Chapter 5 Strategic Reference Point Theory Argues That Managers

Document Type
Test Prep
Book Title
Effective Management 6th Edition
Authors
Chuck Williams
Course Post-Assessment CH 05
Williams Effective Management 6e
TRUE/FALSE
1. There four conditions that must be met if a firm's resources are to be used to achieve a sustainable
competitive advantage. The resources must be valuable, rare, imperfectly imitable, and
nonsubstitutable.
2. An analysis of an organization's external environment begins with an assessment of the company's
distinctive competencies and core capabilities.
3. Companies often choose a stability strategy when their external environment doesn't change much, or
after they have struggled with periods of explosive growth.
4. Reactors follow the consistent strategy of anticipating and reacting to potential external opportunities
and threats prior to their occurrence.
MULTIPLE CHOICE
1. The first step in the strategy-making process is to:
a.
assess the need for strategic change
b.
conduct a situation analysis
c.
choose strategic alternatives
d.
evaluate the impact of changes on the internal environment
e.
create a strategic budget
2. Which of the following is a mechanism used to examine external threats and opportunities facing a
firm as well as its internal strengths and weaknesses?
a.
organizational scanning
b.
internal marketing
c.
corporate strategy
d.
benchmarking
e.
a situational analysis
3. According to Strategic Reference Point Theory, managers have two basic strategic alternatives. They
are:
a.
risk-avoiding strategy and pioneering strategy
b.
risk-maintenance strategy and conflict-avoidance strategy
c.
risk-avoiding strategy and risk-seeking strategy
d.
frontal attack strategy and guerilla strategy
e.
none of these
4. The term ____ refers to the overall organizational strategy that addresses the question "What business
or businesses are we in or should we be in?"
a.
firm-level strategy
b.
corporate-level strategy
c.
industry-level strategy
d.
portfolio strategy
e.
vision
5. The research on diversification in portfolio management indicates that the best approach is probably:
a.
related differentiation
b.
related diversification
c.
unrelated diversification
d.
repositioning
e.
no diversification
6. Which of the following is NOT one of the five industry forces that determine an industry's overall
attractiveness and potential for long-term profitability?
a.
character of rivalry
b.
existing complementary products
c.
bargaining power of suppliers
d.
threat of substitute products
e.
bargaining power of buyers
7. The positioning strategies identified by Michael Porter are:
a.
entrepreneurial, growth, and stability
b.
diversification, acquisition, and divestment
c.
defender strategy; diversification, and cost leadership
d.
focus, cost leadership, and differentiation
e.
divestment; cost leadership, and diversification
8. The purpose of ____ strategies is to choose an industry-level strategy that is best suited to changes in
the organization's external environment.
a.
positioning
b.
differentiation
c.
growth
d.
adaptive
e.
diversification
9. Resource similarity and ____ are factors that determine the extent to which firms will be in direct
competition with each other.
a.
market commonality
b.
resource quality
c.
related diversification
d.
product differentiation
e.
customer autonomy

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