Question 1

Doug is the CEO of Johnson Motors,a business consisting of Chevrolet,Buick,Cadillac,and Mercedes-Benz dealerships.He also sells Fleetwood and American Coach RVs.Doug mentioned to his sales manager that "there is economic value in having many related businesses managed by one ownership group.They are worth more than if they are separate companies." This is an example of ____.

Accepted Answer

Synergy is the economic value of separate,related businesses under one ownership,and management is greater together than the businesses are worth separately.Example: PepsiCo can apply its marketing muscle not only to Pepsi Cola but also to 7-Up and Mountain Dew,which it also owns.When a company has special strengths in one business,it can apply those to its other related businesses.

Question 2

In the BCG matrix,companies that have high growth and high market share,and are definite keepers are ____.

Accepted Answer

In the BCG matrix,stars have high growth and high market share,and are definite keepers.

Question 3

Mountain Rescue Incorporated sells emergency safety and rescue products to ski patrols and rescue workers at prices that are below those of its competitors,who offer a larger line of products and focus on broader markets.Mountain Rescue Incorporated is pursuing a ____ strategy.

Accepted Answer

The cost-focus strategy is to keep the costs,and hence prices,of a product or service below those of competitors and to target a narrow market.

Question 4

Michael Porter proposed that business-level strategies originate with the primary competitive forces in the firm's environment;these forces are _____.

Accepted Answer

Strategic-management expert Michael Porter suggested in his Porter's model for industry analysis that business-level strategies originate in five primary competitive forces in the firm's environment: (1)threats of new entrants, (2)bargaining power of suppliers, (3)bargaining power of buyers, (4)threats of substitute products or services,and (5)rivalry among competitors.

Question 5

The BCG matrix is a means of evaluating strategic business units on the basis of their _____.

Accepted Answer

The BCG matrix is a means of evaluating strategic business units on the basis of (1)their business growth rates and (2)their share of the market.

Question 6

When organizations endeavor to keep their costs,and hence prices,of their products or services below those of competitors and to target a wide market this is a _____ strategy.

Accepted Answer

The cost-leadership strategy is to keep the costs,and hence prices,of a product or service below those of competitors and to target a wide market.

Question 7

Quality Services is an organization that operates several companies that market food products,restaurant equipment,and paper and plastic products,and it even has a division that counsels restaurant owners,helping them become established.Quality Services is involved in a _____ strategy.

Accepted Answer

Diversification strategy means operating several businesses to spread the risk.Major entertainment/media companies follow this strategy.

Question 8

More important than profit growth,stimulating innovation,customer loyalty,and finding qualified employees,global CEOs desire ____.

Accepted Answer

How important is execution to organizational success in today's global economy? A survey of 769 global CEOs from 40 countries revealed that "excellence in execution" was their most important concern,more important than "profit growth," "customer loyalty," "stimulating innovation," and "finding qualified employees."

Question 9

Tom and his family have developed a successful business selling fertilizer to other farmers in his area,consisting of rich,organic compost material.Recently ABC Seed,a national seed company,has been marketing a chemical fertilizer to his customers that is less expensive than Tom's product.ABC's efforts are an example of ___ in Porter's model for industry analysis.

Accepted Answer

In an example of the threats of substitute products or services,oil companies might worry that Brazil is close to becoming energy self-sufficient because it is able to meet its growing demand for vehicle fuel by substituting ethanol derived from sugarcane for petroleum.

Question 10

Porter's competitive strategies of cost-leadership and differentiation focus on ____ markets,and the cost-focus and focused-differentiation strategies focus on ____ markets.

Accepted Answer

Porter's four competitive strategies (also called four generic strategies)are (1)cost leadership (wide markets), (2)differentiation (wide markets), (3)cost-focus (narrow markets),and (4)focused-differentiation (narrow markets).(See Figure 6.3. )

Question 11

Sales this year at Donna's Pawn Shop have been high,and based on several factors,Donna projects next year's sales to also be good.However,even with her forecast of continued strong sales,Donna and her partner need to develop a plan in case sales drop unexpectedly.This type of planning for alternative future conditions is known as ____.

Accepted Answer

Contingency planning,also known as scenario planning and scenario analysis,is the creation of alternative hypothetical but equally likely future conditions.

Question 12

Successful controlling within an organization,according to Bossidy and Charan,demands that managers build a foundation of controlling using the three core processes of _____.

Accepted Answer

Bossidy and Charan outline how organizations and managers can improve the ability to execute.Effective execution requires managers to build a foundation for execution within three core processes found in any business: people,strategy,and operations.

Question 13

Organic Market sells high-quality products and grocery items that are unique to their area;in addition it offers delivery for customers who are unable to leave their home and a number of regular workshops regarding eating healthy.By offering these types of products and services,Organic Market is pursuing a _____ strategy.

Accepted Answer

The differentiation strategy is to offer products or services that are of unique and superior value compared to those of competitors but to target a wide market.

Question 14

When an organization operates several businesses to spread the risk,such as a landscaping company that offers not only landscaping services but also lawn care,snow removal,and other services,that business is utilizing a ____ strategy.

Accepted Answer

A diversification strategy means operating several businesses to spread the risk.A grocery store sells food,toiletries,pharmaceuticals,cards,flowers,and often more.

Question 15

A company's overall ability to execute is a function of effectively executing according to three processes,but Bossidy and Charan proposed that the _____ process is the most important.

Accepted Answer

A company's overall ability to execute is a function of effectively executing according to three processes: people,strategy,and operations.Because all work ultimately entails some human interaction,effort,or involvement,Bossidy and Charan stated that the people process is the most important.

Question 16

What is the assessment of the external environment? What are the critical issues facing the business? Can the business execute the strategy? According to Bossidy and Charan,these are some of the questions that should be addressed in a _____.

Accepted Answer

According to Bossidy and Charan,a strong strategic plan addresses nine questions,among them: What is the assessment of the external environment? What are the critical issues facing the business? Can the business execute the strategy? Are the short term and long term balanced?

Question 17

ABC Office Supply in Dayton sells high-quality,unique pens that are a real value to executives in the area.No other company in its area markets pens of such quality and value.By offering this type of product,ABC Office Supply is an example of a company utilizing a _____ strategy.

Accepted Answer

The focused-differentiation strategy is to offer products or services that are of unique and superior value compared to those of competitors and to target a narrow market.

Question 18

In the BCG matrix,organizations that have slow growth but high market share,and income from them often finances stars and question marks,are ____.

Accepted Answer

In the BCG matrix,cash cows have slow growth but high market share,and income from them often finances stars and question marks.

Question 19

The process by which a company compares its performance with that of high-performing organizations is known as ___.

Accepted Answer

Benchmarking is a process by which a company compares its performance with that of high-performing organizations.

Question 20

ABC Technology makes and sells only one product,a high-quality processor for mainframe computers,within its market,Silicon Valley,California;ABC utilizes a _____ strategy.

Accepted Answer

In a single-product strategy,a company makes and sells only one product within its market.Making just one product allows you to focus your manufacturing and marketing efforts just on that product.This means that your company can become savvy about repairing defects,upgrading production lines,scouting the competition,and doing highly focused advertising and sales.

Quiz 6: Strategic Management: How Exceptional Managers Realize a Grand Design