Question 5

Strategic business analysis are those actions and decisions made by management while trying
to understand the impact of strategic events like: introduction or development of new product
line, setting up a factory in a new location, employing key staff, selecting organizational
structure, investing in new technology, managing risk, complying with relevant laws and
regulations, implementing changes, etc.
ANSWER: TRUE

Question 6
The three organizational levels are:
ANSWER: corporate level, business level functional level

Question 7
The corporate level is where top management directs:
ANSWER: overall strategy for the entire organization

Question 8
Decisions regarding which industries to compete in are the concern of:
ANSWER: Corporate level strategy

Question 9
Competitive strategy is also known as
ANSWER: Business level strategy

Question 10
In essence, organization’s strategy provides a basic understanding of
ANSWER: how the organization will compete
Question 11
Corporate strategy refers to the firm’s ability to match the opportunities in the business
environment with
ANSWER: the choice of what business the firm will be engaged in
Question 12
Functional strategy impacts the operating staff to the greatest degree during their daily work
experiences.
ANSWER: True

Question 13
Business strategy is also called operational strategy
ANSWER: False

Question 14
An analysis of the business environment involves an analysis of the strengths and weaknesses
that seem to exist, and an assessment of their significance
ANSWER: False

Question 15
Deliberate strategy is a bottom-up approach to strategic planning that emphasize intention.
This is built based on the vision and mission of the organization and is focused on achieving
the purpose of doing business
ANSWER: False

Question 16
Wal-Mart is an example of this concept. They have made their operations so efficient and
built such a large distribution network that they are able to get preferential pricing on goods
and sell them to consumers for less than other retailers. For example, a Lego set at Wal-Mart
might sell for 10 percent less than the same set at Target.
ANSWER: Cost leadership strategy

Question 17
Emergent strategy is the process of identifying unforeseen outcomes from the execution of
strategy and then learning to incorporate those unexpected outcomes into future corporate
plans by taking a top bottom approach to management
ANSWER: False
Question 18
Emergent strategy takes a rigid approach to management, thus is largely considered to be less
flexible
ANSWER: False

Question 19
David McConnell aspired to be a writer. When his books weren’t selling he decided to give
out perfume as a gimmick. The statement is an example of:
ANSWER: Intended strategy/deliberate strategy

Question 20
The following are the characteristic of seeing strategy development as a design process
except for:
ANSWER: Strategic choices are made by junior management.

Question 21
The weakness with form of strategic development is strategic drift.
ANSWER: Strategy as experience

Question 22
Adopted by risk averse managers
ANSWER: Strategy as experience

Question 23
The fundamental purpose of an organization’s mission statement is to
ANSWER: define the organization’s purpose in society

Question 24
Of the following, which one would NOT be considered one of the components of a mission
statement?
ANSWER: XYZ shall hire only those individuals who have with sufficient educational
levels so as to be of benefit of our customers
Question 25
The goal of the organization’s is to capture the hearts and minds of
employees, challenge them, and evoke their emotions and dreams.
ANSWER: vision

Question 26
The environmental segments that comprise the general environment typically will NOT
include
ANSWER: substitute products of services

Question 27
An analysis of the economic segment of the external environment would include all of the
following EXCEPT
ANSWER: the move toward a contingent workforce

Question 28
PESTEL analysis is:
ANSWER: a broad frame work to help managers understand the environment in which their
business operates.

Question 29
It affects our attitudes, interest and opinions. These forces shape who we are as people, the
way we behave and ultimately what we purchase. For example within the UK people’s
attitudes are changing towards their diet and health. As a result the UK is seeing an increase
in the number of people joining fitness clubs and a massive growth for the demand of organic
food. Products such as Fitbit attempt to deal with society’s concern, about lack of exercise.
ANSWER: Socio-cultural forces

Question 30
These factors could create advantages and opportunities for organizations. Conversely they
can place obligations and duties on organization. It includes legislation such as the minimum
wage or anti-discrimination laws, voluntary codes and practices and others.
ANSWER: Political-legal forces
Question 31
The presence or absence in the nation of supplier industries that are internationally
competitive.
ANSWER: Related and supporting industries

Question 32
The best strategies, corporate and business, are based on thorough SWOT analysis.
ANSWER: True

Question 33
In the implication of demographic change particularly in the location of demand, an ageing
population suggest increased demand for health care services: a young growing population
has a growing demand for schools, housing and work.
ANSWER: False

Question 34
They are increasing pressure on the businesses in which they work for a number of reasons-
partly for their own safety, partly in order to improve the public image of the company.
ANSWER: Employees

Question 35
As markets globalize, firms supplying them become global customers for their own inputs
and seek global supplier.
ANSWER: True

Question 36
The existence of global competitors and global customers in an industry prompts purely
national firms to start trading globally so as to be able 0to compete on an even footing.
ANSWER: True
Question 37
The technique is based on the hypothesis of the economy industry which are inter-related.
Such inter relationship is known as coefficient in mathematical terms.
ANSWER: Economic input Output Model Method
Question 38
This is also called Index Number Method.
ANSWER: Business Barometers Method

Question 39
The main feature of this method is that it is not guided by the end and it relies on the present
situation for probing into the future. This method, when compared to others, is more dynamic
in character.
ANSWER: Deductive method

Question 40
In the case of direct method, the different sub-ordinate units on departments prepare estimates
and the company takes the aggregate of these departmental estimates. This method is also
called top down method of forecasting.
ANSWER: False

Question 41
Corporations such as Globe and Smart which provides telecommunications service create
high entry barriers through their high level of advertising and promotions is an example of:
ANSWER: Product differentiation

Question 42
Small entrepreneurs often have difficulty obtaining supermarket shelf space for their goods
because large retailers charge space on their shelves and give priority to the established firms
who can pay for the advertising need to generate high customer demand is an example of:
ANSWER: Access to distribution channel

43. Litton Industries’ acquisition of Ingalls Shipbuilding facilities illustrates this concept.
Litton was successful in the 1960s with its contracts to build Navy ships. But when the
Vietnam war ended, defense spending declines and Litton saw a sudden decline in its
earnings. As the firm restructured, divesting from the shipbuilding plant was not feasible
since a large and highly specialized investment could not be sold easily, and Litton was
forced to stay in a declining shipbuilding market. The situation above is an example of what
particular Porters approach to industry analysis?
Answer: Rivalry among existing firms
44. Baxter international, manufacturer of hospital supplies acquired American Hospital
Supply, a distributor. The situation above is an example of what particular Porter’s approach
to industry analysis?
Answer: Bargaining power of suppliers

45. Wholesale customers, like Dick’s Sporting Goods and the Sports Authority, hold a certain
degree of bargaining leverage, as they could substitute Under Armour’s products with other
competitors’ to gain higher margins. The situation above is an example of what particular
Porter’s approach to industry analysis?
Answer: Bargaining power of buyers

46. If new entrants are able to come into the market without much difficulty, firms already in
the market are likely to keep prices low and to meet customer needs as effectively as
possible. As a result, competition in the market will be strong and there will be no
opportunities for high profit margins.
TRUE
47. Suppliers can exert bargaining power over participants in an industry by threatening to
raise prices or reduce the quality of purchased goods or services. Powerful suppliers can
thereby squeeze profitability out of an industry unable to recover cost increases in its own
prices.
Answer: True
48. The product life cycle analysis is a technique used to plot the process of a product through
its lifespan.
Answer: True
49. A typical cycle of competition affects prices and quality. If one company has a large share
of a profitable market, a rival company might start to sell its product at a lower price.
Answer: True

50. In the maturity phase of a products life cycle, or in the decline phase, it becomes less
difficult to lower prices without reducing its quality.
Answer: False

1. The purchase of these goods may not be immediate and can be deferred and it
requires advertising and personal-selling support and extensive marketing in other
areas as well.
 -UNSOUGHT PRODUCTS

2. In this type of product, marketers must establish a high level of brand awareness and
recognition. Extensive distribution is the primary marketing strategy.
-CONVENIENCE PRODUCTS

3. _turnover is slower, and retailers have a great deal of their capital tied-up in
inventory.
-SHOPPING PRODUCTS

4. Thy are major capital items that are typically used directly in the production process
of products.
-INSTALLATIONS

5. Component parts are items that are purchased to be placed in the final product without
further processing.
-TRUE

6. They are industrial products that aid in the buyer’s production or operations, including
installation and accessory equipment.
-CAPITAL ITEMS

7. They are products and services bought by final consumers for personal assumption.
These include convenience products, shopping products, specialty products, and
unsought products.
-CONSUMER PRODUCTS

8. Based on the volume of their purchases, __________ are the most important
commercial customers in the business or industrial market.
-MANUFACTURERS

9. The demand for business products is derived from the ultimate demands for consumer
products.
-TRUE

10. Business products are classified on the basis of how organizational buyers shop for
particular products and services.
-FALSE

11. Personal computers and light factory equipment such as portable drills provide
examples of business products that would be classified as accessory equipment.
-TRUE

12. When purchasing machine tools for their plants, American Honda is:
-USER
13. _______ is determined by what (1) a buyer is willing to pay, (2) a seller is willing to
accept, (3) the competition is allowing to be charged.
-PRICE
14. ________ pricing involves charging very low prices, the aim being to get rid of
competitors so that the supplier can charge considerably higher prices later.
-PREDATORY PRICING

15. Refers to products having low prices placed on them in an attempt to lure customers
to the business and to make further purchases.
-LOSS LEADER PRICING

16. High price is used as a defining criterion. Such pricing strategies work in segments
and industries where a strong competitive advantage exists for the company.
- PREMIUM PRICING

17. Market based pricing is defined as a process of setting prices of goods/services based
on the current market conditions. A critical analysis of the product’s features is done
and then depending on whether the product has more or less features than the
competitor’s product, the price is accordingly set higher or lower than the price of the
competitor’s product.
-TRUE

18. It involves initially charging the highest price your market will accept for your
product, then lowering it over time.
-SKIMMING-BASED PRICING

19. _______ is packaging the interrelated products together to make a complete set and
offered to customers at a temptingly low price.
-PRODUCT BUNDLING

20. The term time based pricing refers to a method of pricing that charges its customers
according to time.
-TRUE

21. ________ is used when there is an idle capacity, competition is very stiff and
businesses have to sell hard their products to at least break-even
-DISTRESS PRICING
22. ___________ can be defined as the activities and processes required to move a
product from the producer to the consumer.
-DISTRIBUTION CHANNEL

23. A set of interdependent organizations involved in the process of making a product or

service available for use or consumption by the consumer or business user is called a:
-DISTRIBUTION CHANNEL
 24. This channel relies on intermediaries to perform most of or all distribution functions,
otherwise known as wholesale distributions.
-INDIRECT CHANNEL

25. It describes a wide variety of marketing arrangements by which the manufacturer or

wholesalers uses more than one channel simultaneously to reach the end user.
-DUAL DISTRIBUTION

26. The most non tradition channel allows for the consumer to send a product to the
producer.
-REVERSE CHANNEL

27. They tend to be more expensive to set up at the beginning and can sometimes require
significant capital investment.
-DIRECT CHANNEL

28. They do not stock a variety of products from various brands. They are under contract
to deal in particular products of only one parent company.
-DISTRIBUTORS

29. They are middlemen who represent the produces to the customer.
-AGENTS

30. A discount supermarket, such as Aldi, is most likely to place an emphasis upon which
of the following elements of the marketing mix?
-PRICE

31. The manufacturer of an upmarket designer fragrance is most likely to focus on:
-PRODUCT RATHER THAN THE PRICE

32. When companies use tools such as special events, lobbying efforts, and annual reports
for communication, they are using _________.
-PUBLIC RELATIONS

33. Offers a group of incentive tools, usually for a short duration to stimulate greater and
speedier purchase of a certain brand or service by consumers or dealers.
-SALES PROMOTION
34. Uses in-person interaction to sell products and services. This type of communication is
carried out by sales representatives, who are the personal connection between a buyer and a
company or a company’s products or services.
-PERSONAL SELLING
35. it is a non-paid form of promotion, organizations frequently provide the material in the
form of news, releases, photographs and press conferences.
-PUBLICITY
36. This mode of promotion is usually paid, with little or no personal message.
-ADVERTISING
37. A paid intimate stimulation of supply for a product, service, or business unit by planting
significant news about it
-PUBLIC RELATIONS
38. Employees are particularly important in service marketing.
-TRUE
39. This both increases customer satisfaction and cuts down on the time it taken to complete a
sale.
-PROCESS
40. This could be addresses through physical representation such as tickets and programs
relating to entertainment, or by incorporating evidence into the design and specification of the
service environment such as décor, color scheme, noise levels, background music, fragrance
and general ambience.
-PHYSICAL EVIDENCE