Management, 13e (Robbins)
Chapter 9 Managing Strategy
1) 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) a cash cow
C) a question mark
D) a dog
2) 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
3) A ________ describes the rationale of how a company is going to make money.
A) functional strategy
B) business model
C) SWOT analysis
D) core competency
4) The top managers of the corporation are meeting to discuss how they will compete in their
chosen markets and how they will attract and satisfy customers. These managers are discussing
________.
A) the business model
B) strategy
C) their competitive advantage
D) core competencies
5) A business model describes how a company is going to make money and what it is going to
do with it.
6) In a short essay, explain strategic management and why it is important.
7) Defining the organizational mission forces managers to identify ________.
A) what the labor supply is like in the locations where the organization operates
B) what the organization is in business to do
C) what the competitor is doing
D) what pending legislation will affect the organization
8) Managers perform an external analysis so that they know about ________.
A) the firm’s basic beliefs and ethical priorities
B) what the competition is doing
C) what customers want
D) their organization’s core competencies
9) Patrick expects that each person he hires for his online business to be involved in studying
trends involving new technology, competitors, and customers. These employees are involved in
________.
A) external analysis
B) internal analysis
C) customer analysis
D) industry analysis
10) When an organization is analyzing its labor supply, it is studying its ________.
A) regulatory environment
B) internal environment
C) external environment
D) economic environment
11) ________ are positive trends in the external environment.
A) Strengths
B) Threats
C) Weaknesses
D) Opportunities
12) Computer peripherals provider Ascent plans to enter a new market in another country. Which
of the following represents a threat for Ascent?
A) Ascent’s profit margin in the previous year was its lowest on record and it will require long-
term planning to improve margins.
B) Ascent lacks the resources to enter the market on its own and has to find a partner in the new
market.
C) Ascent will have to plan its entry carefully as the laws in the country do not favor foreign
businesses.
D) Ascent needs to improve its service capabilities in the new country as this is an important
source of revenue.
13) A study of the external environment allows a manager to understand the ________ and
________ for the organization.
A) threats; weaknesses
B) strengths; weaknesses
C) strengths; opportunities
D) opportunities; threats
14) Casey majored in marketing and really enjoyed studying market research as a subject.
Through research on the Internet and in the university library, she discovers that this industry
appears to have significant positive external trends. She interprets this as a(n) ________.
A) weakness
B) threat
C) strength
D) opportunity
15) Casey realizes that she has a personal characteristic that suggests she is not comfortable
interacting with strangers. She interprets this as a(n) ________ if she is to get a job as a
salesperson.
A) threat
B) strength
C) weakness
D) opportunity
16) Helen, the owner of Crazy Cupcakes, is conducting a SWOT analysis of her company.
Which of the following represents an opportunity for expansion?
A) There has been a trend toward personalized cupcakes for a variety of occasions.
B) The production process was found to be highly efficient and wastage was kept to a minimum.
C) In a taste test, Crazy Cupcakes products ranked higher than competitors in the taste and
texture segments.
D) One of Crazy Cupcakes competitors has added cookies to its product line.
17) Newmark RV is performing an internal analysis. Which of the following would be
considered a resource?
A) a patent for a special design feature
B) a method of production not used by competitors
C) strongly positive reviews from existing customers
D) membership in RVIA, the industry association
18) Bella Vista Clothing targets teenage girls with a range of affordable ready-to-wear clothing.
The company is opening two new outlets, as sales have been excellent. Which of the following
represents a strength for the company?
A) The company’s in-house designers have a knack for identifying and popularizing fashion
trends.
B) Disposable income is rising and consumers will have more money to spend on clothes.
C) Bella Vista has excess production capacity.
D) A long-time competitor recently went out of business and Bella Vista can cut down on its
advertising budget.
19) If a bank estimates the capabilities of its employees who provide customer service prior to
implementing a new training program designed to change their method of providing customer
service, it is ________.
A) conducting an external analysis
B) formulating its competitive strategies
C) performing an internal analysis
D) performing an employee audit
20) An organization’s financial, physical, human, and intangible assets are known as its
________.
A) resources
B) capabilities
C) opportunities
D) core competencies
21) The major value-creating capabilities of the organization are known as its ________.
A) strengths
B) competitive advantages
C) core competencies
D) resources
22) The combined external and internal analyses are called ________.
A) competitor analysis
B) industry analysis
C) market analysis
D) SWOT analysis
23) The final step in the strategic management process allows an organization to understand the
________.
A) effectiveness of the strategies used
B) implementation of the strategies
C) formulation of the strategies
D) resources and capabilities it possesses
24) The first step in the strategic management process is analyzing the external environment.
25) Evaluating an organization’s intangible assets is part of conducting an internal analysis in the
strategic management process.
26) Activities that an organization does well or resources that it has available are called
capabilities.
27) Exceptional or unique organizational resources are known as core capabilities.
28) When conducting a SWOT analysis, threats are activities the organization doesn’t do well or
resources it needs but doesn’t possess.
29) A SWOT analysis includes an analysis of an organization’s environmental opportunities and
threats.
30) The final step in the strategic management process is implementing the objectives.
31) Identify the six steps in the strategic management process and briefly explain what happens
in each step.
32) Top-level managers are responsible for ________ strategies.
A) differentiation
B) corporate
C) competitive
D) functional
33) Lower-level managers are responsible for ________ strategies.
A) functional
B) stability
C) corporate
D) operating
34) A ________ strategy determines what businesses a company is in or wants to be in, and what
it wants to do with those businesses.
A) competitive
B) functional
C) focus
D) corporate
35) What are the three main types of corporate strategies?
A) stability, focus, and turnaround
B) growth, stability, and renewal
C) growth, cost leadership, and differentiation
D) stability, differentiation, and focus
36) A ________ strategy is when an organization expands the number of markets served or the
products offered.
A) growth
B) renewal
C) stability
D) retrenchment
37) Organizations grow by using strategies of ________.
A) concentration, integration, or diversification
B) concentration, integration, or stabilization
C) integration, diversification, or differentiation
D) integration, diversification, or functionalization
38) An organization that grows using ________ focuses on its primary line of business and
increases the number of products offered or markets served in this primary business.
A) concentration
B) horizontal integration
C) vertical integration
D) diversification
39) In ________, the organization becomes its own supplier so it can control its inputs.
A) concentrated integration
B) backward vertical integration
C) forward vertical integration
D) horizontal integration
40) Hendricks Ceramics sells items it buys from ceramic factories. If it were to purchase one of
these factories, it would be engaging in ________.
A) forward vertical integration
B) backward vertical integration
C) horizontal integration
D) concentrated integration
41) In ________, the organization gains control of its outputs by becoming its own distributor.
A) diversified integration
B) concentrated integration
C) backward vertical integration
D) forward vertical integration
42) At Ronald’s fast food business for five years the French fries are its most popular product.
During the past year, its profits have suffered because the farm that supplies it with potatoes has
increased its prices drastically. What should Ronald’s do to control its production costs?
A) Ronald’s should reorganize its organizational hierarchy to increase efficiency.
B) Ronald’s should buy out the farm and become its own supplier.
C) Ronald’s should invest in more efficient fryers.
D) Ronald’s should broaden its product range by introducing potato nuggets on its menu.
43) In ________, a company grows by combining with competitors.
A) concentrated integration
B) horizontal integration
C) vertical integration
D) lateral integration
44) Joe’s Hardware bought Moe’s hardware on the other side of town. This is an example of
________.
A) backward integration
B) forward integration
C) lateral integration
D) horizontal integration
45) An organization that is diversifying its product line is exhibiting what type of corporate
strategy?
A) turnaround strategy
B) retrenchment strategy
C) growth strategy
D) diversification strategy
46) ________ takes place when a company combines with other companies in different, but
associated, industries.
A) Stabilized diversification
B) Horizontal integration
C) Vertical integration
D) Related diversification
47) When a company combines with firms in different and dissimilar industries, it indulges in
________.
A) unrelated diversification
B) horizontal integration
C) vertical integration
D) focused diversification
48) Florance is a chain of flower shops in the Chicago area. The company recently acquired
Knick-knacks, which owns three gift shops. Which of the following is most similar to this
acquisition?
A) A construction firm acquired a textile manufacturer as it seemed like a good investment.
B) Faced with mounting raw material costs, a consumer goods producer took over its supplier.
C) One shoe store chain buys out another shoe store chain and expands its distribution channels
through the acquired chain’s outlets.
D) A toy retailer acquired a children’s book store chain and now retails both toys and books from
co-branded outlets.
49) When an organization continues serving the same clients by offering the same product or
service, maintaining market share, and sustaining the organization’s current business operations,
it is following a ________ strategy.
A) renewal
B) stability
C) retrenchment
D) turnaround
50) Tom’s Welding has been supplying frames to the mobile home industry for many years. His
business has remained steady despite the entry of other firms into the industry. Tom’s is likely
pursuing a ________ strategy.
A) retrenchment
B) renewal
C) stability
D) differentiation
51) ________ strategies address declining performance through retrenchment and turnaround
strategies.
A) Renewal
B) Stability
C) Growth
D) Functional
52) A ________ strategy is used to deal with minor performance problems. It helps an
organization stabilize operations, revitalize organizational resources and capabilities, and prepare
to compete once again.
A) turnaround
B) stability
C) renewal
D) retrenchment
53) During the Great Recession, Malcolm’s Racing Bikes lost a considerable amount of its
business because customers could no longer afford the expensive models in his shop. He was
very near bankruptcy. Malcolm began carrying a line of less expensive bikes to appeal to
recreational bicyclists and families and also opened a repair service. Malcolm used a ________
strategy.
A) retrenchment
B) diversification
C) turnaround
D) reorganization
54) Which of the following provides a framework for understanding diverse businesses and helps
managers establish priorities for allocating resources?
A) a differentiation matrix
B) vertical integration
C) a corporate portfolio matrix
D) a strategic business unit
55) In the Boston Consulting Group (BCG) matrix, a business unit that has a low anticipated
growth rate but a high market share is known as a ________.
A) cash cow
B) star
C) dog
D) question mark
56) In the BCG matrix, a business unit that has a high anticipated growth rate but a low market
share is known as a ________.
A) star
B) dog
C) cash cow
D) question mark
57) 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