Chapter 8 e. business-level: how do we compete?

(media
1. Which of the following is a business activity that an unit, consumer products unit, biotechnology unit)
organization does especially well relative to its 7. _____ level strategy pertains to the major functional
competition? departments within the business unit.
a. Strategy a. Operational
b. Synergy b. Corporate
c. Cash cow c. National
d. Core competence d. Business
e. Multidomestic e. Functional
2. The condition that exists when the organization's
parts interact to produce a joint effect that is greater 8. When Philip-Morris, the tobacco giant, bought Kraft,
than the sum of the parts acting alone is known as: Inc., it was pursuing a _____.
a. core competence. a. corporate-level strategy
b. synergy. b. business-level strategy
c. value creation. c. functional-level strategy
d. business-level strategy. d. multidomestic strategy
e. multidomestic strategy. e. retrenchment strategy
3. When properly managed, _____ can create additional
value with existing resources, providing a big boost to 9. Which of the following pertains to the organization as
the bottom line. a whole?
a. synergy a. Business-level strategy
b. competitors b. Functional-level strategy
c. government contacts c. Corporate-level strategy
d. command structure d. Operational-level strategy
e. cooperation among customers e. Competitive-level strategy
4. _____ can be defined as the combination of benefits 10. Sears' decision to sell off much of its financial
received and costs paid by the customer. services division is an example of a:
a. Organizational benefits a. corporate-level strategy.
b. Value b. business-level strategy.
c. Cost-benefit diversity c. functional-level strategy.
d. Synergy d. growth strategy.
e. Core competence e. stability strategy.
5. After Sunshine Systems merged with RTD Enterprises, 11. A corporate-level strategy is concerned with the
company executives noticed that due to increased question:
employee collaboration between the two units, costs a. what business are we in?
were down and revenues increased within both areas. b. how do we compete?
This is an example of what business phenomenon? c. how do we support our chosen strategy?
a. Strategy execution d. where do we market our products?
b. Portfolio strategy e. should we promote from within?
c. Core competency 12. When Coca-Cola introduced Surge, a new citrus
d. Synergy soft-drink, what type of strategy was being pursued?
e. Delivering value a. Functional-level strategy
6. When AT&T decided to buy Media One, a cable b. Multi-domestic strategy
company, it was pursuing a(n) _____ strategy. c. Corporate-level strategy
a. functional-level: how do we support the business- d. Retrenchment strategy
level strategy?(finance, R&D, manufacturing, marketing) e. Business-level strategy
b. internal growth 13. Ford's decision to completely redesign its Ford
c. multi-domestic Taurus can be classified as a:
d. corporate-level: what business are we in? a. corporate level strategy.
b. business level strategy.
 c. functional level strategy. 18. _____ refers to the use of managerial tools to direct
d. retrenchment strategy. resources toward the achievement of strategic goals.
e. stability strategy. a. Strategy formulation
b. Strategy coordination
14. Janessa is the CEO of a privately-held software c. Strategy execution
company. In defining corporate-level strategies, which d. Strategy control
of the following questions would she most likely be e. Strategy planning
concerned with?
a. How do we compete? 19. Which of the following refers to the planning and
b. What business are we in? decision making that lead to the establishment of the
c. How does marketing support the business? organization's goals and of a specific strategic plan?
d. How can we maximize profits? a. Strategy formulation
e. How can we make manufacturing processes b. Strategy implementation
more efficient? c. Strategy coordination
d. Strategy control
15. Decisions regarding the proper amount of e. SWOT
advertising for a particular good or service are related
to: 20. Fred has been assigned to conduct a SWOT analysis
a. corporate-level strategies. for his organization, Acme, Inc. As part of this
b. functional-level strategies. assignment, Fred will:
c. tactical-level strategies. a. conduct an external wage survey.
d. business-level strategies. b. search for the strengths, weaknesses,
e. retrenchment strategies. opportunities, and threats that impact his firm.
c. choose a grand strategy for his firm.
16. Which of these questions is central to a functional- d. do a cost/benefit analysis.
level strategy? e. develop a mission.
a. What business are we in?
b. How do we compete? 21. Techniques used to monitor external environments
c. How do we support our chosen strategy? include:
d. What business do we buy? a. hiring scanning organizations.
e. Where to market our products? b. hiring the competitive intelligence professionals.
c. government reports.
17. Which of the following lists the strategic d. professional journals.
management process in proper order? e. all of these.
a. Formulate strategy; Evaluate strategy; Perform
SWOT analysis; Define new mission/goals; Execute 22. Classy Clay has extremely creative employees who,
strategy; Control strategy. in the opinion of the organization, keep the company
b. Perform SWOT analysis; Evaluate current ahead of the competition. The creativity of these
mission/goals; Formulate strategy; Execute strategy; employees would be classified as a(n) _____.
Define new mission/goals. a. internal weakness
c. Evaluate current mission/goals; Define new b. external opportunity
mission/goals; Formulate strategy; Execute strategy; c. external strength
Perform SWOT analysis . d. internal strength
d. Evaluate current mission/goals; Perform SWOT e. neutral factor
analysis; Define new mission/goals; Formulate strategy;
Execute strategy. 23. Paramount, Inc. is particularly concerned about
e. Define new mission/goals; Execute strategy; pending legislation in Congress that would further
Formulate strategy; Evaluate new mission/goals; regulate their organization. This legislation would be
Perform SWOT analysis. classified as a(n) _____.
a. external opportunity
 b. internal strength markets to a very different group of customers. As such,
c. external threat Gatekeep can be described as a(n) _____.
d. external weakness a. product unit
e. congressional chaos b. functional unit
c. operational unit
24. Sherri has been asked to participate on a cross- d. strategic business unit
functional task force that is charged with performing an e. boston consulting group unit
audit checklist for her advertising firm. The task force
will analyze organizational strengths and weaknesses as 29. The BCG matrix organizes along which of the
they apply to the firm. Sherri’s task is to analyze following dimensions?
management quality, staff quality, degree of a. Market share and profit
centralization, and organizational charts. This level of b. Sales and market share
analysis pertains to which area of the audit? c. Business growth rate and market share
a. Management and organization d. Business growth rate and profit
b. Marketing e. Sales and profits
c. Human resources
d. Research and development 30. Double Click, Inc. has a number of strategic business
e. Production units. Their hand-held computer unit has a large market
share in this rapidly growing industry. Their hand-held
25. Where does the information about opportunities computer business would be classified as:
and threats comes from? a. a dog.
a. An analysis of the organization's internal b. a star.
environment c. a question mark.
b. A department by department study of the d. a cash cow.
organization e. stuck in the middle.
c. Scanning the external environments
d. Employee grievances 31. Which of these is true about the cash cow?
e. Financial ratios of the organization a. It generates tremendous profits in a rapidly
growing industry.
26. What type of organizational unit has a unique b. It has a small market share in a rapidly growing
business mission, product line, competitors, and industry.
markets relative to other units in the same corporation? c. It has a small market share in a slow growth
a. Product unit industry.
b. Functional unit d. It has a large market share in a slow growth
c. Strategic business unit industry.
d. Operational unit e. It is generally a dead business that should be
e. Business consulting group unit divested.

27. How business units and product lines fit together in 32. The star has a:
a logical way is the essence of: a. large market share in a rapidly growing industry.
a. business-level strategy. b. large market share in a slow growth industry.
b. portfolio strategy. c. small market share in a rapidly growing industry.
c. competitive strategy. d. small share of a slow growth market.
d. financial strategy. e. moderate market share in a slow growth
e. functional strategy. industry.

28. Gatekeep Utilities is a subsidiary of GW Enterprises. 33. Which of the following portfolio categories is made
Gatekeep has a mission and product line that is unique up of poor performers who command only a small
from GW. Gatekeep’s competitors are also very share of a slow growth market?
different from those of its parent, and the subsidiary a. Star
 b. Cash cow e. Industry diversification
c. Question mark
d. Dog 39. Semway, a regional bank, recently announced that it
e. Cat would soon begin offering financial planning services.
This is an example of which of these?
34. The question mark has a: a. Related diversification
a. large market share in a rapidly growing industry. b. Unrelated diversification
b. large market share in a slow growth industry. c. Cross-functional diversification
c. small market share in a rapidly growing industry. d. Product line diversification
d. small share of a slow growth market. e. Industry diversification
e. moderate market share in a slow growth
industry. 40. The purpose of _____ is to expand the firm’s
business operations to produce new kinds of valuable
35. Which of these is true about the dog division? products and services?
a. It has a large market share in a rapidly growing a. retrenchment
industry. b. diversification
b. It has a large market share in a slow growth c. liquidation
industry. d. cash cow
c. It has a small market share in a rapidly growing e. internal growth
industry.
d. It has a small share of a slow growth market. 41. Which of the following strategies refers to moving
e. It has a moderate market share in a rapidly into a new business that is related to the company's
growing industry. existing business activities?
a. Horizontal integration
36. Gillette operates numerous strategic business units. b. Vertical integration: expands into businesses
Most of its units in the personal care division have low that supply to the business or are distributors
market share but high business growth. These units are c. Unrelated diversification
classified as _____. d. Related diversification
a. dogs e. Strategic partnership
b. question marks
c. stars 42. All of the following are Porter's competitive forces
d. cash cows except:
e. none of these a. differentiation.
b. bargaining power of buyers.
37. According to the BCG Matrix, which of the following c. bargaining power of suppliers.
exists in a mature, slow-growth industry, but is a d. threat of substitute products.
dominant business in the industry, with a large market e. potential new entrants.
share?
a. Question mark 43. Which of the following is NOT one of Porter's
b. Asterisk competitive forces?
c. Dog a. Potential new entrants
d. Star b. Bargaining power of suppliers
e. Cash cow c. Bargaining power of stockholders
d. Bargaining power of customers
38. When an organization expands into a totally new e. Rivalry among competitors
line of business, it is implementing a strategy of:
a. Related diversification 44. Which of the following strategies involve an attempt
b. Unrelated diversification to distinguish the firm's products or services from
c. Cross-functional diversification others in the industry?
d. Product line diversification a. Cost leadership
 b. Differentiation
c. Focus 50. General Products Inc. is a small clothing designer
d. Internal growth and manufacturer located in the United States. A vast
e. Liquidation majority of the company’s revenues comes from U.S.
sales, although about ten percent of the company’s
45. Which strategy can be profitable for an organization revenue come from sales to Canada. General Products
when customers are loyal and willing to pay high Inc. can best be described as using which global
prices? corporate strategy?
a. Focus a. Globalization strategy: think global act global
b. Globalization b. Multidomestic strategy: think local act local
c. Overall cost leadership c. Export strategy: domestically focused
d. Differentiation d. Transnational strategy: think global act local
e. Liquidation e. Domestic strategy

46. The _____ strategy involves seeking efficient 51. FLY Industries is a global conglomerate company
facilities, cutting costs and using tight cost controls to headquartered in the United States that does business
be more efficient than competitors. in over fifty countries. The company seeks to balance
a. cost leadership global efficiencies and local responsiveness by hiring
b. differentiation locally as well as from home. It can best be described as
c. focus using which global corporate strategy?
d. internal growth a. Globalization strategy
e. liquidation b. Multidomestic strategy
47. The human resource department at Paula's c. Export strategy
Powerwheels is implementing a number of functional d. Transnational strategy
level strategies. These strategies include focusing on e. Domestic strategy
ways to retain and develop a stable work force and
ways to improve efficiency in the organization. These 52. If ABC International has standardized its product
functional-level strategies are consistent with which of line throughout the world it is pursuing a:
the following strategies? a. multidomestic strategy.
a. Cost leadership b. retrenchment strategy.
b. Differentiation c. diversity strategy.
c. New product development d. globalization strategy.
d. New market development e. liquidation strategy.
e. Divestiture 53. The assumption that a single global market exists
48. With a(n) _____ strategy, the organization would lead to a:
concentrates on a specific regional market or buyer a. globalization strategy.
group. b. multidomestic strategy.
a. cost leadership c. diversity strategy.
b. differentiation d. domestic strategy.
c. focus e. liquidation strategy.
d. internal growth 54. Which of the following strategies would be
e. liquidation appropriate when the need for both national
49. Mingles, Inc. concentrates its efforts on its target responsiveness and global integration is low?
market of 18 to 25 year olds. It is using a(n) _____ a. Globalization
strategy. b. Multidomestic
a. focus c. Export: exports a few domestically produced
b. differentiation products to selected countries
c. cost leadership d. Transnational
d. multidomestic e. Import
e. universal strategy
55. _____ refers to the modification of product design actions are part of which tool for putting strategy into
and advertising strategies to suit the specific needs of action?
individual countries. a. Visible leadership
a. Domestic strategy b. Candid communication
b. Global strategy c. Human resources
c. Transnational strategy d. Clear roles and accountability
d. Multidomestic strategy: handle markets e. Bargaining power of employees
independently for each countrise
e. Market design strategy 61. The _____ function recruits selects, trains, transfers,
promotes, and lays off employees to achieve strategic
56. Which of the following refers to a strategy that goals.
combines global coordination to attain efficiency with a. production
flexibility to meet specific needs in various countries? b. leadership
a. Domestic strategy c. information and control systems
b. Global strategy d. structural design
c. Transnational strategy: seek global efficiencies e. human resource
and local responsiveness
d. Multidomestic strategy
e. Region design strategy

57. Some people argue that _____ is the most difficult

and most important part of strategic management.
a. SWOT analysis
b. strategic formation
c. strategic execution
d. strategic analysis
e. strategy evaluation

58. Persuasion, motivation, and changes in cultures and

values are examples of which of the dimensions used to
implement strategy?
a. Leadership: motivate ppl, shape culture and
values, model desired behaviors
b. Structural design
c. Human resources
d. Information and control systems
e. Compensation

59. Which of the following is NOT one of the tools used

for putting strategy into action?
a. Visible leadership
b. Diversification
c. Human Resources
d. Communication
e. Clear roles and accountability

60. People need to understand how their individual

actions can contribute to achieving an organizational
strategy. This can be accomplished by delegating
authority, creating teams, and defining roles. These