Deck 7: Strategy Formulation: Functional Strategy and Strategic Choice

Question 1

A popular financial strategy in which a company is acquired in a transaction financed largely by debt - eventually paid off with money generated from the acquired company's operations or sale of its assets is

A) illegal in most countries.
B) a good way to build a core competency.
C) an application of the capital asset pricing model.
D) the leveraged buyout.
E) an example of internal financing.

Answer 1

D

Question 2

The first step in constructing a corporate scenario is to

A) develop common-sized financial statement.
B) construct detailed pro forma financial statements.
C) decide upon how much risk management is willing to accept.
D) analyze the societal environment.
E) use industry scenarios to develop a set of assumptions about the task environment.

Answer 2

E

Question 3

The type of marketing strategy in which a company captures a larger share of an existing market for current products through market saturation or market penetration or develops new markets for current products is called

A) market development.
B) push strategy.
C) product development.
D) pull strategy.
E) skimming the cream.

Answer 3

A

Question 4

According to Porter, to achieve a cost advantage by following the functional strategy of technological followership a business unit should

A) pioneer the lowest-cost product design.
B) innovate in other activities to increase buyer value.
C) imitate the products pioneered by others.
D) create low-cost ways of performing value activities.
E) be the first firm down the learning curve.

Question 5

A company which enters into a spirited battle for market share by cutting prices and offering special deals would be an example of which strategy to avoid?

A) follow the leader
B) hit another home run
C) arms race
D) do everything
E) losing hand

Question 6

A company which invests in many interesting opportunities without deciding which of them should have priority would be an example of which strategy to avoid?

A) follow the leader
B) hit another home run
C) arms race
D) do everything
E) losing hand

Question 7

A recent trend in information systems strategy is

A) computerizing accounting.
B) automating customer service.
C) forming closer relationships with customers and suppliers through extranets.
D) replacing Fortran with Cobol in order to boost productivity.
E) replacing main frame computers with robots.

Question 8

A strategy aimed at influencing key stakeholders is a

A) corporate strategy.
B) business strategy.
C) political strategy.
D) functional strategy.
E) horizontal strategy.

Question 9

A company which has previously found great success pioneering an extremely successful product presently trying to turn another "long-shot" into a like success would be an example of which strategy to avoid?

A) follow the leader
B) hit another home run
C) arms race
D) do everything
E) losing hand

Question 10

The flexible manufacturing system is defined by the text as

A) one-of-a-kind production using skilled labor.
B) highly automated assembly lines making one mass-produced product using little human labor.
C) parts grouped into manufacturing families to produce a wide variety of mass-produced items.
D) a process utilizing the just-in-time JIT) method of manufacturing.
E) standardization of components with each machine functioning like a job shop, but is positioned in the same order as the parts are processed.

Question 11

The key to outsourcing is to purchase from the outside only those activities that

A) are not central to the company's distinctive competence.
B) are very expensive.
C) provide the company competitive advantage.
D) are provided by an important supplier.
E) are not very expensive.

Question 12

The type of marketing strategy in which a company develops new products for new or existing markets is

A) market development.
B) push strategy.
C) product development.
D) pull strategy.
E) skimming the cream.

Question 13

Purchasing a product or service from an outside contractor is called

A) vertical integration.
B) horizontal integration.
C) transaction costing.
D) outsourcing.
E) the hokey pokey.

Question 14

The HRM functional strategy in which input for performance appraisal is gathered from multiple sources is

A) the behaviorally anchored rating scale.
B) 360-degree appraisal.
C) bottom-up performance evaluation.
D) strategic performance feedback.
E) tactical performance looping.

Question 15

Which strategy is developed to pull together the various activities and competencies of each department so that corporate and business unit performance improves?

A) business strategy
B) competitive strategy
C) generic strategy
D) enterprise strategy
E) functional strategy

Question 16

Which of the following is an example of a marketing functional strategy?

A) To increase profits by 10%.
B) To maximize shareholders wealth.
C) To achieve overall cost leadership.
D) To diversify into related markets.
E) To increase advertising expenditures to emphasize market "pull" over "push."

Question 17

Which type of pricing attempts to hasten market development and offers the pioneer the opportunity to utilize the experience curve to gain market share and dominate the industry?

A) demand pricing
B) competitive pricing
C) skim pricing
D) penetration pricing
E) loss-leader pricing

Question 18

The technique used to help strategists choose among alternative choices by defining the task environment, developing a set of various forecasts, and using proforma financial statements is called

A) decision trees.
B) S.W.O.T. analysis.
C) industry scenarios.
D) corporate scenarios.
E) Capital Asset Pricing Model.

Question 19

When considering acceptable alternative strategies, the most important criterion is the ability of the proposed strategy to deal with

A) cash flow.
B) the specific strategic factors developed in the S.W.O.T. analysis.
C) defining the competitive environment in which the firm is competing.
D) the future long-term prospects of the industry.
E) governmental regulations and requirements placed on the industry.

Question 20

The manufacturing strategy which requires that people, processes, units, and technology reconfigure themselves to give customers exactly what they want, when they want it is called

A) continuous improvement.
B) mass production.
C) job shop.
D) mass customization.
E) just-in-time.

Question 21

In order to avoid reaching consensus before all the issues have been examined, which decision-making technique assigns a group or individual to identify potential problems with an alternative?

A) devil's advocate
B) Sloan's judgment
C) sales presentation
D) dialectical inquiry
E) scenario construction