Q&A Hero

Q: Within the five forces framework, the five most common threats facing firms from their competitive environment include each of the following except A) substitutes. B) complementors. C) suppliers. D) buyers.

Q: (p. 14) _____ is a critical stage in strategy implementation wherein managers attempt to recast their organization. A. Continuous improvement B. Reengineering C. Strategic control D. Strategy formulation

Q: All of the following are elements of the general environment except A) technological trends. B) demographic trends. C) industrial trends. D) cultural trends.

Q: (p. 14) Which of these refers to short-term, narrow scoped plans that detail "means" or activities that a company will use to achieve short-term projects? A. Policies B. Formality C. Vision D. Functional tactics

Q: In a perfectly competitive industry, A) there are relatively few firms operating in the industry. B) the products and services sold by firms in the industry are very different from each other. C) it is very costly for firms to enter the industry. D) it is not very costly for firms to exit the industry.

Q: (p. 14) Specific actions that need to be undertaken to achieve short-term objectives, usually by functional areas, refers to A. Policies B. Formality C. Tactics D. Process

Q: The ________ consists of broad trends in the context in which a firm operates that can have an impact on a firm's strategic choices. A) micro-environment B) general environment C) task environment D) internal environment

Q: (p. 13) Horizontal integration is an example of a A. Generic strategy B. Grand strategy C. Functional level strategy D. SBU strategy

Q: (p. 12) Which of the following is a generic strategy option? A. Narrow margins B. Diversification C. Differentiation D. Retrenchment

Q: All divestments are caused by industry decline.

Q: (p. 14) Broad, precedent-setting decisions that guide or substitute for repetitive or time-sensitive managerial decision making are called A. Goals B. Strategies C. Objectives D. Policies

Q: (p. 12) The general plan of major actions through which a firm intends to achieve is long-term objectives is called its: A. Corporate plan B. Long-term goal C. Grand strategy D. Mission

Q: The objective of divestment is to extract a firm from a declining industry.

Q: (p. 14) The minimum equity position required for all new McDonald's franchises is an example of: A. A goal B. A procedure C. A policy D. An objective

Q: (p. 12) Long-term objectives are principally attained through: A. Annual goals B. Functional strategies C. Short-term goals D. Grand strategy

Q: Firms pursuing a harvest strategy in a declining industry do not expect to remain in the industry over the long term.

Q: (p. 13) Which of the following is an example of a grand strategy? A. Decentralization B. Policy making C. Conglomerate integration D. Innovation

Q: (p. 13) Grand strategies include: A. Market turnaround B. Vertical diversification C. Conglomerate integration D. Concentric diversification

Q: A firm following a niche strategy in a declining industry reduces its scope of operations and focuses on narrow segments of the declining industry.

Q: (p. 12-13) The difference between long-term and short-term objectives is principally: A. Greater attainability B. Greater flexibility C. Greater measurability D. Greater specificity

Q: (p. 12) The doubling of EPS within 5 years with increases in each intervening year is called a(n): A. Long-term goal B. Long-term objective C. Short-term goal D. Short-term objective

Q: A fragmented industry is an industry that has experienced an absolute decline in unit sales over a sustained period of time.

Q: (p. 12) The results that an organization seeks over a multiyear period are its A. Generic strategies B. Grand strategies C. Mission statements D. Long-term objectives

Q: (p. 11) Description of the company's product, market and technological areas of emphasis is contained in the A. Assessment of the external environment B. Company profile C. Company mission D. Interactive opportunity analysis

Q: Product innovation is an effort to refine and improve a firm's current processes.

Q: (p. 12) Which one of the following is NOT an interactive segment of a firm's external environment? A. Functional B. Remote C. Industry D. Operating

Q: Mature industries are characterized by elements such as slowing growth in total industry demand, a slowdown in increases in product capacity, and an overall increase in the profitability of firms in the industry.

Q: (p. 12) The external environment consists of: A. The operating environment B. Managers C. Employees D. Owners

Q: (p. 12) Analysis of the quantity and quality of the company's financial, human and physical resources is a part of A. Internal analysis B. Mission statement C. External environment analysis D. Corporate goals

Q: (p. 12) Social responsibility is a critical consideration for a company's strategic decision makers since A. Stockholders demand it B. The mission statement must express how the company intends to contribute to the societies that sustain it C. It increases a company's profits D. It helps make decisions

Q: If you were to purchase a new Apple iPod and were unable to use your previously downloaded library of digital music with your new iPod, this would be an example of a customer-switching cost you would incur to use Apple's product.

Q: (p. 10) Which of the following is a major function of the strategic management model? A. It helps make profits for the firm B. It helps in identifying key issues faced by the firm C. It helps in deciding which products to sell D. It depicts the sequence and relationships of the major components of the strategic management process

Q: (p. 10) The behavioral consequences of strategic management are similar to those of A. authoritative decision making B. centralized decision making C. autocratic decision making D. participative decision making

Q: First movers that invest only in technology usually obtain sustained competitive advantages, even if they do not tie up strategically valuable resources in an industry before their full value is widely understood.

Q: (p. 10) Which of these is NOT true about the behavioral effect of strategic management? A. Strategy formulation activities enhance the firm's ability to prevent problems B. Resistance to change is reduced C. Gaps and overlaps in activities among individuals and groups are increased to ensure the checks and balance D. The employee involvement is strategy formulation improves their understanding of the productivity reward relationship in every strategy plan

Q: (p. 9) When the dominance of the CEO approaches autocracy, the effectiveness of the form's strategic planning and management processes are likely to: A. Enhance strategic planning but diminish its processes B. Be greatly enhanced C. Have no effect D. Be diminished

Q: The major opportunity facing firms in fragmented industries is the implementation of strategies that begin to consolidate the industry into a smaller number of firms.

Q: (p. 9) Managers at the _____ level typically have principal responsibilities for developing environmental analysis and forecasting, establishing business objectives and developing business plans prepared by staff groups. A. Corporate B. Functional C. Operational D. Business

Q: (p. 9) The ideal strategic management team includes decision makers from A. All three company levels (corporate, business and functional) B. Just the functional level since they are closest to the customers C. Just the corporate and business levels given that they focus on doing the right thing D. Just the top management since they understand the big picture

Q: An emerging industry is an industry in which a large number of small or medium-sized firms operate and no small set of firms has a dominant market share or creates dominant technologies.

Q: (p. 9) Which of these is NOT a mode of formality identified by Mintzberg? A. Adaptive B. Planning C. Functional D. Entrepreneurial

Q: (p. 9) According to Mintzberg, the adaptive mode refers to A. Strategic formality associated with the large firms that operate under a comprehensive, formal planning system B. Strategic formality associated with medium-sized firms that emphasize the incremental modification of existing competitive approaches C. Strategic formality associated with global firms that emphasize cultural value systems D. Informal, intuitive and limited approach to strategic management with owner-manager of smaller firms

Q: In general, it is rarely the case that all five forces in the five forces framework will be equally threatening at the same time.

Q: It is possible for a single firm to be a complementor of one firm and a competitor of another.

Q: (p. 9) The planning mode refers to the A. Strategic formality associated with the large firms that operate under a comprehensive, formal planning system B. Strategic formality associated with medium-sized firms that emphasize the incremental modification of existing competitive approaches C. Strategic formality associated with global firms that emphasize cultural value systems D. Informal, intuitive and limited approach to strategic management with owner-manager of smaller firms

Q: (p. 9) The informal, intuitive and limited approach to strategic management associated with owner-managers of smaller firm refers to the ____ mode of formality, according to Mintzberg. A. Entrepreneurial B. Functional C. Planning D. Adaptive

Q: If the owner of a jewelry store who normally purchased diamonds from a diamond brokerage firm were to open its own diamond brokerage firm, this would be an example of forward vertical integration.

Q: According to Bradenburger and Nalebluff, a firm's competitors help increase the size of a firm's markets while complementors divide this market among a set of firms.

Q: (p. 9) Firms that are basically under the control of a single individual and produce a limited number of products/services are referred to as following ______ mode. A. Entrepreneurial B. Intrapreneurial C. Managerial D. Corporate

Q: The threat of buyers is greater if the products or services that are being sold to buyers are standard and not differentiated than if the products sold to buyers are highly differentiated.

Q: (p. 9) Henry Mintzberg identified a mode which he associates with medium-sized firms in relatively stable environments. This is referred to as a(n) ____ mode. A. Entrepreneurial B. Adaptive C. Business D. Planning

Q: Sophisticated software can enhance the value that customers receive from a personal computer. Therefore, software can be said to be a complementor of a personal computer.

Q: (p. 9) According to Henry Mintzberg, very large firms typically use the _____ mode of strategic management. A. Adaptive B. Entrepreneurial C. Informal D. Planning

Q: Suppliers are a greater threat to firms in an industry when suppliers are threatened by substitutes.

Q: (p. 9) According to Henry Mintzberg, there are ____ modes based upon formality in strategic management. A. 4 B. 2 C. 5 D. 3

Q: (p. 8) Which of these is usually positively correlated with the cost, comprehensiveness, accuracy and success of planning? A. Greater formality B. Functional structure C. Organizational matrix D. Functional tactics

Q: A firm's supplier poses a greater threat if the supplier's industry has a large number of firms, none of which dominate the supplying industry, than if the supplier's industry is dominated by a small number of firms.

Q: (p. 8) Which one of these forces DOES NOT determine how much formality is needed in strategic management? A. Size B. Country of origin C. Complexity of environment D. Predominant management style

Q: (p. 8) The degree to which participation, responsibility, authority and discretion in decision-making are specified is called: A. Informality B. Formality C. Functional tactic D. Dynamic mode

Q: (p. 8) Decisions concerning plant location, distribution channels, geographic coverage and market segmentation are typically made at: A. The corporate level B. The business level C. The functional level D. The front-line operational level

Q: In an industry, the products or services provided by a firm's rivals meet approximately the same customer needs in the same way as the products or services provided by the firm itself, whereas substitutes meet approximately the same customer needs but do so in different ways.

Q: (p. 8) Corporate-level decisions are characterized by: A. Decreased risk B. Doing things right C. Short-time horizons D. Greater profit

Q: The threat of rivalry tends to be high in an industry when firms are able to meaningfully differentiate their products.

Q: (p. 8) Which level of decisions encompasses greater risk, cost and profit potential? A. Business B. Lower echelon C. Corporate D. Functional

Q: (p. 8) Dividend policies are decided at the A. Corporate level B. Business level C. Functional level D. Operational level

Q: Learning-curve cost advantages are present when the cost of production falls with the cumulative volume of production.

Q: (p. 7) Decisions at which level of management tend to be more value-oriented and conceptual? A. Functional B. Corporate C. Operative D. Business

Q: (p. 7) Whereas corporate and business-level managers center their attention on _____, managers at functional-level center their attention on ____. A. Operational issues; strategic issues B. Doing things right; doing the right things C. Entrepreneurial mode; adaptive mode D. Doing the right things; doing things right

Q: Proprietary technology is more important as a barrier to entry than is managerial know-how.

Q: (p. 6) Functional managers are typically responsible for which of the following? A. Annual objectives B. Tactics C. Corporate goals D. Mission

Q: (p. 6) Which of the following is NOT a level in the decision-making hierarchy of a firm? A. Business B. Corporate C. Operative D. Functional

Q: (p. 6) Which strategic level is typically responsible for developing annual objectives and short-term strategies? A. Functional level B. Corporate level C. Business level D. Board of Directors level

Q: Brand identification and customer loyalty serve as entry barriers because new entrants not only have to absorb the standard costs associated with starting production in a new industry, but also have to absorb the costs associated with overcoming an incumbent firm's differentiation advantages.

Q: (p. 6) The functional level of decision making is characterized by: A. The board of directors deriving corporate goals B. Managers of product, geographic and functional areas C. The CEO developing a company profile D. Business managers interpreting the mission into operational objectives

Q: (p. 6) Which of these managers tries to identify and secure the most profitable and promising market segment? A. Functional managers B. Corporate managers C. Business managers D. Operative

Q: Diseconomies of scale exist in an industry when a firm's costs fall as a function of that firm's volume of production.

Q: (p. 6) Who determines the basis on which a company can compete in the selected product-market arena? A. Functional-level strategic managers B. Corporate-level strategic managers C. Business-level strategic managers D. Operational managers supervising operative

Q: (p. 6) In the middle of the decision-making hierarchy is the _____ level. A. Corporate B. Functional C. Business D. Strategic

Q: The threat of entry in an industry depends on the cost of entry, and the cost of entry, in turn, depends upon the existence and "height" of barriers to entry.

Q: (p. 6) At Office Supply, Inc., ____ -level managers would be responsible for determining whether the company should be involved in home furnishings or electronic appliance businesses, where as ____ -level managers would be responsible for determining how the firm will compete in the selected product-market arena. A. Business; corporate B. Corporate; functional C. Functional; business D. Corporate; business