Chapter 5 The first step in the strategy-making process is to

Document Type
Test Prep
Book Title
Effective Management 6th Edition
Authors
Chuck Williams
Course Pre-Assessment CH 05
Williams Effective Management 6e
TRUE/FALSE
1. An analysis of an organization's external environment begins with an assessment of the company's
distinctive competencies and core capabilities.
2. Companies can grow either externally or internally.
3. Differentiation is the positioning strategy of producing a product or service of acceptable quality at
consistently lower production costs than competitors can, so that the firm can offer the product or
service at the lowest price in the industry.
4. Most companies compete directly with all the firms in their industry.
MULTIPLE CHOICE
1. Which of the following is a condition that must be met if a firm's resources are to be used to achieve a
sustainable competitive advantage?
a.
differentiation
b.
imperfectly imitable resources
c.
related diversification
d.
unrelated diversification
e.
a matrix organizational structure
2. 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
3. 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
4. The ____ is a portfolio strategy that managers use to categorize their corporation's businesses by
growth rate and relative market share. This strategy them to decide how to invest corporate funds.
a.
investment matrix
b.
SWOT matrix
c.
BCG matrix
d.
portfolio management matrix
e.
Maslow grid
5. Companies that are following a ____ strategy would be most likely to try to improve the way in which
they sell the same goods or services to the same customers.
a.
growth
b.
pioneering
c.
retrenchment/recovery
d.
portfolio
e.
stability
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 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
8. 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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