An acronym for the assessment of the external and internal environments (Strengths,

Weaknesses, Opportunities, and Threats) of the business corporation in the process of

strategy formulation/strategic planning is:
A. PET.
B. MBO.
C. SWOT.
D. SBU.

The T in SWOT represents

A. threat.
B. tactic.
C. technique.
D. task.

One company that has successfully found a narrow market niche is

A. Coca-Cola.
B. PepsiCo.
C. Frank J. Zamboni & Company.
D. Walmart.

Which of the following is true of an organization's mission statement?

A. should be crafted very late in the strategic implementation stage
B. explains how the organization will take advantage of opportunities by overcoming all
weaknesses
C. does not have to be unique to the organization
D. should be short so every employee can remember it

SWOT is an acronym that stands for Strategy, Weaknesses, Opportunities, and Threats.
A. TRUE
B. FALSE

If a(n) ______ does not provide a common thread for a corporation's businesses, managers
might be unclear about where the company is heading to in the future.
A. mission
B. computer hardware
C. technology
D. employee

Niche market can grow and change over time

A. TRUE
B. FALSE

An effective mission statement not only needs to be specific to that organization; it must
enable a common thread to highlight and focus the energy of everyone in the organization in
the direction that the top management team believes is best for the business.
A. TRUE
B. FALSE
Which strategy raises the questions of whether to compete on the basis of lower cost or
differentiation and whether to compete for the biggest market or a niche market?
A. business
B. corporate
C. competitive
D. functional

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.

Which of the following is NOT cited as 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 compete in a niche market that we can satisfy which is superior to that of the
competition?
D. Should we compete by garnering political support of influential leaders from other
countries?

According to Porter, the generic competitive strategy that reflects the ability of the
corporation or its business unit to design, produce, and market a comparable product more
efficiently and cost-saving than its competitors is called
A. competitive scope.
B. differentiation.
C. cost leadership.
D. diversification.

What are the three generic competitive strategies that Porter promotes as the means for
outperforming other corporations in a particular industry?
A. cost leadership, differentiation, and focus
B. diversification, concentration, and competitive scope
C. cost, competitive scope, and focus
D. concentration, cost leadership, and differentiation

According to Porter, the generic 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. focus.
D. cost leadership.
Walmart, as a discount retailer, is an example of a company following which of Porter's
competitive strategies?
A. differentiation
B. cost leadership
C. differentiation focus
D. competitive advantage

Apple is an example of a company following which of Porter's generic competitive

strategies?
A. cost leadership
B. differentiation
C. cost focus
D. competitive scope

In manufacturing toilet paper for grocery store chains (and avoiding competing directly
against company X), company Y has followed which of Porter's generic competitive
strategies?
A. differentiation
B. cost focus
C. differentiation focus
D. competitive advantage

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. competitive advantage
B. cost leadership
C. differentiation focus
D. cost focus

Which of the following is NOT one of the risks of a cost leadership strategy?
A. The technology that the organization has been using changes.
B. Pricing for higher quality that is too high above the price of the competition.
C. Competitors can achieve viable imitations.
D. Proximity in differentiation is lost.

Morgan Motor Car Company manufactures classic British sports cars. Which of Porter's
strategies is this company following?
A. differentiation focus
B. cost leadership
C. stuck in the middle
D. cost focus

Walt Disney Company competes successfully in the entertainment industry using which of
Porter's competitive strategies?
A. differentiation
B. stuck in the middle
C. cost leadership
D. cost focus

Research suggests that a differentiation strategy is more likely to generate higher profits
than a lower cost strategy because differentiation creates
A. a better entry barrier.
B. a better exit barrier.
C. a better niche market.
D. no clear long-term strategy.

Differentiation is a viable strategy for earning above-average returns in a specific business

because the resulting increased value to the customer
A. lowers costs.
B. lowers price sensitivity.
C. lowers customer loyalty.
D. lowers entry barriers.

Strict targets and KPIs to improve efficiency and cost reduction are likely to be found in
organizations following which of Porter's generic competitive strategies?
A. cost leadership
B. differentiation
C. stuck in the middle
D. differentiation focus

Intense supervision of labor, sustained capital investment and access to capital are
commonly required skills and resources for which of Porter's generic competitive strategies?
A. cost leadership
B. differentiation
C. cost leadership focus
D. differentiation focus

One skill required of the cost leadership strategy is a strong marketing and advertising
ability.
A. TRUE
B. FALSE

Which of the following is not a reason that companies or business units may form a strategic
alliance?
A. to obtain access to specific markets
B. to reduce financial risk
C. to reduce political risk
D. to set prices in the industry

Which strategy has been used successfully by Yum! Brands to establish KFC and Pizza Hut
restaurants across the globe?
A. joint venture
B. franchising/licensing arrangement
C. strategic alliance
D. marketing strategy
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.
A. TRUE
B. FALSE

One success factor to a strategic alliance is the ability to identify likely partnering risks and
deal with them when the alliance is formed.
A. TRUE
B. FALSE

The goal of strategy is to find an extremely favorable niche so well suited to the firm's
internal and external environment that other corporations are not likely to challenge or
dislodge it.
A. TRUE
B. FALSE

Which of the following statements about Starbucks is NOT true?

A. Starbucks strives to offer customers high-quality coffee, friendly servers, and customer
friendly stores.
B. Starbucks is planning to sell coffee, branded mugs, and espresso machines online.
C. Starbucks plans to use IT innovations to enhance the customer experience.
D. Starbucks is trying to create a unique customer experiences in stores.

Along with capital, ________ is the primary production input that the organization uses to
create products and services.
A. structure
B. politics
C. feedback
D. labor/employee

Which of the following industries has the lowest barrier to entry?

A. Automotive/ Car makers
B. Computer chip
C. Airline
D. Small retailer

Firms use a ________ strategy to provide a specialized product or service for a narrow
target market better than competitors.
A. product differentiation
B. market niche
C. mass customization
D. process efficiency

I-scream-4 Ice Cream recently faced competition against their flagship brand of "Orange
peel ice cream." A competitor made significant in-roads into the market by offering three
varieties of "Orange peel ice cream." I-scream-4 Ice Cream decided to counter this threat by
introducing five new varieties of ice creams. Which competitive strategy is I-scream-4 Ice
Cream implementing?
A. cost leadership
B. differentiation
C. service focus
D. innovation focus

A well-crafted mission statement should have common elements:

A. The design must be simple, short, provide direction
B. It should enable employees knowing exactly what the company does and what it does not
do
C. It should be measurable
D. All are correct

Differentiation strategy often:

A. Lowers customers sensitivity to price
B. Increases buyer loyalty
C. Can generate higher profits
D. All are correct

When a company has no competitive advantage and is doomed to below-average

performance is called:
A. Stuck in the middle
B. Fragmented industry
C. Consolidated industry
D. Service focus