BUSI 400 Homework 1 Strategic Analysis Introduction Assignment solutions complete answers

BUSI 400 Homework 1 Strategic Analysis Introduction Assignment solutions complete answers 

 

Apple’s success under its former CEO, Steve Jobs, was largely attributed to the quality of its leader. According to the text, this would be an example of the "romantic" perspective of leadership.

 

Strategic management consists of the analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages.

 

Management innovations such as total quality, just-in-time, benchmarking, business process reengineering, and outsourcing are important but not enough for building sustainable competitive advantage.

 

Trade-off decisions between effectiveness and efficiency are important in the practice of strategic management.

 

According to Henry Mintzberg, a management scholar, most firms do not realize their original intended strategy.

 

The final realized strategy of a firm is a combination of deliberate and time-tested strategies only.

 

Strategy analysis is the study of only the big picture external environments of the firm.

 

All successful firms compete and outperform their rivals by developing bases for competitive advantage, which can be achieved only through cost leadership.

 

The three primary participants in corporate governance are: (1) the shareholders, (2) the management (led by the chief executive officer), and (3) the employees.

 

Decisions by boards of directors are always consistent with shareholder interests.

 

Ensuring effective corporate governance requires an effective and engaged board of directors, uninvolved shareholders, and proper managerial rewards and incentives.

 

Social responsibility is the idea that organizations are only accountable to stockholders.

 

Shell, NEC, and Procter and Gamble have been measuring their performance according to what has been called a triple bottom line. This technique involves an assessment of financial, social, and environmental performance.

 

Sustainability is being increasingly recognized as a source of cost efficiencies and revenue growth.

 

Strategic management requires managers at all levels of the organization to take a segregated view of the organization.

 

The strategic management process should be addressed only by top-level executives. Midlevel and low-level employees are best equipped to implement the strategies of the organization.

 

Richard Branson, the founder of the Virgin Group, is well known for creating an inclusive organizational structure in which anybody in the organization can be involved in generating and acting on new business ideas.

 

The vision of an organization is at the top level of its hierarchy of organizational goals. The vision statement should be massively inspiring, overarching, and long term.

 

Much research has supported the notion that individuals work much harder when they are asked to do their best rather than when they are striving toward a specific goal.

 

An idealistic vision can arouse employee enthusiasm and therefore is a good vision.

 

The fast-fashion business model of companies such as Inditex SA, the owner of Zara and several other brands, is fundamentally sustainable.

 

The text addresses two perspectives of leadership as well as their implications. These two perspectives are

A) romantic and unromantic.

B) romantic and internal control.

C) external control and unromantic.

D) romantic and external control.

 

A leader in retail mattress retailing, Houston-based Mattress Firm, founded in 1986, acquired one of its chief rivals, Sleepy’s, in 2015 for 780 million USD, thus giving it access to the important online marketplace. Mattress Firm continued to expand its retail operations largely through acquisitions that resulted in marketplace saturation of the physical retail alternatives it now owned. By 2015, online rivals such as Casper Sleep Inc. eroded Mattress Firm’s market domination with their easy online purchasing logistics. What went wrong?

A) CEO Steve Sanger faced external environmental challenges that affected the success of the company.

B) Online retailers lacked physical retail locations.

C) The cost of operating online operations was too high for Mattress Firm.

D) Retail purchasers preferred to test mattresses in the store.

 

A CEO made a lot of mistakes in assessing the market and the competitive conditions and improperly redesigning the organization into numerous business units. Such errors led to significant performance declines. According to the text, this example illustrates the ________ perspective of leadership.

A) external control

B) romantic

C) internal mechanism

D) operational

 

According to the external control view of leadership, which of the following factors would not be considered an external factor that might positively or negatively affect a firm's success?

A) economic downturns

B) governmental legislation

C) outbreak of war

D) company employee morale

 

According to the text, the strategic management process entails three ongoing processes. They are

A) analyses, actions, and synthesis.

B) analyses, decisions, and actions.

C) analyses, evaluation, and critique.

D) analyses, synthesis, and decisions.

 

Management innovations such as total quality, benchmarking, and business process reengineering cannot lead to sustainable competitive advantage because

A) companies that have implemented these techniques have lost money.

B) there is no proof that these techniques work.

C) they cost too much money and effort to implement.

D) many companies are trying to implement them.

 

The organizational versus the individual rationality perspective suggests that objectives that are

A) good for a functional area are always good for the overall organization.

B) good for the overall organization are always best for a functional area.

C) best for a functional area may not be best for the overall organization.

D) best for one functional area will never be best for all functional areas.

 

The four key attributes of strategic management include the idea that strategy must

A) be directed toward overall organizational goals and objectives.

B) be focused only on long-term objectives.

C) be focused on only one specific area of an organization.

D) focus only on competitor strengths.

 

The four key attributes of strategic management include all of the following except

A) including multiple stakeholder interests in decision making.

B) incorporating both short-term and long-term perspectives.

C) recognizing the trade-offs between effectiveness and efficiency.

D) emphasis on the attainment of short-term objectives.

 

Effectiveness is often defined as

A) doing things right.

B) stakeholder satisfaction.

C) doing the right thing.

D) productivity enhancement.

 

In choosing to focus on stakeholders, which of the following will not lead to success for a manager?

A) shareholders and employees

B) employees and suppliers

C) customers and the community at large

D) customers only

 

In strategic management, both the short-term and long-term perspectives need to be considered because

A) shareholder value is only measured by short-term returns.

B) shareholders only care about long-term returns.

C) long-term vision precludes the analysis of present operating needs.

D) the creative tension between the two forces managers to develop more successful strategy.

 

Strategic management involves the recognition of trade-offs between effectiveness and

A) cost.

B) value.

C) return on investment.

D) efficiency.

 

All the following are ambidextrous behaviors except

A) taking initiative and being alert to opportunities beyond the job description.

B) being cooperative and seeking opportunities to combine personal efforts with that of others.

C) intensely focusing on the responsibilities of one individual and maximizing the output of the department in the organization in which that individual works.

D) being brokers, always looking to build internal linkages.

 

Ambidextrous behaviors in individuals illustrate how a dual capacity for ________ can be woven into the fabric of an organization at the individual level.

A) alignment and adaptability

B) alignment and transparency

C) alignment and internal linkages

D) alignment and efficiency

 

The innovation paradox implies that consistency in products and services provokes a tension with the need for new products. This results in a conflict between

A) stability and change.

B) structure and culture.

C) rewards and metrics.

D) stability and metrics.

 

According to Henry Mintzberg, the final realized strategy of a firm is

A) a combination of deliberate and emergent strategies.

B) a combination of deliberate and differentiation strategies.

C) not deliberate.

D) a result of unrealized intended strategy.

 

________ may be considered the advance work that must be done in order to effectively formulate and implement strategies.

A) Goal setting

B) Corporate entrepreneurship

C) Strategy analysis

D) Organizational design

 

Strategy analysis is the starting point of the strategic management process and consists of the

A) analysis only of the vision, mission, and objectives of the firm.

B) analysis of the relevant internal and external environmental factors only.

C) analysis of relevant competitors only.

D) matching of vision, mission, and objectives with the relevant internal and external environmental factors.

 

Strategy formulation at the business level addresses best how to compete in a given business

A) to attain competitive advantage.

B) to reduce costs.

C) to decrease buyer power.

D) to thwart entry of new rivals.

 

Corporate level strategy focuses on what businesses to compete in and

A) how business can be managed to achieve synergy.

B) how business can be managed to reduce synergy.

C) how the firm can work as a stand-alone entity.

D) how the firm can create more value by operating alone.

 

Corporate-level strategy looks at how to manage the ________ of its businesses to create synergies.

A) portfolio

B) stock prices

C) competitors

D) market pricing

 

Entering foreign markets requires firms to ascertain foremost how they will attain

A) market share.

B) low costs.

C) competitive advantage.

D) low returns on investment.

 

New value creation is a major engine for economic growth and is the main focus of ________ strategy.

A) portfolio

B) corporate-level

C) business-level

D) entrepreneurial

 

Two types of strategic control that firms must exercise for good strategy implementation are

A) informational and confrontational.

B) confrontational and behavioral.

C) behavioral and financial.

D) informational and behavioral.

 

Effective organizational design means that firms must have ________ that are consistent with their strategy.

A) designs and plans

B) organizational structures and designs

C) adopters and designs

D) adopters and plans

 

Learning organizations permit the entire organization to benefit from ________ talents.

A) internal and external

B) individual and collective

C) internal and collective

D) external and individual

 

Effective leaders set a direction and develop an organization so that it is committed to excellence and ________ behavior.

A) performant

B) strategic

C) ethical

D) positive

 

Strategies should be formulated that enhance foremost the ________ capacity of a firm.

A) innovative

B) learning

C) implementation

D) business-level

 

Strategy implementation can be the most difficult part of the strategic management process. Which of the following is not likely to be a cause of implementation failure?

A) leadership

B) competition

C) coordination and integration of activities within and outside of the firm

D) organizational commitment to excellence

 

In the interview with Usman Ghani, Chairman of ConfluCore, he finds that key attributes of successful strategies include all but which of the following?

A) Considered strategic processes are applied.

B) Strategies display systematic adaptability.

C) Customer offerings are effectively differentiated by the organizations.

D) To ensure that customer offerings are differentiated, management need not be assessed regularly.

 

The three participants in corporate governance are the shareholders,

A) board of directors, and employees.

B) labor unions, and employees.

C) board of directors, and management.

D) banks and lending institutions, and management.

 

While working to prioritize and fulfill their responsibilities, members of the board of directors of an organization should

A) represent their own interests.

B) represent the interests of the shareholders.

C) direct all actions of the CEO.

D) emphasize the importance of short-term goals.

 

Members of boards of directors are

A) appointed by the Securities and Exchange Commission.

B) elected by the shareholders as their representatives.

C) elected by the public.

D) only allowed to serve one term of four years.

 

An organization is responsible to many different entities. In order to meet the demands of these groups, organizations must participate in stakeholder management. Stakeholder management means that

A) interests of the stockholders are not the only interests that matter.

B) stakeholders are second in importance to the stockholders.

C) stakeholders and managers inevitably work at cross-purposes.

D) all stakeholders receive financial rewards.

 

Stakeholders are

A) a new way to describe stockholders.

B) individuals, groups, and organizations who have a stake in the success of the organization.

C) creditors who hold a lien on the assets of the organization.

D) attorneys and their clients who sue the organization.

 

Procter and Gamble has perfected a technique for compacting cleaning powder into a liquid concentration. Consumers, retailers, shipping and wholesalers, and environmentalists all have benefited from the resulting change in consumer shopping habits and the revolution in industry supply-chain economics. According to the text, this is an example of

A) zero-sum relationship among stakeholders.

B) stakeholder symbiosis.

C) rewarding stakeholders.

D) emphasizing financial returns.

 

There are several perspectives of competition. One perspective is zero-sum thinking. Zerosum thinking means that

A) all parts of the organization gain at no loss.

B) in order for someone to gain others must experience no gain or benefit.

C) one can only gain at the expense of someone else.

D) everyone in the organization shares gains and losses equally.

 

Managers should do more than focus on short-term financial performance. One concept that helps managers do this is stakeholder symbiosis. This means that

A) stakeholders are dependent on each other for their success.

B) stakeholders look out for their individual interests.

C) one can only gain at the expense of someone else.

D) all stakeholders want to maximize shareholder returns.

 

Employee stakeholders are concerned with

A) taxes, warranties, and regulations.

B) wages, benefits, and job security.

C) good citizenship behavior.

D) dividends.

 

Stockholders as a stakeholder group are interested primarily in

A) payment of interest and repayment of principal.

B) value and warranties.

C) dividends and capital appreciation.

D) taxes and compliance with regulations.

 

Wall Street executives have received excessive bonus pay in the past. This concerns which of the following stakeholder groups most directly?

A) government

B) suppliers

C) creditors

D) stockholders

 

Supplier stakeholders are concerned with

A) assurance of a continued relationship with the firm.

B) employee benefits.

C) safe working conditions.

D) capital appreciation.

 

Community stakeholders are concerned primarily with

A) product warranties.

B) corporate citizenship behavior.

C) capital appreciation.

D) repayment of principal.

 

Firms must be aware of goals other than short-term profit maximization. One area of concern should be social responsibility, which is the

A) expectation that business will strive to improve the overall welfare of society.

B) idea that organizations are solely responsible to local citizens.

C) fact that court costs could impact the financial bottom line.

D) idea that businesses are responsible for maintaining a healthy social climate for their employees.

 

According to the text, the triple bottom line approach to corporate accounting includes which three components?

A) financial, environmental, and customer

B) financial, organizational, and customer

C) financial, environmental, and social

D) financial, organizational, and psychological

 

A key stakeholder group that is particularly susceptible to corporate social responsibility (CSR) initiatives is

A) suppliers.

B) rivals.

C) government agencies.

D) consumers.

 

According to the Corporate Citizenship poll conducted by Cone Communications, most Americans say they would be likely to switch brands to one associated with a good cause, if there are similarities between

A) price and availability.

B) availability and quality.

C) price and quality.

D) price and durability.

 

According to a CEO survey by Accenture, ________ are not mutually exclusive corporate goals.

A) quality and profitability

B) sustainability and profitability

C) ROI and quality

D) availability and ROI

 

The ROI on sustainability efforts can be difficult to quantify because

A) an excess of necessary data for accurate calculation is readily available.

B) benefits from such projects are tangible.

C) the payback period is on a different time frame.

D) the payback period is on the same time frame.

 

Sustainability programs often find their success beyond company boundaries, thus ________ systems and ________ metrics cannot capture all of the relevant numbers.

A) external; bio

B) internal; process

C) external; external

D) internal; internal

 

Traditional financial models are built around relatively easy-to-measure, monetized results; whereas, the benefits of sustainability projects involve

A) clear tangibles.

B) clear intangibles.

C) fuzzy tangibles.

D) fuzzy intangibles.

 

The case for sustainability projects needs to be made on the basis of a more holistic and comprehensive understanding of all the ________ benefits.

A) measurable and unmeasurable

B) financial and physical

C) tangible and intangible

D) measurable and physical

 

Some benefits of sustainability projects include

A) reducing risks.

B) lagging behind regulations.

C) displeasing communities.

D) ignoring employee morale.

 

Many organizations have a large number of functional areas with very diverse and sometimes competing interests. Such organizations will be most effective if

A) each functional area focuses on achieving their own goals.

B) goals are defined at the bottom and implemented at the top.

C) functional areas work together to attain overall goals.

D) management and employees have separate goals.

 

Strategy formulation and implementation is a challenging ongoing process. To be effective, it should not involve

A) the CEO and the board of directors.

B) the board of directors, CEO, and CFO.

C) rivals.

D) line and staff managers.

 

The text argues that a strategic perspective in an organization should be emphasized

A) at the top of the organization.

B) at the middle of the organization.

C) throughout the organization.

D) from the bottom up.

 

Peter Senge, of MIT, recognized three types of leaders. ________ are individuals that, although having little positional power and formal authority, generate their power through the conviction and clarity of their ideas.

A) Local line leaders

B) Executive leaders

C) Internal networkers

D) Shop floor leaders

 

Peter Senge, of MIT, recognized three types of leaders. Which of the following describes individuals who champion and guide ideas, create learning infrastructure, and establish a domain for taking action?

A) local line leaders

B) executive leaders

C) internal networkers

D) shop floor leaders

 

Leadership is a necessary (but not sufficient) condition for organizational success. Leaders should emerge at which level(s) of an organization?

A) only at the top

B) in the middle

C) throughout the organization

D) only during times of change

 

Local line leaders have ________ responsibility.

A) local

B) executive

C) profit-and-loss

D) no

 

Internal networks generate their power through the ________ of their ideas.

A) validity and correctness

B) conviction and clarity

C) validation and recognition

D) approval and awareness

 

Executive leaders champion and guide ideas by

A) reinforcing ideas that did not work.

B) creating a learning infrastructure.

C) validating their formal authority.

D) increasing their personal power.

 

Richard Branson, founder of the Virgin Group, empowers his companies through a(n) ________ structure in which anyone can bring forth new ideas.

A) formal

B) hierarchal

C) multi-level

D) informal

 

To inculcate a strategic management perspective, managers must create management ________ to foster change.

A) processes

B) buy-back

C) structures

D) edicts

 

Netflix inculcates a strategic management perspective by

A) emphasizing transparency.

B) creating an environment of non-sharing.

C) obliging a top-down management style.

D) training only high potential employees.

 

For strategic management to be effective in achieving organizational goals,

A) people throughout the organization must work in isolation.

B) top managers only take an integrative, strategic perspective.

C) leaders alone are responsible for the organizational outcome.

D) people throughout the organization must strive toward overall goals.

 

Richard Branson of the Virgin Group believes that the ________ of a person should not dictate the level of influence their ideas should be accorded.

A) age

B) seniority

C) position

D) education

 

The hierarchy of organizational goals is in the following order (least specific to most specific):

A) vision statements, strategic objectives, mission statements.

B) mission statements, strategic objectives, vision statements.

C) vision statements, mission statements, strategic objectives.

D) mission statements, vision statements, strategic objectives.

 

Vision statements are used to create a better understanding of the overall purpose and direction of the organization. Vision statements

A) are very specific.

B) provide specific objectives.

C) set organizational structure.

D) are massively inspiring.

 

Effective vision statements include

A) all strategic directions of the organization.

B) a brief statement of the company's direction.

C) strategic posturing and future objectives.

D) financial objectives and projected figures.

 

WellPoint Health Network states: WellPoint will redefine our industry through a new generation of consumer-friendly products that put individuals back in control of their future. This is an example of a

A) strategic objective.

B) vision statement.

C) vague statement of direction.

D) line manager's individual goal.

 

Although such visions cannot be accurately measured by a specific indicator of how well they are being achieved, they do provide a fundamental statement of the ________ of an organization.

A) values, aspirations, and goals

B) expected returns and limitations

C) outstanding debt

D) credibility

 

In contrast to the vision of an organization, its mission should

A) be shorter in length.

B) encompass both the purpose of the company as well as the basis of competition.

C) encompass all the major rules and regulations of the corporate work force.

D) be less detailed.

 

The vision and mission statements of a company set the overall direction of the organization. Strategic objectives serve what role?

A) operationalize the mission statement

B) modify the mission statement

C) are a shorter version of the mission statement

D) are only clarified by the board of directors

 

Successful organizations are effective in motivating people. Employees work best when

A) they are asked to do their best.

B) work requirements are vague and unclear.

C) they are striving toward specific goals.

D) they are guided by an abstract mission statement.

 

Fortune Brands states they will cut corporate overhead costs by $30 million a year. This is an example of a

A) nonfinancial strategic objective.

B) financial strategic objective.

C) vision statement.

D) mission statement.

 

Our goal is to help save 100,000 more lives each year. (Varian Medical Systems) This is an example of a

A) nonfinancial strategic objective.

B) financial strategic objective.

C) vision statement.

D) mission statement.

 

In large organizations, conflicts can arise between functional areas. In order to resolve these conflicts, strategic objectives

A) put financial objectives above human considerations.

B) align departments toward departmental goals.

C) help resolve conflicts through their common purpose.

D) cause debate and increase conflict.

 

Which of the following is not an example of a financial strategic objective?

A) Increase sales growth 6 percent to 8 percent and accelerate core net earnings growth from 13 percent to 15 percent per share in each of the next 5 years. (Procter & Gamble)

B) Reduce volatile air emissions 15 percent by 2015 from 2010 base year, indexed to net sales. (3M)

C) Generate Internet-related revenue of $1.5 billion. (AutoNation)

D) Cut corporate overhead costs by $30 million per year. (Fortune Brands)

 

In large organizations, the potential exists for different parts of an organization to pursue its own goals rather than the overall company goals. Proper ________ can help to resolve conflicts when they arise.

A) mission statements

B) vision statements

C) organization structure

D) objectives

 

What is the overall purpose of a corporation?

A) to maximize the long-term return to the shareholders

B) to maximize the short-term return to the shareholders

C) to maximize the long-term return to all the stakeholders

D) to maximize the short-term return to all the stakeholders

 

Boards of directors (BOD) as elected representatives of the shareholders are charged with ensuring that the interests and motives of management are aligned with those of the owners. Which one of the following is not part of their general practices?

A) Follow guidelines on the selection of director candidates.

B) Follow guidelines to ensure that its members are independent.

C) Provide detailed procedures for formal evaluations of directors and top officers of the firm.

D) Refrain from strategic support for management efforts to create long-term value.

 

Which of the following is not an internal control that ensures effective corporation governance?

A) proper managerial rewards and incentives

B) threat of hostile takeovers

C) shareholder activism

D) an effective and engaged board of directors

 

Effective mission statements incorporate the concept of stakeholder management. This suggests that organizations must respond to multiple primary internal constituencies such as all the following except

A) customers.

B) suppliers.

C) competitors.

D) employees.

 

Which of the following is not a reason that would make calculating return on investment (ROI) on sustainability projects difficult?

A) The payback period is on a different time frame.

B) Many of the benefits from such projects are tangible and easily measured.

C) The data necessary to calculate accurate ROI in sustainability projects is frequently not available.

D) Many of the benefits of sustainability projects are intangible and not easily measured.

 

Environmental scanning and competitor intelligence provide important inputs for forecasting activities.

 

Perceptual acuity, according to Ram Charan, is the ability to know for certain what will happen in the future.

 

Ted Turner saw the potential of 24-hour news before anyone else. This is an example of perceptual acuity.

 

Environmental monitoring deals with tracking changes in environmental trends that are often uncovered during the environmental scanning process.

 

Competitive Intelligence (CI) is a tool that can provide management with early warnings about both threats and opportunities.

 

Competitive intelligence generally does not benefit very much from gathering information on competitors from sources in the public domain.

 

Even with all the advances in recent years, forecasting is typically considered more of an art than a science and it is of little use in generating accurate predictions.

 

Scenario analysis is a superficial approach to forecasting that seeks to explore possible developments that many only be connected to the past.

 

SWOT analysis is useful in part because it obliges the firm to act proactively by putting an emphasis on identifying opportunities and threats that constrain the action choices a firm might make because of its internal and external environmental scan.

 

In the SWOT framework, the Strengths and Weaknesses are external environmental factors to consider.

 

In the SWOT framework, Opportunities and Threats are environmental conditions internal to the firm.

 

Although changes in the general environment may often adversely or favorably impact a firm, they seldom alter an entire industry.

 

A major sociocultural trend in the United States is the increased number of women in the workforce that has increased the need for business clothing but decreased the demand for baking product staples.

 

Technological innovations can create entirely new industries and alter the boundaries of industries.

 

The Porter five-forces model is designed to help us understand how social attitudes and cultural values impact U.S. businesses.

 

The five-forces model helps to determine both the nature of competition in an industry and the profit potential for the industry.

 

In some industries, low switching costs can act as an important barrier to entry.

 

In most industries, new entrants will not be a threat because the Internet lowers entry barriers.

 

The Internet and digital technologies suppress the bargaining power of buyers by providing them with more information to make buying decisions.

 

Reintermediation is responsible for an overall reduction in business opportunities.

 

Michael Porter, the originator of the five-forces model suggests that for most industries, a one-year time horizon is appropriate for rigorously evaluating the structural underpinnings of profitability of an industry.

 

Michael Porter, the originator of the five-forces model suggests that, as much as possible, analysts should look at industry structure quantitatively, rather than be satisfied with lists of qualitative factors.

 

Two of the key inputs to developing forecasts discussed in the text are

A) environmental scanning and stakeholder identification.

B) assessing internal strengths and environmental scanning.

C) environmental scanning and competitive intelligence.

D) environmental scanning and a SWOT analysis.

 

Airbus launched the A380 in 2007 and after more than 17 billion USD invested in the project, it announced in 2019 that it would discontinue the A380 production by 2021 because it had sold fewer than half the A380s it expected to deliver. This is an example of poor

A) vision statement evaluation.

B) assessing internal strengths.

C) environmental scanning.

D) mission statement evaluation.

 

Environmental analysis requires continual questioning of all these assumptions except

A) a priori ideas about the structure of the relevant industry.

B) continual updating of environmental knowledge.

C) presuppositions about who is and is not a competitor.

D) biases about how to make money in the industry.

 

Firms that were successful in the past can fail today because

A) they keep pace with changes in the nature of competition.

B) the company strategy is outdated.

C) their financial situation is resilient.

D) management monitors the relevant environmental factors regularly.

 

Which one of the following statements is an example of how to improve perceptual acuity?

A) A CEO meets with other CEOs of non-competing companies to examine the world from multiple perspectives and then shares the results with his own management team.

B) A CEO meets with the company management team regularly to analyze current world events and their potential impact on the company.

C) A CEO meets with direct competitors to analyze current industry trends. The CEOs share their conclusions with their respective companies.

D) Outsiders are brought in to the board meeting to critique the company strategy, which considers the new information in its potential revamping of the strategy.

 

Perceptual acuity requires all the following except

A) an ability to sense what is coming.

B) the ability to detect early warning signals of environmental changes.

C) a refusal to consult with others.

D) a strong commitment to external environmental monitoring.

 

Two non-competing global firms meet quarterly to discuss multiple perspectives on world trends. This is an example of how to improve

A) stakeholder management.

B) perceptual acuity.

C) internal scanning.

D) financial returns.

 

Which of the following is not an input process to develop forecasts?

A) environmental scanning

B) competitor intelligence

C) stakeholder management

D) environmental monitoring

 

Boards of directors use outsiders to critique their strategy. This is necessary mostly to improve

A) financial returns.

B) organizational hierarchy.

C) perceptual acuity.

D) employee relations.

 

When the management frame of reference gets out of touch with the realities of the actual business situation, what can happen to the firm?

A) Management perceptual acuity improves.

B) Management gets across-the-board raises.

C) The company business strategy no longer works.

D) It becomes easier to maintain competitive advantage.

 

Corporate retreats do not

A) permit companies to discuss larger marketplace trends.

B) guarantee positive consumer response to new products.

C) give companies an opportunity to look beyond their own industries.

D) oblige management to evaluate assumptions.

 

Why must successful managers recognize opportunities and threats in their company external environment?

A) If they miscalculate the market, opportunities will be lost.

B) If they misread the market, they are likely to become rich.

C) If they identify all of the environmental threats, they are guaranteed to acquire large market share.

D) If they identify all of the environmental opportunities, they are guaranteed to acquire large market share.

 

The failure of the A380 to reach its sales goals is due to

A) similar competitor offers.

B) the miscalculation of market demands.

C) a poor selection of hotel in the sky amenities.

D) a lack of production capacity.

 

________ tracks the evolution of environmental trends, sequences of events, or streams of activities.

A) Environmental scanning

B) Environmental monitoring

C) Environmental surveying

D) Competitive intelligence

 

Companies that are able to spot key trends in the environment know their business and most importantly know their

A) suppliers.

B) employees.

C) customers.

D) competitors.

 

Scanning the general environment would identify information on

A) substitute goods.

B) customer and firm bargaining power.

C) the aging population and ethnic shifts.

D) competitive rivalry.

 

Which of the following is not an example of corporate competitive intelligence?

A) banks tracking home loans

B) airlines changing hundreds of fares daily in response to competitor tactics

C) consumers comparing product offers online

D) car manufacturers offering sales incentives based on rival offers

 

Gathering competitive intelligence

A) is illegal.

B) is good business practice.

C) is considered unethical.

D) minimizes the need to obtain information in the public domain.

 

Environmental forecasting does not involve plausible projections about the ________ of environmental change.

A) direction

B) scope

C) speed

D) lack of intensity

 

When investors examine the performance of beauty products like Olay moisturizers and CoverGirl cosmetics, they are looking for

A) indicators of emerging trends.

B) accidental changes in behavior.

C) supplier preferences.

D) company management trends.

 

Which of the following websites is not an example of one used routinely for corporate competitive intelligence gathering?

A) Slideshare

B) Quora

C) Duolingo

D) YouTube

 

Executives must be careful to avoid spending so much time and effort tracking the actions of ________ that they ignore ________.

A) competitors; customers

B) customers; competitors

C) traditional competitors; new competitors

D) existing customers; existing competitors

 

Banks and airlines are examples of two industries that track competitor offers continually. This is called the process of gathering

A) consumer responses.

B) competitive intelligence.

C) past decisions.

D) mainline information.

 

Which of the following would not lead a manager to believe that an ethical concern exists?

A) Have I done anything that coerced somebody to share this information?

B) Have I done something to circumvent a system intended to secure or protect information?

C) Is the contemplated technique for gathering information relevant?

D) Have I misled anybody in order to gain access?

 

In 1977, Kenneth H. Olsen, then president of Digital Equipment Corp., announced that there was no reason for individuals to have a computer in their home. Long since disproven, this is an example of

A) poor forecasting of future consumer demand.

B) overestimation of uncertainty.

C) excellent forecasting.

D) good prediction skills.

 

It is important to question the reliability of forecasts because

A) if predictions are too low, a company like Motel 6 might build too many units and thus have a surplus of capacity.

B) uncertainty is black and white, and therefore the gray areas are unimportant.

C) underestimating uncertainty can lead to good competitive strategies.

D) the growth new industries, such as that of telecommunications, cannot be predicted.

 

A danger of forecasting discussed in the text is that

A) in most cases, the expense of collecting the necessary data exceeds the benefit.

B) the retrospective nature of forecasting provides little information about the future.

C) it can create legal problems for the firm if regulators discover the company is making forecasts.

D) managers may view uncertainty as black and white while ignoring important gray areas.

 

PPG Industries, the Pittsburgh-based manufacturer of paints, coatings, optical products, specialty materials, chemicals, glass, and fiber glass has paid dividends each year since 1899. It uses a technique to help it identify possible future strategies. What is it?

A) crowdsourcing

B) competitive intelligence

C) scenario analysis

D) monitoring

 

SWOT analysis is a framework for analyzing the internal and external environment of a company. It consists of strengths, weaknesses, opportunities, and threats. According to a SWOT analysis, which of the following is not an aspect that the strategy of the firm must follow?

A) build on its weaknesses

B) remedy the weaknesses or work around them

C) take advantage of the opportunities presented by the environment

D) protect the firm from the threats

 

Scenario planning is a useful technique for firms competing in industries characterized by ________ and ________.

A) predictability; stability

B) low profit margins; stability

C) unpredictability; change

D) high profit margins; stability

 

Scenario analysis draws on a range of disciplines and interests. It is a more ________ approach to forecasting.

A) basic

B) fundamental

C) in-depth

D) superficial

 

In the SWOT framework, ________ are the same for all firms in the same competitive environment.

A) strengths and weaknesses

B) strengths and opportunities

C) weaknesses and threats

D) opportunities and threats

 

In the SWOT framework, ________ are internal factors that are specific to the company.

A) strengths and opportunities

B) strengths and threats

C) threats and weaknesses

D) strengths and weaknesses

 

Heightened concern with fitness might be a threat to some companies and an opportunity to others. In the SWOT framework, these are ________ environmental factors.

A) internal

B) external

C) both internal and external

D) not relevant external

 

By emphasizing the importance of identifying opportunities and threats, the SWOT framework makes firms act ________ rather than ________.

A) quickly; slowly

B) immediately; eventually

C) proactively; reactively

D) intelligently; uninformed

 

SWOT analysis raises awareness about the role of strategy in creating a match between the environmental conditions and ________ of the firm.

A) internal opportunities and threats

B) internal strengths and weaknesses

C) internal strengths and opportunities

D) internal weaknesses and opportunities

 

Steve Jobs, former chairman of Apple, demonstrated that ________ also are important in forecasting.

A) character and ability

B) intuition and judgment

C) training and experience

D) imagination and training

 

Which of the following is not a correct usage of the SWOT framework?

A) build on its strengths

B) remedy the weaknesses or work around them

C) take advantage of the opportunities presented by the environment

D) protect the firm from environmental weaknesses

 

The aging of the population, changes in ethnic composition, and effects of the millennial generation are ________ changes.

A) macroeconomic

B) global

C) sociocultural

D) demographic

 

Larger numbers of women entering the work force since the early 1970s is an example of

A) demographic changes.

B) political and legal environmental changes.

C) sociocultural changes.

D) technological developments.

 

Emerging sociocultural changes in the environment include

A) changes in the ethnic composition.

B) the increasing educational attainment of women in the past decade.

C) progressively less disposable income by consumers.

D) changes in the geographic distribution of the population.

 

All of the following are important elements of the political and legal segment of the general environment except

A) the deregulation of utilities.

B) the increased use of Internet technology.

C) the Americans with Disabilities Act (ADA).

D) increases in the federally mandated minimum wage.

 

Which of the following would be considered part of the general environment of a firm?

A) decreased entry barriers

B) higher unemployment rates

C) increased bargaining power of the firm's suppliers

D) increased competitive intensity

 

Interest rate increases have a ________ impact on the residential home construction industry and a ________ effect on industries that produce consumer necessities such as prescription drugs or basic grocery items.

A) positive; negligible

B) negative; positive

C) negative; negligible

D) positive; negative

 

In the general environment, many relationships exist among the various elements. General environmental trends can have positive and negative impacts on various industries. For example, the aging population might have a ________ impact on the health care industry and a ________ impact on the baby product industry. These are called ________ impacts.

A) negative; positive; demographic

B) positive; negative; technological

C) negative; positive; sociocultural

D) positive; negative; demographic

 

In the general environment, which of the following is not a demographic trend?

A) aging population

B) greater disparities in income levels

C) changes in ethnic composition

D) more women in the workforce

 

Research published in Personnel Psychology shows that older workers are slightly more willing to implement organizational changes than younger workers. This is an example of which segment of the general environment?

A) economic

B) demographic

C) sociocultural

D) political and legal

 

Most companies today use a three-stage career model of education, work, and retirement, but longer lives means changes will be inherent in multistage career models that will need to be addressed by human resource practices. This is an example of which segments of the general environment?

A) economic

B) demographic

C) sociocultural

D) political and legal

 

The U.S. Congress passed the Sarbanes-Oxley Act in 2002, which greatly increases the accountability of auditors, executives, and corporate lawyers. Sarbanes-Oxley has also created a tremendous demand for professional accounting services. This is an example of which segment of the general environment?

A) economic

B) sociocultural

C) political and legal

D) demographic

 

A bill passed by the U.S. Congress in October 2000 allowed 195,000 H-1B visas for each of the following three years—up from a cap of 115,000. However, beginning in 2006 and continuing through 2019, the annual cap on H-1B visas has shrunk to only 65,000—with an additional 20,000 visas available for foreigners with a masters or higher degree from a U.S. institution. This is an example of which segment of the general environment?

A) economic

B) demographic

C) sociocultural

D) political and legal

 

Data Analytics are being used by corporations to understand their customer purchasing patterns. This is an example of which segment of the general environment?

A) economic

B) demographic

C) technological

D) political and legal

 

Genetic engineering has had a positive impact on the pharmaceutical industry. This is an example of which type of general environmental trend?

A) economic

B) demographic

C) technological

D) political and legal

 

Which is considered a force in the five-forces model?

A) increased deregulation in an industry

B) the threat of government intervention

C) recent technological innovation

D) rivalry among competing firms

 

Airbnb, a room-sharing site, offers more rooms than Marriott. Goldman Sachs suggests that the supply of new rooms over the next two years will outpace the previous five even though the growth of American occupancy rates has begun to slow. Which competitive force is involved in this situation?

A) the threat of favorable government policies

B) the threat of new buyers

C) the threat of new entrants

D) the threat of proprietary products

 

Which of the following firms would likely pose the least competitive threat?

A) a firm in the same industry and in the same strategic group

B) a competitor to your product where a high switching cost exists

C) a firm that produces substitute goods to your product line

D) a firm in the same industry and in the nearest strategic group looking to join your group

 

The threat of new entrants is high when there are

A) high capital requirements.

B) low economies of scale.

C) high switching costs.

D) high differentiation among competitor products and services.

 

Product differentiation by incumbents act as an entry barrier because

A) new entrants cannot differentiate their products.

B) incumbents will take legal action if new entrants do not differentiate their products.

C) it helps a firm to derive greater economies of scale.

D) new entrants will have to spend heavily to overcome existing customer loyalties.

 

Which of the following would be an entry barrier?

A) easy access to raw materials

B) low switching costs

C) large economies of scale

D) low capital requirements

 

An automobile manufacturer acquires a rental car company. This is an example of

A) backward integration.

B) forward integration.

C) economies of scale.

D) product differentiation.

 

The bargaining power of the buyer is greater than that of the supplier when

A) volume of purchase is low.

B) the buyer profit margin is low.

C) cost savings from the supplier's product are minimal.

D) threat of backward integration by buyers is low.

 

Buyer power will be greater when

A) the products purchased are highly differentiated.

B) it is concentrated or when a buyer group purchases large volumes relative to seller sales.

C) the industry product is very important to the quality of the buyer end products or services.

D) there are high switching costs.

 

The bargaining power of suppliers increases as

A) threat of forward integration by suppliers increases.

B) importance of buyers to supplier group increases.

C) switching costs for buyers decrease.

D) more suppliers enter the market.

 

New communication technology can impact seemingly unrelated industries such as the airline industry. This would be an example of a

A) threat of entry.

B) backward integration.

C) threat of substitute products.

D) forward integration.

 

The bargaining power of suppliers is enhanced under which following market condition?

A) no threat of forward integration

B) low differentiation of the supplier products

C) greater availability of substitute products

D) dominance by a few suppliers

 

In the five-forces model, conditions under which a supplier group can be powerful include all of the following except

A) lack of importance of the buyer to the supplier group.

B) high differentiation by the supplier.

C) readily available substitute products.

D) dominance by a few suppliers.

 

Because the Internet lowers barriers to entry in most industries, it

A) decreases the threat of new entrants.

B) increases supplier power.

C) makes it easier to build customer loyalty.

D) increases the threat of new entrants.

 

Pittsburgh-based FreeMarkets has developed software enabling large industrial buyers to organize online auctions for qualified suppliers of semistandard parts such as fabricated components, and services. By aggregating buyers, FreeMarkets ________ the ________ bargaining power.

A) decreases; buyer

B) increases; buyer

C) increases; supplier

D) decreases; supplier

 

End users are not

A) the final consumers in a distribution channel.

B) the first customers in a distribution channel.

C) likely to have greater bargaining power because of the Internet.

D) usually the C in B2C.

 

Incumbent firms may enjoy increased bargaining power because the Internet

A) focuses marketing efforts on end users.

B) has reduced the number of wholesalers and distributors.

C) increases channel conflict.

D) diminishes the power of many distribution channel intermediaries.

 

Supplier power has increased because of the Internet for all the following reasons except

A) the growth of new web-based businesses has created more outlets for suppliers to sell to.

B) software that links buyers to a supplier's website has created rapid, low-cost order capabilities.

C) the process of disintermediation makes it possible for some suppliers to reach end users directly.

D) some suppliers have created web-based purchasing systems that encourage switching.

 

In general, the threat of substitutes is heightened because the Internet

A) lowers switching costs.

B) lowers barriers to entry.

C) introduces new ways to accomplish the same task.

D) increases output per unit of cost.

 

How do infomediaries and consumer information websites increase the intensity of competitive rivalry?

A) by shifting customers away from issues of price

B) by consolidating the marketing message that consumers use to make a purchase decision

C) by making competitors in cyberspace seem less equally balanced

D) by highlighting unique selling advantages of a firm

 

The value net is a game-theoretic approach that

A) extends the value chain analysis.

B) uses network analysis to understand the relationships among different companies.

C) helps us to understand the evolution of the five forces over time.

D) is a way to analyze how the interactions of all the players in a game affect the firm.

 

In the value net analysis, complementors are

A) firms that produce substitute products.

B) firms that produce products that have a positive impact on company product value.

C) customers who compliment the company for their good products and services.

D) firms that supply critical inputs to a company.

 

Complements are products or services that have a potential impact on the ________ of the products or services of that company.

A) cost

B) availability

C) value

D) substitutability

 

Nintendo built a security chip into its game console hardware and then licensed the right to develop games to outside firms. These firms paid a royalty to Nintendo for each copy of the game sold. This is an example of Nintendo using ________ products.

A) substitute

B) complement

C) unrelated

D) differentiated

 

Elements of the five forces can be quantified. This is important for analyzing industry structure. Which of the following is not an example of an element that can be quantified?

A) the percentage of the buyer total cost accounted for by the industry product

B) the percentage of industry sales required to fill a plant or operate a logistical network to efficient scale

C) the buyer switching cost

D) the governmental regulatory policy

 

Strategic groups consist of a group of

A) top executives that makes strategies for a company.

B) executives drawn from different companies within an industry that makes decisions on industry standards.

C) firms within an industry that decides to collude rather than compete with each other so that they can increase their profits.

D) firms within an industry that follows similar strategies.

 

Which of the following statements about strategic groups is false?

A) Two assumptions are made: (1) no two firms are totally different, and (2) no two firms are exactly the same.

B) Strategic groupings are of little help to a firm in assessing mobility barriers that protect a group from attacks by other groups.

C) Strategic groups help chart the future directions of firm strategies.

D) Strategic groups are helpful in thinking through the implications of each industry trend for the group as a whole.

 

Strategic groups consist of firms that are more ________ to each other than firms that are not.

A) familiar

B) similar

C) friendly

D) usefulc

 

Strategic groups are clusters of firms that share ________ strategies.

A) differing

B) the same

C) similar

D) new

 

Classifying an industry into strategic groups involves judgment. If it is useful as an analytical tool, we must exercise caution in deciding what dimensions to use to map these firms. Dimensions include all of the following except

A) breadth of product and geographic scope.

B) price and quality.

C) degree of vertical integration.

D) management team.

 

Referring to the textbook Exhibit 2.7 The World Automobile Industry: Strategic Groups, which strategic group is the largest in terms of breadth of product line?

A) Ferrari, Lamborghini, Porsche

B) Toyota, Ford, General Motors, Chrysler, Honda, Nissan

C) Chery, Geely, Tata Motors

D) Mercedes, BMW, Audi

 

Referring to the textbook Exhibit 2.7 The World Automobile Industry: Strategic Groups, which strategic group is the smallest in terms of breadth of product line?

A) Hyundai, Kia

B) Toyota, Ford, General Motors, Chrysler, Honda, Nissan

C) Chery, Geely, Tata Motors

D) Mercedes, BMW, Audi

 

Referring to the textbook Exhibit 2.7 The World Automobile Industry: Strategic Groups, which strategic group consists of firms high in product pricing/quality and average in their product-line breadth?

A) Ferrari, Lamborghini, Porsche

B) Toyota, Ford, General Motors, Chrysler, Honda, Nissan

C) Chery, Geely, Tata Motors

D) Mercedes, BMW, Audi

 

In 2014, Audi introduced the Q3 SUV at a base price of only $32,500. And BMW, with its 1-series, is another well-known example. Such cars, priced in the low $30,000s, compete more directly with products from broad-line manufacturers like Ford, General Motors, and Toyota. This suggests that members of a strategic group can overcome ________ barriers and migrate to other groups that they find attractive if they are willing to commit time and resources.

A) mobility

B) competitive

C) pricing

D) cost

 

The strategic groups concept is valuable for identifying groups with ________ competitive positions.

A) marginal

B) exceptional

C) healthy

D) poor

 

The strategic groups concept is valuable for charting the ________ directions of firm strategies.

A) historical

B) past

C) present

D) future

 

The strategic groups concept is valuable for assessing the implications of industry ________ for the strategic group as a whole.

A) trends

B) positions

C) experience

D) wealth

 

Michael Porter, the originator of the five-forces model suggests that an improved understanding of the root causes of profitability depends upon two critical issues when conducting an industry analysis. One of these is

A) a quick overview of the forces involved.

B) the selection of an appropriate time frame.

C) qualitative analysis of the forces involved.

D) the selection of a short time frame.

 

Delta Pride Catfish, a supplier group of catfish farmers in Mississippi, formed a cooperative to process their own fish, thus bypassing ConAgra and Farm Fresh, their previous processing contractors. By 2014, Delta Pride Catfish controlled over 40 percent of the U.S. catfish market. This is an example of the

A) bargaining power of competitors.

B) bargaining power of suppliers.

C) threat of substitute products.

D) backward integration of services.

 

Which one of the following is not an effect of the digital economy according to the textbook?

A) globalization of business

B) decrease in collaboration

C) disintermediation of markets

D) reduction in the asset intensity of business operations

 

Medical monitoring through wearable devices has been approved by the U.S. Food and Drug Administration for offers from Apple. This is an important development of which factor of the general environment?

A) technological

B) sociocultural

C) demographic

D) economic

 

Grocery stores in California charge money for their plastic bags. This is a response to environmental sustainability concerns and is part of the considerations under which general environment factor?

A) technological

B) sociocultural

C) demographic

D) economic

 

Changes in the U.S. national debt can have a big impact on the ability of the country to compete in world markets. This is an example of which factor in the general environment?

A) technological

B) sociocultural

C) demographic

D) economic