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Exam 6: Strategic Management: How Exceptional Managers Realize a Grand Design

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Question 31

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The BCG matrix is a means of evaluating strategic business units on the basis of their _____.

A) business costs and share of the market
B) differentiation and profitability
C) business growth rates and share of the market
D) BCG ratio
E) product quality and profitability

F) None of the above
G) B) and E)

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Question 32

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Research has shown that companies seldom start utilizing strategic management after a crisis, but rather when profits are high and their industries become less competitive.

A) True
B) False

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Question 33

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An organization's vision is its short-term goals.

The upper-level managers of Brooms International, a 120-year-old broom and mop manufacturing company, realize that their production facility is outdated. Therefore, they know their competitors, with newer production plants, have gained a competitive advantage over their organization. This is an example of an external weakness.

Over the course of 40 years, Sal grew his company to six package shipping stores. With his retirement approaching and the increased competition, he decided to reduce the number of locations to two. Sal's reduction of effort represents a _____.

When Pablo and his partner wrote the mission for their fitness center, like any good mission statement it did not include descriptions of their customers or the products and services they offer.

Lily, the CEO of Beautiful Flowers, is interested in using strategic management in her florist shops nationwide. When she attended the workshop on strategic management, the speaker suggested to first establish the mission and the vision, second to assess the current reality, and third to formulate the grand strategy as the first three steps in the strategic-management process.

Organic Foods International has decided to increase its market share by hiring a marketing rep to visit businesses in the area and invite their employees to shop at Organic Foods and for monthly health events. The store also hired two new employees to handle the anticipated increase in customer traffic. Organic Foods is utilizing a _____.

Tom and his family have developed a successful business selling fertilizer to other farmers in his area, consisting of rich, organic compost material. Recently ABC Seed, a national seed company, has been marketing a chemical fertilizer to his customers that is less expensive than Tom's product. ABC's efforts are an example of ___ in Porter's model for industry analysis.

For over 20 years, ABC Manufacturing produced only one product, a car part for Moraine Assembly, the Moraine, Ohio, General Motors truck factory. So when GM closed the Moraine Assembly facility, ABC was an example of a vulnerable company.

Regarding the findings from a SWOT analysis, organizational strengths are ____.

A defensive strategy is also known as a(n) _____.

A SWOT analysis is _____.

Mona, the CEO of an auto dealership, told her managers that "based on the high sales for this year, the forecast for next year looks very good." So after completing their budget for the upcoming year, based on the forecast that predicts continued strong sales, Mona and her managers are developing a plan in case sales drop unexpectedly. This type of planning is known as contingency planning.

Delux Technology has a reputation of reliability and winning customer service, building this highly respected name brand over the last 15 years. As a speaker at a business conference, Steve, the CEO of Delux, told his audience that "We have built our reputation by changing little over the last several years, but consistently helping customers with great, caring service and a reliable product." Delux Technology utilizes a ____.

Regarding the results of a SWOT analysis, organizational opportunities are ____.

Sandra and her partner are involved in the time-consuming, yet vital process of choosing among different strategies and altering them to best fit the long-term goals of their preschool for the next three years. This process is known as goals formulation.

According to Burt Nanus, "powerful mission and vision statements challenge and inspire people in the organization and help to align their energies in multiple directions."

Contingency planning is also known as time management and compartmentalization.

Humberto, the owner of a small floral shop, is worried because he recently heard that a popular local grocery store, just two blocks away, is adding a floral department soon. Humberto is concerned because new competitors can take away customers from existing organizations.