Test 1 Strategic Management test bank
Flashcard maker : Lily Taylor
The environmental analysis that looks at the natural environment plus four aspects of the societal environment is called the
STEEP Analysis (Ch 4)
Five years ago, my company’s market share was at 5%. Today it is at 10%. In carrying out my strategic planning for next five years, I will forecast my market share at the end of that period will be 15%. This common form of predicting the future is called
trend extrapolation (Ch 4)
An appropriate substitute for a Coke would be _____________
a candy bar (Ch 4)
Which of the following products/services would BEST suggests a global industry approach?
soccer ball (Ch 4)
Environmental uncertainty is a combination of
Degree of complexity and degree of change (Ch 4)
When using the Delphi Technique, the job of the experts is to _____________:
provide as accurate a picture of the future as possible. (Ch 4)
The aging of the U.S. population would represent a(n) _______________________ for a business seeking to understand their business environment
sociocultural force (Ch 4)
In preparing an EFAS, the analyst looks at _________________.
opportunities and threats (Ch 4)
A company that tends to operate in at least two industries, with one or more industries being stable and one or more being variable would be considered a(n):
analyzer (Ch 4)
Having economies of scale as a key success factor in an industry usually represents _____________.
A barrier to entry for a small start-up hoping to break into the industry (Ch 4)
If Wal-Mart were to decide to enter the automobile distributor business, this would represent a monumental shift in that industry and over time would fundamentally change its competitive landscape. Wal-Mart’s entry into this market would represent a ____________________ originating from the ________________ environment for the automobile distributor’s industry
driving force, task (Ch 4)
Gillette puts a great deal of emphasis on developing new products with an eye toward making sure its current product is replaced as industry leader by its new product. As such, Gillette would be classified as a(n):
prospector (Ch 4)
The primary protection offered by cost leadership against the relative powers of both suppliers and buyers is
It keeps cost down.? (Ch 4)
5. Congress passed the Clean Air Act in response to the public’s newfound environmental concerns and outrage over what it (the public) perceived to be unrestrained corporate pollution. In response, a number of industries such as utilities and automobile manufacturers have had to make dramatic changes in the technology used in the creation and operation of their products. These industries are responding to a change in the ________________ environment that was brought about by changes in the ________________ environment
e. political-legal, sociocultural (Ch 4)
6. With the “graying of America,” a number of industries such as travel (i.e.), golf, and assisted living communities have experienced tremendous growth. These companies are capitalizing on the aging of the American population by closely monitoring the changes in the ________________ environment.
d. sociocultural (Ch 4)
7. When the pressure for coordination is strong and the pressure for local responsiveness is weak for multinational corporations within a particular industry, the industry will tend to become
a. global. (Ch 4)
8. You are tasked with developing a strategic plan for a high tech software company. While working your way through the strategic planning process, it becomes obvious that the industry’s future competitive environment will be impossible to predict with any degree of accuracy. Your best option for completing your tasking would be to use
d. Delphi technique (Ch 4)
9. Labor unions were formed specifically to increase the ____________________.
b. bargaining power of suppliers? (Ch 4)
10. Rivalry among competitors is likely to be strongest when the industry is in the ____________ stage of its lifecycle.
c. mature (Ch 4)
11. The comments section of the EFAS is where one notes:
c. how the weight of an opportunity or threat is estimated (Ch 4)
12. With a limited marketing budget, I need to know which of my industry rivals I most need to concentrate my negative advertising on. Generally, this will be the one(s) trying to get the same customers I’m trying to get, and in pretty much the same way. One tool that I can use to make this determination would be:
a. a strategic group map (Ch 4)
13. A high level of competition (rivalry) within an industry can be viewed as:
e. all of the above
a. a barrier to entry
a. a barrier to entry
b. a sign that the industry is in the mature stage
c. a negative in assessing the attractiveness of the industry
d. a relatively expensive way of conducting business for industry participants (Ch 4)
14. If I want to determine which products/services would be considered substitutes for the product/service offered by a particular company, I would best consults its:
d. business model (Ch 4)
1. A board of directors that tends to approve, question, and make final decisions on mission, strategy, policies, and objectives would be considered a(n) ________________ board.
d. active participation (Ch 2)
2. Stewardship theory is most applicable to a(n) ________________________director.
b. inside (Ch 2)
3. In a legal sense, the board of directors is required to _____________ the affairs of the corporation but not to ________________ them.
c. monitor, manage (Ch 2)
4. __________________ is the inclusion of a corporation’s workers on its board.
a. An interlocking directory (Ch 2)
5. Current trends suggest that future boards of directors will be:
b. Smaller (Ch 2)
6. Max Combo sits on the Board of Directors for ACME, Inc. and also on the Board of Wiley & Sons. As such, these two boards would be considered:
c. direct interlocking directorates (Ch 2)
7. To protect shareholders from the failed oversight that lead to many infamous corporate scandals, Congress passed the _______________________ in 2002.
d. Sarbanes-Oxley Act (Ch 2)
8. In the 2008 elections, then-candidate Obama captured (much of) the nation’s imagination by laying out a vision for America that was decidedly different from the one that guided the country at the time. Some thought his was the path to national salvation, others the path to ruin. In any case, almost all considered him _________________.
c. a transformational leader (Ch 2)
9. Corporate governance refers to the relationship between:
c. Top management, board of directors, and shareholders. (Ch 2)
10. _________________ is/are responsible for getting things accomplished with and through others in order to meet corporate objectives.
e. Each individual employee (Ch 2)
1. Dr. Manning was recently named to the board of directors of Smokey’s Volunteer Sausage. While she was excited to have such a prestigious honor on her resume, she was equally relieved when she found out that she wouldn’t be called on to do much. In fact, the board historically only gathered from time to time for photo shoots and the rare ceremonial function. From the sound of her new job description, it seems obvious that Dr. Manning is joining a ________________ board.
b. phantom (Ch 2)
2. Revis, Inc. is looking to replace its retiring CEO. They have narrowed the search to two candidates. The first is an outsider who has built her career on turning around under-performing companies before moving on to her next challenge. The second candidate has been with Revis for over twenty years, advancing by doing things the company way. Based solely on this information, one would expect the first candidate’s actions to be more reflective of the __________________ theory of top management motivation, and the second candidate’s more consistent with the ___________________ theory.
b. Agency, Stewardship (Ch 2)
3. Given the growing concern over Corporate Governance, more and more companies are shying away from assigning the Chair and CEO positions to one person. Those that still do remain vulnerable to all of the agency issues that brought down the Enron’s and WorldCom’s of the world. The best way the board can protect the interests of the shareholders and also provide some much needed oversight of the Chief Executive is to appoint a(n) _____________.
b. lead director (Ch 2)
4. In the movie, “Other People’s Money”, Danny DeVito’s character, “Larry the Liquidator” was attempting a corporate takeover by persuading the shareholders to immediately vote out the entire current Board of Directors and vote in a board that would put him in charge. The corporation’s current leadership would have had less to worry about if they had __________________ in place.
b. a staggered board (Ch 2)
5. According to your text, the least important responsibility of the Board of Directors is:
b. Caring for shareholder interests. (Ch 2)
6. The role of the board of directors in the strategic management of the corporation is likely to:
a. be more active in the future. (Ch 2)
7. _______________________ directors are being banned from U.S. corporate boards of directors because of the potential conflict of interest represented by the other work (legal, insurance, etc.)
b. Affiliated (Ch 2)
8. When Jeffrey Skilling, ex-CEO of Enron testified in court that all of his illegal decisions had been approved by the board of directors, many wanted to criminally indict the board members for failure to act with ___________________.
d. due care (Ch 2)
9. Max Combo of Wiley & Sons and Slim Pickens of Warner Brothers both sit on the Board of Directors for ACME, Inc. As such, their respective boards would be considered:
d. indirect interlocking directorates (Ch 2)
10. An organization is more likely to get effective oversight of top management with ___________________ directors than with ______________________ directors.
a. outside, inside (Ch 2)
1. Recruiting and training a company’s new employees would be considered
c. a support activity (Ch 5)
1. The material in your textbook would be considered:
a. explicit knowledge (Ch 5)
3. It costs me $10 per unit to make 1000 widgets and $7 per unit to make 10,000 widgets. This difference in per unit cost is probably the result of a(n) _____________.
e. economy of scale (Ch 5)
1. A company’s __________________________ identifies how it plans to make money in its current business environment
a. business model (Ch 5)
5. The _________________________ structure is the one most commonly used in business and involves top managers with titles such as “Marketing Manager”, “Production Manager”, and “Finance Manager”.
b. functional (Ch 5)
6. In class, we have often talked about how Wal-Mart uses its superior distribution system to dominate the various industries they enter. As such, this distribution system would be considered a _____________:
a. distinctive competency. (Ch 5)
7. A ______________ is a name given to a company’s product which identifies that item in the mind of the consumer.
d. brand (Ch 5)
1. In preparing an IFAS, the analyst looks at _________________.
d. strengths and weaknesses (Ch 5)
9. Unlike the other forces in Porter’s (5 forces +1) competitive analysis, suppliers and buyers are considered part of an industry’s:
b. value chain (Ch 5)
10. ________________________ will tell you whether or not a particular competency is distinctive.
c. VRIO (Ch 5)
11. The department in charge of buying the raw materials that go into making a company’s product would be considered _____________________.
h. a support activity (Ch 5)
12. The concepts that you have learned in this class that you will take with you to the “real world” would BEST be considered:
f. explicit knowledge (Ch 5)
13. In the 1980’s, IBM was famous for its formal, very conservative image. Employees were expected to wear dark suits and conservative ties. This conservative nature carried over into how they viewed the marketplace, which some say led to their downfall in the computer industry. The new IBM is much more relaxed, with suits being replaced by Polo’s and creativity valued over conformity. It would appear that IBM has experienced a change in ___________________.
g. corporate culture (Ch 5)
14. Bob is starting a new business venture. So far, his entire organization consists of himself and his cousin, Sharon. Between the two of them, they have to accomplish everything required to get the company up and running. The most appropriate structure for this company would be:
i. simple (Ch 5)
15. IBM used to be the preeminent seller of mainframe computers. Later, they found their way to personal computers as their main source of income. Today, they make a living selling information technology services. It’s clear that IBM has seen evolution in its:
i. business model (Ch 5)
16. When you look at the majors in most business schools (including Belmont’s), they seem to mirror the __________________ structure found in the business world.
b. functional (Ch 5)
17. I mentioned in class that the era of Blu-ray video discs is coming to an end, soon to be replaced by HD ‘video in a cloud’ that can be downloaded anywhere, anytime, and on multiple devices. If this actually comes to pass, it would be an example of _______________________.
b. a technological discontinuity (Ch 5)
18. You get a new job with an international consulting firm. In your first week, you are assigned to work with a group of four people who happen to live on four different continents. Assuming the company is not interested in a ridiculous travel budget, you are likely now a member of a
d. virtual team (Ch 5)
19. Kellham Industries has worked hard to improve its quality control, which is now on par with that of the better companies in its industry. It is clear, then that through its extraordinary effort Kellham has developed a ______________ for the company.
d. core competency (Ch 5)
20. Based on our discussion in class, it is clear that “coupon Tuesdays” would be considered a:
c. fast-cycle resource ? (Ch 5)
21. Everybody’s familiar with Arm & Hammer and its famous logo. Few, if any recognize its parent company, Church & Dwight Co., Inc. It is clear that the company lacks a strong
c. corporate brand (Ch 5)
22. Many consider Bill Belichick a uniquely gifted football coach (NFL’s New England Patriots, for those of you who don’t know/care). Many have attempted to decipher his secrets to consistent success, but to date no one have been able to duplicate his ‘genius’. It could be argued that his core and distinctive competencies have a great deal of ________________.
a. durability (Ch 5)
23. Wal-Mart very seldom offers its customers the latest, most advance technology. They usually wait until the technology has matured and become standardized before stocking it on the shelves. This approach is consistent with the _____________ business model.
d. efficiency (Ch 5)
24. It has been said that the more you do something, the better you get at it. The equivalent of this in business is ____________________, which suggest that the longer businesses (and large corporations in particular) are in operation, the lower their costs will be because they’ve learned from their mistakes, formed long-term value chain relationships, and often developed scale economies.
b. the experience curve (Ch 5)
25. IBM’s failure to compete in the PC industry forced the computer icon to sell off its computer business to Lenovo and concentrate its efforts in the computer services part of the value chain. As such, IBM experienced a shift in its ______________________________.
e. center of gravity (Ch 5)
1. A(n) __________________ is a matrix designed to generate alternative strategies
e. TOWS (Ch 6)
2. An industry whose market share is dominated by a few large players would be considered ______________________:
b. consolidated (Ch 6)
3. A _____________________ is an organization that is created when two or more companies combine resources to create an independent business entity
c. joint venture (Ch 6)
4. Some suggest that competing gas stations on the Mississippi gulf coast secretly and illegally agreed to raise prices to twice the normal amount after Katrina, even when there was no real shortage. If this were true, the stations would be guilty of ___________________.
b. collusion (Ch 6)
5. A company that aims to sell a high-end product to a select group of people is using a ____________________ competitive strategy.
d. focused differiation (Ch 6)
6. With the launch of the iPad, Apple created an entirely new category of computer, one that is the fastest growing in the industry. They risked a great deal to make Steven Jobs vision a reality, but their _______________ tactic obviously paid off.
b. first mover (Ch 6)
7. Porter’s two generic strategies for outperforming other companies in a particular industry are:
a. differentiation and lower cost. (Ch 6)
8. In preparing an SFAS, the analyst looks at _________________.
b. the most important factors from the IFAS and EFAS (Ch 6)
9. ________________________ focuses on improving the competitive position of a company’s or business unit’s product or services within the specific industry or market segment that the company or business unit serves.
c. Business strategy (Ch 6)
1. Objectives are:
b. an organization’s performance targets—the results and outcomes management wants to achieve.
2. The international organization _______________ represents complete regional economic integration, while _______________ is only interested in improved trade between its members.
d. EU, NAFTA
3. Compared to “beverage company,” “cola company” would represent a ___________________ mission definition.
5. If I were interested in finding out who/what a company is, I would consult its _____________ and if I wanted to know where it is going I would refer to its ___________________.
d. mission statement, vision statement
6. Many would argue that Apple’s strategic vision and direction has been driven/determined over the past decade by its dynamic CEO and co-founder. If this is true, then the retirement of Stephen Jobs might force Apple to abandon its _________________ mode of strategic planning.
7. In a SWOT analysis, the ‘T’ stands for:
8. Charles Darwin’s Theory of Evolution suggests that natural selection, the process by which the natural environment determines what characteristics are more or less successful at a given point in time, determines which living creatures survive and which do not. Likewise, the ______________theory suggests that environmental evolution will determine which organizations survive, and which become obsolete over time.
b. Population Ecology
9. Some would argue that the increase in strong hurricanes such as Irene is the result global warming which, left unchecked, may also melt Polar icecaps, flood coastal areas, and fundamentally change weather patterns the world’s economy has depended on for centuries. These consequences represent _______________ risks possible should businesses fail to institute environmentally sustainable practices.
10. _________________ emphasizes improvement of the competitive position of a corporation’s products or services in the specific industry or market segment served by that business unit.
b. Business strategy
1. Then-President Bush proposed the Free Trade Area of the Americas (FTAA), a free trade zone that would stretch from the top of North America to the tip of South America. If the FTAA comes to pass, it will encompass all of the following alliances except:
2. _________________ is the approach the marketing department would take to achieve company objectives and maximize resource productivity.
c. Functional Strategy
3. In looking at how companies’ concept of strategic management evolves over time, the earliest phase looks most like:
c. Basic financial planning.
4. Compared to “telecommunications company,” “cellular telephone company” would represent a ___________________ mission definition.
5. In a SWOT analysis, the ‘O’ stands for:
6. In addressing the hierarchy of strategy, a large company like Johnson & Johnson would be concerned with strategy at the:
c. business, functional, and corporate levels.
7. In most companies, crafting and executing strategy is:
c. a collaborative effort in which every manager has a role for the area he or she heads.
8. Strategic decisions have three defining characteristics. They are directive, rare, and ____________.
9. To earn and maintain its AACSB accreditation, Belmont has to demonstrate that it continuously improves its programs based on the documented feedback and performance of past students. As such, AACSB appears to be encouraging the development of:
e. learning organizations
10. Southwest Airline’s recent commercials trumpet the fact that, consistent with their mission of providing quality, low-cost service, they do not charge a baggage fee to Southwest customers. Aside from being a brilliant marketing ploy, this would also be considered a Southwest _____________.
11. ______________________ takes __________________ one step further in stating that not only can an organization adapt to its environment, it can actually reshape its environment.
d. Strategic choice perspective, institution theory
12. At the annual corporate retreat, the top management team spends at least one full day reviewing the past years performance and comparing the actual results to those anticipated in their previous year’s strategic plan. This process is part of the __________ phase of the strategic management process.
b. evaluation and control
13. A new employee is concerned about the proper handling of invoices. Since she wants to make a good first impression, you advise her to consult the company’s ___________ to find the answer.
14. Gladness, Inc. is a manufacturing company that currently makes scooters and bicycles. The company has been presented with the opportunity to acquire a company that manufactures skateboards. The decision whether or not to pursue this acquisition would fall under the prevue of __________________.
a. corporate strategy
15. What is the primary distinction between a strategic vision and a mission statement?
a. A strategic vision portrays a company’s future business whereas a company’s mission statement typically describes its present business and purpose.