Chapter Review Guide Questions

April 27, 2019

Chapter 5

1. What conditions, externally and internally, would be desired/necessary for a firm to diversify?
2. Could a firm simultaneously pursue focus, differentiation, and cost leadership? Should firms do that? Discuss.
3. Discuss how important it is for a college football or basketball team to have a good game plan for the big rival game this
coming weekend. How much time and effort do you feel the coaching staff puts into developing that game plan? Why is
such time and effort essential?
4. How does strategy formulation differ for a small versus a large organization? How does it differ for a for-profit versus a
nonprofit organization?
5. Why is it not advisable to pursue too many strategies at once?

Chapter 6
1. Many multidivisional firms do not report revenues or profits by division or segment in their Form 10K or Annual Report.
What are the pros and cons of this management practice? Discuss.
2. For a firm that you know well, give an example SO Strategy, showing how an internal strength can be matched with an
external opportunity to formulate a strategy.
3. For a firm that you know well, give an example WT Strategy, showing how an internal weakness can be matched with an
external threat to formulate a strategy.
4. Do you believe the reasons to disclose by-segment financial information offset the reasons not to disclose by-segment
financial information? Explain why or why not.
5. How would application of the strategy-formulation framework differ from a small to a large organization?

Chapter 7

1. The chapter says strategy formulation focuses on effectiveness, whereas strategy implementation focuses on efficiency.
Which is more important, effectiveness or efficiency? Give an example of each concept.
2. In stating objectives, why should terms such as increase, minimize, maximize, as soon as possible, adequate, and decrease
be avoided?
3. Considering avoidance, diffusion, confrontation, which method of conflict resolution do you prefer most? Why? Which do
you prefer least? Why?
4. Explain why Chandler’s strategy-structure relationship commonly exists among firms.
5. Explain how to choose between a divisional-by-product and a divisional-by-region organizational structure.

Chapter 8

1. Do you agree or disagree with the following statement? “Television viewers are passive viewers of ads, whereas Internet
users take an active role in choosing what to look at so customers on the Internet are tougher for marketers to reach.”
Explain your reasoning.
2. How important or relevant do you believe “purpose-based marketing” is for organizations today?
3. Explain how and why the Internet makes market segmentation easier.
4. In accounting terms, distinguish between intangibles and goodwill on a balance sheet. Why do these two items generally
stay the same on projected financial statements?
5. Explain why projected financial statement analysis is considered both a strategy-formulation and a strategy-implementation
tool.