Chapter 8—Managing Strategy and Strategic Planning Key
1. Devising successful strategies is a simple task.
2. In general, a well-conceived strategy addresses three areas: distinctive competence, scope, and resource
deployment.
3. Business–level strategy is the set of strategic alternatives from which an organization chooses as it manages
its operations simultaneously across several industries and several markets.
4. Conglomerates compete in dozens or even hundreds of markets.
5. Strategy execution focuses on the content of the strategy.
6. Strategic formulation is the set of processes involved in executing strategic plans.
7. An emergent strategy is a plan chosen and implemented to support specific goals.
8. Emergent strategies are ineffective and should be avoided.
9. Ugg makes footwear and accessories for men, women, and children. That is the company’s resource
deployment.
10. SWOT analysis determines the primary strategy, wages, operations, and tactics in an organization.
11. Most organizations have a difficult time focusing on weaknesses.
12. In general, when the level of competitive rivalry, the power of suppliers and buyers, and the threat of
substitutes and new entrants are all low, an industry has relatively few opportunities and numerous threats.
13. Chanel, Monte Blanc, and Allen Edmonds pursue an overall cost leadership strategy.
14. Ralston-Purina’s products include a number of old standbys, but a large percentage of its revenues also
comes from products that did not exist five years ago. Ralston-Purina’s approach to things represents a
prospector strategy.
15. The concept of product life cycle can be used to choose which strategy is appropriate for a given product at
a particular point in time.
16. During the maturity stage of the product life cycle, sales volume for a product typically reaches its peak.
17. Organizational culture helps firms implement their strategies.
18. The function of accounting and finance in a business that is implementing a differentiation strategy is to
control the flow of funds without discouraging the creativity needed to constantly develop new products and
services to meet customer needs.
19. The key to implementing business strategies is integrating different functions.
20. Each business or set of businesses within an organization is frequently referred to as a star business
unrelated, or SBU.
21. There are three types of diversification strategies: single-product strategy, related diversification, and
unrelated diversification.
22. Most organizations start out diversified.
23. Stars, question marks, and dogs could all be net cash users.
24. An international strategy in which the company attempts to combine the benefits of global scale efficiencies
with the benefits and advantages of local responsiveness is called global strategy.
25. An international strategy in which the company manages itself as a collection of domestic markets is called
a home replication strategy.
26. Effective strategies
27. Southwest Airlines gained access to the Atlanta market when it purchased Air Tran. This is an example of a
change in Southwest’s
28. Which of the following areas does a well-conceived strategy address?
29. Search giant Google offered to buy Motorola Mobility to solidify its positions in Smartphones, tablet
computers, and TV set-top boxes powered by its Android operating system. This is an example of Google’s
30. Hewlett Packard contemplated selling its PC division. This is an example of change in ____.
31. Coca-Cola sells soft drinks, bottled water, and sports drinks. This is an example of
32. St. Luke’s Hospital started offering deeply discounted computerized tomography (CT) scans for smokers
worried about lung cancer. St. Luke’s willingness to change the price is an example of change in
33. When an airline uses profits from one region to lower prices in another region it is using
34. ____ is the component of strategy that indicates what the organization does exceptionally well.
35. When Steve Jobs was CEO of Apple, his charisma, marketing skills, and technical vision helped create a(n)
____ at Apple that made it the leader in mobile devices.
36. Business-level strategy focuses primarily on
37. Strategy formulation is
38. Hewlett Packard made PCs. Projected industry sales of Smartphones were expected to be almost double
expected sales of PCs. HP went through the strategy change process looking first at the content of its strategy.
That was
39. GE competes in industries ranging from medical devices, to financial services, to turbine engines. GE’s
mixed strategy is an example of ____ strategy.
40. The primary concern of strategy implementation is
41. A(n) ____ strategy is a plan chosen and implemented to support specific goals, such as an increase of
market share by 5 percent.
42. A(n) ____ strategy is a pattern of action that develops over time in an organization in the absence of
missions and goals, or despite missions and goals.
43. Google bought YouTube even though it operated at a loss. The business strategy for YouTube is ____.
44. Yahoo! has a business strategy that creates revenue by selling ads. Yahoo! uses a(n) ____ strategy.
45. In environmental SWOT analysis, the external organizational position is analyzed according to its
46. The starting point in formulating strategies is usually
47. The Windows operating system is used in 90% of the world’s PCs. Microsoft has an international
48. MySpace was the first big social network. But headlines about predator dangers created an opportunity for
Facebook to arrive as the “safer” place to network. The safe perception of Facebook is a(n)
49. Many companies make bead jewelry, but Chamilia is the only one with a licensing agreement with Disney
to make beads of Disney characters. The agreement is a(n) ____ for Chamilia.
50. In a small community in Michigan, there are two funeral homes. One of them clips all pictures from the
local paper, laminates them, and mails them to the person photographed with a brief note. This is an attempt to
build positive relations with potential customers during happy times. If the other funeral home chose to make
similar customer contact, the competitors would have
51. Chaparral Steel is so efficient in its steel production and casting processes that it is the only U.S. steel
producer that regularly exports its products to Japan. This is an example of Chaparral Steel’s
52. In their book In Search of Excellence, Peters and Waterman found that successful companies “stuck to their
knitting.” In other words, they concentrated on those things that they do well. To which component of
organizational strategy does this idea most directly relate?
53. Smart cars are the only cars that can park perpendicular to the curb, which is especially beneficial in cities.
This is an example of
54. Starstruck Eateries has been very successful over the years by monitoring what successful restaurants in
other cities are doing and copying them. This is known as
55. Datril was introduced into the pain-reliever market as a product just like Tylenol. The makers of Datril used
____ to copy Tylenol’s distinctive competence.
56. When one disposable shaver maker introduced a three-blade shaver, the other introduced three blades within
months. They repeated the process with four blades. This is an example of
57. Trollbeads was the original maker of bead bracelets where beads are like individual charms and can be
changed by the wearer. Trollbeads success let Pandora, Chamilia, and a slew of jewelry designers start making
bead charms. Pandora used
58. Siemens corporate research earns on average 20 patents a day. The patents give Siemens ____.
59. Fort Howard Paper Company has a cost-saving manufacturing process that its competitors cannot imitate.
Fort Howard Paper enjoys
60. AirTran Airlines (formerly ValuJet) has an airplane fleet that is older than those owned by other airlines.
This is a potential ____ because it can give the company an image of poor quality or unsafe planes.
61. Howard Schultz traveled in Italy and liked the coffee. He founded Starbucks with a plan to introduce
American coffee drinkers to this Italian-style drink. This is an example of ____.
62. The expiration of a pharmaceutical drug patent allows generic drug makers to introduce the same chemical
compound under a different name and at lower prices. This is an example of ____ for the developer of the
original drug.
63. Network news programs have been losing viewers for years. They all cover stories from left of center in the
political spectrum. Fox News saw ____ and covers stories from right of center. The reporters all say they have
no bias.
64. Toyota is the most successful automaker selling hybrid vehicles. Toyota uses
65. Porter’s generic strategies classify firms by which of the following?
66. Fox News covers stories from a right of center political point of view. They use a(n) ____ strategy. All
reporters say they have no bias.
67. Mercedes-Benz sells high quality automobiles at high prices. It uses a(n) ____ strategy.
68. Mont Blanc pens sell for hundreds of dollars. Mont Blanc uses a(n) ____ strategy.
69. Target is a discount retailer with cleaner stores, more customer service, and more current fashions. Target
uses a(n) ____ strategy.
70. Bic pens work great and sell for about ten cents a pen. Bic uses a(n) ____ strategy.
71. Which of the following companies is noted primarily for employing an overall cost leadership strategy?
72. Which of the following is NOT one of the strategy types listed in the Miles and Snow typology?
73. 3M is a highly innovative firm that is constantly seeking new markets and is oriented toward growth and
taking risks. It uses a(n) ____ strategy.
74. If the marketing department adopts a strategy calling for substantial test marketing, aggressive advertising
campaigns, and inducing consumer product trials, which of the following is most likely the business strategy
being used by the company as a whole?
75. According to the Miles and Snow model of business strategy, which of these strategies is the most
appropriate for use in an unstable environment?
76. Dell was once a dominant brand in the PC market, commanding high prices. Now Dell is sold in Wal-Mart.
This strategy is called
77. Google is a highly successful search engine site. It maintained that expertise and tried to expand into mobile
devices. It used a(n) ____ strategy.
78. Which of the strategy types in the Miles and Snow model avoids long-term commitment to any single
technology, is highly decentralized, and has a propensity to take risk?
79. Which of the following is an example of one of the Miles and Snow typology classifications for business
strategies?
80. Blue Origins is a privately funded company started by Amazon CEO Jeff Bezos. Blue Origins plans to offer
space tourism. It uses a(n) ____ strategy.
81. ____ strategies in the Miles and Snow model represent a middle-of-the-road approach to business strategy.
82. AOL eliminated fees to some subscribers to try to attract more users. AOL was using a(n) ____ strategy.
83. The ____ strategy is the most conservative approach in the Miles and Snow classifications of business
strategies.
84. ____ strategy refers to a mid-range strategy that attempts to move into new market areas at a deliberate and
carefully planned pace.
85. Kmart has struggled for years competing with Wal-Mart and Target. It tried celebrity labels, but that did not
help. It cannot lower prices as low as Wal-Mart, because it does not have the distribution expertise. This is an
example of a(n) ____ strategy.