88) Offering lower prices is the best method for a small business to establish its competitive
edge.
Topic: The Strategic Management Process, Step 7
AACSB: Analytic Skills
89) The focal point of the entire strategic plan and the competitive strategy chosen is the
customer.
Topic: The Strategic Management Process, Step 7
AACSB: Analytic Skills
90) Small businesses have some competitive advantages over larger companies—being able to
respond quickly, having greater flexibility, being able to build and defend niches, etc.
Topic: The Strategic Management Process, Step 8
AACSB: Analytic Skills
91) The best conversion of strategic plans to operational plans is done by top management
without the help of the employees.
Topic: The Strategic Management Process, Step 8
AACSB: Analytic Skills
92) To be of any real value to the small business owner, strategic plans must be broken down
beyond operational plan level into projects with assigned responsibilities.
Topic: The Strategic Management Process, Step 8
AACSB: Analytic Skills
93) The secret to good control is the identification and tracking of key performance indicators.
Topic: The Strategic Management Process, Step 9
AACSB: Analytic Skills
94) The key to the balanced scorecard is identifying the key single measure for the specific
company being evaluated.
Topic: The Strategic Management Process, Step 9
AACSB: Analytic Skills
20
95) The balanced scorecard looks at the small business from the perspectives of the customer, the
company itself, innovation, and finances.
Topic: The Strategic Management Process, Step 9
AACSB: Analytic Skills
96) A balanced scorecard is a set of common measures for all companies.
Topic: The Strategic Management Process, Step 9
AACSB: Analytic Skills
97) The first step in creating a knowledge management program is to take an inventory of the
special knowledge a company possesses that gives it a competitive advantage.
Topic: Introduction
AACSB: Analytic Skills
98) Objectives are the broad, long-range attributes that a business seeks to accomplish.
Topic: The Strategic Management Process, Step 6
AACSB: Analytic Skills
99) A goal is the master plan that covers all of the major parts of the organization and ties them
together into a unified whole.
Topic: The Strategic Management Process, Step 6
AACSB: Analytic Skills
100) The key to a successful differentiation strategy is to build it on a distinctive competence—
something the small company is uniquely good at doing in comparison to its competitors.
Topic: The Strategic Management Process, Step 7
AACSB: Analytic Skills
21
101) A focus strategy is ideally suited to many small businesses, which often lack the resources
to reach a national market.
Topic: The Strategic Management Process, Step 7
AACSB: Analytic Skills
102) A company’s intellectual capital is likely to be the source of its competitive advantage in the
marketplace.
Topic: Introduction
AACSB: Analytic Skills
103) One of the biggest pitfalls many entrepreneurs stumble into is failing to differentiate their
companies from the crowd of competitors.
Topic: Building a Competitive Advantage
AACSB: Analytic Skills
104) Developing core competencies does not necessarily require a company to spend a great deal
of money.
Topic: Building a Competitive Advantage
AACSB: Analytic Skills
105) A sound mission statement needs to be lengthy in order for it to be effective.
Topic: Develop a Clear….Mission
AACSB: Analytic Skills
106) Owners of traditional travel agencies are facing threats from many sides, including the
Internet.
Topic: Assess the Company’s….Threats
AACSB: Analytic Skills
107) Tight cost control; trained, dependable, honest in-store managers can be success factor for a
restaurant.
Topic: Identify the Key….Business
AACSB: Analytic Skills
22
108) In a competitive profile matrix, a major strength is given a ranking of 1.
Topic: Analyze the Competition
AACSB: Analytic Skills
109) A time frame for achieving objectives is important.
Topic: Create Company Goals and Objectives
AACSB: Analytic Skills
110) A differentiation strategy works well when buyers are sensitive to price changes, when
competing firms sell the same commodity products, and when companies can benefit from
economies of scale.
Topic: Three Strategic Options
AACSB: Analytic Skills
111) A strategic plan doesn’t need to be put into action to be complete.
Topic: Translate Strategic Plans into Action Plans, Step 8
AACSB: Analytic Skills
112) Early involvement of the total work force in the strategic management process is a luxury
that larger businesses cannot achieve.
Topic: Translate Strategic Plans into Action Plans, Step 8
AACSB: Analytic Skills
113) Common bases for a focus strategy include superior customer service, special product
features, complete product lines, instantaneous parts availability, absolute product reliability,
supreme product quality, and extensive product knowledge.
Topic: The Strategic Management Process
AACSB: Analytic Skills
114) One of the strategic management processes is to establish accurate control.
Topic: The Strategic Management Process
AACSB: Analytic Skills
23
115) One of the strategic management processes is to translate strategic plans into unachievable
plans.
Topic: The Strategic Management Process
AACSB: Analytic Skills
116) One of the strategic management processes is to develop a clear vision and translate it into a
meaningful mission statement.
Topic: The Strategic Management Process
AACSB: Analytic Skills
117) Highly successful entrepreneurs are able to communicate their vision and their enthusiasm
about that vision to those around them.
Topic: The Strategic Management Process, Step 1
AACSB: Analytic Skills
118) A mission statement addresses the first question of any business venture: “Where do I see
myself to be?”
Topic: The Strategic Management Process, Step 1
AACSB: Analytic Skills
119) To be effective, a mission statement must become a natural part of the organization,
embodied in the minds, habits, attitudes, and decisions of everyone in the company every day.
Topic: The Strategic Management Process, Step 1
AACSB: Analytic Skills
120) The balanced scorecard is a set of measurements unique to a company that includes both
financial and operational measures and gives managers a quick yet comprehensive picture of the
company’s total performance.
Topic: The Strategic Management Process, Step 9
AACSB: Analytic Skills
24
121) What is the importance of strategic management to small businesses? In your discussion,
explain how strategic planning is different for a small business.
Topic: Introduction
AACSB: Analytic Skills
122) Explain how vision and mission work together, providing direction for the small business.
In your discussion, identify at least five key questions a mission statement should answer.
Topic: The Strategic Management Process, Step 1
AACSB: Analytic Skills
123) Describe core competencies and the role they play in helping the company segment its
market and develop effective competitive strategies.
Topic: Building a Competitive Advantage
AACSB: Analytic Skills
124) What is the importance of positioning for the small business?
Topic: The Strategic Management Process, Step 1
AACSB: Communication
125) Discuss the importance of knowing your firm’s strengths and weaknesses and what
opportunities and threats exist in the external environment.
Topic: The Strategic Management Process, Step 2, 3
AACSB: Communication
25
126) Why is it important for a business owner to monitor the competition? Explain how a
business owner could use a competitive profile matrix to do that. Include in the review what its
value is, what information it contains, and how a small business owner would create it.
Topic: The Strategic Management Process, Step 5
AACSB: Reflective Thinking
127) Create three goals and objectives for the following small company:
An Internet database for small business exporters that offers to match domestic entrepreneurs to
foreign distributors, venture capitalists, and/or joint venture candidates. The company takes a
percentage fee for its service.
Topic: The Strategic Management Process, Step 6
AACSB: Reflective Thinking
128) Michael Porter defines three basic strategies: cost leadership, differentiation, and focus.
Describe each, explain under what conditions each works, and what the pitfalls are of each one.
Topic: The Strategic Management Process, Step 7
AACSB: Analytic Skills
26
129) Explain the “balanced scorecard,” reviewing its strengths and the five perspectives it takes
in evaluating a business.
Topic: The Strategic Management Process, Step 9
AACSB: Analytic Skills
27