TW MGMT 371 Chap 9

Strategies
The plans for how the organization will do what its in business to do, how it will compete successfully, and how it will attract and satisfy its customers in order to achieve its goals
Business Model
How a company is going to make money
Focuses on whether customers will value what the company is providing and whether the company can make nay money doing that
A ________ describes the rationale of how a company is going to make money.
Business Model
First four steps of Strategic management process describe the strategic that must take place in an organization
Planning
Defining the organizational mission forces managers to identify ________.
What the organization is in business to do
Defining the organizational mission forces mangers to identify_______
What the organization is in business to do
Managers do an external analysis so that they know about ________.
What the competition is doing
When an organization is analyzing its labor supply, it is studying its ________.
External Environment
________ are positive trends in the external environment.
Opportunities
Computer peripherals provider Ascent plans to enter a new market in another country. Which of the following represents a threat for Ascent?
Ascent will have to plan its entry carefully as the laws in the country do not favor foreign businesses.
A study of the external environment allows a manager to understand the ________ and ________ for the organization.
Opportunities; threats
Helen, the owner of Crazy Cupcakes, is conducting a SWOT analysis of her company to find out where she can improve her business and to identify possibilities for expansion. Which of the following represents an opportunity for expansion?
There has been a trend toward personalized cupcakes for a variety of occasions.
The third step in strategic management process is related to the analysis of the ________.
Internal Environment
Bella Vista Clothing targets teenage girls with a range of affordable ready-to-wear clothing. The company is opening two new outlets, as sales have been excellent. Which of the following represents a strength for the company?
The company’s in-house designers have a knack for identifying and popularizing fashion trends.
If a bank estimates the capabilities of its employees who provide customer service prior to implementing a new training program designed to change their method of providing customer service, it is ________.
doing an internal analysis
An organization’s financial, physical, human, and intangible assets are known as its ________.
Resources
The major value-creating capabilities of the organization are known as its ________.
Core Competencies
The combined external and internal analyses are called
SWOT Analysis
The final step in the strategic management process allows an organization to understand the ________.
effectiveness of the strategies used
Top-level managers are responsible for ________ strategies.
corporate
Lower-level managers are responsible for ________ strategies.
Functional
A ________ strategy determines what businesses a company is in or wants to be in, and what it wants to do with those businesses.
Corporate
What are the three main types of corporate strategies
growth, stability and renewal
A ________ strategy is when an organization expands the number of markets served or the products offered.
Growth
Organizations grow by using strategies of ________.
concentration, integration, or diversification
An organization that grows using ________ focuses on its primary line of business and increases the number of products offered or markets served in this primary business.
Concentration
In ________, the organization becomes its own supplier so it can control its inputs.
backward vertical integration
In ________, the organization gains control of its outputs by becoming its own distributor.
Forward vertical integration
Ronald’s has been in the fast food business for five years. After struggling for two years, it finally broke even, and the french fries it offers are its most popular product. However, during the past year, its business has suffered because the farm that used to supply it with potatoes has increased its prices drastically. What should Ronald’s do to control its production costs?
Ronald’s should buy out the farm and become its own supplier
In ________, a company grows by combining with competitors.
Horizontal integration
When L’Oreal acquired The Body Shop, it carried out ________.
Horizontal integration
An organization that is diversifying its product line is exhibiting what type of corporate strategy?
Growth Strategy
________ takes place when a company combines with other companies in different, but associated, industries.
Related Diversification
When a company combines with firms in different and dissimilar industries, it indulges in ________.
unrelated diversification
Florance is a chain of flower shops in the Chicago area. The company recently acquired Knick-knacks, which owns three gift shops. Which of the following is most similar to this acquisition?
Toy World acquired Unicorn Children’s Books and now retails both toys and books from co-branded outlets.
When an organization continues serving the same clients by offering the same product or service, maintaining market share, and sustaining the organization’s current business operations, it is following a ________ strategy.
Stability
________ strategies address declining performance through retrenchment and turnaround strategies.
Renewal
A ________ strategy is used to deal with minor performance problems. It helps an organization stabilize operations, revitalize organizational resources and capabilities, and prepare to compete once again.
retrenchment
Which of the following provides a framework for understanding diverse businesses and helps managers establish priorities for allocating resources?
A corporate portfolio matrix
In the BCG matrix, a business unit that has a high anticipated growth rate but a low market share is known as a ________.
question mark
In the Boston Consulting Group (BCG) matrix, a business unit that has a low anticipated growth rate but a high market share is known as a ________.
Cash Cow
In the BCG matrix, a ________ has a low anticipated growth rate and a low market share.
dog
In the BCG matrix, a ________ enjoys a high anticipated growth rate and a high market share.
Star
________ should be sold off or liquidated as they have low market share and low growth potential.
Dogs
Managers should “milk” cash cows for as much as they can, limit any new investment in them, and use the large amounts of cash generated to invest in ________ and ________.
stars; question marks
Heavy investment in ________ will help take advantage of the market’s growth and help maintain high market share.
Stars
In an organization, the single independent businesses which formulate their own competitive strategies are known as ________.
strategic business units
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.
design thinking
Which of the following is a competitive force under the five forces model?
Threat of Substitutes
A cost leadership strategy requires a firm to ________.
maintain the lowest cost structure
A company that competes by offering unique products that are widely valued by customers is following a ________.
differentiation strategy
Which of the following strategies involves a cost advantage or a differentiation advantage in a narrow segment?
focus strategy
A firm that is “stuck in the middle” cannot develop ________.
a cost or differentiation advantage
Functional-level strategy directly supports the ________.
Competitive strategy
________ is the ability to anticipate, envision, maintain flexibility, think strategically, and work with others in the organization to initiate changes that will create a viable and valuable future for the organization.
Strategic Leadership
How can an organization develop strategic flexibility?
It should have multiple alternatives when making strategic decisions.
________ is the ability to recognize major external changes, to quickly commit resources, and to recognize when a strategic decision is not working.
Strategic Flexibility
An organization that initially brings a product innovation to the market is known as the ________.
First mover
An Internet-based knowledge management system that shortens customer response times would be an e-business technique that contributes to the competitive advantage of a ________.
differentiator
Who targets a narrow market segment with customized products?
a focuser
A ________ firm uses both online and traditional stand-alone locations.
clicks-and-bricks
Which of the following is an advantage of being a first mover?
opportunity to begin building customer relationships
An internal analysis will help Patrick identify the ________ of the company.
strengths and weaknesses
Casey majored in marketing and really enjoyed studying market research as a subject. Through research on the Internet and in the university library, she discovers that this industry appears to have significant positive external trends. She interprets this as a(n) ________.
Opportunity
Casey realizes that she has a personal characteristic that suggests she is not comfortable interacting with strangers. She interprets this as a(n) ________ if she is to get a job as a salesperson.
Weakness
Noting the growing popularity of South-East Asian food, you decide to open a new outlet called Rice Rocket. Which of the following, if true, could prove to be a threat to this plan?
A competitor, Pan Asia, has a similar product lineup and first mover advantage in the market.
You decide to concentrate on Taco Rocket’s primary business by only increasing the menu to include new items such as enchiladas and rice bowls. This is an example of what type of growth strategy?
Concentration
Your oldest supplier, Zorro Distributors, is a family-owned firm. Recently, the firm’s president, Diego De La Vega, made the decision to retire. To his disappointment, none of his five children stepped forward to take his place at the helm of the firm. Sr. De La Vega is concerned that if he sells his company to a larger distributor, many of his employees will lose their jobs. You approach your old friend with a generous offer to buy Zorro and continue its current operations. Should your offer be accepted, Taco Rocket would be undertaking ________.
Backward vertical integration
You decide to purchase a local five-store hardware chain because it was a good investment. This is an example of ________.
unrelated diversification
Because of the good profits and a fear of growing too fast, you decide to keep Taco Rocket in the same business and do not change the menu. You hope to retain the same market share and return-on-investment record. This is considered a ________ strategy.
Stability
No matter which business Colleen decides to buy, she intends that each company be a strategic business unit. This means that ________.
each business will be independent and will have its own competitive strategies
Your oldest holding, Taco Rocket, has not grown much in recent years, but due to low debt, it generates a huge amount of cash. According to BCG, Taco Rocket would be considered a ________.
Cash Cow
Recently, you also purchased a company that manufactures a new satellite dish, allowing you to enter into the cable television market. The business is profitable and growing, but the technological unknowns make it risky. BCG considers it a ________.
Question mark