Professional Documents
Culture Documents
) The TOWS Matrix illustrates how the external opportunities and threats facing a particular
corporation can be matched with that company's internal strengths and weaknesses to result in
four sets of possible strategic alternatives.
Answer: TRUE
Diff: 3 PageRef: 230
Topic: Generating Alternative Strategies by Using a TOWS Matrix
9) SO strategies attempt to take advantage of opportunities by overcoming weaknesses.
Answer: FALSE
Diff: 3 PageRef: 231
Topic: Generating Alternative Strategies by Using a TOWS Matrix
10) Business strategy focuses on improving the competitive position of a company's or business
unit's products or services within the specific industry or market segment that the company or
business unit serves.
Answer: TRUE
Diff: 1 PageRef: 231
Topic: Business Strategies
11) Differentiation is the ability of a company or business unit to design, produce, and market a
comparable product more efficiently than its competitors.
Answer: FALSE
Diff: 2 PageRef: 233
Topic: Business Strategies
12) A cost leader's lower costs allow it to continue to earn profits during times of heavy
competition.
Answer: TRUE
Diff: 2 PageRef: 234
Topic: Business Strategies
13) An example of a company following a cost focus strategy is Potlach Corporation, who makes
house brands toilet paper for Safeway and other grocery store chains.
Answer: TRUE
Diff: 2 PageRef: 235-236
Topic: Business Strategies
AACSB: Analytic Skills
14) One risk of a cost leadership strategy is that the technology may change.
Answer: TRUE
Diff: 2 PageRef: 236
Topic: Business Strategies
AACSB: Reflective Thinkin
15) An example of a company that was "stuck in the middle" is K-Mart as they tried to imitate
both Wal-Mart's low-cost strategy and Target's differentiation strategy.
Answer: TRUE
Diff: 2 PageRef: 237
Topic: Business Strategies
AACSB: Analytic Skills
16) Based on the eight dimensions of quality discussed in the text, reliability is defined as the
product's ease of repair.
Answer: FALSE
Diff: 1 PageRef: 237
Topic: Business Strategies
17) Most entrepreneurial ventures follow focus strategies.
Answer: TRUE
Diff: 2 PageRef: 237
Topic: Business Strategies
18) The strategic rollup was developed in the mid-1990s as an efficient way to quickly
consolidate a fragmented industry with the resulting large firm creating economies of scale.
Answer: TRUE
Diff: 2 PageRef: 238
Topic: Business Strategies
19) Rollups are synonymous with mergers and acquisitions.
Answer: FALSE
Diff: 1 PageRef: 238
Topic: Business Strategies
20) One danger of D'Aveni's concept of hypercompetition is that it may lead to an overemphasis
on short-term tactics over long-term strategy.
Answer: TRUE
Diff: 3 PageRef: 240
Topic: Business Strategies
AACSB: Reflective Thinking
21) One skill required of the cost leadership strategy is a strong marketing ability.
Answer: FALSE
Diff: 1 PageRef: 240
Topic: Business Strategies
22) Successful late movers tend to be large firms with considerable resources and related
experience.
Answer: TRUE
Diff: 2 PageRef: 241
Topic: Business Strategie
23) The first company to manufacture and sell a new product or service is called the ground
breaker.
Answer: FALSE
Diff: 1 PageRef: 241
Topic: Business Strategies
24) A defensive tactic usually takes place in an established competitor's market location.
Answer: FALSE
Diff: 2 PageRef: 241
Topic: Business Strategies
25) When AMD went after Intel's microprocessor business by developing low priced chips to go
after the customers Intel didn't mind losing, it was using a frontal attack.
Answer: FALSE
Diff: 3 PageRef: 241
Topic: Business Strategies
AACSB: Analytic Skills
26) Oracle is using encirclement in attacking SAP in ERP software by surrounding SAP with
acquisitions.
Answer: TRUE
Diff: 3 PageRef: 242
Topic: Business Strategies
AACSB: Reflective Thinking
27) Microbreweries that make beer for sale for local customers, use guerilla warfare against
national brewers like Anheuser-Busch.
Answer: TRUE
Diff: 3 PageRef: 243
Topic: Business Strategies
AACSB: Analytic Skills
28) Collusion is the active cooperation of firms within an industry to reduce output and raise
prices in order to get around the normal economic law of supply and demand.
Answer: TRUE
Diff: 2 PageRef: 243
Topic: Business Strategies
29) Too much partnering experience with the same strategic partners generates diminishing
returns over time and leads to reduced performance.
Answer: TRUE
Diff: 3 PageRef: 244
Topic: Business Strategies
AACSB: Reflective Thinkin
30) A licensing arrangement is an agreement in which the licensing firm grants rights to another
firm in another country or market to produce and/or sell a product.
Answer: TRUE
Diff: 1 PageRef: 246
Topic: Business Strategies
31) A value chain partnership is a loose alliance with several distributors for the short-term.
Answer: FALSE
Diff: 2 PageRef: 246
Topic: Business Strategies
32) One success factor to a strategic alliance is the ability to identify likely partnering risks and
deal with them when the alliance is formed.
Answer: TRUE
Diff: 2 PageRef: 247
Topic: Business Strategies
33) The concept that advocates management's attempt to find a strategic fit between external
opportunities and internal strengths while working around external threats and internal
weaknesses is called
A) environmental analysis.
B) position analysis.
C) strategic evaluation.
D) objective analysis.
E) situational analysis.
Answer: E
Diff: 1 PageRef: 224
Topic: Situational Analysis: SWOT Analysis
34) The particular capabilities and resources a firm possesses and the superior way in which they
are used is called
A) distinctive competencies.
B) differentiating capabilities.
C) situational proficiency.
D) core competencies.
E) distinctive characteristics.
Answer: A
Diff: 2 PageRef: 224
Topic: Situational Analysis: SWOT Analysis
35) An acronym for the assessment of the external and internal environments of the business
corporation in the process of strategy formulation/strategic planning is
A) P.E.T.
B) M.B.O.
C) S.W.O.T.
D) S.B.U.
E) R.O.I.
Answer: C
Diff: 1 PageRef: 224
Topic: Situational Analysis: SWOT Analysis
36) The T in SWOT represents
A) tactic.
B) threat.
C) tautology.
D) temporal.
E) time.
Answer: B
Diff: 1 PageRef: 224
Topic: Situational Analysis: SWOT Analysis
37) The text authors note that the essence of strategy is
A) opportunity divided by capacity.
B) strength divided by opportunity.
C) threat divided by capacity.
D) threat divided by opportunity.
E) opportunity divided by threat.
Answer: A
Diff: 2 PageRef: 224
Topic: Situational Analysis: SWOT Analysis
38) All of the following reflect criticisms of the SWOT analysis EXCEPT
A) uses no weights to reflect priorities.
B) only requires a single level of analysis.
C) provides a rational link to strategy implementation.
D) ambiguity in words and phrases.
E) generation of lengthy lists.
Answer: C
Diff: 3 PageRef: 224
Topic: Situational Analysis: SWOT Analys
39) In the development of a SFAS matrix, the first step is to
A) enter the ratings of how the company's management is responding to each of the strategic
factors.
B) calculate the weighted scores.
C) list the most important EFAS and IFAS items.
D) indicate short-term for the duration.
E) enter the weights for all of the internal factors.
Answer: C
Diff: 3 PageRef: 225
Topic: Situational Analysis: SWOT Analysis
40) A corporation's specific competitive role which is so well-suited to the firm's internal and
external environment that other corporations are NOT likely to challenge or dislodge it.
A) propitious niche
B) strategic fit
C) common thread
D) business screen
E) implicit strategy
Answer: A
Diff: 2 PageRef: 225
Topic: Situational Analysis: SWOT Analysis
41) According to the text, unique market opportunities that are available for only a particular
time are called
A) situational occasions.
B) critical openings.
C) strategy implementation.
D) strategic windows.
E) trigger points.
Answer: D
Diff: 2 PageRef: 227
Topic: Situational Analysis: SWOT Analysis
42) One company that has successfully found a propitious niche is
A) Coca-Cola.
B) PepsiCo.
C) Wal-Mart.
D) Frank J. Zamboni & Company.
E) Disney.
Answer: D
Diff: 3 PageRef: 227-228
Topic: Situational Analysis: SWOT Analysis
AACSB: Analytic Skills
43) The technique that illustrates how management can match the external opportunities and
threats with its strengths and weaknesses to yield four sets of strategic alternatives is called a (an)
A) IFAS Table.
B) EFAS Table.
C) SFAS Table.
D) TOWS Matrix.
E) Issues Priority Matrix.
Answer: D
Diff: 2 PageRef: 230
Topic: Generating Alternative Strategies by Using a TOWS Matrix
44) In a TOWS Matrix, SO Strategies
A) are generated by thinking of ways in which a company or business unit could use its strengths
to take advantage of opportunities.
B) attempt to take advantage of opportunities by overcoming weaknesses.
C) are basically defensive and primarily act to minimize weaknesses and avoid threats.
D) consider a company's or unit's strengths as a way to avoid threats.
E) are ways to get strategists to think "out of the box."
Answer: A
Diff: 3 PageRef: 231
Topic: Generating Alternative Strategies by Using a TOWS Matrix
45) In a TOWS Matrix, ST Strategies
A) are generated by thinking of ways in which a company or business unit could use its strengths
to take advantage of opportunities.
B) attempt to take advantage of opportunities by overcoming weaknesses.
C) are basically defensive and primarily act to minimize weaknesses and avoid threats.
D) consider a company's or unit's strengths as a way to avoid threats.
E) are ways to get strategists to think "out of the box."
Answer: D
Diff: 3 PageRef: 231
Topic: Generating Alternative Strategies by Using a TOWS Matrix
46) In a TOWS Matrix, WT Strategies
A) are generated by thinking of ways in which a company or business unit could use its strengths
to take advantage of opportunities.
B) attempt to take advantage of opportunities by overcoming weaknesses.
C) are basically defensive and primarily act to minimize weaknesses and avoid threats.
D) consider a company's or unit's strengths as a way to avoid threats.
E) are ways to get strategists to think "out of the box."
Answer: C
Diff: 3 PageRef: 231
Topic: Generating Alternative Strategies by Using a TOWS Matrix
47) Business strategy focuses on
A) ensuring that the company maintains the existing market share that it has historically enjoyed.
B) improving the competitive position of a corporation's products or services within the industry
or market segment served.
C) providing adequate shareholders' return on investment.
D) preventing the competition from gaining a competitive edge by undermining their marketing
plan.
E) recovering the competitive lead by using all available resources that the company can provide.
Answer: B
Diff: 2 PageRef: 231
Topic: Business Strategies
48) Business strategy is composed of
A) corporate and competitive strategy.
B) functional and divisional strategy.
C) competitive and cooperative strategy.
D) corporate and cooperative strategy.
E) divisional and competitive strategy.
Answer: C
Diff: 3 PageRef: 231
Topic: Business Strategies
49) Which of the following is NOT one of the questions that development of a competitive
strategy should raise?
A) Should we compete on the basis of lower cost?
B) Should we compete head-to-head with major competitors?
C) Should we differentiate our products or services on some basis other than cost?
D) Should we compete by garnering political support of influential leaders?
E) Should we compete in a niche market that we can satisfy which is superior to that of the
competition?
Answer: D
Diff: 3 PageRef: 231-233
Topic: Business Strategies
AACSB: Analytic Skills
50) According to Porter, the competitive strategy that reflects the ability of the corporation or its
business unit to design, produce, and market a comparable product more efficiently than its
competitors is called
A) competitive scope.
B) differentiation.
C) concentration.
D) diversification.
E) lower cost.
Answer: E
Diff: 2 PageRef: 233
Topic: Business Strategies
51) What are the two generic competitive strategies that Porter promotes as the means for
outperforming other corporations in a particular industry?
A) competitive scope and differentiation
B) diversification and concentration
C) lower cost and competitive scope
D) concentration and lower cost
E) lower cost and differentiation
Answer: E
Diff: 1 PageRef: 233
Topic: Business Strategies
52) According to Porter, the competitive strategy that reflects the ability to provide unique and
superior value to the buyer in terms of product quality, special features, or after-sale service is
called
A) competitive scope.
B) differentiation.
C) concentration.
D) diversification.
E) lower cost.
Answer: B
Diff: 2 PageRef: 233
Topic: Business Strategies
53) According to Porter, the term that applies to the breadth of a company's or business unit's
target market is called
A) competitive scope.
B) differentiation.
C) concentration.
D) diversification.
E) lower cost.
Answer: A
Diff: 2 PageRef: 233
Topic: Business Strategies
54) Wal-Mart, McDonald's and Alamo are all examples of companies following which of
Porter's
competitive strategies?
A) differentiation
B) cost leadership
C) differentiation focus
D) competitive advantage
E) cost focus
Answer: B
Diff: 3 PageRef: 234
Topic: Business Strategies
AACSB: Analytic Skills
55) When lower cost and differentiation strategies have a narrow focus on a market niche they
are simply called
A) cost leadership and differentiation.
B) concentration and differentiation.
C) cost focus and differentiation focus.
D) competitive scope and focused differentiation.
E) diversification and concentration.
Answer: C
Diff: 2 PageRef: 234
Topic: Business Strategies
56) Which of Porter's competitive strategies recommends that a company emphasize a particular
buyer group or geographic market and attempts to seek a cost advantage in its targeted segment?
A) differentiation
B) cost leadership
C) differentiation focus
D) competitive advantage
E) cost focus
Answer: E
Diff: 2 PageRef: 235
Topic: Business Strategies
57) Patagonia uses sustainability in pursuing which of Porter's generic strategies?
A) differentiation
B) cost leadership
C) differentiation focus
D) competitive advantage
E) cost focus
Answer: A
Diff: 2 PageRef: 235
Topic: Business Strategies
AACSB: Analytic Skills
58) Orphagenix, a small biotech firm, avoids head-to-head competition with large
pharmaceutical companies by developing orphan drugs to target diseases that affect fewer than
200,000 people. This is an example of which of Porter's generic strategies?
A) differentiation
B) cost leadership
C) differentiation focus
D) competitive advantage
E) cost focus
Answer: C
Diff: 3 PageRef: 235
Topic: Business Strategies
AACSB: Analytic Skills