63) When Google purchased YouTube, a company that featured different, but related products,
Google was engaging in which of the following?
A) concentration
B) forward vertical integration
C) backward vertical integration
D) diversification
64) Two companies that both sell fine timepieces combine. What are they doing?
A) diversifying, because they both sell the same products
B) integrating vertically, because they both sell the same products
C) integrating vertically in a backward direction, because they are sharing distribution
D) integrating horizontally, because they both sell similar products
65) A company whose goal is to retain its ideal size and market share is employing which kind of
strategy?
A) noncorporate
B) growth
C) renewal
D) stability
66) Troubled companies seek ________ to address serious problems.
A) competitive strategies
B) corporate strategies
C) vertical and horizontal strategies
D) renewal strategies
67) To address limited, short-term problems, a company is most likely to employ a ________
strategy.
A) retrenchment
B) turnaround
C) doomsday
D) self-critical
68) A company that is on the verge of collapse or bankruptcy might employ this strategy.
A) retrenchment
B) incremental improvement
C) turnaround
D) hunker down
69) Remedies that all renewal strategies employ include which of the following?
A) hiring efficiency experts
B) new ad campaigns
C) emulating competitors
D) cutting costs
70) The ________ strategy occupies the level below the corporate strategy.
A) business unit
B) competitive
C) functional
D) performance
71) A diversified corporation is likely to have ________.
A) multiple competitive strategies
B) a single competitive strategy
C) no more than two competitive strategies
D) thousands of competitive strategies
72) The thing that makes your product special is known as your ________.
A) assets
B) destruction device
C) competitive advantage
D) core device
73) Competitive advantages for a high-prestige, premium coffee franchise like Starbucks are
likely to include all of the following EXCEPT ________.
A) high quality
B) lowest prices
C) well-trained employees
D) pleasant venues
74) A cost leadership competitive strategy focuses on which of the following?
A) efficiency
B) innovation
C) elegant design
D) luxury
75) Which of the following would you expect to find in a clothing store that follows a cost
leadership strategy?
A) only the finest, most expensive materials
B) pampered, personalized service
C) state-of-the-art design
D) basic, no frills, practical items
76) A company with a differentiation strategy focuses on making its products or services
________.
A) unique and special
B) similar to its competitors
C) familiar
D) affordable
77) A differentiation strategy ________.
A) usually focuses on price
B) must focus on price
C) can focus on a brand image
D) can focus on value, but not service
78) A company that looks for a niche in the market is following which strategy?
A) cost leadership
B) differentiation
C) focus
D) turnaround
79) Which of the following describes a company that is following a focus strategy?
A) a software company that makes a wide variety of games and financial products
B) a software company that makes games for a wide audience
C) a software company that makes financial products for accountants, consumers, and businesses
D) a software company that makes financial products for accountants only
80) According to Michael Porter, a company with good products that has no clear competitive
advantage is said to be ________.
A) perfectly positioned
B) stuck in the middle
C) in the wheelhouse
D) outside of the box
81) Most successful companies find that ________ a competitive advantage is almost as difficult
as developing a competitive advantage.
A) assessing
B) sustaining
C) modifying
D) eliminating
82) All of the following are threats to a sustainable, long-term competitive advantage EXCEPT
________.
A) market stability
B) market instabilities and disturbances
C) evolution of the industry
D) new technology in the industry
83) To gain a sustainable competitive advantage, a pharmaceutical company might ________.
A) market aggressively
B) set high prices for its products
C) secure exclusive rights to produce a drug
D) produce as many generic drugs as possible
84) A company’s strategic weapon is any product, service, or other attribute it has that ________.
A) gives it an edge over its competitors
B) identifies problems that the company has
C) identifies the potential of employees
D) helps diversify the company
85) To create a competitive advantage that is sustainable, a company can begin by focusing on
quality, then ________.
A) make sure quality doesn’t decline at too rapid a pace
B) make incremental improvements to keep quality levels high
C) change its entire product line frequently
D) slowly diminish quality and raise the prices of its products
86) This term describes an electric shaver company that carefully observes its competitor’s
production line to look for ways to improve its own manufacturing process.
A) trademarking
B) benchmarking
C) quality engineering
D) reverse marketing
87) Up to now your success has been based on selling high-quality tacos and burritos at a price
that others can’t match. Your business is pursuing which of Porter’s strategies?
A) differentiation strategy
B) cost leadership strategy
C) competitive advantage strategy
D) focus strategy
88) You are thinking of buying a tortilla factory in a nearby state. This action would be an
example of ________.
A) forward vertical integration
B) horizontal integration
C) backward vertical integration
D) forward diversification
89) Recently, Taco Rocket has considered buying a local competitor and the two would combine
under the Taco Rocket name. This is an example of which of the following?
A) stability
B) vertical integration
C) horizontal integration
D) diversification
90) For a limited time, Taco Rocket is thinking of coming out with a new Fifth Degree Burrito
that is so hot it “burns a hole in the plate.” Catering to the small segment of the market that likes
super-hot food is an example of a ________.
A) focus strategy
B) cost leader strategy
C) long-term strategy
D) differentiation strategy
91) Strategic management is the act of figuring out how an organization will compete in the
marketplace and attract loyal customers.
92) The first step in the strategic management process is analyzing the external environment.
93) A mission statement for a kayak manufacturer might be as follows: To make the highest-
quality kayaks and sell them at a competitive price.
94) An external analysis will identify the threats to a company’s well-being, but not opportunities
for success.
95) Core competencies include an organization’s major capabilities and its resources.
96) Capabilities are “what” an organization has; resources are “how” it uses what it has.
97) SWOT analysis includes the identification of an organization’s strengths, weaknesses,
opportunities, and threats.
98) The final three steps in the strategic management process involve the creation and
implementation of strategies for realizing organizational goals.
99) A corporate strategy may be a growth strategy, a stability strategy, or a renewal strategy.
100) A diversification strategy focuses on a company becoming its own supplier of inputs.
101) A company with a stability strategy will plan to dramatically increase market share in a
highly competitive market.
102) The most drastic renewal strategy an organization can carry out is a retrenchment strategy.
103) “A distinctive edge” is a way of describing a competitive advantage.
104) Innovation and super-high quality are typically the keys to a cost-leadership strategy.
105) A focus strategy seeks to appeal to a narrow segment of a market.
106) Customer service cannot be considered a strategic weapon for an organization.
107) Xerox Corporation’s study of Japanese competitors was the first effort by an American
company at benchmarking.
108) In a short essay, describe the first two steps in the strategic management process.
109) In a short essay, describe the final four steps in the strategic management process.
110) In a short essay, discuss the cost leadership strategy according to Michael Porter.