Chapter 6 – Strategic Management T/F – Flashcards
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SWOT analysis is a panacea for strategy.
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F
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A propitious niche is a need in the marketplace that is currently unsatisfied.
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F
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The first firm through a strategic window can occupy a propitious niche and discourage competition (if the firm has the required internal strengths).
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T
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Niches do not change over time.
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The TOWS Matrix illustrates how the external opportunities and threats facing a particular corporation can be matched with that company's internal strengths and weaknesses to result in four sets of possible strategic alternatives.
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T
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SO strategies attempt to take advantage of opportunities by overcoming weaknesses.
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Business strategy focuses on improving the competitive position of a company's or business unit's products or services within the specific industry or market segment that the company or business unit serves.
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T
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Differentiation is the ability of a company or business unit to design, produce, and market a comparable product more efficiently than its competitors.
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Differentiation concentrates on a particular niche buyer group, product line segment, or geographic market.
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A cost leadership's strategy lower costs allow it to continue to earn profits during times of heavy competition.
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Cost focus is a low-cost competitive strategy that focuses on a particular buyer group or geographic market and attempts to serve only this niche, to the exclusion of others. Answer: T (p.149)
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One risk of a cost leadership strategy is that the technology may change.
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An example of a company that is "stuck in the middle" is Hewlett-Packard.
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T
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Based on the eight dimensions of quality discussed in the text, reliability is defined as the product's ease of repair.
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Most entrepreneurial ventures follow focus strategies.
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T
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The strategic rollup was developed in the mid-1990s as an efficient way to quickly consolidate a fragmented industry.
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Rollups are the same as conventional mergers and acquisitions.
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One danger of D'Aveni's concept of hypercompetition is that it may lead to an overemphasis on short-term tactics over long-term strategy.
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One skill of the cost leadership strategy is a strong marketing ability.
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Differentiation strategies require creative flair.
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Successful late movers tend to be large firms with considerable resources and related experience.
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Timing tactics answer the question of where a company implements a strategy.
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The first company to manufacture and sell a new product or service is called the ground breaker.
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A defensive tactic usually takes place in an established competitor's market location.
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When AMD went after Intel's microprocessor business by developing low priced chips to go after the customers Intel didn't mind losing, it was using a frontal attack.
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Encirclement occurs as an attacking company or unit encircles the competitor's positioning in terms of products or markets or both.
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T
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Microbreweries that make beer for sale for local customers, use guerilla warfare against national brewers like Anheuser-Busch.
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Collusion is the active cooperation of firms within an industry to reduce output and raise prices in order to get around the normal economic law of supply and demand.
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With tacit collusion, there is no direct communication among competing firms.
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Joint ventures are a rarely chosen strategic alliance.
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A licensing arrangement is an agreement in which the licensing firm grants rights to another firm in another country or market to produce and/or sell a product.
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A value chain partnership is a loose alliance with several distributors for the short-term.
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Research suggests that suppliers who engage in long-term relationships are more profitable than suppliers with multiple short-term contracts.
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One success factor to a strategic alliance is the ability to identify likely partnering risks and deal with them when the alliance is formed.
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T
