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69) AI Rubber is one of four suppliers of molded rubber products and has a 45% market share.
The market for its products is shrinking. AI Rubber is part of a larger corporation that includes a
total of seven different companies. In the BCG matrix, AI Rubber would be considered a
________.
A) star
B) cash cow
C) question mark
D) dog
70) When a totally new product, such as laser discs years ago, is introduced, it would be
considered a ________ according to the BCG matrix.
A) star
B) cash cow
C) question mark
D) dog
71) When Stratasys began making 3D printers in 1988, the future of this new invention was
unknown but expected to grow. Stratasys was one of a handful of producers of these printers.
According to the BCG matrix, Stratasys was a ________.
A) cash cow
B) question mark
C) dog
D) star
72) In the BCG matrix, a ________ has a low anticipated growth rate and a low market share.
A) question mark
B) cash cow
C) dog
D) star
73) As smartphone cameras improved, consumers turned away from traditional cameras.
Polaroid lost market share and finally realized their product was no longer desired. At that point,
Polaroid would be considered a ________ in the BCG matrix.
A) question mark
B) dog
C) cash cow
D) star
74) ________ should be sold off or liquidated as they have low market share and low growth
potential.
A) Cash cows
B) Stars
C) Question marks
D) Dogs
75) 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 ________.
A) dogs; stars
B) cash cows; dogs
C) stars; question marks
D) question marks; dogs
76) Heavy investment in ________ will help take advantage of the market's growth and help
maintain high market share.
A) cash cows
B) stars
C) question marks
D) dogs
77) Corporate strategies determine what business a company is in or wants to be in, and what it
wants to do with those businesses.
78) Diversification is an example of a corporate retrenchment strategy.
79) If Burger King were to buy out Mom and Pop's Burgers, Burger King would be growing by
vertical integration.
80) When a firm integrates backward, it becomes its own distributor.
81) A trucking company that grows by purchasing a chain of gasoline stations is engaged in
horizontal integration.
82) A stability strategy is an organizational strategy in which an organization maintains the status
quo.
83) A retrenchment strategy is a short-run renewal strategy that helps an organization stabilize
operations, revitalize organizational resources and capabilities, and prepare to compete once
again.
84) A turnaround strategy is a type of renewal strategy used when an organization is in serious
trouble.
85) The BCG matrix evaluates an organization's various businesses to identify which ones offer
high potential and which ones drain organizational resources.
86) Stars, one of the four business groups in the BCG matrix, are characterized by low growth
and high market share.
87) List and discuss the different types of corporate strategies.
88) Discuss the methods by which an organization grows. Give relevant examples.
89) Discuss the corporate portfolio matrix and the Boston Consulting Group (BCG) matrix.
90) List and discuss the three levels of strategy that a large organization must develop.
91) A ________ describes how a business will compete in its primary market.
A) mission statement
B) corporate strategy
C) competitive advantage
D) competitive strategy
92) In an organization, the single independent businesses which formulate their own competitive
strategies are known as ________.
A) strategic growth units
B) strategic business units
C) strategic profit units
D) service units
93) Bixler Corporation boasts that it has the fewest warranty claims in its industry. We can infer
from this that ________.
A) Bixler's quality is a competitive advantage
B) Bixler has an ineffective TQM program
C) Bixler has employed design thinking in the development of its products
D) Bixler is using social media to promote its products
94) 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.
A) design thinking
B) inventory management
C) strategic flexibility
D) e-business strategies
95) When used to connect with customers or to connect employees with co-workers in other
locations, social media ________.
A) provide a means for customers to order products online
B) create distractions that can keep employees from being productive
C) provide information for competitors that give them a competitive advantage
D) can create a competitive advantage
96) Which of the following is a competitive force under the five forces model?
A) past rivalry with competitors
B) bargaining power of distributors
C) vertical integration
D) threat of new entrants
97) When the price of beef skyrockets, consumers switch to pork and chicken. This demonstrates
________.
A) the threat of new entrants
B) the threat of substitutes
C) the bargaining power of buyers
D) the bargaining power of suppliers
98) When one gas station lowers its price a penny, the station on the other corner of the
intersection lowers its price, followed by the gas stations on the next block, and so on, until
nearly every gas station in town has lowered its prices. This situation illustrates ________.
A) intense rivalry among competitors
B) a differentiation strategy
C) the treat of substitutes
D) a cost leadership strategy
99) A cost leadership strategy requires a firm to ________.
A) maintain the lowest cost structure
B) maintain the lowest prices to its customers
C) aim at a cost advantage in a niche market
D) match its competition's prices
100) People's Airlines offers what it calls "no frills" flights: no reserved seating, no snacks or
meals on flights, small planes that fly to smaller airports away from the city centers. People's
Airlines is likely following a ________ strategy.
A) differentiation
B) focus
C) quality
D) cost leadership
101) Every fast food hamburger restaurant chain wants you to believe their product is the best
because it is stored or prepared uniquely. Each of these is pursuing a ________.
A) low cost leadership strategy
B) differentiation strategy
C) focus strategy
D) quality strategy
102) A company that competes by offering unique products that are widely valued by customers
is following a ________.
A) leadership strategy
B) differentiation strategy
C) focus strategy
D) functional strategy
103) Apple is an example of a company that was ________.
A) pursuing a cost leadership strategy
B) stuck in the middle
C) distinguishing itself from its competitors
D) unable to develop a successful competitive strategy
104) Which of the following strategies involves a cost advantage or a differentiation advantage
in a narrow segment?
A) retrenchment strategy
B) focus strategy
C) functional strategy
D) leadership strategy
105) Ferrari sells very expensive, stylish, high-quality cars to very wealthy people. Ferrari
follows a ________ strategy.
A) functional
B) focus
C) differentiation
D) quality
106) A firm that is '"stuck in the middle'" cannot develop ________.
A) a cost or differentiation advantage
B) a functional strategy
C) a leadership strategy
D) a competitive advantage
107) Functional-level strategy directly supports the ________.
A) corporate strategy
B) competitive strategy
C) operating strategy
D) concentration strategy
108) Within an organization, the single independent businesses that formulate their own
competitive strategies are known as strategic business units.
109) Establishing a competitive advantage is important but insufficient. To be successful in the
long term, firms must maintain that advantage.
110) A company that competes by offering unique products that are widely valued by customers
is following a differentiation strategy.
111) Although it is difficult to do, a "stuck in the middle" company can keep costs low and
distinguish itself from its competitors.
112) Discuss the concept of competitive advantage and explain how quality is a competitive
advantage.
113) Discuss the five forces model and the various competitive strategies that an organization
may use.
114) Discuss how social media can create a competitive advantage.
115) Who targets a narrow market segment with customized products?
A) a differentiator
B) a niche marketer
C) a focuser
D) a first mover
116) ________ 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.
A) Strategic leadership
B) Strategic management
C) Strategic competence
D) Strategic flexibility
117) How can an organization develop strategic flexibility?
A) It should commit resources only after thorough planning.
B) It should ignore mistakes.
C) It should depend on tried and tested perspectives from senior employees.
D) It should have multiple alternatives when making strategic decisions.
118) ________ is the ability to recognize major external changes, to quickly commit resources,
and to recognize when a strategic decision is not working.
A) Strategic apprenticeship
B) Strategic flexibility
C) Strategic leadership
D) Strategic management
119) How can a cost leader use e-business to reduce costs?
A) It could automate purchasing and payment systems so that customers have detailed status
reports.
B) It could provide rapid online responses to service requests.
C) It could use Internet-based knowledge systems to shorten customer response times.
D) It could use Web-based inventory control systems that reduce storage costs.
120) 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 ________.
A) cost leader
B) differentiator
C) focuser
D) brick
121) A ________ firm uses both online and traditional stand-alone locations.
A) first mover
B) clicks-and-bricks
C) focuser
D) brick-and-mortar
122) An important part of customer service is ________.
A) maintaining a friendly attitude
B) giving customers what they want
C) offering a toll-free number with representatives available 24/7.
D) keeping costs low by offshoring the customer service call center
123) An organization that initially brings a product innovation to the market is known as the
________.
A) first mover
B) free rider
C) cash cow
D) question mark
124) Which one of the following is an advantage of being a first mover?
A) certainty over the direction of technology and market
B) low development costs
C) no financial or strategic risks
D) opportunity to begin building customer relationships
125) What is a strategic disadvantage of being a first mover?
A) least opportunity to build customer loyalty
B) risk of competitors imitating innovations
C) no cost and learning benefit
D) no control over resources
126) Managers using the strategic management process always achieve positive outcomes.
127) Basic scientific research requires the least resource commitment because there are no
production costs involved.
128) Innovation can help firms achieve a differentiation competitive strategy.
129) Focusing on process development can lead to a successful cost leadership competitive
strategy.
130) Discuss how managers can formulate e-business strategies that contribute to the
development of a sustainable competitive advantage in today's environment.
131) Explain the term "first mover" and then list the advantages and disadvantages of being a
first mover in the market.
