Strategic Management (C8)

TRUE OR FALSE (Decide si es falsa o verdadera c/u de las siguientes preguntas)

1) Strategic management is the set of managerial decisions and actions that determines the short-term
performance of an organization.
FALSE

2) The first step in the strategic management process is analyzing the external environment.
FALSE

3) Within an industry, an environment can present opportunities to one organization and pose threats to
another.
TRUE

4) Evaluating an organization's intangible assets is part of doing an internal analysis in the strategic
management process.
TRUE

5) Activities that an organization does well or resources that it has available are called capabilities.
FALSE

6) Exceptional or unique organizational resources are known as core capabilities.

FALSE

7) SWOT (FODA) analysis includes an analysis of an organization's environmental opportunities and

threats.
TRUE

8) The final step in the strategic management process is implementing the objectives.
FALSE

9) Corporate-level strategies are developed for organizations that run more than one type of business.
TRUE

10) A stability strategy is developed when management decides it will remain profitable by maintaining the
status quo in a rapidly changing external environment.
FALSE

11) When managers "manage strategically" by following the strategic management process, the chosen
strategies will always lead to positive outcomes.
FALSE

Decide cual inciso se ajusta más a la respuesta correcta

1) What is a strategic design for how a company intends to profit from its strategies, work processes, and
work activities?
A) business model
B) strategic model
C) strategic management model
D) competitive model
A
2) Why is strategic management important?
A) It has little impact on organizational performance.
B) It is involved in many of the decisions that managers make.
C) Most organizations do not change.
D) Organizations are composed of similar divisions and functions.
B

3) In the first step of strategic management, the mission of the firm answers the question, ________
A) What business should we be in?
B) What is our reason for being in business?
C) Who are our customers?
D) Who are our creditors?
B

4) What provides clues to what an organization sees as its purpose?

A) the organization's goals
B) the organization's strategies
C) the organization's business model
D) the organization's mission
D

5) In the first step of strategic management, identifying the current strategies and goals provides ________.
A) a basis to determine if the goals need to be changed
B) an understanding of what the competition is doing
C) an idea of what trends and changes are occurring
D) important information about an organization's specific resources and capabilities
A

6) In analyzing the environment, managers should know ________.

A) the competition's stock price
B) pending legislation that might affect the organization
C) the organization's purpose
D) the goals currently in place and the strategies currently being used
B

7) When an organization is analyzing its labor supply, it is studying its ________.

A) organizational culture
B) internal environment
C) external environment
D) organizational structure
C

8) ________ and ________ are outcomes from a study of the external environment.
A) Threats; weaknesses
B) Strengths; weaknesses
C) Weights; measures
D) Opportunities; threats
D
9) If a bank estimates the capabilities of its training and development department employees prior to
implementing a new training program designed to change their method of providing customer service, it is
completing what step in the strategic management process?
A) doing an external analysis
B) identifying the organization's current mission, goals, and strategies
C) doing an internal analysis
D) formulating strategies
C

10) ________ are the organization's major value-creating skills, capabilities, and resources that determine
the organization's competitive weapons.
A) Strengths
B) Opportunities
C) Core competencies
D) Weaknesses
C

11) Corporate reputation is an organization's ________ resource.

A) financial
B) physical
C) intangible
C

12) The merging of the analyses of internal and external factors influencing the organization's strategy is
known as ________.
A) complete studies
B) organizational behavior and theory
C) definitional analysis
D) SWOT analysis
D

13) The final step in strategic planning answers the question, ________
A) How effective have our strategies been?
B) What business have we been in?
C) What business should we have we been in?
D) How much money have we lost?
A

14) Middle-level managers typically are responsible for ________ strategies.

A) competitive
B) organizational
C) operational
D) corporate
A

15) ________ strategy determines what businesses an organization should be in.

A) Business
B) Organizational
C) Operational
D) Corporate
D
16) When PepsiCo seeks to integrate the strategies of Pepsi, 7-Up International, and Frito-Lay, it is
developing what level of business strategy?
A) functional
B) system
C) management
D) corporate
D

17) What can provide a framework for understanding diverse businesses and help managers establish
priorities for making resource allocation decisions?
A) a competitive advantage
B) a competitive strategy
C) a corporate portfolio matrix
D) a strategic business unit
C

18) An organization is said to have ________ when it has several different businesses that are independent
and that formulate their own strategies.
A) operational units
B) strategic business units
C) competitive advantages
D) legal subunits
B

19) An example of ________ is when an organization possesses a characteristic that sets itself apart from
competitors and gives the firm a distinctive edge.
A) core competency
B) competitive power
C) legal propriety
D) competitive advantage
D

20) What can challenge managers' attempts at creating a long-term, sustainable competitive advantage?
A) old technologies
B) predictable changes
C) competitive strategies
D) market instabilities
D

21) Cost leadership as a strategy requires a firm to ________.

A) aggressively search out efficiencies to maintain the lowest cost structure
B) be unique in its product offering
C) aim at a cost advantage in a niche market
D) aim to be similar to its competition in most operations
A

22) Differentiation as a strategy requires a firm to ________.

A) aggressively search out efficiencies to maintain the lowest cost structure
B) be unique in its product offering
C) aim at a cost advantage in a niche market
D) aim to be similar to its competition in all operations
B

23) Practically any successful consumer product or service can be identified as an example of the
________.
A) differentiation strategy
B) focus strategy
C) breadth strategy
D) cost leadership strategy
A

24) What generic competitive strategy involves a cost advantage or a differentiation advantage in a narrow
segment or niche?
A) differentiation
B) focus
C) breadth
D) cost leadership
B

25) A firm that is "stuck in the middle" cannot develop ________.

A) a cost or differentiation advantage
B) an effective strategy
C) long-term success
D) strategic flexibility
A

26) Functional-level strategy directly supports ________.

A) corporate strategy
B) competitive strategy
C) differentiation strategy
D) focus strategy
B

27) What is the ability to recognize major external environmental changes, to quickly commit resources,
and to recognize when a strategic decision is not working?
A) strategic flexibility
B) strategic management
C) competitive advantage
D) an opportunity
A

28) How can a company create strategic flexibility?

A) encourage employees to be open about disclosing negative information
B) know what has happened with strategies in the past
C) get old ideas from senior employees
D) never make mistakes
A

29) How can a cost leader use e-business to reduce costs?

A) by adding a sales phone line and a sales force
B) by personally testing and evaluating job applicants
C) by using stand-alone locations only
D) by using Web-based inventory control systems that reduce storage costs
D

30) Senior managers must decide whether or not the emphasis of their innovation efforts is going to be
based upon ________.
A) market research
B) communication
C) process improvement
D) cost effectiveness
C

31) What company would benefit most from using a scientific research strategy to achieve high
performance levels?
A) Merck
B) Wal-Mart
C) Macy's
D) Delta Airlines
A

32) What is a strategic advantage of being a first mover?

A) certainty over the direction of technology and market
B) low development costs
C) no financial or strategic risks
D) cost and learning benefits
D

33) What is a strategic disadvantage of being a first mover?

A) a slow start at forming customer relationships and customer loyalty
B) risk of competitors imitating innovations
C) reputation for being a follower
D) no control over resources
B
A New Business (Scenario)
Patrick majored in entrepreneurship and computer science in college. After graduation, he decided to start
his own business as an e-business entrepreneur, founding an online B2B reverse auction company called
CompuSave. (B2B signfica Business to Business)

1) After hiring several employees, Patrick requires that each person in this company be involved in
studying trends involving new technology, competitors, and customers. These employees are involved in
________.
A) external analysis
B) internal environment
C) strategic management
D) strategic flexibility
A

2) Patrick to complete a SWOT for the company's internal environment each quarter. This includes
A) strengths and weaknesses
B) opportunities and threats
C) strengths and opportunities
D) threats and weaknesses
A

3) Patrick needs to complete a SWOT of the external environment in order to put together his strategic
plan. he will analyze the
A) threats and weaknesses
B) strengths and weaknesses
C) opportunities and threats
D) strengths and opportunities
C

SWOT Analysis (Scenario)

As a process of self-examination during her senior year of college, Casey decides to develop a SWOT
analysis of her prospects relative to getting a job.

1) Casey realizes that she has a personal characteristic that suggests she is not comfortable interacting with
strangers. She interprets this as a(n) ________ if she is to get a job as a salesperson.
A) alternative
B) strength
C) weakness
D) opportunity
C

2) Casey majored in marketing and really enjoyed studies in market research. Through research on the
Internet and in the university library, she discovers that this industry appears to have significant positive
external trends. She interprets this as a(n) ________.
A) alternative
B) strength
C) weakness
D) opportunity
D
3) Casey has been involved in ________ at a personal level.
A) opportunity analysis
B) risk avoidance
C) strategic planning
D) stage decision making
C

Powerballs (Scenario)
Colleen invested a dollar in the Powerball Lottery and won $60 million. Subsequently, she decides to start
her own business selling lawn mowers.

1) No matter which business Colleen decides to buy, she intends to operate each business independently
and allow each to determine its own strategy. This will mean that each company will be a(n) ________.
A) operational unit
B) strategic business unit
C) competitive advantage
D) legal subunit
B

2) Colleen decides that she wants to assemble lawn mowers. She decides that she wants a business to
develop a distinctive edge in producing high-quality lawn mowers. This emphasis on quality is to be so
strong that her company will have a ________ that will set her company apart from her competition.
A) core competence
B) competitive power
C) legal propriety
D) competitive advantage
D

El Taco Grande (Scenario)

As the original owner of Taco Rocket, you have seen your business holdings grow substantially over the
last 10 years. The number of stores you own and franchise has grown by 200 percent and you own a
number of companies in related and unrelated areas.

1) You purchased Shanghai Grill and Zorro Distributors after being in business for five years. What level
of strategy integrates the strategies of your various business units?
A) corporate level
B) business level
C) functional level
D) strategic level
A

2) You now need to decide how to best manage and utilize the large number of assets represented by the
numerous companies you own. For each SBU, you must create a ________ strategy to determine how your
corporation should compete in each of its businesses. (SBU mean Strategic Business Unit)
A) corporate-level
B) business-level
C) functional-level
D) tactical
B
Megabyte Center, S.A. (Scenario)
Your old friend, Ariel Eskenazi, is the owner and general manager of Megabyte Center, a computer reseller
and systems integrator located in Panama City, Panama. Since leaving IBM to start a business in his home
country, Ariel's company has steadily grown, due in large part to the business partnerships he's established
over the years with large foreign computer and software firms, such as Goldstar and Microsoft. These
relationships have helped his company win considerable market share in Panama, as well as in other parts
of Latin America. However, since the 1999 turnover of the Panama Canal to the Panamanian government,
there has been a huge influx of foreign capital into Panama. For example, several large Asian firms have
made Panama a beachhead for their American operations. Tourism is on the rise, with over a score of new
hotels built in the metropolitan area alone over the past three years. As a result, demand for Megabyte's
products and services has increased markedly, but so has the level and diversity of its competition. While
Megabyte's customer base has remained fairly loyal, many longtime customers are beginning to demand
price concessions and enhanced service levels in return for their continued business. Additionally, Ariel has
learned recently that several of his former suppliers and business partners are considering establishing local
sales offices of their own in Panama City. Ariel knows you are very knowledgeable about competitive
strategy and calls you asking for advice. You begin by telling him about the types of corporate strategies.

1) With all the changes presently occurring in the computer reseller market, you advise him to stay with his
present course until the market calms down. You are recommending which corporate strategy for Ariel to
use?
A) renewal
B) stability
C) growth
B

2) Because his customers are demanding price concessions and enhanced service levels in return for their
continued business, Ariel decides that he wants to compete by offering unique products that are widely
valued by customers. What strategy is Ariel following?
A) focus
B) cost leadership
C) differentiation
D) stability
C