Management, 14e (Robbins/Coulter)
Chapter 9 Managing Strategy
1) The CEO is meeting with his top managers to determine how best to compete successfully in
the company’s market. This group is developing the company’s ________.
A) strategy
B) competitive advantage
C) strengths and weaknesses
D) opportunities and threats
2) The top managers of the corporation are meeting to discuss how they will compete in their
chosen markets and how they will attract and satisfy customers. These managers are discussing
________.
A) the business model
B) strategy
C) their competitive advantage
D) core competencies
3) A ________ describes the rationale of how a company is going to make money.
A) mission statement
B) business model
C) SWOT analysis
D) core competency
4) The CEO and his top managers have asked themselves two important questions: a. do
customers value what the company is providing; and b. can the company make money doing
that? This group is developing a ________.
A) strategy
B) competitive advantage
C) business model
D) BCG matrix
5) The main reason strategic management is important is ________.
A) it allows an organization to anticipate economic recessions
B) it can make a difference in how well an organization performs
C) it reduces uncertainty
D) it simplifies the environment
6) Strategic management involves only the planning function.
7) A strategy defines how a company is going to make money.
8) A business model describes how a company is going to make money and what it is going to
do with it.
9) Strategic management helps coordinate the efforts of all department and functional areas of an
organization.
10) Strategic management is not important for non-profit organizations because their focus is on
providing a needed service, not on making a profit.
11) In a short essay, explain strategic management and why it is important.
12) Defining the organizational mission forces managers to identify what ________.
A) its competitive advantage is
B) the organization is in business to do
C) its capabilities are
D) pending legislation will affect the organization
13) Managers perform an external analysis so that they know about ________.
A) the firm’s basic beliefs and ethical priorities
B) what the competition is doing
C) what vendors want
D) their organization’s core competencies
14) Patrick expects each person he hires for his online business to be involved in studying trends
involving new technology, competitors, and customers. These employees are involved in
________.
A) external analysis
B) internal analysis
C) economic analysis
D) industry analysis
15) When an organization is analyzing its labor supply, it is studying its ________.
A) regulatory environment
B) internal environment
C) external environment
D) economic environment
16) ________ are positive trends in the external environment.
A) Strengths
B) Threats
C) Weaknesses
D) Opportunities
17) Computer peripherals provider Ascent plans to enter a new market in another country. Which
one of the following represents a threat for Ascent?
A) Ascent’s profit margin in the previous year was its lowest on record and it will require long-
term planning to improve margins.
B) Ascent lacks the resources to enter the market on its own and has to find a partner in the new
market.
C) Ascent will have to plan its entry carefully as the laws in the country do not favor foreign
businesses.
D) Ascent needs to improve its service capabilities in the new country as this is an important
source of revenue.
18) A study of the external environment allows a manager to understand the ________ and
________ for the organization.
A) threats; weaknesses
B) strengths; weaknesses
C) strengths; opportunities
D) opportunities; threats
19) Brutus’ Fried Chicken patented the recipe for the spices used in the coating of the chicken.
The patent protection lasts for 17 years. Brutus’ Fried Chicken will view this patent protection as
a(n) ________.
A) threat until the patent expires
B) opportunity during the time of the patent protection
C) weakness because the patent cannot be renewed
D) cost of doing business
20) 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 trends in employment. She interprets this as a(n) ________.
A) weakness
B) threat
C) strength
D) opportunity
21) 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.
A) threat
B) strength
C) weakness
D) opportunity
22) Helen, the owner of Crazy Cupcakes, is conducting a SWOT analysis of her company.
Which one of the following represents an opportunity for expansion?
A) There has been a trend toward personalized cupcakes for a variety of occasions.
B) The production process was found to be highly efficient and wastage was kept to a minimum.
C) In a taste test, Crazy Cupcakes products ranked higher than competitors in the taste and
texture segments.
D) One of Crazy Cupcakes competitors has added cookies to its product line.
23) Newmark RV is performing an internal analysis. Which of the following would be
considered a resource?
A) a patent for a special design feature
B) a method of production not used by competitors
C) strongly positive reviews from existing customers
D) membership in RVIA, the industry association
24) 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 one of the
following represents a strength for the company?
A) The company’s in-house designers have a knack for identifying and popularizing fashion
trends.
B) Disposable income is rising and consumers will have more money to spend on clothes.
C) Bella Vista has excess production capacity.
D) A long-time competitor recently went out of business and Bella Vista can cut down on its
advertising budget.
25) A bank estimates the capabilities of its customer service employees prior to implementing a
new training program designed to change their method of providing customer service. The bank
is ________.
A) conducting an external analysis
B) formulating its competitive strategies
C) performing an internal analysis
D) performing an employee audit
26) An organization’s financial, physical, human, and intangible assets are known as its
________.
A) resources
B) capabilities
C) strengths
D) core competencies
27) Harness International, a global wiring harness company, allows each customer to access its
engineering drawings on the company’s extranet, speeding up the design process for every
project. Harness would consider this to be a(n) ________.
A) resource
B) capability
C) competitive advantage
D) opportunity
28) The major value-creating capabilities of the organization are known as its ________.
A) strengths
B) competitive advantages
C) core competencies
D) resources
29) The combined external and internal analyses are called ________.
A) competitor analysis
B) industry analysis
C) market analysis
D) SWOT analysis
30) After the SWOT analysis is complete, managers are ready to ________.
A) begin production
B) identify competitors
C) formulate strategies
D) review the analysis
31) The final step in the strategic management process allows an organization to understand the
________.
A) effectiveness of the strategies used
B) implementation of the strategies
C) external environment
D) resources and capabilities it possesses
32) The first step in the strategic management process is analyzing the external environment.
33) A firm’s reputation in the marketplace would be considered a resource.
34) Evaluating an organization’s intangible assets is part of conducting an internal analysis in the
strategic management process.
35) Activities that an organization does well or resources that it has available are called
capabilities.
36) Exceptional or unique organizational resources are known as core capabilities.
37) When conducting a SWOT analysis, threats are activities the organization doesn’t do well or
resources it needs but doesn’t possess.
38) A SWOT analysis includes an analysis of an organization’s environmental opportunities and
threats.
39) The final step in the strategic management process is implementing the objectives.
40) Identify the six steps in the strategic management process and briefly explain what happens
in each step.
41) Top-level managers are responsible for ________ strategies.
A) tactical
B) corporate
C) competitive
D) functional
42) Lower-level managers are responsible for ________ strategies.
A) functional
B) stability
C) corporate
D) tactical
43) A(n) ________ strategy determines what businesses a company is in or wants to be in, and
what it wants to do with those businesses.
A) competitive
B) functional
C) operating
D) corporate
44) What are the three main types of corporate strategies?
A) stability, focus, and turnaround
B) growth, stability, and renewal
C) growth, cost leadership, and differentiation
D) stability, differentiation, and focus
45) A ________ strategy is when an organization expands the number of markets served or the
products offered.
A) growth
B) renewal
C) stability
D) retrenchment
46) Organizations grow by using strategies of ________.
A) concentration, integration, or diversification
B) concentration, integration, or stabilization
C) integration, diversification, or differentiation
D) integration, diversification, or functionalization
47) 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.
A) diversification
B) horizontal integration
C) vertical integration
D) concentration
48) Emily’s Bakery’s customers have asked her to open a second location in a neighboring town
offering the same menu as the original location. If Emily decides to do this, she will be following
a ________ strategy.
A) focus
B) differentiation
C) concentration
D) diversification
49) In ________ integration, the organization becomes its own supplier so it can control its
inputs.
A) concentrated
B) backward vertical
C) forward vertical
D) horizontal
50) Hendricks Ceramics sells items it buys from ceramic factories. If it were to purchase one of
these factories, it would be engaging in ________ integration.
A) forward vertical
B) backward vertical
C) horizontal
D) concentrated
51) In ________ integration, the organization gains control of its outputs by becoming its own
distributor.
A) diversified
B) concentrated
C) backward vertical
D) forward vertical
52) The French fries at Ronald’s fast food business have been its most popular product. During
the past year, its profits have suffered because the farm that supplies it with potatoes has
increased its prices drastically. What should Ronald’s do to control its production costs?
A) Ronald’s should expand its menu to include sweet potato fries.
B) Ronald’s should buy out the farm and become its own supplier.
C) Ronald’s should invest in more efficient fryers.
D) Ronald’s should broaden its product range by introducing potato nuggets on its menu.
53) In ________, a company grows by combining with competitors.
A) concentrated integration
B) horizontal integration
C) vertical integration
D) lateral integration
54) Joe’s Hardware bought Moe’s hardware on the other side of town. This is an example of
________.
A) backward integration
B) forward integration
C) lateral integration
D) horizontal integration
55) An organization that is diversifying its product line is exhibiting what type of corporate
strategy?
A) turnaround strategy
B) retrenchment strategy
C) growth strategy
D) diversification strategy
17
56) ________ takes place when a company combines with other companies in different, but
associated, industries.
A) Stabilized diversification
B) Horizontal integration
C) Vertical integration
D) Related diversification
57) When a company combines with firms in different and dissimilar industries, it indulges in
________.
A) unrelated diversification
B) horizontal integration
C) vertical integration
D) focused diversification
58) 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?
A) A construction firm acquired a textile manufacturer as it seemed like a good investment.
B) Faced with mounting raw material costs, a consumer goods producer took over its supplier.
C) One shoe store chain buys out another shoe store chain and expands its distribution channels
through the acquired chain’s outlets.
D) A toy retailer acquired a children’s book store chain and now retails both toys and books from
co-branded outlets.
59) 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.
A) renewal
B) stability
C) retrenchment
D) growth
60) Tom’s Welding has been supplying frames to the mobile home industry for many years. His
business has remained steady despite the entry of other firms into the industry. Tom’s is likely
pursuing a ________ strategy.
A) retrenchment
B) renewal
C) stability
D) differentiation
61) ________ strategies address declining performance through retrenchment and turnaround
strategies.
A) Renewal
B) Stability
C) Growth
D) Functional
62) 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.
A) turnaround
B) stability
C) renewal
D) retrenchment
63) During the Great Recession, Malcolm’s Racing Bikes lost a considerable amount of its
business because customers could no longer afford the expensive models in his shop. He was
very near bankruptcy. Malcolm began carrying a line of less expensive bikes to appeal to
recreational bicyclists and families and also opened a repair service. Malcolm used a ________
strategy.
A) retrenchment
B) diversification
C) turnaround
D) reorganization
64) Which one of the following provides a framework for understanding diverse businesses and
helps managers establish priorities for allocating resources?
A) a differentiation matrix
B) a competitive strategy
C) a corporate portfolio matrix
D) a business unit matrix
65) In the BCG matrix, a ________ enjoys a high anticipated growth rate and a high market
share.
A) question mark
B) star
C) cash cow
D) dog
66) 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 ________.
A) cash cow
B) star
C) dog
D) question mark
67) The tobacco market in the United States has stagnated but Altria has a 50% share of it.
According to the BCG Matrix, Altria is a ________.
A) star
B) cash cow
C) question mark
D) dog
68) In the BCG matrix, a business unit that has a high anticipated growth rate but a low market
share is known as a ________.
A) star
B) dog
C) cash cow
D) question mark