Deck 1: Mastering Strategy: Art and Science

Question 1

The idea of "stratego," from which the word strategy is derived, refers to the idea of defeating an enemy by effectively using resources.

Answer 1

True

Question 2

Intended strategies are usually described in detail within an organization's strategic plan.

Answer 2

True

Question 3

Deciding what a firm is not going to do is just as important to strategy as deciding what it is going to do.

Answer 3

True

Question 4

A firm is bound to fail if it maintains flexibility in formulating strategies.

Question 5

For a small firm, licensing technology to larger firms provides a second income stream and decreases the chances of imitation.

Question 6

One important aspect of a business model is providing customers with a good or service more cheaply than they can create it themselves.

Question 7

Unexpected twists and turns in the external as well as the internal environment place limits on the value of strategic planning.

Question 8

Executives who make assumptions about what an adversary can and cannot do put their organization's performance in jeopardy.

Question 9

The history of strategic management can be traced back several thousand years.

Question 10

Developing a viable business model requires that a firm sell goods or services for more than it costs the firm to create and distribute those goods.

Question 11

The book, "The Principles of Scientific Management," was a response to Taylor's observation that most tasks within organizations were organized in a haphazard way.

Question 12

Strategy is a complex concept that involves many different processes and activities within an organization.

Question 13

Viewing strategy as position involves only the actions of a single firm.

Question 14

Strategic management is a process that involves building a careful understanding of how changes in the world might affect a particular firm.

Question 15

The demands of strategic management are simple enough to be handled alone by the chief executive officer.

Question 16

Sometimes good strategies simply cannot overcome a stronger adversary.

Question 17

Most strategic ploys are illegal.

Question 18

All firms benefit equally in substantial performance improvements created by planning.

Question 19

Strategic ploys can be especially beneficial when facing much stronger opponents.

Question 20

Realized strategies are a product of a firm's intended strategy, deliberate strategy, and emergent strategy.

Question 21

A department store consistently keeps low prices, and this strategy helps the store to attract many customers. This is an example of a strategic:

A) ploy.
B) plan.
C) position.
D) pattern.
E) perspective.

Question 22

Economies of _____ refer to a cost advantage that is created when a firm can produce a good or service at a lower per unit price due to producing the good or service in large quantities.

A) scale
B) demand
C) scope
D) brand
E) integration

Question 23

A company that manufactures soaps could not sell its products despite spending a good amount on advertisements. Therefore, management decided to use the concept of direct marketing. They thought of appointing a large number of salespersons who would do door-to-door selling of the product. This is an example of a strategic:

A) ploy.
B) plan.
C) position.
D) pattern.
E) perspective.

Question 24

There is only one single established method of conceptualizing the concept of strategy.

Question 25

A strategic _____ is a specific move designed to outwit or trick competitors.

A) pattern
B) perspective
C) ploy
D) plan
E) position

Question 26

A company that manufactures cars aims to sell them to customers in the premium market segment. This is an example of strategy as:

A) ploy.
B) plan.
C) position.
D) pattern.
E) perspective.

Question 27

_____ examines how actions and events involving top executives, firms, and industries influence a firm's success or failure.

A) Managerial Forecasting
B) Impact Analysis
C) Strategic management
D) Trend analysis
E) Performance Appraisal

Question 28

Strategy as _____ focuses on the extent to which a firm's actions over time are consistent.

A) pattern
B) perspective
C) ploy
D) plan
E) position

Question 29

Strategy formulation involves developing specific strategies and actions.

Question 30

Strategic management involves a single conceptualization of the concept of strategy drawn from recent history.

Question 31

A viable business model requires that a firm:

A) sell goods or services at the same cost the firm needs to create and distribute those goods.
B) sell goods or services without paying any attention to the costs that the firm has to bear in order to create and distribute those goods.
C) give away goods or services for free in order to attract more and more customers.
D) sell goods or services for more than it costs the firm to create and distribute those goods.
E) sell goods or services for less than it costs the firm to create and distribute those goods.

Question 32

A coffee chain was losing its customers to its competitors and wanted to increase its sales. Therefore, it started offering complimentary pastries with every cup of coffee to outwit its competitors. Soon, the company registered an increase in its sales. This is an example of a strategic:

A) ploy.
B) plan.
C) position.
D) pattern.
E) perspective.

Question 33

A strategic _____ is a carefully crafted set of steps that a firm intends to follow in order to be successful.

A) pattern
B) perspective
C) ploy
D) plan
E) position

Question 34

Trends and events of the external environment seldom affect the overall state of an organization.

Question 35

Strategy implementation entails crafting an effective organizational structure and corporate culture.

Question 36

Strategy as _____ refers to a firm's place in the industry relative to its competitors.

A) pattern
B) perspective
C) ploy
D) plan
E) position

Question 37

The study of strategic management involves knowing how and when to apply creative thinking.

Question 38

Firms must evaluate their own resources to understand how they might react to changes in the environment.

Question 39

Myshirts.com, a company that manufactures shirts, buys large batches of dressing material from a supplier. The supplier charges them less than what Myshirts.com would have had to pay if it had purchased the material from different sources. As a consequence, the cost of manufacturing each shirt at Myshirts.com is lower than at other manufacturers. This is an example of economies of:

A) scale.
B) demand.
C) scope.
D) brand.
E) integration.

Question 40

Strategic management is neither an art nor a science.

Question 41

A _____ strategy is the part of the intended strategy that an organization continues to pursue over time.

A) marked
B) deliberate
C) make over
D) non-realized
E) pre-termed

Question 42

Strategy as _____ refers to how executives interpret the competitive landscape around them.

A) pattern
B) perspective
C) ploy
D) plan
E) position

Question 43

_____ published a book titled The Principles of Scientific Management.

A) Michael Porter
B) Frederick W. Taylor
C) Niccolò Machiavelli
D) Thomas Friedman
E) Alfred Chandler

Question 44

Quattro is a pizza shop that delivers pizzas without any extra charge. It also refunds the entire amount of the order when the pizza was not delivered within 30 minutes from the order placement. After two years it stopped this policy, but it still delivers pizzas without any extra charge. The fact that it stopped the policy of refunds in case of a delay of more than 30 minutes is an example of a _____ strategy.

A) make over
B) non-realized
C) marked
D) deliberate
E) pre-termed

Question 45

Marty's, a clothing company, has a number of outlets that are owned and managed by private individuals. These outlets are allowed to use the brand name and products of the clothing line after paying a fee to Marty's. They also pay a part of their revenues to Marty's. Marty's is an example of a:

A) franchisee
B) bailee
C) franchisor
D) bailer
E) legatee

Question 46

A _____ strategy refers to the part of the intended strategy that are abandoned.

A) marked
B) deliberate
C) make over
D) non-realized
E) pre-termed

Question 47

A(n) _____ strategy is an unplanned strategy that arises in response to unexpected opportunities and challenges.

A) emergent
B) marked
C) pre-termed
D) intended
E) realized

Question 48

A _____ is an organization which grants the right to use its brand name, products, and processes to other organizations.

A) legatee
B) franchisee
C) bailee
D) bailer
E) franchisor

Question 49

Marty's, a clothing company, has a number of outlets which are owned and managed by private individuals. These outlets are allowed to use the brand name and products of Marty's after paying a fee to the company. They also pay a part of their revenues to Marty's. Each of these outlets is a:

A) franchisee
B) bailee
C) franchisor
D) bailer
E) legatee

Question 50

A(n) _____ strategy is the strategy that an organization actually follows.

A) established
B) marked
C) pre-termed
D) arranged
E) realized

Question 51

_____ involves an organization granting the right to use its brand name, products, and processes to other organizations in exchange for an upfront payment and a percentage of revenues generated by the other organizations.

A) Differentiation
B) Positioning
C) Brand essence
D) Franchising
E) Comparative scaling

Question 52

A(n) _____ strategy is the strategy that an organization hopes to execute.

A) emergent
B) marked
C) pre-termed
D) intended
E) realized

Question 53

A clothing line company has a number of outlets which are owned and managed by private individuals. These outlets are allowed to use the brand name and products of the clothing line after paying a fee to the clothing line company. They also pay a part of their revenue to the clothing line. This is an example of:

A) franchising
B) exporting
C) differentiation
D) retail expansion
E) brand dilution

Question 54

A pizza shop plans to deliver pizzas to households. The delivery would be made without any extra charge. It hopes to execute this strategy in the suburbs. This is an example of a(n) _____ strategy.

A) marked
B) pre-termed
C) intended
D) realized
E) emergent

Question 55

Roomz, a mid-range hotel, used to provide only food and accommodation facilities. It soon realized that most of its customers are foreign tourists who constantly ask for directions and advice on places to visit. The hotel then decided to start a travel desk which would help tourists select and visit places of historical and cultural significance. This is an example of a(n) _____ strategy.

A) marked
B) pre-termed
C) intended
D) realized
E) emergent

Question 56

Pizzas at Home, a pizza shop, plans to deliver pizzas to households. Deliveries would be made without any extra charge. Soon, Pizzas at Home realizes it must start charging a nominal fee for delivery. Many other pizzerias start following the same strategy. Pizzas at Home then starts offering free pizzas if they are not delivered within 30 minutes of the order placement. The strategy followed by Pizzas at Home is an example of a(n) _____ strategy.

A) marked
B) pre-termed
C) established
D) realized
E) arranged

Question 57

The book The Principles of Scientific Management _____.

A) stressed how strategy and organizational structure need to be consistent with each other in order to ensure strong firm performance
B) offered concepts such as Five Forces Analysis and Generic Strategies that continue to strongly influence how executives choose strategies
C) stressed how organizations could become more efficient through identifying the "one best way" of performing important tasks
D) argued that many of the advantages that firms in developed countries like the United States, Japan, and Great Britain take for granted are disappearing
E) emphasized student's critical thinking skills in general and the notion that multiple ways of addressing a problem could be equally successful in particular

Question 58

Quattro is a pizza shop that delivers pizzas without any extra charge. It also refunds the entire amount of the order when the pizza was not delivered within 30 minutes from the order placement. After two years it stopped this policy, but it still delivers pizzas without any extra charge. The fact that it continues to deliver pizzas to households without any extra charge is an example of a _____ strategy.

A) make over
B) non-realized
C) marked
D) deliberate
E) pre-termed

Question 59

Dormer is the only fine dining restaurant in a small town. The opening of a new restaurant is viewed as a threat by some of the employees at Dormer. Others see it as an opportunity for Dormer to strengthen itself by looking out for its weaknesses and ironing them out. This is an example of strategy as:

A) ploy.
B) plan.
C) position.
D) pattern.
E) perspective.

Question 60

An organization which gets the right to use another organization's brand name, products, and processes is referred to as a _____.

A) legatee
B) franchisee
C) bailee
D) bailer
E) franchisor

Question 61

A(n) _____ fee refers to the upfront fee paid by an organization which gets the right to use another organization's brand name, products, and processes.

A) royalty
B) establishment
C) acceptance
D) acknowledgement
E) franchise

Question 62

The key question examined by strategic management is:

A) Why do some companies outperform other companies?
B) When is the correct time to introduce new products?
C) How much input should all levels of management have in the company's strategic plan?
D) When to create new products vs. expanding existing product lines?
E) What type of management style creates strategic advantage?

Question 63

A(n) _____ fee refers to the percentage of franchisees' revenues paid to an organization which has granted the right to use its brand name, products, and processes.

A) royalty
B) establishment
C) acceptance
D) acknowledgement
E) franchise

Question 64

Which two pivotal events that took place in 1980 led to the establishment of strategic management as a field of study?

A) The publication of the books, The World is Flat: A Brief History of the Twenty-First Century and Strategy and Structure: Chapters in the History of the Industrial Enterprise
B) The creation of the New England Journal and the publication of The World is Flat: A Brief History of the Twenty-First Century
C) The publication of The Principles of Scientific Management and the "capstone" course recommended by The Ford Foundation
D) The creation of the Strategic Management Journal and the publication of Competitive Strategy: Techniques for Analyzing Industries and Competitors
E) The publication of Strategy and Structure: Chapters in the History of the Industrial Enterprise and the release of The Ford Foundation report recommending the "capstone" course

Question 65

Which of the following statements holds true for the "capstone" course recommended by The Ford Foundation?

A) It stressed how strategy and organizational structure need to be consistent with each other in order to ensure strong firm performance
B) It offered concepts such as Five Forces Analysis and Generic Strategies that continue to strongly influence how executives choose strategies
C) It stressed how organizations could become more efficient through identifying the "one best way" of performing important tasks
D) It argued that many of the advantages that firms in developed countries like the United States, Japan, and Great Britain take for granted are disappearing
E) It emphasized student's critical thinking skills in general and the notion that multiple ways of addressing a problem could be equally successful

Question 66

In 1895, cereal tycoon C.W. Post started offering a cereal-based drink called Postum. Part of Postum's initial marketing strategy involved ads that promoted the nutritional benefits of Postum while raising concerns about the health effects of coffee. This type of advertising is an example of a strategic ???______.

A) plan
B) purpose
C) position
D) perspective
E) ploy

Question 67

Which of the following statements holds true for the book The World is Flat: A Brief History of the Twenty-First Century?

A) It stressed how strategy and organizational structure need to be consistent with each other in order to ensure strong firm performance
B) It offered concepts such as Five Forces Analysis and Generic Strategies that continue to strongly influence how executives choose strategies
C) It stressed how organizations could become more efficient through identifying the "one best way" of performing important tasks
D) It argued that many of the advantages that firms in developed countries like the United States, Japan, and Great Britain take for granted are disappearing
E) It emphasized student's critical thinking skills in general and the notion that multiple ways of addressing a problem could be equally successful

Question 68

Alfred Chandler's book focused on:

A) the SWOT analysis
B) the principles of scientific management
C) the Five Forces Analysis
D) international competition and the flat world
E) strategy and structure

Question 69

Who wrote the book, The World is Flat: A Brief History of the Twenty-First Century?

A) Michael Porter
B) Frederick W. Taylor
C) Niccolò Machiavelli
D) Thomas Friedman
E) Alfred Chandler

Question 70

What is a business model?

Question 71

Which of the following statements holds true for the book Strategy and Structure: Chapters in the History of the Industrial Enterprise?

A) It stressed how strategy and organizational structure need to be consistent with each other in order to ensure strong firm performance
B) It offered concepts such as Five Forces Analysis and Generic Strategies that continue to strongly influence how executives choose strategies
C) It stressed how organizations could become more efficient through identifying the "one best way" of performing important tasks
D) It argued that many of the advantages that firms in developed countries like the United States, Japan, and Great Britain take for granted are disappearing
E) It emphasized student's critical thinking skills in general and the notion that multiple ways of addressing a problem could be equally successful in particular

Question 72

The strategic management process begins with an understanding of strategy and _________.

A) timing
B) purpose
C) success
D) society
E) performance

Question 73

Strategic management is described as being part science and part ______.

A) accounting
B) art
C) philosophy
D) history
E) ethics

Question 74

Marty's, a clothing company, has a number of outlets that are owned and managed by private individuals. These outlets are allowed to use the brand name and products of Marty's after paying a fee to the company. They also pay a part of their revenues to Marty's. The upfront payment these outlets make to Marty's for using the Marty's brand name is referred to as a(n):

A) acceptance fee
B) acknowledgement fee
C) franchise fee
D) royalty fee
E) establishment fee

Question 75

An example of strategic ______ is the corporate ownership and management of General Motors brands Chevrolet (entry-level), Buick (mid-level) and Cadillac (upscale) that represent three different price points and markets within the vehicle industry.

A) pricing
B) planning
C) perspective
D) positioning
E) None of the above

Question 76

What is the name of Sun Tzu's best-known work that is still studied by business and military leaders today?

A) War: A Study of Strategy
B) Deceptive Aspects of Strategy
C) Success Without the Struggle
D) The Art of War
E) The Lotus Flower of Strategy

Question 77

Marty's, a clothing company, has a number of outlets which are owned and managed by private individuals. These outlets are allowed to use the brand name and products of Marty's after paying a fee to the company. They also pay a part of their revenues to the clothing line. The part of the revenues paid by the outlets to Marty's is referred to as:

A) acceptance fee
B) acknowledgement fee
C) franchise fee
D) royalty fee
E) establishment fee

Question 78

The integral part to a company's strategic plan that describes the process through which a company hopes to earn profits is the:

A) Income Growth Strategy
B) Business Model
C) Profit Margin Analysis
D) Economic Process Model
E) Environmental Impact Study

Question 79

The Hebrews leaving Egypt, the Greek soldiers inside of the Trojan Horse, and King Arthur's famous round table are all examples of:

A) Historical Fables
B) Failed leadership
C) Modern strategic planning
D) Strategy in ancient times
E) Militant strategy

Question 80

Which of the following statements holds true for the book, Competitive Strategy: Techniques for Analyzing Industries and Competitors?

A) It stressed how strategy and organizational structure need to be consistent with each other in order to ensure strong firm performance
B) It offered concepts such as Five Forces Analysis and Generic Strategies that continue to strongly influence how executives choose strategies
C) It stressed how organizations could become more efficient through identifying the "one best way" of performing important tasks
D) It argued that many of the advantages that firms in developed countries like the United States, Japan, and Great Britain take for granted are disappearing
E) It emphasized student's critical thinking skills in general and the notion that multiple ways of addressing a problem could be equally successful