Question 1

People's Airlines offers what it calls "no frills" flights: no reserved seating, no snacks or meals on flights, small planes that fly to smaller airports away from the city centers. People's Airlines is likely following a ________ strategy.

Accepted Answer

People's Airlines is focusing on offering low-cost flights by cutting out amenities like reserved seating and in-flight meals. This aligns with a cost leadership strategy, which is focused on providing the lowest cost product or service in the market.

Question 2

Stars, one of the four business groups in the BCG matrix, are characterized by low growth and high market share.

Accepted Answer

Stars are characterized by high growth and high market share, not low growth. The term "stars" refers to products or services that have high market share in a high-growth market, and therefore have the potential to become cash cows in the future.

Question 3

A turnaround strategy is a type of renewal strategy used when an organization is in serious trouble.

Accepted Answer

A turnaround strategy is a type of renewal strategy that is used to address serious organizational issues, such as financial distress, low profitability, or declining market share. It involves implementing significant changes to the organization's operations, structure, or management to improve its performance and restore its competitiveness.

Question 4

The BCG matrix evaluates an organization's various businesses to identify which ones offer high potential and which ones drain organizational resources.

Accepted Answer

The statement accurately describes the purpose and use of the BCG matrix.

Question 5

A retrenchment strategy is a short-run renewal strategy that helps an organization stabilize operations, revitalize organizational resources and capabilities, and prepare to compete once again.

Accepted Answer

A retrenchment strategy is a short-term strategy that aims to stabilize an organization's operations, revitalize its resources and capabilities, and prepare it to compete once again. It often involves cutting costs, reducing staff, and divesting non-core assets to refocus on core strengths and improve financial performance.

Question 6

List and discuss the three levels of strategy that a large organization must develop.

Accepted Answer

The answer of List and discuss the three levels of...

Question 7

When the price of beef skyrockets, consumers switch to pork and chicken. This demonstrates ________.

Accepted Answer

The behavior of consumers switching to pork and chicken in response to a spike in beef prices shows that there are substitute products available, which implies a high level of threat of substitutes.

Question 8

Discuss the methods by which an organization grows. Give relevant examples.

Accepted Answer

The answer of Discuss the methods by which an organization...

Question 9

A cost leadership strategy requires a firm to ________.

Accepted Answer

A cost leadership strategy requires a firm to maintain the lowest cost structure compared to its competitors. This can be achieved through various methods such as economies of scale, efficient supply chain management, and low-cost labor. By having a lower cost structure, the firm can offer lower prices to its customers or maintain higher profit margins compared to competitors who have higher costs.

Question 10

A ________ describes how a business will compete in its primary market.

Accepted Answer

A competitive strategy describes how a business plans to compete in its primary market, and involves decisions about pricing, marketing, product development, and other aspects of the business. A mission statement articulates the company's overall purpose and values, while a corporate strategy outlines the company's overall direction and focus. Competitive advantage refers to the unique advantage a company has over its competitors in terms of cost, quality, or other factors.

Question 11

When used to connect with customers or to connect employees with co-workers in other locations, social media ________.

Accepted Answer

Social media can create a competitive advantage by building brand awareness, increasing customer engagement, and improving communication and collaboration among employees in different locations. While it is important to monitor social media use to minimize distractions, and protect sensitive information, its benefits can outweigh the risks.

Question 12

A trucking company that grows by purchasing a chain of gasoline stations is engaged in horizontal integration.

Accepted Answer

Horizontal integration involves the acquisition of companies that operate in the same industry and at the same level of the supply chain. Purchasing a chain of gasoline stations would be an example of vertical integration, as the trucking company is acquiring an entity in a different level of the supply chain.

Question 13

Discuss the corporate portfolio matrix and the Boston Consulting Group (BCG) matrix.

Accepted Answer

The answer of Discuss the corporate portfolio matrix and the...

Question 14

When one gas station lowers its price a penny, the station on the other corner of the intersection lowers its price, followed by the gas stations on the next block, and so on, until nearly every gas station in town has lowered its prices. This situation illustrates ________.

Accepted Answer

The scenario described in the question shows intense rivalry among competitors, as gas stations are reacting to each other's price changes in order to maintain their market share. This is a classic example of price competition in a highly competitive market.

Question 15

Kiva Systems, manufacturer of robots used in flexible automation systems, demonstrates the power of ________ by "teaching" its robots to dispose of used cardboard and to assist in gift wrapping for e-commerce warehouse fulfillment.

Accepted Answer

The power demonstrated by Kiva Systems is design thinking, which involves developing creative and innovative solutions to complex problems through a user-centric approach. By "teaching" its robots to handle tasks such as disposing of used cardboard and gift wrapping, Kiva Systems is showcasing how its robots can be designed to meet the needs and preferences of e-commerce warehouse fulfillment operations. The other choices (B, C, and D) may also be relevant to Kiva Systems' operations, but they are not the best fit for the specific demonstration discussed in the question.

Question 16

Which of the following is a competitive force under the five forces model?

Accepted Answer

The five forces model, developed by Michael Porter, includes the threat of new entrants as one of the competitive forces. This force assesses how easy or difficult it is for new companies to start competing in an industry, which can affect the competitive landscape.

Question 17

In an organization, the single independent businesses which formulate their own competitive strategies are known as ________.

Accepted Answer

Strategic business units are independent businesses within an organization that are formulated with their own competitive strategies. These units have their own managers and are responsible for their own profits and losses. Strategic growth units and strategic profit units are not widely recognized terms in the field of business strategy. Service units may be a part of an organization, but they do not typically formulate their own competitive strategies.

Question 18

Bixler Corporation boasts that it has the fewest warranty claims in its industry. We can infer from this that ________.

Accepted Answer

The statement implies that Bixler's products are of superior quality and have fewer defects, which is a competitive advantage in the industry. Option B, C, and D are not related to the inference drawn from the statement.

Question 19

List and discuss the different types of corporate strategies.

Accepted Answer

The answer of List and discuss the different types of...

Question 20

A stability strategy is an organizational strategy in which an organization maintains the status quo.

Accepted Answer

A stability strategy focuses on maintaining the current business operations, products, and markets without making significant changes. It is often adopted when an organization is satisfied with its current position and aims to maintain it.

Quiz 9: Strategic Planning