Question 1

When an organization focuses on making itself more competitive by producing products more cheaply than competitors can,it is following a ________.

Accepted Answer

A cost leadership strategy is aimed at becoming the lowest-cost producer in the industry, allowing the organization to price its products lower than competitors or achieve higher margins.

Question 2

Which one of the following strategy formulation tools outlines the primary forces that determine competitiveness within an industry and illustrates how those forces are related?

Accepted Answer

The answer of Which one of the following strategy formulation...

Question 3

An SBU with a relatively small market share of a low-growth market is a ________.

Accepted Answer

An SBU (Strategic Business Unit) with a relatively small market share in a low-growth market is classified as a "dog" according to the Boston Consulting Group (BCG) matrix. Dogs are considered to have low potential and may not generate significant profits.

Question 4

Which one of the following is true about a star SBU?

Accepted Answer

Star SBUs are characterized by their high market share in high-growth markets, which often requires significant investment to support and capitalize on the rapid growth.

Question 5

________ is a strategy that emphasizes making an organization more competitive by targeting a particular customer type.

Accepted Answer

Focus strategy is about targeting a specific market niche, where the organization aims to achieve competitive advantage by focusing on the needs of a particular group of customers.

Question 6

An SBU with a large market share of a low-growth market is a ________.

Accepted Answer

An SBU (Strategic Business Unit) with a large market share in a low-growth market is referred to as a "cash cow" in the BCG matrix. This term is used because such businesses generate more cash than they consume, allowing companies to invest in other areas.

Question 7

Which strategy is an organization following when it focuses on making an organization more competitive by developing a product or products that customers perceive as being different from products offered by competitors?

Accepted Answer

The differentiation strategy involves making an organization more competitive by developing unique products that customers perceive as different and better than those of competitors. This approach emphasizes uniqueness and innovation in product features, quality, or brand image.

Question 8

In an attempt to offer better deals to customers and thereby increase its market share,Dun's Burgers renegotiated for lower prices from its main supplier of beef.Dun's Burgers is using which of the following strategies to attract customers?

Accepted Answer

Dun's Burgers is using a cost leadership strategy by renegotiating for lower prices from its supplier to offer better deals to customers, aiming to increase its market share through lower costs.

Question 9

A business strategy that is generally applied to star or question mark SBUs is ________.

Accepted Answer

Star or question mark SBUs (Strategic Business Units) are typically in the growth phase of the product life cycle or in markets with high growth potential. Therefore, a growth strategy is generally applied to these types of SBUs to capitalize on their potential and secure a dominant market position.

Question 10

________ is a strategy adopted by management to increase the amount of business that an SBU is currently generating.

Accepted Answer

Growth strategies are specifically designed to increase the amount of business that a Strategic Business Unit (SBU) is currently generating. This can involve expanding into new markets, increasing market share, or launching new products or services.

Question 11

The Razzmatazz Group of companies plans to launch a new flavor of crackers that is distinct and unusual.Which one of the following strategies is the company following to become more competitive?

Accepted Answer

The Razzmazz Group is aiming to become more competitive by launching a new and unique flavor of crackers, which aligns with the differentiation strategy. This approach involves offering distinctive products or services to stand out in the market.

Question 12

GenEx Group manufactures a variety of products for different markets.One of its SBUs,GenEx Textiles,is one of its leading revenue generators.GenEx Textiles is the leading player in the market for textiles.However,the parent company has realized that growth prospects in the textile industry is limited.The company has already exploited the market to the fullest and sustained growth in the future is unlikely.In fact,a substantial amount of the revenue generated from this textile business is used to fund other SBUs of the parent company.GenEx Textiles is an example of a ________ for the GenEx Group.

Accepted Answer

GenEx Textiles is described as a leading player in its market with limited growth prospects, where the revenue it generates is used to fund other strategic business units (SBUs) of the parent company. This scenario fits the definition of a "cash cow" in the BCG matrix, which refers to a business unit that has a large market share in a mature, slow-growing industry and generates more cash than it needs to maintain its market share.

Question 13

Which one of the following strategy formulation tools was specifically developed to expand on the BCG Growth-Share Matrix?

Accepted Answer

The GE Multifactor Portfolio Matrix was specifically developed to expand on the BCG Growth-Share Matrix by incorporating multiple factors to assess industry attractiveness and business strength, rather than just market growth rate and market share.

Question 14

With the GE Multifactor Portfolio Matrix,the businesses falling in the cells that form a diagonal from lower left to upper right are ________.

Accepted Answer

The GE Multifactor Portfolio Matrix evaluates business units on two dimensions: industry attractiveness and competitive strength. Businesses that fall in the diagonal from lower left to upper right are considered of medium strength. They are in a position where selective investment is advised, focusing on those with potential for growth or improvement in their competitive position.

Question 15

Which one of the following is true about a cash cow?

Accepted Answer

Cash cows are defined as businesses or products that have a large share of a slow-growing market. They generate more cash than they consume, which makes them valuable assets for a company. This is because they require less investment to maintain their market position and can provide the company with funds to invest in other areas.

Question 16

Dun's Burgers has decided to open takeaway counters that will be open until 11 p.m.to cater to people who return late from work.This turns out to be an excellent strategy as Dun's becomes a hot favorite with the people who work late shifts.This is an example of ________.

Accepted Answer

This is an example of a focus strategy, where Dun's Burgers has identified and targeted a specific segment of the market - people who work late shifts - by offering a product tailored to their needs (takeaway counters open until 11 p.m.).

Question 17

Which one of the following is true about the GE Multifactor Portfolio Matrix?

Accepted Answer

The GE Multifactor Portfolio Matrix is a strategic planning tool that helps managers develop organizational strategies based on two dimensions: market attractiveness and business strengths.

Question 18

Kreme Makeups,Inc. ,an SBU of Kreme Industries,offers a wide variety of makeup products and accessories for women.Although the market growth rate is high,the SBU's current market share is low and it needs substantial investment.The parent company is trying to decide if Kreme Makeups has long-term sustainability before investing any more cash in it.In the context of the BCG matrix,this SBU of Kreme Industries would be classified as a ________.

Accepted Answer

Kreme Makeups, Inc. is described as having a high market growth rate but a low market share, which requires significant investment to improve its position. This fits the definition of a "question mark" in the BCG matrix, which are businesses that operate in high growth markets but have low market shares.

Question 19

An SBU of FlexiTech Inc.manufactures CD drives.Although it has a large share in the market and the product makes significant profits for the company,market growth potential is limited.Under which quadrant of the BCG Growth-Share Matrix does the CD manufacturing unit fall?

Accepted Answer

The CD manufacturing unit of FlexiTech Inc. falls under the "cash cow" quadrant of the BCG Growth-Share Matrix because it has a large market share and generates significant profits, but operates in a market with limited growth potential. Cash cows are typically established products or services with low growth prospects but high market share, providing steady income.

Question 20

An SBU with a small market share of a high-growth market is a ________.

Accepted Answer

An SBU (Strategic Business Unit) with a small market share in a high-growth market is referred to as a "question mark" in the BCG matrix. This is because it's uncertain whether these units will become stars (with high market share in a high-growth market) or fall into decline, necessitating strategic decisions about investment or divestment.

Quiz 9: Strategic Planning: Strategies, tactics, and Competitive Dynamics