Chap006
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Chap006

Course: MAN 3025, Spring 2012

School: University of Florida

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Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design Chapter 06 Strategic Management: How Star Managers Realize a Grand Design True / False Questions 1. Managers must be willing to make large, painful decisions to suddenly alter strategy. True False 2. In a world of rapid and discontinuous change, the ability to please nonmanagerial employees has been called the golden trait among...

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06 Chapter - Strategic Management: How Star Managers Realize a Grand Design Chapter 06 Strategic Management: How Star Managers Realize a Grand Design True / False Questions 1. Managers must be willing to make large, painful decisions to suddenly alter strategy. True False 2. In a world of rapid and discontinuous change, the ability to please nonmanagerial employees has been called the golden trait among managers. True False 3. A business plan is a document with the purpose of outlining a proposed firm's profit and loss statements for its first operating cycle. True False 4. Formal business plans can be dangerous to the survival of new businesses; many who try them fail because of the resources required to write and agree upon the plan. True False 5. A strategy is a large-scale action plan that sets direction for an organization. True False 6. Strategic management is the process of involving select managers from the executive leadership of the organization in the formulation and implementation of strategies and strategic goals. True False 6-1 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 7. An organization should adopt strategic management and strategic planning to encourage new ideas. True False 8. Bad planning is usually a result of top managers' inability to gather enough information. True False 9. Planning is usually a straightjacket for new ideas, since it effectively blocks peripheral vision in favor of a predetermined course. True False 10. A sustainable competitive advantage is the ability of an organization to produce goods or services more effectively than its competitors and outperform them. True False 11. Ford's Sync in-dash communications platform, despite its high level of technology, has been unable to provide the company with a distinct competitive advantage. True False 12. Harvard Business School professor Michael Porter is a leading authority on competitive strategy. True False 13. Strategic conservation attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company. True False 6-2 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 14. Strategic positioning can be achieved by performing similar activities to rivals, but in different ways. True False 15. A strategic position may be based on serving the few needs of a few customers. True False 16. Good strategy allows a company to be everything to everyone. True False 17. Strategic planning is appropriate for large companies, but does not help the performance of small companies. True False 18. Management of a small company in an industry that is not very competitive should not engage in strategic planning because the small gains in performance may not be worth the effort. True False 19. Organizations may turn to the strategic-management process after a crisis. True False 20. The first step of the strategic-management process is to establish the grand strategy. True False 21. The strategic-management process has five steps and a feedback loop. True False 6-3 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 22. A vision will be demoralizing to employees if it describes a future state that appears beyond the reach of the organization. True False 23. Many good mission statements include descriptions of an organization's customers, as well as its major products or services. True False 24. According to Burt Nanus, good vision statements are useful because they help people to consider all interesting elements in their environments. True False 25. A good vision statement should describe a company's major strengths and competitive advantage in its industry. True False 26. A mission statement should be ambitious. True False 27. A comprehensive strategy assesses current organizational performance and then explains how its mission is to be accomplished. True False 28. A defensive strategy is sometimes called retrenchment strategy. True False 6-4 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 29. A development strategy is a grand strategy that involves expansion. True False 30. A continuity strategy is a grand strategy that involves little or no significant change. True False 31. Best Buy plans to keep its prices low and make few changes in the near future, which is an example of a stability strategy. True False 32. A grand strategy can be established by using tools like SWOT analysis and forecasting. True False 33. Strategy formulation is the process of choosing among different strategies and altering them to best fit the organization's needs. True False 34. The starting point in establishing a grand strategy is usually an analysis of Porter's competitive forces. True False 35. Strategy actualization is the term for putting strategic plans into effect. True False 36. A common challenge to strategy implementation is resistance by people within the organization. True False 6-5 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 37. One of the ways to keep a strategic plan on track is to make it very comprehensive, covering as many scenarios for the future as you can. True False 38. Competitive intelligence challenges the brains of employees to make them better equipped to produce novel ideas for business. True False 39. SWOT analysis helps management to develop a realistic understanding of the organization in relation to internal and external environments. True False 40. Obsolete technology and outdated facilities are examples of organizational threats. True False 41. Guthrie Community College has done a SWOT analysis and discovered that the number of college-bound high-school juniors in its state has grown by nearly 20% in the past few years. This is a strength for Guthrie. True False 42. Organizational threats are the environmental factors that hinder an organization's ability to achieve a competitive advantage. True False 43. Forecasting is a strategic-planning tool used to make long-term strategy. True False 6-6 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 44. Two types of forecasting are trend analysis and competitive intelligence. True False 45. Contingency planning is a hypothetical extension of a past series of events into the future. True False 46. Too little or unreliable historical data may result in erroneous trend analyses. True False 47. Contingency planning can also be called scenario planning. True False 48. The use of hedging to manage the cost of aviation fuel is an example of trend analysis. True False 49. In Porter's model for industry analysis, there are three primary competitive forces in a firm's environment. True False 50. Kraft Macaroni & Cheese is now challenged by new competitors such as Annie's and other store brands, which Porter's model for industry analysis calls the threat of new entrants. True False 51. In a cost-leadership strategy, an organization targets a wide market and offers products of services of unique and superior value compared to competitors. True False 6-7 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 52. Luxury carmaker Rolls-Royce has a focused-differentiation strategy. True False 53. A single-product strategy can be described as focused but vulnerable. True False 54. A small florist most likely follows a diversification strategy. True False 55. Burberry makes outerwear, accessories like umbrellas, and children's clothing, which is called a related diversification strategy. True False 56. Synergy is one of the benefits of a single-product strategy. True False 57. General Electric sells lighting products and is also involved in plastics, broadcasting, and financial services. GE uses a related diversification strategy. True False 58. The BCG matrix is a means of evaluating strategic business units on the basis of both their business growth rates and their profitability. True False 59. Cash cows in the BCG matrix have slow growth but high market share. True False 6-8 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 60. Execution is tactical in nature, rather than part of a company's strategy. True False 61. A company must be able to execute three core processes of business including people, products, and administration. True False 62. There are seven leader behaviors that help a manager successfully execute a strategy. True False 63. Managers who execute well insist on realism. True False Multiple Choice Questions 64. A ______ represents an "educated guess" about what must be done in the long term for survival or the prosperity of the organization or its principal parts. A. trend analysis B. mission C. strategy D. forecast E. contingency plan 65. "Find out what customers want, then provide it to them as cheaply and quickly as possible" is Wal-Mart's A. growth plan. B. technical plan. C. synergy. D. strategy. E. forecast. 6-9 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 66. Effective strategic management involves A. only top management. B. only top and middle management. C. only middle and lower management levels. D. only lower management level. E. managers from all parts of the organization. 67. Which of the following would be considered a reason for adopting strategic management and strategic planning? A. To enhance employee loyalty B. To keep corporate taxes at a minimum C. To develop independent work from the staff D. To provide direction and momentum E. To increase market dominance with repeat purchase 68. Which of the following statements about strategic planning and strategic management is true? A. Strategic planning is rarely used because it does not allow for flexibility in changing conditions. B. Strategic management is a process completed by top managers. C. Both can be used to develop a sustainable competitive advantage. D. Middle managers need not understand strategies; they simply follow them. E. Strategic planning is used to accomplish tactical goals. 69. Which of the following is NOT a typical cause of bad planning? A. Information overload B. Inadequate planning budgets C. Ineffective group dynamics D. Poor assessment of an organization's capabilities E. Faulty assumptions about the future 6-10 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 70. Which of the following is NOT an area in which a company needs to get and stay ahead in order to sustain a competitive advantage? A. Talented employees B. Quality C. Effectiveness D. Being responsive to customers E. Innovating 71. __________ means performing different activities from rivals or performing similar ones in different ways. A. Competitive planning B. Distinctive positioning C. Collaborative planning D. Strategic segmentation E. Strategic positioning 72. Which of the following statements about strategy and strategic positioning is FALSE? A. Many customers with broad needs can be a source of strategic position. B. A company has to choose not only what strategy to follow but what strategy not to follow. C. Few customers with broad needs can be a source of strategic position. D. Strategy involves creating a "fit" among activities. E. Few customers with narrow needs can be a source of strategic position. 73. Consumers can use a national company called Service Magic to receive bids from quality providers of a variety of services, including home remodel, landscaping, plumbing and housecleaning. Which of the following is the source of Service Magic's strategic position? A. Low profit margin and many customers B. Broad needs and few customers C. Broad needs and many customers D. High profit margin and many customers E. High profit margin and few customers 6-11 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 74. JT runs a small bakery on the main street of a resort town. Though his was the only bakery around, the business had been suffering in the recent recession and he was contemplating whether he should attempt strategic planning. JT should be aware of what research finding regarding strategic planning? A. Only large firms show performance gains from strategic planning. B. Only small firms show performance gains from strategic planning. C. Performance gains from strategic planning are equal among small and large firms. D. Both small and large firms benefit from strategic planning, but small firms get a larger boost in performance. E. Both small and large firms benefit from strategic planning, but the small improvement in performance may not be worth the effort for small firms. 75. According to the text, a small firm is likely to benefit significantly from strategic planning A. regardless of the nature of its industry or market. B. when it is in a very competitive industry. C. when it is in a very new industry. D. when it is in a very stable industry. E. when it has a very small market. 76. Zach manages a small bike repair store. In order to determine if strategic planning will be likely to help his business, Zach should primarily assess A. how many competitors he has. B. foot traffic by his location. C. his profitability in the prior six months. D. industry trends. E. how much he intends to grow in the next five years. 77. Which of the following steps of the strategic-management process is the source of its feedback loop? A. Carry out the strategic plan B. Maintain strategic control C. Establish the grand strategy D. Establish the mission and vision E. Formulate the strategic plans 6-12 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 78. Which of the following is NOT a stage in the strategic-management process? A. Conduct a trend analysis B. Maintain strategic control C. Establish the grand strategy D. Establish the mission and vision E. Carry out the strategic plans 79. Which of the following should be included in a good vision statement? A. Firm's attitude toward its employees. B. Geographical areas in which the firm will compete. C. Firm's basic technology. D. Firm's standards of excellence and high ideals. E. Firm's major products or services. 80. Which of the following is a question that should be answered by a company's mission statement? A. Does it inspire enthusiasm and encourage commitment? B. Does it set standards of excellence? C. Is it appropriate for the organization? D. Is it well articulated? E. Who is our customer? 81. The common grand strategies are A. star, question mark, cash cow, and dog. B. cost-leadership, differentiation, cost focus, and focused differentiation. C. growth, stability, and defensive. D. strengths, weaknesses, opportunities, and threats. E. defender, prospector, analyzer, and reactor. 6-13 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 82. Techno Tools is selling off land, buildings and some of its product inventory. This is a variation of which of these grand strategies? A. Right-size B. Growth C. Stability D. Defensive E. Reorganization 83. American Auto Parts recently acquired two smaller auto parts companies in the Southwest to gain a national presence. American Auto Parts is pursuing a(n) ______ strategy. A. escalation B. growth C. stability D. merger E. defensive 84. Rocky Mountain Ski and Snowboard is a small shop that provides ski equipment for Rocky Mountain skiers. It has decided to increase advertising in the Denver Post and the Vail Voice as well as sponsor one of the mountain competitions. It is following which strategy? A. Inducement B. Defensive C. Growth D. Stability E. Enhancement 85. Jabra has been running a commercial real estate business for nearly thirty years. As he approaches retirement, he is content to simply lease the commercial space he currently has, rather than make new deals to develop additional properties. Jabra is using which grand strategy? A. Stability B. Retrenchment C. Inducement D. Defensive E. Growth 6-14 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 86. A strategy that involves reduction in the organization's efforts is the ______ strategy. A. retrenchment B. reorganization C. downsize D. growth E. stability 87. A luxury cruise line was struggling with heavy debt and a sharp decline in customers, and it eventually declared bankruptcy. Which of the following strategies has the company followed? A. Growth B. Stability C. Defensive D. Reduction E. Reactive 88. Lane Office Products phased out its line of typewriters several years ago as part of its ______ strategy. A. growth B. stability C. defensive D. reorganization E. reactor 89. The process of choosing among different strategies and altering them to best fit the organization is called A. strategy formulation. B. contingency planning. C. strategic control. D. strategy implementation. E. trend analysis. 6-15 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 90. Actively selling strategic plans to middle and supervisory managers, rather than just announcing them, is helpful for A. situation analysis. B. strategy formulation. C. strategy implementation. D. contingency planning. E. strategic control. 91. ______ consists of monitoring the execution of strategy and making adjustments, if necessary. A. Mission translation B. Strategic control C. Strategy implementation D. Contingency planning E. SWOT analysis 92. Which of the following is NOT one of Bryan Barry's recommendations to keep a strategic plan on track? A. Keep moving. B. Engage people. C. Don't second guess. D. Keep it simple. E. Stay focused. 93. Gaining information about one's competitors' activities so that you can anticipate their moves and react appropriately is called A. SWOT analysis. B. forecasting model. C. contingency plan. D. trend analysis. E. competitive intelligence. 6-16 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 94. Which of the following is NOT a likely source of information for competitive intelligence? A. Competitors' press releases B. Industry gossip C. Competitors' annual reports D. Competitor's customer records E. Field visits to customers 95. Andy is interested in learning more about what one of his competitors is doing so that he can anticipate its upcoming moves and react quickly. Which of the following would you suggest to him for this purpose? A. Go through the competitor's trash on its property B. Pose as an applicant for a job with the competitor C. Use investor information D. Call the competitor, explain who you are, and ask directly E. Pay the competitor's customers for information 96. Careful monitoring of an organization's internal and external environment to detect early signs of opportunities and threats that may influence the firm's plans is called A. competitive intelligence. B. forecasting. C. contingency planning. D. trend analysis. E. environmental scanning. 97. A situational analysis is also known as A. strategic control. B. SWOT analysis. C. trend analysis. D. contingency planning. E. forecasting. 6-17 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 98. When analyzing the "S" in a SWOT analysis, a manager might take note of A. a decrease in the size of the market. B. competitors' actions. C. high turnover of employees. D. strong financial resources of the firm. E. governmental actions. 99. When analyzing the "W" in SWOT analysis, a manager might take note of A. a decrease in the size of the market. B. competitors' actions. C. high turnover of employees. D. good financial resources of the firm. E. governmental actions. 100. When analyzing the "O" in SWOT analysis, a manager might take note of A. favorable government regulations. B. absenteeism among employees. C. good morale among workers. D. high service levels. E. good financial position. 101. When analyzing the "T" in SWOT analysis, a manager might take note of A. the firm's assets. B. a competitor's new product. C. employee absenteeism. D. strong corporate culture. E. high service levels. 6-18 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 102. Analysis of changing demographics of the population would be part of the assessment of a company's A. strengths. B. weaknesses. C. opportunities. D. threats. E. opportunities or threats depending on the outcome of the analysis. 103. A manager assessing the organization's access to capital is involved in analysis of A. strengths. B. weaknesses. C. opportunities. D. threats. E. strengths or weaknesses depending on the outcome of the assessment. 104. Karen has just completed an assessment that indicates that her employees lack technological expertise to produce a new product line. She has discovered one of her firm's A. strengths. B. weaknesses. C. opportunities. D. threats. E. market challenges. 105. Environmental factors that the organization may exploit for a competitive advantage are known as A. organizational strengths. B. organizational opportunities. C. organizational threats. D. organizational weaknesses. E. competitive strategies. 6-19 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 106. The skills and capabilities that give the organization advantages in executing strategies in pursuit of its mission are known as A. organizational strengths. B. organizational opportunities. C. organizational threats. D. organizational weaknesses. E. competitive strategies. 107. Emily has prepared a report that details how prices for several of the raw materials her firm uses in production have risen up to 30% in the last year. Her report would be an input into the __________ part of a SWOT analysis. A. strengths B. weaknesses C. opportunities D. threats E. structure 108. A vision or projection of the future is called a(n) A. trend. B. forecast. C. contingency. D. strategy. E. opportunity. 109. A time series forecast, which is used to predict long-term trends, cyclic patterns and seasonal variations, is one type of A. organizational strength. B. contingency planning. C. trend analysis. D. balancing the scorecard. E. strategy formulation. 6-20 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 110. Creation of alternative hypothetical but equally likely future conditions is called A. contingency planning. B. trend analysis. C. balancing the scorecard. D. strategy formulation. E. forecasting. 111. Which of the following is NOT one of the forces that affects industry competition, according to Porter's model for industry analysis? A. Threats of new entrants B. Threats of substitute products and services C. Bargaining power of buyers D. Threats of government interference E. Bargaining power of suppliers 112. Oil companies must be aware of other firms' development of ethanol products since this is an example of which one force in Porter's model for industry analysis? A. Bargaining power of buyers B. Rivalry among competitors C. Bargaining power of suppliers D. Threats of new entrants E. Threats of substitute products and services 113. Porter's competitive strategies include A. prospector, defender, analyzer, and reactor. B. growth, stability, and retrenchment. C. cost leadership, differentiation, cost focus, and focused differentiation. D. strengths, weaknesses, opportunities, and threats. E. stars, questions marks, cash cows, and dogs. 6-21 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 114. An organization is developing a low cost line of environmentally friendly cleaning products that it intends to distribute internationally. Here, the organization is following a ______ strategy. A. cost leadership B. differentiation C. cost focus D. retrenchment E. focused-differentiation 115. An organization that is offering unique, superior products or services to a wide market is pursuing a strategy of A. cost leadership. B. differentiation. C. cost focus. D. diversification. E. focused-differentiation. 116. An example of a firm that pursues a differentiation strategy is A. Cartier. B. Bic. C. Lexus. D. San Francisco Bay Area discount gas station chain. E. Rolls Royce. 117. Timex Watch makes inexpensive but reliable watches sold throughout the U.S. and is an example of an organization pursuing a _________ strategy. A. cost leadership B. differentiation C. cost focus D. focused-differentiation E. retrenchment 6-22 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 118. An organization that keeps costs and prices low in targeting a narrow market is pursuing a strategy of A. cost leadership. B. differentiation. C. cost focus. D. stability. E. focused-differentiation. 119. An organization that offers unique, superior products or services to a narrow market is pursuing a strategy of A. cost leadership. B. differentiation. C. cost focus. D. diversification. E. focused-differentiation. 120. Which of the following carmakers pursues a focused-differentiation strategy? A. Ferrari B. Ford C. Volkswagen D. Honda E. Kia 121. The benefit of the single-product company is A. synergy. B. focus. C. isolated systems. D. differentiation. E. lower costs. 6-23 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 122. Time Warner runs different divisions specializing in television, music, and publishing. Time Warner is using a(n) ______ strategy. A. stability B. defensive C. diversification D. differentiation E. infiltration 123. Which of the following is most likely to use a diversification strategy? A. A tax preparation business B. A flower shop C. A lawn service D. A grocery store E. A shoe store 124. __________ refers to the idea that the economic value of separate, related businesses under one ownership and management is greater together than the businesses are worth separately. A. Structural benefit B. Synergy C. Selective function D. Alignment E. Interaction 125. Which of the following strategy tools suggests that an organization will do better in fastgrowing markets in which it has a high market share rather than in slow-growing markets in which it has a low market share? A. SWOT analysis B. Porter's model for industry analysis C. Porter's competitive strategies D. The BCG matrix E. Trend analysis 6-24 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 126. Adriana is assessing her company's portfolio of products. One of them is the best-selling brand of mouthwash, although this is now a slow growing market. If Adriana uses the BCG matrix, she would classify this product as a A. star. B. cloud. C. question mark. D. cash cow. E. dog. 127. Amazon's Kindle has a very high percentage of the market for eBook readers, and this is also a quickly growing market. Thus, using the BCG matrix, the Kindle would be classified as a A. star. B. cloud. C. question mark. D. cash cow. E. dog. 128. According to Bossidy and Charan, effective ______ requires managers to build a foundation for it within three core process: people, strategy, and operations. A. tactics B. strategy C. follow-through D. execution E. operations 129. According to Bossidy and Charan, which business process is most important for effective execution? A. Strategy B. People C. Alignment D. Operations E. Research 6-25 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 130. A recent survey found that the top concern among CEOs worldwide is A. profit growth. B. customer loyalty. C. excellence in execution. D. stimulating innovation. E. finding qualified employees. 131. Which of the following is NOT a question that Bossidy and Charan believe a strong strategic plan must address? A. How will the company handle their social responsibility? B. What is the assessment of the external environment? C. Who is the competition? D. Can the business execute the strategy? E. Are the short term and long term balanced? 132. Which of the following is NOT a behavior of a leader who executes? A. Set clear priorities B. Insist on realism C. Follow through D. Know yourself E. Understand employee limitations 133. Bossidy and Charan believe that to excel at execution, a leader should A. be hands-off once the strategy is set. B. micromanage the tactics. C. empower employees to take over the execution. D. probe for weaknesses in the substance and details. E. let the plan run its course before attempting to revise it. 6-26 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design Essay Questions 134. Define strategic positioning. Explain the three principles that underlie strategic positioning. 135. Describe the strategic management process. Explain what the "feedback loop" is and why it is important. 136. Name the three common grand strategies, and provide an example of how a company might use each. 137. Explain strategy implementation, including the role of resistance. 6-27 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 138. Define competitive intelligence and explain how you might go about obtaining it legally. 139. What are the fundamental differences in examining internal and external environments when conducting a situation analysis? 140. Give examples of what managers might look at in performing each element of a SWOT analysis. 141. Define forecasting and discuss its importance. Describe the two types of forecasting described in the text. 6-28 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 142. Describe what determines competitiveness within a particular industry using Porter's model for industry analysis. Provide an example for at least three of the five forces in the model. 143. Describe Porter's four competitive strategies and explain how they differ from each other. Provide an example of a firm that might use each. 144. Explain the positive and negative aspects of pursuing a single-product strategy versus a diversification one. Provide an example of a company that uses each type of strategy. 145. Explain the three core processes of business and how they relate to execution. 6-29 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 146. List at least five of the seven essential types of leader behaviors that are needed to fuel the engine of execution. 6-30 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design Chapter 06 Strategic Management: How Star Managers Realize a Grand Design Answer Key True / False Questions 1. (p. 163) Managers must be willing to make large, painful decisions to suddenly alter strategy. TRUE One of the lessons of successful managers is that they must be willing to make large, painful decisions to suddenly alter strategy. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 6-31 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 2. (p. 163) In a world of rapid and discontinuous change, the ability to please nonmanagerial employees has been called the golden trait among managers. FALSE Because of fast-spreading world conditions, such as the threat of products becoming commodities, rapidly increasing productivity, and global overcapacity, managers must be able to make difficult decisions. The writer Geoffrey Colvin puts it as, "The future will demand ever more people with the golden trait, the fortitude to accept and even seek psychic pain." AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 3. (p. 164) A business plan is a document with the purpose of outlining a proposed firm's profit and loss statements for its first operating cycle. FALSE A business plan is a document that outlines a proposed firm's goals, the strategy for achieving them, and the standards for measuring success. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 4. (p. 164) Formal business plans can be dangerous to the survival of new businesses; many who try them fail because of the resources required to write and agree upon the plan. FALSE Evidence suggests that firms with formal business plans are more apt to survive. For example research examined 396 entrepreneurs in Sweden and found that a greater number of firms that failed never had a formal business plan. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 6-32 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 5. (p. 165) A strategy is a large-scale action plan that sets direction for an organization. TRUE A strategy is a large-scale action plan that sets the direction for an organization. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 6. (p. 165) Strategic management is the process of involving select managers from the executive leadership of the organization in the formulation and implementation of strategies and strategic goals. FALSE Strategic management is a process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 7. (p. 165) An organization should adopt strategic management and strategic planning to encourage new ideas. TRUE An organization should adopt strategic management and strategic planning for three reasons: They can (1) provide direction and momentum, (2) encourage new ideas, and above all (3) develop a sustainable competitive advantage. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 6-33 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 8. (p. 166) Bad planning is usually a result of top managers' inability to gather enough information. FALSE Bad planning usually results from faulty assumptions about the future, poor assessment of an organization's capabilities, ineffective group dynamics, and information overload. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 9. (p. 166) Planning is usually a straightjacket for new ideas, since it effectively blocks peripheral vision in favor of a predetermined course. FALSE Some people object that planning can foster rigidity, that it creates blinders that block out peripheral vision and reduces creative thinking and action. Actually, far from being a straitjacket for new ideas, strategic planning can help encourage them by stressing the importance of innovation in achieving long-range success. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 10. (p. 167) A sustainable competitive advantage is the ability of an organization to produce goods or services more effectively than its competitors and outperform them. TRUE A sustainable competitive advantage is the ability of an organization to produce goods or services more effectively than its competitors do, thereby outperforming them. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 6-34 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 11. (p. 167) Ford's Sync in-dash communications platform, despite its high level of technology, has been unable to provide the company with a distinct competitive advantage. FALSE "Right now (using Sync)," says an automotive analyst, "Ford has redefined this market, and it has made it very difficult for anybody to enter the space and compete."In other words, Sync is a distinct competitive advantage for the car company. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 12. (p. 167) Harvard Business School professor Michael Porter is a leading authority on competitive strategy. TRUE Certainly Michael Porter's status as a leading authority on competitive strategy is unchallenged. The Strategic Management Society, for instance, voted him the most influential living strategist. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 13. (p. 168) Strategic conservation attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company. FALSE Strategic positioning attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 6-35 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 14. (p. 168) Strategic positioning can be achieved by performing similar activities to rivals, but in different ways. TRUE Strategic positioning means performing different activities from rivals, or performing similar activities in different ways. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 15. (p. 168) A strategic position may be based on serving the few needs of a few customers. FALSE Strategic position emerges from three sources: Few needs and many customers, broad needs and few customers, and lastly, broad needs and many customers. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 16. (p. 168) Good strategy allows a company to be everything to everyone. FALSE Strategy requires trade-offs in competing. Some strategies are incompatible. Thus a company has to choose not only what strategy to follow but what strategy not to follow. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 6-36 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 17. (p. 168) Strategic planning is appropriate for large companies, but does not help the performance of small companies. FALSE One analysis of several studies found that strategic planning was appropriate not just for large firmscompanies with fewer than 100 employees could benefit as well, although the improvement in financial performance was small. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 18. (p. 168) Management of a small company in an industry that is not very competitive should not engage in strategic planning because the small gains in performance may not be worth the effort. TRUE Research results indicate that for small companies strategic planning is probably not worth the effort unless the company is in a highly competitive industry where small differences in performance may affect the firm's survival potential. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 19. (p. 169) Organizations may turn to the strategic-management process after a crisis. TRUE When is a good time to begin the strategic-management process? Often it's touched off by some crisis, such as the one facing Toyota recently regarding uncontrolled acceleration problems in its automobiles. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 6-37 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 20. (p. 170) The first step of the strategic-management process is to establish the grand strategy. FALSE The first step of the strategic-management process is to establish the mission and the vision. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 21. (p. 170) The strategic-management process has five steps and a feedback loop. TRUE The strategic-management process has five steps, plus a feedback loop (see Figure 6.1). AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 22. (p. 171) A vision will be demoralizing to employees if it describes a future state that appears beyond the reach of the organization. FALSE A vision should be positive and inspiring, and it should stretch the organization and its employees to achieve a desired future state that appears beyond its reach. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 6-38 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 23. (p. 171) Many good mission statements include descriptions of an organization's customers, as well as its major products or services. TRUE Mission statements may include information about customers and products or services. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 24. (p. 171) According to Burt Nanus, good vision statements are useful because they help people to consider all interesting elements in their environments. FALSE Burt Nanus says that good vision statements prevent people from being overwhelmed by immediate problems because they help distinguish what is truly important from what is merely interesting. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 25. (p. 171) A good vision statement should describe a company's major strengths and competitive advantage in its industry. FALSE Descriptions of major strengths and competitive advantage should be included in a mission statement. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 6-39 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 26. (p. 171) A mission statement should be ambitious. FALSE Good vision statements are typically ambitious. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 27. (p. 171) A comprehensive strategy assesses current organizational performance and then explains how its mission is to be accomplished. FALSE A grand strategy, after an assessment of current organizational performance, explains how the organization's mission is to be accomplished. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 28. (p. 172) A defensive strategy is sometimes called retrenchment strategy. TRUE A defensive strategy or a retrenchment strategy, is a grand strategy that involves reduction in the organization's efforts. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 6-40 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 29. (p. 172) A development strategy is a grand strategy that involves expansion. FALSE A growth strategy is a grand strategy that involves expansionas in sales revenues, market share, number of employees, or number of customers or (for nonprofits) clients served. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 30. (p. 172) A continuity strategy is a grand strategy that involves little or no significant change. FALSE A stability strategy is a grand strategy that involves little or no significant change. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 31. (p. 172) Best Buy plans to keep its prices low and make few changes in the near future, which is an example of a stability strategy. TRUE An example of a stability strategy is Best Buy, which had strong revenues in 2009. So it plans to continue the same strategy in the near future, such as keeping prices low and revamping selling space to better show off the latest electronic gadgets. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 6-41 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 32. (p. 173) A grand strategy can be established by using tools like SWOT analysis and forecasting. TRUE Among the strategic-planning tools and techniques used to establish a grand strategy are (1) SWOT analysis and (2) forecasting. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 33. (p. 173) Strategy formulation is the process of choosing among different strategies and altering them to best fit the organization's needs. TRUE Strategy formulation is the process of choosing among different strategies and altering them to best fit the organization's needs. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 34. (p. 173) The starting point in establishing a grand strategy is usually an analysis of Porter's competitive forces. FALSE Among the techniques used in strategy formulation, rather than a grand strategy, is Porter's competitive forces and strategies. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 6-42 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 35. (p. 173) Strategy actualization is the term for putting strategic plans into effect. FALSE Putting strategic plans into effect is strategy implementation. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 36. (p. 173) A common challenge to strategy implementation is resistance by people within the organization. TRUE Often implementation means overcoming resistance by people who feel the plans threaten their influence or livelihood. This is particularly the case when the plans must be implemented rapidly, since delay is the easiest kind of resistance there is. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 37. (p. 173) One of the ways to keep a strategic plan on track is to make it very comprehensive, covering as many scenarios for the future as you can. FALSE To keep a strategic plan on track, you need to engage people, keep it simple, stay focused, and keep moving toward your vision of the future. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 6-43 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 38. (p. 174) Competitive intelligence challenges the brains of employees to make them better equipped to produce novel ideas for business. FALSE Practicing competitive intelligence means gaining information about one's competitors' activities so that you can anticipate their moves and react appropriately. If you are a manager, one of your worst nightmares is that a competitor will surprise you with a service or product. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 39. (p. 174-175) SWOT analysis helps management to develop a realistic understanding of the organization in relation to internal and external environments. TRUE SWOT analysis should provide a realistic understanding of the organization in relation to its internal and external environments so you can better formulate strategy in pursuit of the firm's mission. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 40. (p. 176) Obsolete technology and outdated facilities are examples of organizational threats. FALSE Does your organization have obsolete technology? outdated facilities? a shaky marketing operation? These are examples of organizational weaknessesthe drawbacks that hinder an organization in executing strategies in pursuit of its mission. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 6-44 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 41. (p. 176) Guthrie Community College has done a SWOT analysis and discovered that the number of college-bound high-school juniors in its state has grown by nearly 20% in the past few years. This is a strength for Guthrie. FALSE The increased number of college-bound high-school juniors represents an opportunity for Guthrie because it is an environmental factor that the organization may exploit for competitive advantage. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 42. (p. 176) Organizational threats are the environmental factors that hinder an organization's ability to achieve a competitive advantage. TRUE Organizational threats are environmental factors that hinder an organization's achieving a competitive advantage. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 43. (p. 177) Forecasting is a strategic-planning tool used to make long-term strategy. TRUE Once they've analyzed their organization's Strengths, Weaknesses, Opportunities, and Threats, planners need to do forecasting for making long-term strategy. A forecast is a vision or projection of the future. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 6-45 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 44. (p. 177) Two types of forecasting are trend analysis and competitive intelligence. FALSE Two types of forecasting are trend analysis and contingency planning. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 45. (p. 177) Contingency planning is a hypothetical extension of a past series of events into the future. FALSE A trend analysis is a hypothetical extension of a past series of events into the future. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 46. (p. 177) Too little or unreliable historical data may result in erroneous trend analyses. TRUE The basic assumption of a trend analysis is that the picture of the present can be projected into the future. This is not a bad assumption, if you have enough historical data, but it is always subject to surprises. And if your data are unreliable, they will produce erroneous trend projections. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 6-46 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 47. (p. 177) Contingency planning can also be called scenario planning. TRUE Contingency planningalso known as scenario planning and scenario analysisis the creation of alternative hypothetical but equally likely future conditions. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 48. (p. 178) The use of hedging to manage the cost of aviation fuel is an example of trend analysis. FALSE In the past several years, Southwest Airlines has been able to effectively use hedging to hold down its costs for aviation fuel. This is an example of contingency planning. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 49. (p. 179) In Porter's model for industry analysis, there are three primary competitive forces in a firm's environment. FALSE Strategic-management expert Michael Porter suggested in his Porter's model for industry analysis that business-level strategies originate in five primary competitive forces in the firm's environment: (1) threats of new entrants, (2) bargaining power of suppliers, (3) bargaining power of buyers, (4) threats of substitute products or services, and (5) rivalry among competitors. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 6-47 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 50. (p. 179) Kraft Macaroni & Cheese is now challenged by new competitors such as Annie's and other store brands, which Porter's model for industry analysis calls the threat of new entrants. TRUE New competitors can take away customers from existing organizations, which is called the threat of new entrants in the model. Example: Kraft Macaroni & Cheese is a venerable, wellknown brand but is threatened from the low end by store brands, such as Walmart's brand, and from the high end by Annie's Creamy Macaroni and Cheese with Real Aged Wisconsin Cheddar. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 51. (p. 180) In a cost-leadership strategy, an organization targets a wide market and offers products of services of unique and superior value compared to competitors. FALSE The cost-leadership strategy is to keep the costs, and hence prices, of a product or service below those of competitors and to target a wide market. The differentiation strategy is to offer products or services that are of unique and superior value compared with those of competitors but to target a wide market. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 6-48 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 52. (p. 181) Luxury carmaker Rolls-Royce has a focused-differentiation strategy. TRUE The focused-differentiation strategy is to offer products or services that are of unique and superior value compared to those of competitors and to target a narrow market. Some luxury cars are so expensiveRolls-Royce, Ferrari, Lamborghinithat only a few car buyers can afford them. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 53. (p. 181-182) A single-product strategy can be described as focused but vulnerable. TRUE In a single-product strategy, a company makes and sells only one product within its market. This allows you to focus your manufacturing and marketing efforts just on that product. The risk, of course, is that you are vulnerable if a rival gets the jump on you, or if an act of God intervenes (for a florist, roses suffer a blight right before Mother's Day), and your entire business may go under. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 6-49 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 54. (p. 181) A small florist most likely follows a diversification strategy. FALSE A single-product strategy is followed by the small florist who sells only one product within its market. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 55. (p. 182) Burberry makes outerwear, accessories like umbrellas, and children's clothing, which is called a related diversification strategy. TRUE An example of a related diversification strategy is the famous British raincoat maker Burberry. It started by making and marketing outerwear clothing but since then has expanded into related business lines, including accessories such as umbrellas, children's clothing, and even fragrances, which it sells in its own stores. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 56. (p. 183) Synergy is one of the benefits of a single-product strategy. FALSE Synergy is characteristic of a related diversification strategy. The concept of synergy is that the economic value of separate, related businesses under one ownership and management is greater together than the businesses are worth separately. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 6-50 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 57. (p. 182) General Electric sells lighting products and is also involved in plastics, broadcasting, and financial services. GE uses a related diversification strategy. FALSE Unrelated diversification means operating several businesses under one ownership that are not related to one another. GE, which began by making lighting products, diversified into such unrelated areas as plastics, broadcasting, and financial services. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 58. (p. 182) The BCG matrix is a means of evaluating strategic business units on the basis of both their business growth rates and their profitability. FALSE The BCG matrix is a means of evaluating strategic business units on the basis of (1) their business growth rates and (2) their share of the market. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 59. (p. 183) Cash cows in the BCG matrix have slow growth but high market share. TRUE Cash cows in the BCG matrix have slow growth but high market share, and income from them finances stars and question marks. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 6-51 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 60. (p. 184) Execution is tactical in nature, rather than part of a company's strategy. FALSE Execution is not simply tactics; it is a central part of any company's strategy. It consists of using questioning, analysis, and follow-through to mesh strategy with reality, align people with goals, and achieve results promised. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-05 How does effective execution help managers during the strategic-management process? Topic: Implementing & Controlling Strategy: Execution 61. (p. 184) A company must be able to execute three core processes of business including people, products, and administration. FALSE A company's overall ability to execute is a function of effectively executing according to three processes: people, strategy, and operations. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-05 How does effective execution help managers during the strategic-management process? Topic: Implementing & Controlling Strategy: Execution 62. (p. 185) There are seven leader behaviors that help a manager successfully execute a strategy. TRUE Bossidy and Charan propose that there are seven essential types of leader behaviors that are needed to fuel the engine of execution. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-05 How does effective execution help managers during the strategic-management process? Topic: Implementing & Controlling Strategy: Execution 6-52 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 63. (p. 186) Managers who execute well insist on realism. TRUE Insisting on realism is one of the seven leader behaviors Bossidy and Charan say are needed to fuel the engine of execution. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-05 How does effective execution help managers during the strategic-management process? Topic: Implementing & Controlling Strategy: Execution Multiple Choice Questions 64. (p. 165) A ______ represents an "educated guess" about what must be done in the long term for survival or the prosperity of the organization or its principal parts. A. trend analysis B. mission C. strategy D. forecast E. contingency plan A is strategy a large-scale action plan that sets the direction for an organization. It represents an "educated guess" about what must be done in the long term for the survival or the prosperity of the organization or its principal parts. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 6-53 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 65. (p. 165) "Find out what customers want, then provide it to them as cheaply and quickly as possible" is Wal-Mart's A. growth plan. B. technical plan. C. synergy. D. strategy. E. forecast. A strategy is a large-scale action plan that sets the direction for an organization. An example is "Find out what customers want, then provide it to them as cheaply and quickly as possible", the strategy of Wal-Mart. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 66. (p. 165) Effective strategic management involves A. only top management. B. only top and middle management. C. only middle and lower management levels. D. only lower management level. E. managers from all parts of the organization. Strategic management is a process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals. Precisely because middle and first-line managers are the ones who will be asked to understand and implement the strategies, they should also help to formulate them. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 6-54 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 67. (p. 165) Which of the following would be considered a reason for adopting strategic management and strategic planning? A. To enhance employee loyalty B. To keep corporate taxes at a minimum C. To develop independent work from the staff D. To provide direction and momentum E. To increase market dominance with repeat purchase There are three reasons why an organization should adopt strategic management and strategic planning: (1) to provide direction and momentum, (2) to encourage new ideas, and above all (3) to develop a sustainable competitive advantage. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 68. (p. 165) Which of the following statements about strategic planning and strategic management is true? A. Strategic planning is rarely used because it does not allow for flexibility in changing conditions. B. Strategic management is a process completed by top managers. C. Both can be used to develop a sustainable competitive advantage. D. Middle managers need not understand strategies; they simply follow them. E. Strategic planning is used to accomplish tactical goals. There are three reasons why an organization should adopt strategic management and strategic planning: (1) to provide direction and momentum, (2) to encourage new ideas, and above all (3) to develop a sustainable competitive advantage. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 6-55 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 69. (p. 166) Which of the following is NOT a typical cause of bad planning? A. Information overload B. Inadequate planning budgets C. Ineffective group dynamics D. Poor assessment of an organization's capabilities E. Faulty assumptions about the future Bad planning usually results from faulty assumptions about the future, poor assessment of an organization's capabilities, ineffective group dynamics, and information overload. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 70. (p. 167) Which of the following is NOT an area in which a company needs to get and stay ahead in order to sustain a competitive advantage? A. Talented employees B. Quality C. Effectiveness D. Being responsive to customers E. Innovating Sustainable competitive advantage occurs when an organization is able to get and stay ahead in four areas: (1) in being responsive to customers, (2) in innovating, (3) in quality, and (4) in effectiveness. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 6-56 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 71. (p. 168) __________ means performing different activities from rivals or performing similar ones in different ways. A. Competitive planning B. Distinctive positioning C. Collaborative planning D. Strategic segmentation E. Strategic positioning According to Porter, strategic positioning attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company. "It means," he says, "performing different activities from rivals, or performing similar activities in different ways." AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 72. (p. 168) Which of the following statements about strategy and strategic positioning is FALSE? A. Many customers with broad needs can be a source of strategic position. B. A company has to choose not only what strategy to follow but what strategy not to follow. C. Few customers with broad needs can be a source of strategic position. D. Strategy involves creating a "fit" among activities. E. Few customers with narrow needs can be a source of strategic position. Three key principles underlie strategic positioning: (1) strategy is the creation of a unique and valuable position which emerges from three sources (few needs and many customers, broad needs and few customers, broad needs and many customers). (2) Strategy requires trade-offs in competing; a company has to choose not only what strategy to follow but what strategy not to follow. (3) Strategy involves creating a "fit" among activities. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 6-57 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 73. (p. 168) Consumers can use a national company called Service Magic to receive bids from quality providers of a variety of services, including home remodel, landscaping, plumbing and housecleaning. Which of the following is the source of Service Magic's strategic position? A. Low profit margin and many customers B. Broad needs and few customers C. Broad needs and many customers D. High profit margin and many customers E. High profit margin and few customers According to Porter, strategic positioning attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company. "It means," he says, "performing different activities from rivals, or performing similar activities in different ways." AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 6-58 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 74. (p. 168) JT runs a small bakery on the main street of a resort town. Though his was the only bakery around, the business had been suffering in the recent recession and he was contemplating whether he should attempt strategic planning. JT should be aware of what research finding regarding strategic planning? A. Only large firms show performance gains from strategic planning. B. Only small firms show performance gains from strategic planning. C. Performance gains from strategic planning are equal among small and large firms. D. Both small and large firms benefit from strategic planning, but small firms get a larger boost in performance. E. Both small and large firms benefit from strategic planning, but the small improvement in performance may not be worth the effort for small firms. One analysis of several studies found that strategic planning was appropriate not just for large firmscompanies with fewer than 100 employees could benefit as well, although the improvement in financial performance was small. Nevertheless, the researchers concluded, "it may be that the small improvement in performance is not worth the effort involved in strategic planning unless a firm is in a very competitive industry where small differences in performance may affect the firm's survival potential." AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 75. (p. 168) According to the text, a small firm is likely to benefit significantly from strategic planning A. regardless of the nature of its industry or market. B. when it is in a very competitive industry. C. when it is in a very new industry. D. when it is in a very stable industry. E. when it has a very small market. Researchers conclude that "it may be that the small improvement in performance is not worth the effort involved in strategic planning unless a firm is in a very competitive industry where small differences in performance may affect the firm's survival potential." AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 6-59 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 76. (p. 168) Zach manages a small bike repair store. In order to determine if strategic planning will be likely to help his business, Zach should primarily assess A. how many competitors he has. B. foot traffic by his location. C. his profitability in the prior six months. D. industry trends. E. how much he intends to grow in the next five years. Strategic planning is not likely to result in a significant improvement unless Zach is in a highly competitive industry. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 77. (p. 170) Which of the following steps of the strategic-management process is the source of its feedback loop? A. Carry out the strategic plan B. Maintain strategic control C. Establish the grand strategy D. Establish the mission and vision E. Formulate the strategic plans The feedback loop, which provides as opportunity to revise actions, originates at the final step of the strategic-management process, to maintain strategic control (see Figure 6.1). AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 6-60 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 78. (p. 170) Which of the following is NOT a stage in the strategic-management process? A. Conduct a trend analysis B. Maintain strategic control C. Establish the grand strategy D. Establish the mission and vision E. Carry out the strategic plans The steps of the strategic-management process are establishing the mission and vision, establishing the grand strategy, formulating the strategic plans, carrying out the strategic plans and maintaining strategic control (see Figure 6.1). AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 79. (p. 171) Which of the following should be included in a good vision statement? A. Firm's attitude toward its employees. B. Geographical areas in which the firm will compete. C. Firm's basic technology. D. Firm's standards of excellence and high ideals. E. Firm's major products or services. Good vision statements should set standards of excellence and reflect high ideals (see Table 6.1). AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 6-61 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 80. (p. 171) Which of the following is a question that should be answered by a company's mission statement? A. Does it inspire enthusiasm and encourage commitment? B. Does it set standards of excellence? C. Is it appropriate for the organization? D. Is it well articulated? E. Who is our customer? Good mission statements should answer the question, "Who is our customer?" (see Table 6.1). AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 81. (p. 171) The common grand strategies are A. star, question mark, cash cow, and dog. B. cost-leadership, differentiation, cost focus, and focused differentiation. C. growth, stability, and defensive. D. strengths, weaknesses, opportunities, and threats. E. defender, prospector, analyzer, and reactor. Three common grand strategies are growth, stability, and defensive. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 6-62 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 82. (p. 172) Techno Tools is selling off land, buildings and some of its product inventory. This is a variation of which of these grand strategies? A. Right-size B. Growth C. Stability D. Defensive E. Reorganization A defensive strategy or a retrenchment strategy, is a grand strategy that involves reduction in the organization's efforts. In a variation of this strategy, it can sell off (liquidate) assetsland, buildings, inventories, and the like. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 83. (p. 172) American Auto Parts recently acquired two smaller auto parts companies in the Southwest to gain a national presence. American Auto Parts is pursuing a(n) ______ strategy. A. escalation B. growth C. stability D. merger E. defensive A growth strategy is a grand strategy that involves expansionas in sales revenues, market share, number of employees, or number of customers or (for nonprofits) clients served. In a variation of this strategy, it can acquire similar or complementary businesses. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 6-63 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 84. (p. 172) Rocky Mountain Ski and Snowboard is a small shop that provides ski equipment for Rocky Mountain skiers. It has decided to increase advertising in the Denver Post and the Vail Voice as well as sponsor one of the mountain competitions. It is following which strategy? A. Inducement B. Defensive C. Growth D. Stability E. Enhancement A growth strategy is a grand strategy that involves expansionas in sales revenues, market share, number of employees, or number of customers or (for nonprofits) clients served. In a variation of this strategy, it can increase its promotion and marketing efforts to try to expand its market share. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 85. (p. 172) Jabra has been running a commercial real estate business for nearly thirty years. As he approaches retirement, he is content to simply lease the commercial space he currently has, rather than make new deals to develop additional properties. Jabra is using which grand strategy? A. Stability B. Retrenchment C. Inducement D. Defensive E. Growth A stability strategy is a grand strategy that involves little or no significant change. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 6-64 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 86. (p. 172) A strategy that involves reduction in the organization's efforts is the ______ strategy. A. retrenchment B. reorganization C. downsize D. growth E. stability A defensive strategy or a retrenchment strategy, is a grand strategy that involves reduction in the organization's efforts. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 87. (p. 172) A luxury cruise line was struggling with heavy debt and a sharp decline in customers, and it eventually declared bankruptcy. Which of the following strategies has the company followed? A. Growth B. Stability C. Defensive D. Reduction E. Reactive A defensive strategy or a retrenchment strategy, is a grand strategy that involves reduction in the organization's efforts. In a variation of this strategy, it can declare bankruptcy. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 6-65 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 88. (p. 172) Lane Office Products phased out its line of typewriters several years ago as part of its ______ strategy. A. growth B. stability C. defensive D. reorganization E. reactor A defensive strategy or a retrenchment strategy, is a grand strategy that involves reduction in the organization's efforts. In a variation of this strategy, it can gradually phase out product lines or services. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 89. (p. 173) The process of choosing among different strategies and altering them to best fit the organization is called A. strategy formulation. B. contingency planning. C. strategic control. D. strategy implementation. E. trend analysis. Strategy formulation is the process of choosing among different strategies and altering them to best fit the organization's needs. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 6-66 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 90. (p. 173) Actively selling strategic plans to middle and supervisory managers, rather than just announcing them, is helpful for A. situation analysis. B. strategy formulation. C. strategy implementation. D. contingency planning. E. strategic control. Often implementation means overcoming resistance by people who feel the plans threaten their influence or livelihood. Thus, top managers can't just announce the plans; they have to actively sell them to middle and supervisory managers. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 91. (p. 173) ______ consists of monitoring the execution of strategy and making adjustments, if necessary. A. Mission translation B. Strategic control C. Strategy implementation D. Contingency planning E. SWOT analysis Strategic control consists of monitoring the execution of strategy and making adjustments, if necessary. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 6-67 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 92. (p. 173) Which of the following is NOT one of Bryan Barry's recommendations to keep a strategic plan on track? A. Keep moving. B. Engage people. C. Don't second guess. D. Keep it simple. E. Stay focused. To keep a strategic plan on track, suggests Bryan Barry, you need to do the following: Engage people. Keep it simple. Stay focused. Keep moving. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 93. (p. 174) Gaining information about one's competitors' activities so that you can anticipate their moves and react appropriately is called A. SWOT analysis. B. forecasting model. C. contingency plan. D. trend analysis. E. competitive intelligence. Practicing competitive intelligence means gaining information about one's competitors' activities so that you can anticipate their moves and react appropriately. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 6-68 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 94. (p. 174) Which of the following is NOT a likely source of information for competitive intelligence? A. Competitors' press releases B. Industry gossip C. Competitors' annual reports D. Competitor's customer records E. Field visits to customers Gaining competitive intelligence isn't always easy, but there are several avenuesand, surprisingly, most of them are public sourcesincluding the public prints and advertising, investor information, and informal sources. A competitor's customer records are not available publicly, nor would they yield much information about upcoming plans. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 95. (p. 174) Andy is interested in learning more about what one of his competitors is doing so that he can anticipate its upcoming moves and react quickly. Which of the following would you suggest to him for this purpose? A. Go through the competitor's trash on its property B. Pose as an applicant for a job with the competitor C. Use investor information D. Call the competitor, explain who you are, and ask directly E. Pay the competitor's customers for information Gaining competitive intelligence isn't always easy, but there are several avenuesand, surprisingly, most of them are public sourcesincluding the public prints and advertising, investor information, and informal sources such as trade show gossip and from salespeople. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 6-69 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 96. (p. 174) Careful monitoring of an organization's internal and external environment to detect early signs of opportunities and threats that may influence the firm's plans is called A. competitive intelligence. B. forecasting. C. contingency planning. D. trend analysis. E. environmental scanning. Environmental scanning is careful monitoring of an organization's internal and external environments to detect early signs of opportunities and threats that may influence the firm's plans. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 97. (p. 174) A situational analysis is also known as A. strategic control. B. SWOT analysis. C. trend analysis. D. contingency planning. E. forecasting. SWOT analysisalso known as a situational analysisis a search for the Strengths, Weaknesses, Opportunities, and Threats affecting the organization. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 6-70 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 98. (p. 175) When analyzing the "S" in a SWOT analysis, a manager might take note of A. a decrease in the size of the market. B. competitors' actions. C. high turnover of employees. D. strong financial resources of the firm. E. governmental actions. Strengths of a company include financial resources & requirements, an internal factor. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 99. (p. 176) When analyzing the "W" in SWOT analysis, a manager might take note of A. a decrease in the size of the market. B. competitors' actions. C. high turnover of employees. D. good financial resources of the firm. E. governmental actions. High turnover of employees is an internal matter that is a weakness. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 6-71 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 100. (p. 176) When analyzing the "O" in SWOT analysis, a manager might take note of A. favorable government regulations. B. absenteeism among employees. C. good morale among workers. D. high service levels. E. good financial position. A manager may be able to discover an opportunity in favorable government regulations. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 101. (p. 176) When analyzing the "T" in SWOT analysis, a manager might take note of A. the firm's assets. B. a competitor's new product. C. employee absenteeism. D. strong corporate culture. E. high service levels. A competitor's new product may be a threat if it is likely to capture market share. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 6-72 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 102. (p. 176) Analysis of changing demographics of the population would be part of the assessment of a company's A. strengths. B. weaknesses. C. opportunities. D. threats. E. opportunities or threats depending on the outcome of the analysis. Changing demographics may be either an opportunity or a threat in the environment. For example, the aging population may help some firms but hurt others. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 103. (p. 176) A manager assessing the organization's access to capital is involved in analysis of A. strengths. B. weaknesses. C. opportunities. D. threats. E. strengths or weaknesses depending on the outcome of the assessment. Access to capital may be either an internal strength or weakness, since some firms have this and others don't. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 6-73 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 104. (p. 176) Karen has just completed an assessment that indicates that her employees lack technological expertise to produce a new product line. She has discovered one of her firm's A. strengths. B. weaknesses. C. opportunities. D. threats. E. market challenges. The lack of technological expertise is a weakness of the organization. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 105. (p. 176) Environmental factors that the organization may exploit for a competitive advantage are known as A. organizational strengths. B. organizational opportunities. C. organizational threats. D. organizational weaknesses. E. competitive strategies. Organizational opportunities are environmental factors that the organization may exploit for competitive advantage. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 6-74 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 106. (p. 176) The skills and capabilities that give the organization advantages in executing strategies in pursuit of its mission are known as A. organizational strengths. B. organizational opportunities. C. organizational threats. D. organizational weaknesses. E. competitive strategies. Organizational strengths are the skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its mission. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 107. (p. 176) Emily has prepared a report that details how prices for several of the raw materials her firm uses in production have risen up to 30% in the last year. Her report would be an input into the __________ part of a SWOT analysis. A. strengths B. weaknesses C. opportunities D. threats E. structure Rising costs for raw materials is an external threat to a company. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 6-75 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 108. (p. 177) A vision or projection of the future is called a(n) A. trend. B. forecast. C. contingency. D. strategy. E. opportunity. A forecast is a vision or projection of the future. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 109. (p. 177) A time series forecast, which is used to predict long-term trends, cyclic patterns and seasonal variations, is one type of A. organizational strength. B. contingency planning. C. trend analysis. D. balancing the scorecard. E. strategy formulation. An example of trend analysis is a time-series forecast, which predicts future data based on patterns of historical data. Time-series forecasts are used to predict long-term trends, cyclic patterns (as in the up-and-down nature of the business cycle), and seasonal variations (as in Christmas sales versus summer sales). AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 6-76 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 110. (p. 177) Creation of alternative hypothetical but equally likely future conditions is called A. contingency planning. B. trend analysis. C. balancing the scorecard. D. strategy formulation. E. forecasting. Contingency planningalso known as scenario planning and scenario analysisis the creation of alternative hypothetical but equally likely future conditions. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 111. (p. 179) Which of the following is NOT one of the forces that affects industry competition, according to Porter's model for industry analysis? A. Threats of new entrants B. Threats of substitute products and services C. Bargaining power of buyers D. Threats of government interference E. Bargaining power of suppliers Strategic-management expert Michael Porter suggested in his Porter's model for industry analysis that business-level strategies originate in five primary competitive forces in the firm's environment: (1) threats of new entrants, (2) bargaining power of suppliers, (3) bargaining power of buyers, (4) threats of substitute products or services, and (5) rivalry among competitors. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 6-77 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 112. (p. 180) Oil companies must be aware of other firms' development of ethanol products since this is an example of which one force in Porter's model for industry analysis? A. Bargaining power of buyers B. Rivalry among competitors C. Bargaining power of suppliers D. Threats of new entrants E. Threats of substitute products and services In an example of the threats of substitute products or services, oil companies might worry that Brazil is close to becoming energy self-sufficient because it is able to meet its growing demand for vehicle fuel by substituting ethanol derived from sugar cane for petroleum. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 113. (p. 180) Porter's competitive strategies include A. prospector, defender, analyzer, and reactor. B. growth, stability, and retrenchment. C. cost leadership, differentiation, cost focus, and focused differentiation. D. strengths, weaknesses, opportunities, and threats. E. stars, questions marks, cash cows, and dogs. Porter's four competitive strategies (also called four generic strategies) are (1) cost leadership, (2) differentiation, (3) cost-focus, and (4) focused-differentiation. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 6-78 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 114. (p. 180) An organization is developing a low cost line of environmentally friendly cleaning products that it intends to distribute internationally. Here, the organization is following a ______ strategy. A. cost leadership B. differentiation C. cost focus D. retrenchment E. focused-differentiation The cost-leadership strategy is to keep the costs, and hence prices, of a product or service below those of competitors and to target a wide market. AACSB: Analytic Bloom's: Understand Difficulty: Hard Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 115. (p. 181) An organization that is offering unique, superior products or services to a wide market is pursuing a strategy of A. cost leadership. B. differentiation. C. cost focus. D. diversification. E. focused-differentiation. The differentiation strategy is to offer products or services that are of unique and superior value compared to those of competitors but to target a wide market. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 6-79 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 116. (p. 181) An example of a firm that pursues a differentiation strategy is A. Cartier. B. Bic. C. Lexus. D. San Francisco Bay Area discount gas station chain. E. Rolls Royce. The differentiation strategy is to offer products or services that are of unique and superior value compared to those of competitors but to target a wide market. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 117. (p. 180) Timex Watch makes inexpensive but reliable watches sold throughout the U.S. and is an example of an organization pursuing a _________ strategy. A. cost leadership B. differentiation C. cost focus D. focused-differentiation E. retrenchment The cost-leadership strategy is to keep the costs, and hence prices, of a product or service below those of competitors and to target a wide market. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 6-80 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 118. (p. 181) An organization that keeps costs and prices low in targeting a narrow market is pursuing a strategy of A. cost leadership. B. differentiation. C. cost focus. D. stability. E. focused-differentiation. The cost-focus strategy is to keep the costs, and hence prices, of a product or service below those of competitors and to target a narrow market. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 119. (p. 181) An organization that offers unique, superior products or services to a narrow market is pursuing a strategy of A. cost leadership. B. differentiation. C. cost focus. D. diversification. E. focused-differentiation. The focused-differentiation strategy is to offer products or services that are of unique and superior value compared to those of competitors and to target a narrow market. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 6-81 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 120. (p. 181) Which of the following carmakers pursues a focused-differentiation strategy? A. Ferrari B. Ford C. Volkswagen D. Honda E. Kia The focused-differentiation strategy is to offer products or services that are of unique and superior value compared to those of competitors and to target a narrow market. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 121. (p. 181) The benefit of the single-product company is A. synergy. B. focus. C. isolated systems. D. differentiation. E. lower costs. Making just one product allows you to focus your manufacturing and marketing efforts just on that product. This means that your company can become savvy about repairing defects, upgrading production lines, scouting the competition, and doing highly focused advertising and sales. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 6-82 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 122. (p. 182) Time Warner runs different divisions specializing in television, music, and publishing. Time Warner is using a(n) ______ strategy. A. stability B. defensive C. diversification D. differentiation E. infiltration Diversification strategy means operating several businesses in order to spread the risk. Major entertainment/media companies follow this strategy. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 123. (p. 182) Which of the following is most likely to use a diversification strategy? A. A tax preparation business B. A flower shop C. A lawn service D. A grocery store E. A shoe store Diversification strategy means operating several businesses in order to spread the risk. A grocery store sells food, toiletries, cards, flowers and often more. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 6-83 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 124. (p. 183) __________ refers to the idea that the economic value of separate, related businesses under one ownership and management is greater together than the businesses are worth separately. A. Structural benefit B. Synergy C. Selective function D. Alignment E. Interaction Synergy is the economic value of separate, related businesses under one ownership and management is greater together than the businesses are worth separately. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 125. (p. 183) Which of the following strategy tools suggests that an organization will do better in fast-growing markets in which it has a high market share rather than in slow-growing markets in which it has a low market share? A. SWOT analysis B. Porter's model for industry analysis C. Porter's competitive strategies D. The BCG matrix E. Trend analysis In general, the BCG matrix suggests that an organization will do better in fast-growing markets in which it has a high market share rather in slow-growing markets in which it has a low market share. These concepts are illustrated in Figure 6.4. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 6-84 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 126. (p. 183) Adriana is assessing her company's portfolio of products. One of them is the bestselling brand of mouthwash, although this is now a slow growing market. If Adriana uses the BCG matrix, she would classify this product as a A. star. B. cloud. C. question mark. D. cash cow. E. dog. In the BCG matrix, cash cows have slow growth but high market share, and income from them often finances stars and question marks. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 127. (p. 183) Amazon's Kindle has a very high percentage of the market for eBook readers, and this is also a quickly growing market. Thus, using the BCG matrix, the Kindle would be classified as a A. star. B. cloud. C. question mark. D. cash cow. E. dog. In the BCG matrix, stars have high growth and high market share, and are definite keepers. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 6-85 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 128. (p. 184) According to Bossidy and Charan, effective ______ requires managers to build a foundation for it within three core process: people, strategy, and operations. A. tactics B. strategy C. follow-through D. execution E. operations Bossidy and Charan outline how organizations and managers can improve the ability to execute. Effective execution requires managers to build a foundation for execution within three core processes found in any business: people, strategy, and operations. AACSB: Analytic Bloom's: Remember Difficulty: Easy Learning Objective: 06-05 How does effective execution help managers during the strategic-management process? Topic: Implementing & Controlling Strategy: Execution 129. (p. 184) According to Bossidy and Charan, which business process is most important for effective execution? A. Strategy B. People C. Alignment D. Operations E. Research A company's overall ability to execute is a function of effectively executing according to three processes: people, strategy, and operations. Because all work ultimately entails some human interaction, effort, or involvement, Bossidy and Charan believe that the people process is the most important. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-05 How does effective execution help managers during the strategic-management process? Topic: Implementing & Controlling Strategy: Execution 6-86 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 130. (p. 184) A recent survey found that the top concern among CEOs worldwide is A. profit growth. B. customer loyalty. C. excellence in execution. D. stimulating innovation. E. finding qualified employees. How important is execution to organizational success in today's global economy? A survey of 769 global CEOs from 40 countries revealed that "excellence in execution" was their most important concernmore important than "profit growth," "customer loyalty," "stimulating innovation," and "finding qualified employees." AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-05 How does effective execution help managers during the strategic-management process? Topic: Implementing & Controlling Strategy: Execution 131. (p. 185) Which of the following is NOT a question that Bossidy and Charan believe a strong strategic plan must address? A. How will the company handle their social responsibility? B. What is the assessment of the external environment? C. Who is the competition? D. Can the business execute the strategy? E. Are the short term and long term balanced? According to Bossidy and Charan, a strong strategic plan addresses nine questions, among them: What is the assessment of the external environment? Who is the competition? Can the business execute the strategy? Are the short term and long term balanced? AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-05 How does effective execution help managers during the strategic-management process? Topic: Implementing & Controlling Strategy: Execution 6-87 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 132. (p. 186) Which of the following is NOT a behavior of a leader who executes? A. Set clear priorities B. Insist on realism C. Follow through D. Know yourself E. Understand employee limitations According to Bossidy and Charan, there are seven essential leader behaviors that fuel the engine of execution. Rather than understand their limitations, you should expand people's capabilities. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-05 How does effective execution help managers during the strategic-management process? Topic: Implementing & Controlling Strategy: Execution 133. (p. 184) Bossidy and Charan believe that to excel at execution, a leader should A. be hands-off once the strategy is set. B. micromanage the tactics. C. empower employees to take over the execution. D. probe for weaknesses in the substance and details. E. let the plan run its course before attempting to revise it. Bossidy and Charan point out, "The leader who boasts of her hands-off style or puts her faith in empowerment is not dealing with the issues of the day. Leading for execution is not about micromanaging. Leaders who excel at execution immerse themselves in the substance of execution and even some of the key details. They use their knowledge of the business to constantly probe and question. They bring weaknesses to light and rally their people to correct them." AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-05 How does effective execution help managers during the strategic-management process? Topic: Implementing & Controlling Strategy: Execution 6-88 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design Essay Questions 134. (p. 168) Define strategic positioning. Explain the three principles that underlie strategic positioning. Strategic positioning attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company. It means, according to Porter, "performing different activities from rivals, or performing similar activities in different ways." Three key principles underlie strategic positioning: Strategy is the creation of a unique and valuable position, which emerges from three sources: few needs, many customers; broad needs, few customers; or broad needs, many customers. Strategy requires trade-offs in competing. A company has to choose not only what strategy to follow but what strategy not to follow. Strategy involves creating a "fit" among activities. "Fit" has to do with the ways a company's activities interact and reinforce one another. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-01 Am I really managing if I don't have a strategy? Topic: The Dynamics of Strategic Planning 135. (p. 170-173) Describe the strategic management process. Explain what the "feedback loop" is and why it is important. The strategic management process involves 5 steps: 1. Establish the mission and vision 2. Establish the grand strategy 3. Formulate the strategic plans 4. Carry out the strategic plans 5. Maintain strategic control The feedback loop comes out of strategic control. Through control, managers monitor progress and take corrective action early and rapidly when things go awry, returning to earlier steps to fix problems. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 6-89 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 136. (p. 172) Name the three common grand strategies, and provide an example of how a company might use each. There are the three common grand strategies: 1. A growth strategy is a grand strategy that involves expansionas in sales revenues, market share, number of employees, or number of customers or (for nonprofits) clients served. Examples: It can improve an existing product or service to attract more buyers. It can increase its promotion and marketing efforts to try to expand its market share. It can expand into new products or services. It can acquire similar or complementary businesses. 2. A stability strategy is a grand strategy that involves little or no significant change. Examples: It can go for a no-change strategy (if, for example, it has found that too-fast growth leads to foul-ups with orders and customer complaints). It can go for a little-change strategy (if, for example, the company has been growing at breakneck speed and feels it needs a period of consolidation). 3. A defensive strategy or a retrenchment strategy, is a grand strategy that involves reduction in the organization's efforts. Examples: It can reduce costs, as by freezing hiring or tightening expenses. It can sell off (liquidate) assetsland, buildings, inventories, and the like. It can gradually phase out product lines or services. It can declare bankruptcy. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 137. (p. 173) Explain strategy implementation, including the role of resistance. Putting strategic plans into effect is strategy implementation. Strategy implementation is the stage of the strategic management process where managers determine possible roadblocks within the organization and see if the right people and control systems are available to execute the plans. Resistance may be encountered when people feel the plans threaten their livelihoods or their influence. This is especially true when plans are being implemented quickly, as delays (a form of resistance) can easily be constructed and these delays may heavily damage a plan. Thus, top managers can't just announce the plans; they have to actively sell them to middle and supervisory managers. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-02 What's the five-step recipe for the strategic management process? Topic: The Strategic-Management 6-90 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 138. (p. 174) Define competitive intelligence and explain how you might go about obtaining it legally. Competitive intelligence means gaining information about one's competitors' activities so that one can anticipate their moves and react appropriately. Gaining competitive intelligence isn't always easy, but there are several avenues and most of them are public sources including (1) the public prints and advertising, (2) investor information like corporate annual reports, and (3) informal sources such as trade show gossip and information from company salespeople. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 139. (p. 174-176) What are the fundamental differences in examining internal and external environments when conducting a situation analysis? SWOT analysis, also called a situation analysis, looks at internal strengths and weaknesses and external opportunities and threats. The internal environment looks at organizational strengthsthe skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its mission, and organizational weaknessesthe drawbacks that hinder an organization in executing strategies in pursuit of its missionare also part of the internal environment. The external environment includes organizational opportunitiesenvironmental factors that the organization may exploit for competitive advantage. It also includes organizational threats environmental factors that hinder an organization's achieving a competitive advantage. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 6-91 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 140. (p. 174-176) Give examples of what managers might look at in performing each element of a SWOT analysis. SWOT analysisalso known as a situational analysisis a search for the Strengths, Weaknesses, Opportunities, and Threats affecting the organization. Examples of a firm's strengths and weaknesses: work processes, organization, culture, staff, product quality, production capacity, image, financial resources & requirements, service levels, other internal matters. Examples a firm's opportunities and threats: market segment analysis, industry & competition analysis, impact of technology on organization, product analysis, governmental impacts, other external matters (see Figure 6.2). AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 141. (p. 177) Define forecasting and discuss its importance. Describe the two types of forecasting described in the text. Forecasting is developing a vision or projection of the future, which is a necessary component of strategic planning. The two types are trend analysis and contingency planning. Trend analysis is a hypothetical extension of a past series of events into the future. Contingency planning is the creation of alternative hypothetical but equally likely future conditions. AACSB: Analytic Bloom's: Understand Difficulty: Medium Learning Objective: 06-03 How can competitive intelligence; SWOT; and forecasting help me establish my strategy? Topic: Establishing the Grand Strategy 6-92 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 142. (p. 179-180) Describe what determines competitiveness within a particular industry using Porter's model for industry analysis. Provide an example for at least three of the five forces in the model. Competitiveness within a particular industry originates in the five primary competitive forces in the firm's environment: 1. threats of new entrants: for Kraft, new entrants might be store brands or Annie's 2. bargaining power of suppliers: companies without multiple suppliers are at the mercy of the one 3. bargaining power of buyers: customers who use the Internet to shop around are more able to negotiate a better price 4. threats of substitute products or services: for big oil companies, firms making ethanol provide a substitute product 5. rivalry among competitors: For Coca Cola, Pepsi is an established rival AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 143. (p. 180-181) Describe Porter's four competitive strategies and explain how they differ from each other. Provide an example of a firm that might use each. Porter identified two "wide" strategies (cost-leadership and differentiation) that deal with broad markets, and two "narrow" strategies (cost-focus and focused-differentiation) that target specific markets. 1. Cost-leadership focuses on keeping costs and prices low for a wide market, and examples are Dell, Timex, Home Depot, and Bic. 2. Differentiation stresses offering unique and superior products and services to a wide market and examples include Ritz-Carlton, Lexus, and PepsiCo. 3. Cost-focus emphasizes keeping low costs and prices, but to a narrow market and examples include low-cost products sold at discount store and discount regional gas station chains. 4. Focused-differentiation stresses unique and superior products to a narrow market and examples include Rolls Royce, Cartier, Turnbull & Asser, and niche books. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 6-93 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 144. (p. 181-183) Explain the positive and negative aspects of pursuing a single-product strategy versus a diversification one. Provide an example of a company that uses each type of strategy. In a single-product strategy, a company makes and sells only one product within its market. Making just one product allows you to focus your manufacturing and marketing efforts just on that product. This means that your company can become savvy about repairing defects, upgrading production lines, scouting the competition, and doing highly focused advertising and sales. The risk, of course, is that if you do not focus on all aspects of the business, if a rival gets the jump on you, or if an act of God intervenes (for a florist, roses suffer a blight right before Mother's Day), your entire business may go under. The single-product strategy is seen all the time as you drive past the small retail businesses in a small town: There may be one shop that sells only flowers, one that sells only security systems, and so on. Diversification is operating several businesses in order to spread the risk. Diversification may be related or unrelated. Related diversification has three advantages: reduced riskbecause if one product is weak, others may take up the slack, management efficienciesbecause administration is spread over several businesses, and synergy, that the sum is greater than the parts. You see the diversification strategy at the small retailer level when you drive past a store that sells gas and food and souvenirs and rents DVD movies. AACSB: Analytic Bloom's: Apply Difficulty: Hard Learning Objective: 06-04 How can four techniquesPorter's competitive forces; competitive strategies; diversification and synergy; and the BCG matrixhelp me formulate strategy? Topic: Formulating Strategy 6-94 Chapter 06 - Strategic Management: How Star Managers Realize a Grand Design 145. (p. 184-185) Explain the three core processes of business and how they relate to execution. A company's overall ability to execute is a function of effectively executing in terms of its people processes, strategic processes, and operational processes. People process: An effective leader tries to evaluate talent by linking people to particular strategic milestones, developing future leaders, dealing with nonperformers, and transforming the mission and operations of the human resource department. Strategic processes: A good strategic plan addresses nine questions. In considering whether the organization can execute the strategy, a leader must take a realistic and critical view of its capabilities and competencies. Operations processes: The strategy process defines where an organization wants to go, and the people process defines who's going to get it done. Operations or the operating plan provides the path for people to follow. The operating plan should address all the major activities in which the company will engage and then define short-term objectives for these activities, to provide targets for people at which to aim. AACSB: Analytic Bloom's: Apply Difficulty: Medium Learning Objective: 06-05 How does effective execution help managers during the strategic-management process? Topic: Implementing & Controlling Strategy: Execution 146. (p. 185-186) List at least five of the seven essential types of leader behaviors that are needed to fuel the engine of execution. The seven essential types of leader behaviors are: 1. know your people and your business: engage intensely with your employees 2. insist on realism: don't let others avoid reality 3. set clear goals and priorities: focus on a few rather than many goals 4. follow through: establish accountability and check on results 5. reward the doers: show top performers that they matter 6. expand people's capabilities: develop the talent 7. know yourself: do the hard work of understanding who you are. AACSB: Analytic Bloom's: Apply Difficulty: Medium Learning Objective: 06-05 How does effective execution help managers during the strategic-management process? Topic: Implementing & Controlling Strategy: Execution 6-95

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University of Florida - MAN - 3025
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Southern Miss. - BUS - 201
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Colorado - ECON - 7010
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UConn - DRAM - 1100
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UConn - DRAM - 1100
Alyssa MutarelliProduction Concept StatementFor my production concept statement, I would like to reformat Fat Pig by NeilLaBute. Fat Pig is a play that is centered on the issue of physical appearance betweentwo lovers, and how their friends do not app
UConn - DRAM - 1100
Alyssa MutarelliOBeautiful Play ReviewOBeautiful was a modern play about high school students dealing with bullying,pregnancy, and their views conflicting with their religion. The male lead, Lenny, wasbeing bullied and ended up committing suicide and
UConn - DRAM - 1100
Play ResponsesFat Pig:After reading Fat Pig, it seemed to clearly portray the way our society feels about peoplewho are overweight. From Carters over the top, shallow reaction it is clear that Carterwanted Tom to break up with Helen. However, it was n
BC - EC - 261
Class notes section 10-11DataDurable goods orders were at 9.9% and 2% excluding transportation but usually these numbersseesaw so putting too much weight on them is cautionaryCapital Goods orders has seen almost no improvementPending home sales have
BC - MU - 070
Frederick ChopinThe Mazurka in C# Minor, Op. 30, No. 4Performed by Lushtak, FainaIt goes without saying that Frederick Chopin stands as one of the greatest composers andpianists in history. None can deny the impact Chopin left on music and especially
BC - MU - 070
Listening Annotations1. Debussy Nuages (Clouds) from Nocturnesa. Often called Trois Nocturnes or Three Nocturnesb. Composed by Claude Debussy who was born on August 22, 1862 in Francec. Inspired by impressionist paintingsd. Theme is mysterious, as if
BC - MU - 070
Professor GawlickFundamentals of MusicJanuary 22 2012Gustavo Dudamel conducts Mahler's First and TenthThe article first accentuates the conductors subtle nuances in a slight edge over theorchestras performance as a whole. It begins with an overall de
BC - MU - 070
Fundamentals of Music4/25/2012Alea III Concert ReportOn April 25, 2012 Alea III, a contemporary music ensemble residing at BostonUniversity performed An International Salute to Roman Totenberg. The performance was heldat Boston Universitys TSAI Perfo
BC - MU - 070
Music FinalProfessor Barbara S. GawlickFundamentals of Music5-5-2012In the Beginning was SoundThe Reith Lectures are a series of lectures given by prominent figures in the modernworld. In 2006, Daniel Barenboim, an Argentinian conductor, gave five R
BC - COMM - 201
Caroline FozFebruary 13,2012Evaluating Persuasive SpeechesPublicSpeakingI ranked The Partial-Birth Abortion speech as number one, in the sense that it was themost persuasive. The speaker got right to the point during her introduction. The simple ac