Good intuitive judgment is always needed to determine appropriate weights and ratings
in the input stage matrices.
Four common approaches to determine R&D budget allocations are: 1. finance as many
project proposals as possible; 2. use a percentage-of-sales method; 3. budget for R&D
about what competitors spend; or 4. decide how many successful new products are
needed and work backwards to estimate the required R&D investment.
Retrenchment and turnaround are the same strategy.
The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix, the Strategic
Position and Action Evaluation (SPACE) Matrix, the Boston Consulting Group (BCG)
Matrix, the Internal-External (IE) Matrix, and the Grand Strategy Matrix are included in
stage two of the strategy-formulation framework.
Firms, like organisms, must be “adept at adapting” or they will not survive.
CEOs and business owners should delegate the responsibility for ensuring that high
ethical principles are espoused and practiced in an organization.
Five major stakeholders that affect pricing decisions are consumers, governments,
suppliers, distributors, and competitors.
Strategy formulation
A) is managing forces during the action.
B) requires coordination among a few individuals.
C) is primarily an operational process.
D) requires special motivation and leadership skills.
E) all of the above
All of the following situations are conducive to market development EXCEPT
A) when new channels of distribution are expensive and unreliable.
B) when an organization is successful at what it does.
C) when new untapped or unsaturated markets exist.
D) when an organization has excess production capacity.
E) when an organization’s basic industry is rapidly becoming global in scope.
The BCG Matrix is designed specifically to enhance which type of firm’s efforts to
formulate strategies?
A) Companies with more than one division
B) Large companies
C) Companies with annual sales greater than $1 million
D) Companies with annual sales of less than $1 million
E) All companies
Which of the following is NOT one of the four perspectives from which the Balanced
Scorecard allows firms to evaluate strategies?
A) Social responsibility
B) Financial performance
C) Customer knowledge
D) Internal business processes
E) Learning and growth
Generally, external opportunities and threats are
A) uncontrollable by a single organization.
B) unable to have a significant impact on an organization.
C) not worth monitoring and evaluating.
D) key functions in strategy implementation.
E) key functions in strategy exploitation.
What is the range for a firm’s total weighted score in an External Factor Evaluation
Matrix?
A) 0 to 5
B) 0 to 4
C) 1 to 5
D) 1 to 4
E) 0 to 10
Who has mandated that every publicly held company in the United States must issue an
annual cash-flow statement in addition to the usual financial reports?
A) SEC
B) Congress
C) FCC
D) FASB
E) OPEC
Intuitive judgments are almost always involved in deriving quantitative criteria.
What analytical tool has four quadrants based on two dimensions: competitive position
and market growth?
A) Competitive Profile Matrix
B) Internal-External Matrix
C) SPACE Matrix
D) Grand Strategy Matrix
E) QSPM
According to Porter, what is usually the most powerful of the five competitive forces?
A) Potential development of substitute products
B) Bargaining power of suppliers
C) Bargaining power of consumers
D) Rivalry among competing firms
E) Potential entry of new competitors
Corrective actions should always
A) strengthen an organization’s competitive position in its industry.
B) streamline asset holdings.
C) have no risk.
D) involve abandoning existing strategies.
E) all of the above