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Chapter 8 – Strategic Management
True/False Questions
3. 6.
The first step in the strategic management process is analyzing the external environment. False (difficult)
Within an industry, an environment can present opportunities to one organization and pose threats to another.
True (moderate)
11. The final step in the strategic management process is implementing the objectives. False (difficult)
TYPES OF ORGANIZATIONAL STRATEGIES
12. Corporate-level strategies are developed for organizations that run more than one type of business. True (moderate)
21. The business group that is characterized by having low growth but high market share is known as a cash
cow. True (moderate)
23. According to the Boston Consulting Group matrix, question marks are businesses that generate large
amounts of cash, but their prospects for future growth are limited? False (moderate)
27. According to Porter's competitive strategies framework, the cost leadership strategy would result in the best
quality product at a justifiable cost. False (difficult)
Multiple Choice
38. 39. 41.
The strategic management process is divided into which of the following sections? a. planning, implementation, and evaluation (easy) b. problem identification, planning, and implementation c. implementation, evaluation, and restructuring
d. mission statement, environmental evaluation, and specific goals e. mission statement, environmental scoping, and evaluation
In the strategic management process, the ______________ defines the organizational purpose and answers the question: \a. objective b. evaluation c. strategy
d. mission (easy) e. values statement
Which of the following is not an example of an organization's mission? a. We believe our first responsibility is to doctors, nurses and patients, to mothers and all others who use
our products and services. (Johnson & Johnson).
b. AMAX's principal products are molybdenum, coal, iron ore, copper, lead, zinc, petroleum and natural
gas, potash, phosphates, nickel, tungsten, silver, gold, and magnesium.
c. We at Xeren want to increase market share by 10% during the next fiscal year. (difficult) d. We are dedicated to the total success of Corning Glass Works as a worldwide competitor.
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44. 45. 50. 55. 56. 60. 62.
e. Hoover Universal is a diversified, multi-industry corporation with strong manufacturing capabilities,
entrepreneurial policies, and individual business unit autonomy.
Which of the following is not part of the organization's external environment? a. what competition is doing
b. pending legislation that might affect the organization c. consumer trends
d. employees' education level (moderate) e. labor supply
What step in the strategic management process follows analyzing the external environment? a. identifying opportunities and threats (moderate) b. mission statement c. evaluation
d. identifying strengths and weaknesses e. formulating strategies
What step in the strategic management process follows analyzing the organization's resources? a. identifying opportunities and threats b. formulating strategy c. mission statement d. implementing strategy
e. identifying strengths and weaknesses (easy)
In the strategic management process, what step comes prior to evaluating results? a. identifying strengths and weaknesses b. formulating strategies
c. identifying opportunities and threats d. implementing strategies (easy)
f. analyzing the organization's resources
What is the final step in the strategic management process? a. mission statement
b. identifying opportunities and threats c. implementing strategies
d. analyzing the organization's resources e. evaluating results (easy)
Which of the following is one level of strategic planning in large companies? a. management level b. financial level c. staff level
d. corporate level (easy) e. systems level
Lower level managers in an organization are typically responsible for which of the following types of strategies?
a. functional-level strategies b. business-level strategies c. corporate-level strategies d. mergers and acquisitions
Which of the following is associated with corporate-level strategies?
a. They are needed if your organization is in more than one type of business. (moderate) b. They answer: \
63.
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65. 68.
c. They represent a single business.
d. They are a method of support for the business-level strategies. e. They determine the operations of a single business unit.
When PepsiCo seeks to integrate the strategies of Pepsi, 7-Up International, and Frito-Lay, it is developing what level of business strategy? a. functional b. system
c. management d. business
e. corporate (moderate)
Examples of a corporate-level stability strategy include all of the following EXCEPT: a. continuing to serve the same clients by offering the same product or service. b. maintaining market share.
c. sustaining the organization’s return-on-investment results.
d. implementing vertical or horizontal integration. (moderate)
When should management pursue a stability strategy? a. Organizational performance is slipping. b. The environment is changing.
c. The organization's performance is satisfactory and the environment is stable. (moderate) d. The firm has valuable strengths.
e. There are abundant environmental opportunities.
In ______________, the organization attempts to gain control of its inputs by becoming its own supplier. a. forward vertical integration
b. backward vertical integration (moderate) c. horizontal integration d. related diversification e. unrelated diversification
Which of the following describes a company growing by combining with other organizations in the same industry?
a. forward vertical integration b. backward vertical integration
c. horizontal integration (moderate) d. related diversification e. unrelated diversification
Which of the four business groups in the corporate portfolio matrix has high growth and high market share? a. cash cow
b. stars (difficult) c. question marks d. dogs e. elephants
Michael Porter's competitive strategies framework identifies three generic competitive strategies: cost leadership, differentiation, and ______________. a. depth. b. breadth.
c. revenue growth. d. focus. (moderate) e. acquisition.
70. 76.
78.
86. 98.
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102. Porter's competitive strategies framework describes a ______________ strategy whereby an organization
wants to be unique in its industry along dimensions widely valued by buyers. a. differentiation (moderate) b. focus c. cost leadership d. depth e. defender
105. According to the boxed feature, “Managing in an E-Business World,” all of the following are mentioned as
major implications of the increasingly dynamic and uncertain environments on e-business strategies EXCEPT:
a. environmental analysis will become an important part of everyone’s job. b. strategy will become increasingly long term in orientation. (moderate) c. barriers to entry are practically nonexistent.
d. a sustainable competitive advantage will be harder to achieve.
Scenarios
A Large Taco (Scenario)
It is now ten years later and, as the original owner of Taco Rocket, you have seen your business holdings grow substantially. You now need to decide how to best manage and utilize the large number of assets represented by the companies you own. You called the Boston Consulting Group (BCG), and they have offered you some advice based on their corporate portfolio matrix.
117. Your oldest holding, Taco Rocket, has not grown much in recent years but, due to low debt, generates a
huge amount of cash. Taco Rocket would be considered, according to BCG, a ______________. a. cash cow. (moderate) b. star. c. question mark. d. dog. e. does not fit with their matrix-
118. Recently, you also purchased a company that manufactures a new satellite dish, allowing you to enter into
the cable television market. The business is profitable and growing, but the technological unknowns make it risky. BGC considers it a ______________. a. cash cow. b. star. c. question mark. (moderate) d. dog. e. does not fit with their matrix-
119. Another purchase you made was to acquire a local coffee-cart chain with thirty locations around the city.
You don't see it growing very much, but then, it doesn't cost much to operate. BGC has labeled this venture a ______________. a. cash cow. b. star. c. question mark. d. dog. (moderate) e. does not fit with their matrix
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120. You also got somewhat lucky with an investment made a few years ago. You were an original investor in a
computer chip company that took off quickly and now dominates the market. While growing quickly, it does not tend to generate positive cash flow and is in continuous need of reinvestment of equipment and product development. BGC considers this a ______________. a. cash cow. b. star. (moderate) c. question mark. d. dog. e. does not fit with their matrix-
Essay Questions
THE STRATEGIC MANAGEMENT PROCESS
121. In a short essay, list and discuss the eight steps in the strategic management process.
123. In a short essay, list and discuss the three levels of strategy that an organization must develop. Answer
a. Corporate-level strategy – this strategy seeks to determine what businesses a company should be in or
wants to be in. Corporate-level strategy determines the direction that the organization is going and the roles that each business unit in the organization will plan in pursuing that direction.
b. Business-level strategy – this strategy seeks to determine how an organization should compete in each
of its businesses. For a small organization in only one line of business or the large organization that has not diversified into different products or markets, the business-level strategy typically overlaps with the organization’s corporate strategy. For organizations with multiple businesses, however, each division will have its own strategy that defines the products or services it will offer and the customers it wants to reach.
c. Functional-level strategy – this strategy seeks to determine how to support the business-level strategy.
For organizations that have traditional functional departments such as manufacturing, marketing, human resources, research and development, and finance, these strategies need to support the business-level strategy (moderate)
126. In a short essay, discuss the Boston Consulting Group (BCG) matrix and explain its usefulness in
segmenting businesses. Include a discussion of the characteristics for each of the four categories based on the BCG matrix. Answer
The Boston Consulting Group matrix introduced the idea that an organization’s businesses could be evaluated and plotted using a 2 x 2 matrix to identify which ones offered high potential and which were a drain on organizational resources. The horizontal axis represents market share, which was evaluated as either low or high; and the vertical axis indicates anticipated market growth, which also was evaluated as either low or high. Based on its evaluation, the business was placed in one of four categories:
a. Cash cows (low growth, high market share) – businesses in this category generate large amounts of
cash, but they prospects for future growth are limited.
b. Stars (high growth, high market share) – these businesses are in a fast-growing market, and hold a
dominant share of that market. Their contribution to cash flow depends on their need for resources. c. Question marks (high growth, low market share) – these businesses are in an attractive industry, but
hold a small market share percentage.
d. Dogs (low growth, low market share) – businesses in this category do not produce, or consume, much
cash. However, they hold no promise for improved performance. (easy)
罗宾斯《管理学》第九版题库-8
