plan. A strategic plan results from tough managerial choices among numerous good alternatives, and it signals commitment to specific markets, policies, procedures, and operations.

Strategic Management

The process of formulating an organization's game plan; in a corporate setting, this term may refer to the whole strategic-management process.

Strategic Planning

A framework or illustration of the strategic-management process; a clear and practical approach for formulating, implementing, and evaluating strategies.

Strategic-Management Model

The process of formulating, implementing, and evaluating strategies as revealed in the comprehensive model, that begins with vision/mission development and ends with strategy evaluation and feedback.

Strategic-Management Process

The means by which long-term objectives will be achieved. May include geographic expansion, diversification, acquisition, product development, market penetration, retrenchment, divestiture, liquidation, and joint ventures.

Strategies

The means by which long-term objectives will be achieved. Business strategies may include geographic expansion, diversification, acquisition, product development, market penetration, retrenchment, divestiture, liquidation, and joint ventures.

Strategies

Individuals most responsible for the success or failure of an organization Help an organization gather, analyze, and organize information

Strategists

The person(s) responsible for formulating and implementing a firm's strategic plan, including the CEO, president, owner of a business, head coach, governor, chancellor, and/or the top management team in a firm.

Strategists

Determining which strategies are not working well.

Strategy Evaluation

Stage 3 in the strategic-management process. The three fundamental strategy-evaluation activities are (1) review external and internal factors that are the bases for current strategies, (2) measure performance, and (3) take corrective actions; strategies need to be evaluated regularly because external and internal factors constantly change.

Strategy Evaluation

1. Developing a vision and mission 2. Identifying an organization's external opportunities and threats 3. Determining internal strengths and weaknesses 4. Establishing long term objectives 5. Generating alternative strategies 6. Choosing particular strategies to pursue.

Strategy Formulation

Stage 1 in the strategic-management process; includes developing a vision/mission, identifying an organization's external opportunities/threats, determining internal strengths/weaknesses, establishing long-term objectives, generating alternative strategies, and choosing particular strategies to pursue.

Strategy Formulation

Requires a firm to establish annual objectives, devise policies, motivate employees, and allocate resources so that formulated strategies can be executed Often called the action stage

Strategy Implementation

Profits Before Interest and Taxes/Total Interest Charges The extent to which earnings can decline without the firm becoming unable to meet its annual interest costs

Times Interest Earned Ratio

Sales/Total Assets Whether a firm is generating a sufficient volume of business for the size of its asset investment

Total Assets Turnover

Strategies that result from matching a firm's internal weaknesses with its external opportunities.

WO Strategies

Strategies that result from matching a firm's internal weaknesses with its external threats.

WT Strategies

According to recent research by Cuddy, Fiske, and Glick, what ethics variable(s) is most important in doing business? A. Strengths and weaknesses B. Intelligence C. Trustworthiness D. Opportunities and threats E. Competence

According to the chapter, a pitfall to watch for and avoid in strategic planning is: A. Using strategic planning to relinquish control over decisions and resources B. Failing to communicate the plan to a board of directors, who continue working in the dark C. Doing strategic planning only to satisfy accreditation or regulatory requirements D. Sexual harassment E. Failing to communicate the plan to outside-USA segments, who continue working in the dark

A strategy-formulation tool that summarizes and evaluates a firm's major strengths and weaknesses in the functional areas of a business, and provides a basis for identifying and evaluating relationships among those areas.

IFE Matrix

Using one's cognition without evident rational thought or analysis; based on past experience, judgment, and feelings; essential to making good strategic decisions but must not be relied on heavily in lieu of objective analysis.

Intuition

What is often considered the first step in strategic planning? A. Developing a vision statement B. Establishing objectives C. Obtaining shareholders or financial supporters D. Securing capital to operate E. Devising a mission

What 10 characteristics does a mission statement need to have?

1. Broad in scope; does not include monetary amounts, numbers, percentages, ratios, or objectives 2. Concise; fewer than one hundred words in length 3. Inspiring 4. Identifies the utility of a firm's products 5. Reveals that the firm is socially responsible 6. Reveals that the firm is environmentally responsible 7. Includes nine components: customers, products or services, markets, technology, concern for survival/growth/profits, philosophy, distinctive competence, concern for public image, concern for employees 8. Reconciliatory; resolves divergent views among stakeholders 9. Enduring but never cast in stone 10. Attracts customers; is written from a customer perspective

What 5 characteristics does a vision statement need to have?

1. Clear: reveals type of industry and what firm strives to become 2. Futuristic: reveals what the firm strives to become or accomplish within five years 3. Concise: one sentence in length 4. Unique: reveals the firm's competitive advantage 5. Inspiring: motivates the readers to support the firm

What are the functions of management?

1. Planning 2. Organizing 3. Motivating 4. Controlling

What are the 10 benefits of having clear objectives?

1. Provide direction by revealing expectations. 2. Allow synergy. 3. Assist in evaluation by serving as standards. 4. Establish priorities. 5. Reduce uncertainty. 6. Minimize conflicts. 7. Stimulate exertion. 8. Aid in allocation of resources. 9. Aid in design of jobs. 10. Provide basis for consistent decision making.

What are the characteristics of objectives?

1. Quantitative: measurable 2. Understandable: clear 3. Challenging: achievable 4. Compatible: consistent vertically and horizontally in a chain of command 5. Obtainable: realistic

What are some pitfalls to avoid in strategic planning?

1. Using strategic planning to gain control over decisions and resources 2. Doing strategic planning only to satisfy accreditation or regulatory requirements 3. Too hastily moving from mission development to strategy formulation 4. Not communicating the plan to employees, who continue working in the dark 5. Top managers making many intuitive decisions that conflict with the formal plan 6. Top managers not actively supporting the strategic-planning process 7. Not using plans as a standard for measuring performance 8. Delegating planning to a "planner" rather than involving all managers 9. Not involving key employees in all phases of planning 10. Not creating a collaborative climate supportive of change 11. Viewing planning as unnecessary or unimportant 12. Viewing planning activities as silos comprised of independent parts 13. Becoming so engrossed in current problems that insufficient or no planning is done 14. Being so formal in planning that flexibility and creativity are stifled

A fundamental strategy-evaluation activity includes_____. A. reviewing external and internal factors that are the bases for current strategies, measuring performance, and taking corrective actions B. monitoring employees C. taking corrective actions D. measuring performance E. reviewing external and internal factors that are the bases for current strategies.

Apple's financially lean position with regard to manufacturing facilities provides the firm with a _______ over Sony, which invests heavily in manufacturing facilities. A. competitive advantage B. strategic advantage C. comparative advantage D. sustained competitive advantage E. disadvantage

If included in a mission statement, the phrase, "We follow the golden rule in all that we do" would satisfy what component? A. Philosophy B. Markets C. Ethics D. Integrity E. Self-concept

Strengths and weaknesses can be determined by elements of being rather than performance. For example, ______. A. a strength may involve ownership of natural resources B. a weakness may be a history of exemplary sustainability C. a weakness may be a current ratio above 2.0 D. a strength may be high employee turnover E. a strength may be a historic reputation for paying low wages

Which of the following activities is included in strategy implementation? A. Develop a strategy-supportive culture and create an effective organizational structure. B. Motivate employees and establish a mission statement. C. Develop a SWOT Matrix D. Redirect marketing efforts and prepare a vision statement. E. Establish annual objectives and develop a vision statement.

Which of the following is a reason some firms do not engage in strategic planning? A. They receive no formal training in strategic management. B. They are being punished for not planning. C. They know the effort of planning yields monetary rewards. D. They understand the benefits of planning. E. They are willing to invest time and effort.

According to the model used in this text, what should be answered when developing a strategic plan? A. How are we going to get there? B. Where are we now, where do we want to go, and how are we going to get there? C. Where is the captain? D. Where do we want to go? E. Where are we now?

Asking the question, ______ is synonymous with asking, "What is our mission?" A. What is our objective? B. What is our business? C. Where are we going? D. What are we doing? E. Why are we here?

Dale McConkey said, "Plans are less important than planning." What does this statement mean? A. The strategic planning narrative is not that important. B. Communication, understanding, and commitment are vitally important in strategic planning. C. Honesty, integrity, and humility are vitally important in strategic planning. D. Manager and employee involvement in decision making is important. E. The strategic planning matrices are not that important.

Guidelines, rules, and procedures established to support implementation efforts are called _____. A. opportunities B. policies Your answer is correct.C. objectives D. strengths E. strategies

In a business, which of the following should be established first? A. Long-term objectives B. Vision statement C. Mission statement D. Creed statement E. Strategy

According to the chapter, the worst thing strategists can do is to develop strategic plans and then ____. A. begin changing the plans B. place the plans on the corporate website C. present the plans to operating managers to execute D. go on vacation E. file the plans away in a file cabinet

Analytical thinking and intuitive thinking ______. A. are seldom used together B. are typically at odds with each other C. complement each other D. guarantee strategic success E. are not used in strategic planning

The strategic management process begins with______. A. strategy implementation B. strategic opportunity identification C. strategy formulation D. strategy evaluation E. strategic planning

The vision statement answers which of the following questions? A. What do we stand for? B. What is our purpose? C. What do we want to become? D. Where do we want to operate? E. What are our markets?

Which statement FALSE? A. During the process of developing vision and mission statements, some organizations use discussion groups of managers to develop and modify existing statements. B. The process of developing a mission statement should create an "emotional bond" and "sense of mission" between the organization and its employees. C. An outside person with expertise in developing vision and mission statements who has unbiased views should always manage the statement-development process. D. Mission statements should include the 9 components. E. Vision statements should pass the 5 out of 5 test.

Who said, "Perfection is not attainable. But if we chase perfection, we can catch excellence"? A. Chuck Noll, Head Coach Pittsburgh Steelers (1969dash-91) B. President Barack Obama (2015) C. Vince Lombardi, Head Coach Green Bay Packers (1959dash-67) D. Tom Landry, Head Coach Dallas Cowboys (1960dash-88) E. George S. Halas, Head Coach Chicago Bears (1933dash-42, 1946dash-55, 1958dash-67)

_____ is the science of planning and directing large-scale military operations, of maneuvering forces into the most advantageous position prior to actual engagement with the enemy. A. Coordination B. Formulating objectives C. Strategy D. Leadership E. Mission development

According to Drucker, the most important time to ask seriously, "What do we want to become?" and "What is our business?" is ______. A. when a company has been unsuccessful B. when a company buys another company C. when the company's vision statement has been altered D. when a company has been successful E. when a company's long-term objectives have been established

All elements of the strategic planning process can change over time except one element that almost never changes. What is that element? A. Mission statement B. Vision statement C. Long-term objectives statement D. Core value statement E. Sustainability statement

In which stage of the strategic management process is an organization likely to develop a mission statement? A. Strategic opportunity identification B. Strategy evaluation C. Strategy implementation D. Strategy formulation E. Strategic planning

Quality mission statements identify the ______ of a firm's products to its customers. A. scope B. quality C. price D. utility E. availability

Regarding vision statements, which statement below is FALSE? A. Vision statements should be one sentence long. B. Vision statements should be written from a customer perspective. C. Vision statements should do more than identify the product/service a firm offers. D. Vision statements should answer the question "What is our mission?" E. Firms should develop a vision statement before a mission statement.

Strategic management is based on the idea that organizations should monitor internal and external trends _____. A. periodically B. quarterly C. monthly D. continually E. annually

The logical starting point for strategic management is to ______. A. implement the plan B. analyze metrics C. perform a SWOT analysis D. identify the existing vision, mission, objectives, and strategies E. hold off-premises retreats

To create an excellent vision and mission, a firm needs core values. These core values ______ for the vision and mission. A. assess the competition B. outline the strategic plan C. predict the firm's future D. create an ethical foundation E. define the firm's long-term objectives

Which of the following statements is FALSE? A. An overly general mission statement that does not exclude any strategy alternatives could be dysfunctional. B. A good mission statement allows for the generation and consideration of a range of feasible alternative objectives and strategies without unduly stifling management creativity. C. Excess specificity in a mission statement would limit the potential of creative growth for the organization. D. Apple Computer's mission statement should open the possibility for diversification by Apple into pesticides. E. A mission statement needs to be broad to reconcile differences effectively amonglong dash—and appeal tolong dash—an organization's diverse stakeholders.

A meta-analysis of 20 years of empirical research on mission statements concluded there is a positive relationship between mission statements and ______. A. employee turnover B. employee satisfaction C. customer satisfaction D. organizational efficiency E. measures of financial performance

In great companies, core values ______. A. are put on the company website B. are stated but typically not practiced C. are secondary to the vision and mission D. change often to reflect environmental changes E. almost never change

Perhaps the best way to develop a skill for writing and evaluating mission statements is to ______. A. use templates available on the web B. copy competitor's mission statements C. attend training workshops D. use an outside consultant E. study actual company missions

The focus of strategic management is ______. A. increasing return on investment B. functional planning C. the profits of the firm D. separating all the functional areas of the business to achieve organizational success E. the integration of all the functional areas of the business to achieve its organizational objectives

Three primary intrinsic benefits of strategic planning include ______. A. less need for lower levels of planning, less need for communication, and greater commitment B. increased return on investment, higher profits, and higher employee satisfaction C. less need for communication, deeper understanding, and greater commitment D. enhanced communication, greater commitment, and higher profits E. enhanced communication, deeper understanding, and greater commitment

Which of the following four types of strategies are developed in a SWOT (Strengths-Weaknesses-Opportunities-Threats) Analysis? A. ST, WT, SW, OT B. OT, WO, ST, WT C. WT, WO, WS, SW D. SW, ST, WO, WT E. SO, WO, ST, WT

Which of the following is NOT a pitfall of strategic planning? A. Not using plans as standards for measuring performance B. Viewing planning as unnecessary or unimportant C. Using strategic planning to gain control over decisions and resources D. Top managers making many intuitive decisions that conflict with the formal plan E. Involving key employees in all phases of planning

Which of the following is a characteristic of a good mission statement? A. It is narrow in scope. B. It is written from the company's perspective. C. It is cast in stone. D. It is more than 150 words long. E. It reveals that the firm is socially responsible.

Generally, in war, the best policy is to take a state intact rather than to ruin it. Likewise, the best objective is to capture the enemy's army, regiment, company, or squad intact rather than destroy them. Winning 100 victories in 100 battles is not the epitome of skill. What is the epitome of skill? A. To use shock and awe as rapid victory strategies B. To form alliances and coalitions to fight all your battles C. To win nearly all battles regardless of the number D. To win all battles regardless of the number E. To subdue the enemy without fighting

______________ skills include actual tools, techniques, and concepts being used by businesses and learned by students using this text. Broad Skills to Be Developed 1. Critical thinking: to define and solve problems and make decisions or form judgments about a particular situation or set of circumstances. 2. Collaboration: to work with colleagues on reports, presentations, and projects. 3. Knowledge application and analysis: to learn a concept and then apply that knowledge to other challenges. 4. Business ethics and social responsibility: to know in your heart that good ethics is good business. 5. Information technology: to enhance one's word-processing, spreadsheets, database, presentation, and software skills. 6. Data literacy: to access, assess, interpret, manipulate, summarize, and communicate data. 7. Specific Skills to Be Gained; Learn How to: 1. Develop a three-year strategic plan for any for-profit or nonprofit company or organization. 2. Write and evaluate vision and mission statements. 3. Conduct an external and internal strategic planning assessment. 4. Formulate strategies using SWOT analysis. 5. Develop and use a BCG and IE portfolio matrix analysis. 6. Develop and use a QSPM analysis. 7. Determine an appropriate set of recommendations with associated costs for any firm. 8. Develop and use perceptual maps to better position firms versus rival companies. 9. Determine the value of any firm using various corporate valuation methods. 10. Perform EPS-EBIT analysis to determine the extent that debt versus stock should be used to raise needed capital for the firm. 11. Develop and use value chain analysis, balance scorecards, and financial ratio analysis. 12. Evaluate corporate structures and develop effective organizational charts. 13. Develop and use projected financial statements to support any proposed strategic plan. 14. Use a popular corporate strategic planning Excel template.

Employability

An enduring statement of purpose that distinguish one business from other similar firms; a statement that identifies the scope of a firm's operations in product and market terms and addresses the question "What is our business?" A declaration of an organization's "reason for being."

Mission Statement

_____________ involves efforts directed toward shaping human behavior, such as leadership, communication, teamwork, job enrichment, and human resource management (HRM).

Motivating

______________ includes all managerial activities that result in a structure of task and authority relationships, such as organizational design, job specialization, job descriptions, span of control, job design, and job analysis.

Organizing

___________ consists of all managerial activities related to preparing for the future, such as establishing objectives, devising strategies, and developing policies.

Planning

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