Beruflich Dokumente
Kultur Dokumente
com
CHAPTER 08
STRATEGY FORMULATION: FUNCTIONAL STRATEGY AND STRATEGIC CHOICE
True/False
1.
A core competency is a skill that a corporation can do exceedingly well.
Answer: T
Insourcing is purchasing from someone else a product or service that has been previously
provided internally.
Answer: F
(p.165)
2.
(p.166)
3.
Outsourcing might lead to companies being locked into long-term contracts with outside suppliers
that are no longer competitive.
(p.167)
Answer: T
4.
A product strategy deals with pricing, selling, and distributing a product.
Answer: F
A financial strategy examines the financial implications of corporate and business-level strategic
options and identifies the best financial course of action.
Answer: T
(p.168)
5.
An operations strategy determines how and where a product or service is to be manufactured, and
the level of vertical integration in the product process.
Answer: T
(p.169)
6.
(p.171)
7.
The continuous improvement system was developed in China.
Answer: F
(p.172)
8.
The importance of sole sourcing was supported by Michael Porter.
Answer: F
(p.174)
9.
Logistics strategy deals with the flow of products into and out of the manufacturing process.
Answer: T
(p.174)
10.
The follow-the-moon management philosophy allows project team members living in one country
to pass their work to team members in another country in which the work day is just beginning.
(p.176)
Answer: F
11.
Corporate scenarios are pro forma balance sheets and income statements that forecast the effect
each alternative strategy and its various programs will likely have on division and corporate return
on investment.
(p.178)
Answer: T
12.
The first step in developing a corporate scenario is to develop common-size financial statements.
Answer: F
The third step in developing a corporate scenario is to construct detailed pro forma financial
statements for each strategic alternative.
Answer: T
(p.178)
13.
Risk is composed not only of the probability that the strategy will be effective, but also of the
amount of assets the corporation must allocate to that strategy and the length of time the assets
will be unavailable for other uses.
Answer: T
(p.179)
14.
195
(p.180)
To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com
15.
Using a figurate options approach, when the future is highly uncertain, its pays to have a broad
range of options open.
Answer: F
(p.181)
16.
Top management can propose a political strategy to influence its key stakeholders.
Answer: T
(p.181)
17.
If the strategy is incompatible with the corporate culture, the likelihood of its success is high.
Answer: F
(p.182)
18.
In evaluating a strategic alternative, decision makers can decide to ignore the alternatives
incompatibility with organizational culture and manage around the culture.
Answer: T
(p.182)
19.
Strategic volition is the evaluation of alternative strategies and selection of the best alternative.
Answer: F
(p.183)
20.
One criteria in strategic alternative evaluation is mutual exclusivity.
Answer: T
(p.184)
Multiple Choice
21.
Which strategy is developed to pull together the various activities and competencies of each
department so that corporate and business unit performance improves?
a.
b.
c.
d.
e.
22.
23.
business strategy
competitive strategy
generic strategy
enterprise strategy
functional strategy
Functional strategy and strategic choice is a part of _____ in the strategy management model.
a.
b.
c.
d.
e.
b.
c.
d.
e.
(p.166)
It must be something that can be used to develop new products or enter new
markets.
It must be a capability held throughout the organization.
It must be a resource that cannot be purchased from someone else.
It must be measurable.
It must be goal-driven.
24.
To be considered a distinctive competency, a competency must meet certain tests. Which of the
following is NOT one of these tests?
a.
b.
c.
(p.164)
strategy formulation
environmental scanning
strategy implementation
evaluation and control
strategy manipulation
(p.165)
196
(p.165)
To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com
d.
e.
25.
One core competency of Avon Products noted in the text was its
a.
b.
c.
d.
e.
26.
28.
29.
30.
31.
(p.166)
vertical integration.
horizontal integration.
transaction costing.
outsourcing.
the hokey pokey.
(p.166)
(p.166)
extendibility.
competitor unique.
customer value.
price sensitivity.
market credibility.
(p.166)
In testing for a distinctive competency, the characteristic that something could be used to develop
new products/services or enter new markets refers to
a.
b.
c.
d.
e.
(p.165)
Which one of the following is NOT a way a corporation can gain access to a distinctive
competency?
a.
b.
c.
d.
e.
27.
(p.167)
A study of 30 firms revealed that outsourcing can lead to a _____ percent reduction in costs.
197
(p.166)
To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com
a.
b.
c.
d.
e.
32.
A study of 30 firms revealed that outsourcing can lead to a _____ percent increase in capacity and
quality.
(p.166)
a.
b.
c.
d.
e.
33.
36.
37.
c.
(p.169)
marketing
functional
operations
financial
human resource management
(p.166)
The pricing, selling, and distributing of a product is referred to as a(n) _____ strategy.
a.
b.
c.
d.
e.
(p.167)
Which of the following was a characteristic of firms with unsuccessful outsourcing experience?
a.
b.
c.
d.
e.
(p.162)
According to the text, one company that has utilized outsourcing and sold its factory in Ireland to
Celestica, Inc. is
a.
b.
c.
d.
e.
35.
5
9
15
20
30
The key to outsourcing is to purchase from the outside only those activities that
a.
b.
c.
d.
e.
34.
5
9
15
20
30
198
(p.169)
To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com
d.
e.
38.
39.
41.
42.
43.
(p.169)
market development.
push strategy.
product development.
pull strategy.
skimming the cream.
(p.169)
market development.
push strategy.
product development.
pull strategy.
skimming the cream.
The type of marketing strategy in which a company develops new products for new or existing
markets is called
a.
b.
c.
d.
e.
(p.169)
Nike.
Pepsi.
Proctor and Gamble.
Axion.
Motorola.
The type of marketing strategy in which a company captures a larger share of an existing market
for current products through market saturation or market penetration or develops new markets for
current products is called
a.
b.
c.
d.
e.
(p.169)
Axion.
Biz.
Euro.
Masquerade.
Treater.
According to the text, a company that has used advertising and promotion to implement a market
saturation/penetration strategy is
a.
b.
c.
d.
e.
(p.169)
40.
Provide the corporation with the appropriate financial structure and funds to
achieve its overall objectives.
Develop new products for existing markets.
demand pricing.
brand pricing.
brand extension.
penetration extension.
demand extension.
199
(p.169)
To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com
44.
When a company spends a large amount of money on trade promotion in order to gain or hold
shelf space in retail outlets, a company is using a _____ strategy.
a.
b.
c.
d.
e.
45.
46.
48.
(p.169)
demand pricing
competitive pricing
skim pricing
penetration pricing
loss-leader pricing
Which type of pricing attempts to hasten market development and offers the pioneer the
opportunity to utilize the experience curve to gain market share and dominate the industry?
a.
b.
c.
d.
e.
(p.169)
pull
push
lengthening
knot
hold
Which type of pricing takes advantage of the demand curve while the product is still novel and
competitors are few?
a.
b.
c.
d.
e.
47.
pull
push
lengthening
knot
hold
When a company uses advertising which pulls the products through the distribution channels, the
company is using a _____ strategy.
a.
b.
c.
d.
e.
(p.169)
(p.169)
demand pricing
competitive pricing
skim pricing
penetration pricing
loss-leader pricing
The examination of financial implications of corporate and business-level strategic options and the
identification of the best financial course of action is known as a _____ strategy.
(p.169)
a.
b.
c.
d.
e.
marketing
functional
operations
financial
human resource management
200
To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com
49.
50.
51.
53.
54.
(p.170)
leveraged bargains.
management buyouts.
management bargains.
coordinated buyouts.
debt buyouts.
(p.170)
tracking stock.
holding stock.
shareholder stock.
tracked stock.
split stock.
All of the following companies were cited in the text as having used tracking stocks as part of
their financial strategy EXCEPT
a.
b.
c.
d.
e.
(p.170))
(p.170)
52.
Examine the financial implication of corporate and business level strategic options and
identify the best financial course of action.
Provide the corporation with the appropriate financial structure and funds to achieve its
overall objectives.
Institute a new product development plan to generate profit potential.
Provide competitive advantage through a lower cost of funds and a flexible ability to
raise capital to support a business strategy.
Attempt to maximize the financial value of the firm.
All of the following are benefits for a company to raising its debt levels EXCEPT
a.
b.
c.
d.
e.
(p.170)
AT&T
Motorola.
J.C. Penney.
Staples.
Sprint.
201
(p.170)
To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com
55.
The strategy that deals with product and process innovation and improvement is known as a
_____ strategy.
a.
b.
c.
d.
e.
56.
57.
59.
60.
(p.171)
technological follower.
technological opportunist.
technological leader.
technological manufacturer.
technological entrepreneur.
(p.171)
(p.171)
58.
marketing
R&D
operations
financial
human resource management
(p.170)
(p.171)
technological follower.
technological opportunist.
technological leader.
technological manufacturer.
technological entrepreneur.
According to the text, which athletic shoe manufacturer spends most on research and development
within its industry?
(p.171)
a.
b.
c.
d.
e.
Nike
ASICS
Adidas
Reebok
Converse
202
To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com
61.
If a company wishes to be a technological leader and also maintain a cost advantage, the
appropriate R&D strategy would be
a.
b.
c.
d.
e.
62.
63.
b.
c.
d.
e.
65.
66.
(p.171)
When a company determines how and where a product or service is to be manufactured, the level
of vertical integration in the production process, the deployment of physical resources, and
relationships with suppliers, the company is developing its _____ strategy.
a.
b.
c.
d.
e.
(p.171)
If a company wishes to be a technological follower and also maintain a cost advantage, the
appropriate R&D strategy would be to
a.
(p.171)
If a company wishes to be a technological leader and also pursue a differentiation strategy, the
appropriate R&D strategy would be
a.
b.
c.
d.
e.
64.
If a company wishes to be a technological follower and also maintain a cost advantage, the
appropriate R&D strategy would be
a.
b.
c.
d.
e.
(p.171)
(p.171)
marketing
R&D
operations
financial
human resource management
Which one of the following is NOT an element of concern for a corporation's operations strategy?
(p.171)
a.
b.
c.
d.
e.
203
To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com
204
To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com
67.
68.
69.
71.
72.
(p.171)
(p.172)
(p.172)
(p.172)
mass customization.
connected line batch flow.
connected job flow.
mass batch flow.
mass job flow.
When there are highly automated assembly lines making one mass-produced product using little
human labor, this setup is called
a.
b.
c.
d.
e.
70.
When components are standardized and each machine functions like a job shop but is positioned
in the same order as the parts are processed, this setup is known as
a.
b.
c.
d.
e.
(p.172)
Mattel.
Lands End.
Old Navy.
Levi.
Gap.
205
(p.173)
To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com
73.
The manufacturing strategy which requires that people, processes, units, and technology
reconfigure themselves to give customers exactly what they want, when they want it is called
a.
b.
c.
d.
e.
74.
75.
77.
78.
(p.174))
centralization.
downsizing.
logistical partnerships.
computerization.
containerized shipping.
The flow of products into and out of manufacturing is a factor when developing
a _____ strategy.
a.
b.
c.
d.
e.
(p.174)
sole sourcing.
multiple sourcing.
just-in-time sourcing.
backup sourcing.
parallel sourcing.
During the 1990s, two trends were evident in logistics: outsourcing and
a.
b.
c.
d.
e.
(p.173)
sole sourcing.
multiple sourcing.
just-in-time sourcing.
backup sourcing.
parallel sourcing.
The purchasing strategy in which two suppliers are the sole suppliers of different parts, but are
also the backup suppliers for each other's parts is
a.
b.
c.
d.
e.
(p.173)
operations
purchasing
R&D
financial
human resource management
The purchasing strategy in which the purchasing company orders a particular part from several
vendors is
a.
b.
c.
d.
e.
76.
continuous improvement.
mass production.
job shop.
mass customization.
just-in-time.
When a company deals with obtaining raw materials, parts, and supplies needed to perform the
operations function, the company is developing its _____ strategy.
a.
b.
c.
d.
e.
(p.173)
marketing
logistics
operations
financial
human resource management
206
(p.174)
To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com
79.
Which of the following is NOT an element of concern for strategy focused on human resources?
a.
b.
c.
d.
e.
80.
81.
83.
(p.177)
A company which has invested so heavily in a particular strategy that it will not consider a change
in this strategy even if it is not successful, would be an example of which strategy to avoid?
(p.177)
a.
b.
c.
d.
e.
84.
(p.176)
computerizing accounting.
automating customer service.
forming closer relationships with customers and suppliers through intranets.
replacing Fortran with Cobol in order to boost productivity.
replacing mainframe computers with robots.
A company which has previously found great success pioneering an extremely successful product
presently trying to turn another "long-shot" into a like success would be an example of which
strategy to avoid?
a.
b.
c.
d.
e.
(p.176)
82.
According to the text, the current percentage of the total workforce of U.S. Fortune 1000 firms
that represents the number of temporary or part-time workers teams is
a.
b.
c.
d.
e.
(p.175)
207
(p.177)
To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com
85.
A company which enters into a spirited battle for market share by cutting prices and offering
special deals would be an example of which strategy to avoid?
a.
b.
c.
d.
e.
86.
87.
89.
90.
(p.178)
Which one of the following is NOT one of the factors used to evaluate the attractiveness of a
particular strategic alternative towards risk?
a.
b.
c.
d.
e.
(p.178)
decision trees.
S.W.O.T. analysis.
industry scenarios.
corporate scenarios.
Capital Asset Pricing Model.
(p.178)
The technique used to help strategic managers choose among alternative choices by defining the
task environment, developing a set of various forecasts, and using pro forma financial statements
is called
a.
b.
c.
d.
e.
(p.177)
When considering acceptable alternative strategies, the most important criterion is the ability of
the proposed strategy to deal with
a.
b.
c.
d.
e.
88.
A company which invests in many interesting opportunities without deciding which of them
should have priority would be an example of which strategy to avoid?
a.
b.
c.
d.
e.
(p.177)
The length of time the asset will be unavailable for other uses.
The probability that the strategy will be effective.
The probability that the strategy will result in substantial growth.
The amount of assets the corporation must allocate to that strategy.
The ability to quantify the amount of risk using a method of financial analysis.
208
(p.180)
To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com
91.
According to the text, which one of the following is NOT one of the reasons why innovations
seem to occur more often in small firms rather than in large, established corporations?
a.
b.
c.
d.
e.
92.
d.
e.
93.
95.
(p.181)
If there is little fit between a strategic alternative under study and the corporate culture, which one
of the following is NOT one of the considerations that must be taken into account?
(p.182)
a.
b.
c.
d.
e.
96.
(p.181)
cooperative strategy.
political strategy.
competitive strategy.
marketing strategy.
profit strategy.
Which of the following is NOT one reason why the corporation's culture is so important when
considering a strategy change?
a.
b.
c.
d.
e.
(p.181)
The type of strategy used to influence a corporation's key stakeholders in order to increase their
support of corporate activities is
a.
b.
c.
d.
e.
94.
An entrepreneur in a small firm is more willing to accept greater risk than would a larger
firm.
Small firms are completely ignorant of risk management.
The greater the assets involved and the longer they are tied up, the more likely top
management in large firms is to demand a high probability of success.
Companies operating in global industries must deal with a greater amount of risk than
firms operating only in one country.
If the corporation's stock is widely held as in the case of large firms and experiences
stock price declines due to some external assessment, it places the firm in jeopardy of
being acquired.
Which one of the following is NOT one of the questions that management should raise in their
attempt to assess the importance to the corporation of stakeholders' concerns?
a.
b.
c.
(p.180)
Even the most attractive strategic alternative may not be implemented because
a.
b.
it may not meet the exacting financial ratios that management has declared necessary.
the firm may fear head-to-head competition with the major players in the industry.
209
(p.182)
To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com
c.
d.
e.
97.
According to the text, unanimous agreement is not the best way to determine the merits of a
proposed alternative strategy. To avoid this consensus trap, which technique assigns a group or
individual to identify potential pitfalls and problems with a proposed alternative strategy in a
formal presentation?
a.
b.
c.
d.
e.
98.
100.
101.
e.
(p.184)
(p.184)
devils advocate.
strategy shadow committee.
sales presentation.
board of directors.
scenario constructionists.
Which one of the following is NOT one of the reasons why once a strategy has been selected, a
change in policy quickly should follow?
a.
b.
c.
d.
e.
(p.184)
devil's advocate
Sloan's judgment
sales presentation
dialectical inquiry
scenario construction
A committee composed of employees at least two to three echelons below the executive level
strategy committee and whose duty is to propose what the company should do differently is
referred to as
a.
b.
c.
d.
e.
(p.183)
devil's advocate
Sloan's judgment
sales presentation
dialectical inquiry
scenario construction
According to the text, unanimous agreement is NOT the best way to determine the merits of a
proposed alternative strategy. To avoid this consensus trap, which technique involves presenting
two conflicting views (the thesis and the antithesis) presented in a debate format?
a.
b.
c.
d.
e.
99.
(p.184)
210