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Chapter 8 Strategic Management (prep)

31. What are the decisions and actions that determine long-run performance of an organization?
a. strategies
32. __________________ is the collection of managerial decisions and actions that determine the long-run performance of an organization.
c. Strategic management
33. What is a strategic design for how a company intends to profit from its strategies, work processes, and work activities?
a. business model
34. Studies of the factors that contribute to organizational performance have shown _____________ relationship between strategic planning and performance.
d. a positive
35. Why is strategic management important?
b. It is involved in many of the decisions that managers make.
36. The first __________ steps of the strategic management process describe the planning that must take place.
c. four
37. In the first step of strategic management, the mission of the firm answers the question, ____________
b. What is our reason for being in business?
38. What provides clues to what an organization sees as its purpose?
d. the organization’s mission
39. In the first step of strategic management, identifying the current strategies and goals provides ___________.
a. a basis to determine if the goals need to be changed
40. In analyzing the environment, managers should know ____________.
b. pending legislation that might affect the organization
41. When an organization is analyzing its labor supply, it is studying its ________________.
c. external environment
42. ___________ and ___________ are outcomes from a study of the external environment.
d. Opportunities; threats
43. The third step in strategic management is related to analysis of ____________.
b. the internal environment
44. What are an organization’s financial, physical, human, and intangible assets that are used to develop, manufacture, and deliver products or services to its customers?
a. its resources
45. If a bank estimates the capabilities of its training and development department employees prior to implementing a new training program designed to change their method of providing customer service, it is completing what step in the strategic management process?
c. doing an internal analysis
46. ________________ are the organization’s major value-creating skills, capabilities, and resources that determine the organization’s competitive weapons.
c. Core competencies
47. An example of a core competency of a firm is ___________.
b. communicating with customers in their own languages worldwide
48. Relative to the organization’s culture, a manager must be aware that ___________.
b. the content of a culture has a major effect on the strategies that can be pursued
49. What drawback of a strong organizational culture should a manager consider when completing the strategic management process?
a. It can be more difficult to change.
50. What is a culture that supports the firm’s chosen strategy?
d. a strategically appropriate culture
51. Corporate reputation is an organization’s ________________ resource.
c. intangible
52. The merging of the analyses of internal and external factors influencing the organization’s strategy is known as ____________.
d. SWOT analysis
53. The final step in strategic planning answers the question, ____________
a. How effective have our strategies been?
54. Middle-level managers typically are responsible for _______________ strategies.
a. business
55. ___________ strategy determines what businesses an organization should be in.
d. Corporate
56. When PepsiCo seeks to integrate the strategies of Pepsi, 7-Up International, and Frito-Lay, it is developing what level of business strategy?
d. corporate
57. What are the three main types of corporate strategies?
b. growth, stability, and renewal
58. There are three main types of growth strategies: _____________.
a. concentration, vert or horz integration, and diversification
59. Growth through _______________ is achieved when an organization chooses to grow by increasing its own business operations.
a. concentration
60. In _______________, the organization gains control of its outputs by becoming its own distributor.
d. forward vertical integration
61. When an organization attempts to combine with other organizations in the same industry, the strategy is known as _____________.
b. horizontal integration
62. If United Airlines were to merge with Northwest Airlines, this would be an example of what kind of growth strategy?
a. horizontal integration
63. An organization that is diversifying its product line is exhibiting what type of growth strategy?
c. growth
64. When an organization attempts to combine with other organizations in different, but associated industries, the strategy is known as a _____________ strategy.
d. related diversification
65. When an organization attempts to combine with other organizations in different and disassociated industries, the strategy is known as a(n) _____________ strategy.
a. unrelated diversification
66. A stability strategy is particularly appropriate when ____________.
b. the industry is in a state of rapid upheaval
67. A(n) ___________ strategy addresses organizational weaknesses, helps stabilize operations, and revitalizes organizational resources and capabilities.
d. retrenchment
68. What type of strategy is a renewal strategy for times when the organization’s performance problems are more critical?
b. turnaround
69. In the Boston Consulting Group (BCG) matrix, a business unit that exists in a low anticipated growth rate and a high market share is known as a _________.
a. cash cow
70. In the BCG matrix, a business unit that exists in a high anticipated growth rate and a low market share is known as a __________.
d. question mark
71. In the BCG matrix, a ________ does not consume or produce much cash and holds little or no improved performance.
c. dog
72. Managers should “milk” cash cows for as much as they can, limit any new investment in them, and use the large amounts of cash generated to invest in __________ and __________ .
c. stars; question marks
73. Heavy investment in __________ will help take advantage of the market’s growth and help maintain high market share.
b. stars
74. The __________ should be sold off or liquidated as they have low market share in markets with low growth potential.
d. dogs
75. What can provide a framework for understanding diverse businesses and help managers establish priorities for making resource allocation decisions?
c. a corporate portfolio matrix
76. __________________ strategy determines how an organization should compete in each of its businesses.
a. Business
77. For a small organization in only one line of business, the competitive strategy simply describes ______________.
a. how the company will compete in its main market
78. An organization is said to have ______________ when it has several different businesses that are independent and that formulate their own strategies.
b. strategic business units
79. An example of ________________ is when an organization possesses a characteristic that sets itself apart from competitors and gives the firm a distinctive edge.
d. competitive advantage
80. What company has a competitive advantage in developing and marketing products because it stresses risk taking and innovation?
a. 3M
81. To a degree, an organization’s commitment to quality and continuous improvement can differentiate it from competitors, but constant improvement and reliability of an organization’s products and/or services may result in a competitive advantage that is _________.
b. sustainable
82. What can challenge managers’ attempts at creating a long-term, sustainable competitive advantage?
d. market instabilities
83. Michael Porter proposes that some ____________ are inherently more profitable than others.
b. industries
84. Which of the following is a force in the Porter’s five forces model of industry attractiveness?
c. bargaining power of suppliers
85. Michael Porter’s competitive strategies framework identifies three generic competitive strategies: cost leadership, differentiation, and ___________.
d. focus
86. Cost leadership as a strategy requires a firm to ____________.
a. aggressively search out efficiencies to maintain the lowest cost structure
88. Differentiation as a strategy requires a firm to ___________.
b. be unique in its product offering
89. Practically any successful consumer product or service can be identified as an example of the ________________.
a. differentiation strategy
90. What generic competitive strategy involves a cost advantage or a differentiation advantage in a narrow segment or niche?
b. focus
91. When following the focus strategy, a ____________ can be based on product variety, type of end buyer, distribution channel, or geographic location of buyers.
a. segment
92. A firm that is “stuck in the middle” cannot develop _____________.
a. a cost or differentiation advantage
93. The premise of the rule of three is that _____________.
c. three companies usually dominate the majority of market share
94. Functional-level strategy directly supports ____________.
b. business strategy
95. What is the ability to recognize major external environmental changes, to quickly commit resources, and to recognize when a strategic decision is not working?
a. strategic flexibility
96. How can a company create strategic flexibility?
a. encourage employees to be open about disclosing negative information
97. How can a cost leader use e-business to reduce costs?
d. by using Web-based inventory control systems that reduce storage costs
98. An Internet-based knowledge management system that resulted in shorter customer response times would be one e-business technique that contributes to the competitive advantage of a _____________.
b. differentiator
99. Who targets a narrow market segment with customized products?
c. a focuser
100. What e-business strategy uses both online and traditional stand-alone locations?
b. clicks-and-bricks
101. Customer service strategies involve giving the customers what they want, effective communication, and ____________.
b. providing employees with customer service training
102. Innovation strategies should reflect the organization’s philosophy about innovation, which is shaped by _______________.
c. innovation emphasis and innovation timing
103. Senior managers must decide whether or not the emphasis of their innovation efforts is going to be based upon ____________.
c. process improvement
105. Process development strategies seek to achieve a competitive advantage by _____________.
a. looking for ways to enhance existing work processes
106. The first organization to bring a product or service to market is often referred to as the _____________.
c. first mover
107. What is a strategic advantage of being a first mover?
d. cost and learning benefits
108. What is a strategic disadvantage of being a first mover?
b. risk of competitors imitating innovations

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