1. To gain firms need to provide unique products and services.

a. a bank loan
b. a sustainable competitive advantage
c. governmental legitimacy
d. export orders
e. competitors
2. All of the following are political, governmental, and legal variables that can represent key
opportunities or threats to organizations EXCEPT
a. environmental regulations.
b. tariffs.
c. population changes by race, age, sex, and level of affluence.
d. legislation on equal employment.
e. level of defense expenditures.
3. It is always easier to say you are going to do something (strategy formulation) than to
actually do it (strategy implementation).
a. FALSE
b. TRUE
4. Specific results an organization seeks to achieve in pursuing its basic mission are
a. rules.
b. tenets.
c. objectives.
d. policies.
e. strategies.
5. The four strategies of the SPACE Matrix are aggressive, conservative, offensive, and
defensive.
a. FALSE
b. TRUE
6. Sometimes______ is used to refer to strategic formulation, implementation and evaluation,
with______ strategic formulation. referring only to
a. strategic management; strategic planning
b. strategic planning; strategic processing
c. strategic implementation; strategic focus
d. strategic planning; strategic management
e. strategic management; strategic processing
7. Which of the following is NOT a management issue central to strategy implementation?
a. Developing budgets
b. Devising policies
c. Minimizing resistance to change
d. Developing an effective human resources function
e. Revising reward and incentive plans
8. What is NOT one of Michael Porter's five competitive forces?
a. Bargaining power of consumers
b. Bargaining power of suppliers
c. Bargaining power of unions
d. Potential entry of new competitors
e. Rivalry among competing firms
9.Significant barriers to entry are not always sufficient to keep some new firms from entering
industries with higher-quality products, lower prices, and substantial marketing resources.
a. False
b. True
10. Since resources can more easily be bought and sold, sustaining competitive advantages.
resources are often more important for gaining and
a tangible organizational
b. Intangible, tangible
c. intangible external
d. tangible intangible
e. internal, external
11. Company websites that sell products they produce directly to consumers are examples of
which type of strategy?
a. Forward integration
b. Horizontal integration
c. Product development
d. Conglomerate diversification
e. Backward integration
12. An acquisition occurs when a large organization purchases a smaller one or vice versa.
a. FALSE
b. TRUE
13. Anything that a firm does especially well compared to rival firms is referred to as
a. comparative disadvantage.
b. an external opportunity.
c. competitive advantage.
d. opportunity cost.
e. unsustainable advantage
14. Which of the following is NOT a corrective action a company might take to correct
unfavorable variances?
a. Allocating resources differently
b. Raising capital with stock or debt
c. Taking punitive action
d. Revising objectives
e. Divesting a division
15. An IFE Matrix can be developed in ___ steps.
a. six
b. three
c. four
d. two
e. five
16. The stability position (SP) and competitive position (CP) dimension variables in a SPACE
Matrix are assigned a numerical value ranging from -1 (best) to -7 (worst).
a. TRUE
b. FALSE
17. A strategy of seeking ownership or increased control of a firm's suppliers is backward
integration.
a. FALSE
b. TRUE
18. The most complex of all organizational structures is a matrix structure.
a. FALSE
b. TRUE
19. The SWOT matrix, if used appropriately, does not have any limitations.
a. FALSE
b. TRUE
20. A firm takes corrective actions during strategy evaluation. Which of the following is NOT
a type of corrective action?
a. Take on more debt
b. Divest a division
c. Alter strategies
d. Revise objectives
e. Replace one or more key individuals
20. Unlike strategy formulation, strategy implementation varies considerably among different
types and sizes of organizations.
a. TRUE
b. FALSE
21. Which matrix is included in the decision stage of the strategy formulation framework?
a.Quantitative Strategic Planning Matrix (QSPM)
b.Boston Consulting Group (BCG) Matrix
c.Internal Factor Evaluation (IFE. Matrix
d.Grand Strategy Matrix
e.Strategic Position and Action Evaluation (SPACE) Matrix
22. The emergence of 3D printing is an example of a(n) ________ force that impacts
organizations.
a.legal
b.social, cultural, demographic, and environment (SCDE.
c.political
d.technological
e.economic
23. The management function that is most important for strategy implementation is
a.planning.
b.rewarding.
c.organizing.
d.training.
e.controlling.
24. The goal of strategic management is to
a. eliminate and abolish competitive advantage.
b. eliminate competitive advantage.
c. achieve competitive advantage.
d. achieve and maintain competitive advantage.
e. maintain competitive advantage.
25. The emergence of 3D printing is an example of a(n) ________ force that impacts
organizations.
a. legal
b. social, cultural, demographic, and environment (SCDE.
c. political
d. technological
e. economic
26. Which is NOT a characteristic of policies?
a. Represent the basis for allocating resources
b. Allow coordination across organizational units
c. Provide a basis for management control
d. Reduce the amount of time managers spend making decisions
e. Let both employees and managers know what is expected of them
27Which term refers to selling a division or part of an organization?
a. Horizontal integration
b. Joint venture
c. Divestiture
d. Liquidation
e. Concentric diversification
28. Which of the following is the process of influencing people to accomplish specific
objectives?
a. Controlling
b. Staffing
c. Planning
d. Organizing
e. Motivating
29What is the first step in designing an External Factor Evaluation (EFE. Matrix?
a. Drawing the horizontal and vertical lines for the matrix
b. Identifying key external factors
c. Calculating the sales of each competitor
d. Determining four competitors
e. Summing the weighted score for each competitor
30. What term is used to describe specific guidelines, methods, procedures, rules, forms, and
administrative practices established to support and encourage work toward stated goals?
a. Annual objectives
b. Long-term objectives
c. Policies
d. Values
e. Strategies
31. A vision statement identifies the scope of a firm's operations in product and market terms.
a. False
b. True
32. The management function of organizing is included in human resource management.
a. False
b. True
33. Which of the following is NOT a published source of external strategic information?
a. Periodicals
b. Customer surveys
c. Directories
d. Reports
e. Journals
34. The act of oversight and direction for an organization is referred to as
a. centralized control.
b. governance.
c. organizational direction.
d. establishing norms.
e. corporate law making.
35. Because activities are organized according to the way work is actually performed, a
divisional structure by process is similar to the matrix structure.
a. FALSE
b. TRUE
36. What is the range for a firm's total weighted score in an External Factor Evaluation Matrix?
a. 0 to 10
b. 0 to 4
c. 1 to 4
d. 0 to 5
e. 1 to 5
37. The final stage in strategic management is strategy implementation.
a. False
b. True
38. Corrective actions are almost always ________ except when external and internal factors
have not significantly changed and the firm is progressing satisfactorily toward achieving stated
objectives.
a. unnecessary
b. prohibitively expensive
c. futile
d. needed
e. undesirable
39. "All of our locations will be open at least two evenings per week until 8:30 p.m." is an
example of a(n)
a. administration.
b. policy.
c. procedure.
d. objective.
e. goal.
40. Firms pursuing a cost leadership strategy need to have a strong R&D orientation.
a.True
b. False
41. A firm's annual objectives can be stated by business segment.
a. TRUE
b. FALSE
42. Marketing research is the systematic gathering, recording and analyzing, of data about
problems relating to the marketing of goods and services.
a. True
b. False
43. What type of strategies would you recommend when a firm's SPACE Matrix directional
vector has the coordinates (-2, +3)?
a. Conservative
b. Defensive
c. Competitive
d. Integrative
e. Aggressive
44. According to the Grand Strategy Matrix, organizations in which quadrant have a strong
competitive position, but are in a slow-growth industry?
a. I
b. IV
c. V
d. III
e. II
45. When a domestic company first begins to export to India, it is an example of
a. horizontal integration.
b. forward integration.
c. market development.
d. concentric diversification.
e. backward integration.
46. Exchanging members of conflicting parties so each can gain an appreciation of the other's
point of view exemplifies a confrontation approach.
a. TRUE
b. FALSE
47. The acronym SCDE stands for social, cultural, demographic, and ________ forces.
a. ethnic
b. economic
c. environment
d. external
e. ecological
48. Adequate and timely ________ is/are the cornerstone of effective strategy evaluation.
a. prompts
b. feedback
c. punishment
d. reminders
e. rewards
49. During what stage of strategic management is a firm's specific internal strengths and
weaknesses determined?
a. Evaluation
b. Feedback
c. Goal-setting
d. Implementation
e. Formulation
50. As many managers and employees as possible should be involved in the process of
performing an external audit.
a. False
b. True
51. In performing strategic planning and case analysis, relevant SCDE factors for a particular
firm need not be quantified to be useful.
a. False
b. True
52. Which of the following is NOT one of the steps involved in constructing a SWOT Matrix?
a. List the firm's external weaknesses.
b. Match internal strengths with external opportunities, and record the resultant SO strategies in
the appropriate cell.
c. List the firm's key external threats.
d. List the firm's external opportunities.
e. Match internal strengths with external threats, and record the resultant ST strategies.
53. What is NOT one of the basic ways a divisional structure can be organized?
a. By customer
b. By geographic area
c. By cost
d. By process
e. By product
54. Gaining ownership or increased control over distributors or retailers is called forward
integration strategy.
a. TRUE
b. FALSE
55. Which strategy seeks to increase market share for present products or services in present
markets through greater marketing efforts?
a. Product development
b. Backward integration
c. Forward integration
d. Market development
e. Market penetration
56. The top row of a Quantitative Strategic Planning Matrix (QSPM) consists of alternative
strategies derived from all of the following EXCEPT
a. Strategic Position and Action Evaluation (SPACE. Matrix)
b. Internal-External (IE.) Matrix.
c. Grand Strategy Matrix.
d. Competitive Profile Matrix (CPM).
e. Boston Consulting Group (BCG) Matrix.
57. A(n) ________ ideally supports the collective commitment of an organization's people to a
common purpose.
a. order
b. plan
c. strategy
d. law
e. culture
58. What can be defined as the art and science of formulating, implementing and evaluating
cross-functional decisions that enable an organization to achieve its objectives?
a. Strategic management
b. Strategic leading
c. Strategy evaluation
d. Strategy implementation
e. Strategy formulation
59. Procter & Gamble's (P&G) sale of many of its brands in order to focus on its core brands is
an example of which type of strategy?
a. Unrelated diversification
b. Retrenchment
c. Related diversification
d. Liquidation
e. Divestiture
60. Generally, external opportunities and threats are
a. key functions in strategy implementation.
b. unable to have a significant impact on an organization.
c. not worth monitoring and evaluating.
d. key functions in strategy exploitation.
e. uncontrollable by a single organization.
61. A resource is valuable if it is rare, hard to imitate, or
a. not easily substitutable.
b. inefficient.
c. expensive.
d. inexpensive.
e. easily substitutable.
62. For a resource to be valuable, it must be either rare, hard to imitate, or not easily
substitutable.
a.False
b. True
63. The strategic-management process is becoming more widely used by
a. small firms.
b. governmental organizations.
c. nonprofit institutions.
d. all types of organizations.
e. multinational conglomerates.
64. One of the steps of the SWOT Matrix is to list the firm's key external opportunities.
a. FALSE
b. TRUE
65. Which strategy is effective when new, but related, products could be offered at highly
competitive prices?
a. Forward integration
b.Conglomerate diversification
c.Related integration
d.Unrelated diversification
e.Related diversification
66. Distribution becomes especially important when a firm is striving to implement a product
development or diversification.
a.True
b.False
67Which of the following is NOT a key question that can reveal internal strengths and
weaknesses regarding a firm's marketing function?
a.Does the firm have an effective sales organization?
b.Has the firm's market share been increasing?
c.Are the firm's products and services priced appropriately?
d.Does the firm have good liquidity?
e.Are markets segmented effectively?
68. An external audit focuses on identifying and evaluating trends and events within the control
of management.
a.False
b.True
69. The Omega Company sells two very different types of products, each of which needed
special emphasis. The type of structure that would best suit the Omega Company is the
________ structure.
a.divisional-by-process
b.divisional-by-geography
c.divisional-by-region
d.divisional-by-size
e.divisional-by-product
70 Competitive advantages are normally the result of superiority in one of three areas. Which of
the following is one of them?
a.Revenues
b.Profits
c.Resources
d.Markets
e.Products
71. Medium-sized firms tend to be divisionally structured, whereas large firms tend to use an
SBU (strategic business unit) or matrix structure.
a.TRUE
b.FALSE
72. The extent to which a manufacturing plant's output reaches its potential output is called
capacity utilization.
a.True
b.False
73. Strategic management focuses on integrating management, marketing, finance and
accounting, production and operations, research and development, and information systems to
achieve organizational success.
a.True
b.False
74. Major competitors' strengths are areas of concern, but do not represent key threats to a firm.
a.False
b.True
75. Strategists are usually found in higher levels of management and have considerable authority
for decision making in the firm.
a.True
b.False
76. In the BCG Matrix, when a division of an organization has a high relative market share and is
in a fast-growing industry, it is called a
a.Question Mark.
b.Cat.
c.Dog.
d.Star.
e.Cash Cow.
77. Market penetration can be classified as either a conservative, aggressive, or competitive
strategy when using the Strategic Position and Action Evaluation (SPACE. Matrix.
a.TRUE
b.FALSE
78. The most important determinants of an organization's overall strategic position are
considered to be the two internal dimensions, financial position (FP), and competitive position
(CP), and the two external dimensions, industry position (IP), and stability position (SP).
a.TRUE
b.FALSE
79. The strengths and weaknesses of an organization are determined relative to the strengths and
weaknesses of its competitors.
a.False
b.True
80. The Internal Factor Evaluation Matrix should use a total of 20 internal factors.
a.False
b.True
81. If Gap opens five stores for the first time in China, this is an example of which type of
strategy?
a.Market development
b.Forward integration
c.Backward integration
d.Horizontal integration
e.Product development
82. Market penetration, market development, and product development are intensive strategies.
a.FALSE
b.TRUE
83. Panera installing online ordering and delivery from their restaurants is an example of which
type of strategy?
a.Backward integration
b.Unrelated diversification
c.Forward integration
d.Related diversification
e.Horizontal integration
84. In terms of number of employees, restructuring usually involves increasing the size of the
firm.
a.FALSE
b.TRUE
85. The first activity in the strategy-evaluation process is to
a.develop organizational goals.
b.take corrective actions to ensure that performance conforms to plans.
c.compare expected results with actual results.
d.examine the underlying bases of a firm's strategy.
e.examine the capital structure.
86. ________ advantages refer to the benefits a firm may achieve by entering a new market or
developing a new product or service prior to rival firms.
a.Corporate
b.Outsourcing
c.Differentiator
d.First mover
e.Fast follower
87. Effective strategy formulation can usually guarantee successful strategy implementation.
a.TRUE
b.FALSE
88. Backward integration is effective in all of these cases EXCEPT
a.when present suppliers have high profit margins.
b.when an organization needs to acquire a needed resource quickly.
c.when an organization competes in an industry that is growing rapidly.
d.when the advantages of stable prices are not particularly important.
e.when an organization has both capital and human resources to manage the new business of
supplying its own raw materials.
89. Unpublished sources of external strategic information include all of the following EXCEPT
a.abstracts.
b.speeches at professional and shareholders' meetings.
c.market research.
d.conversations with stakeholders.
e.customer surveys.
90. Which of the following is NOT an external force that must be examined in formulating
strategies?
a.Environmental
b.Social
c.Cultural
d.Economic
e.Organizational
91. "Beginning in March, production employees will have the option of working up to 12 hours
of overtime per week." is an example of a procedure.
a.TRUE
b.FALSE
92. With the matrix structure it is common for functional resources to be duplicated.
a.TRUE
b.FALSE
93. There are five basic functions of marketing: marketing research and target market analysis,
product planning, promoting products, pricing products, and placing or distributing products.
a.False
b.True
94. Bargaining power of consumers is usually the most powerful of Porter's five competitive
forces.
a.False
b.True
95. Determining opportunities and threats is generally the first step in strategic planning.
a.True
b.False
96. An organization's present strategies, objectives, vision, and mission, coupled with the
external and internal audit information, provide a basis for generating and evaluating feasible
alternative strategies.
a.TRUE
b.FALSE
97. The two positive-rated dimensions on the SPACE Matrix are
a.CP and SP.
b.FP and SP.
c.FP and IP.
d.IP and SP.
e.FP and CP.
98 Which stage of the strategy-formulation framework involves the Quantitative Strategic
Planning Matrix?
a.Stage 3
b.Stage 4
c.Stage 5
d.Stage 2
e.Stage 1
99. ________ plans can be defined as alternative plans that can be put into effect if certain key
events do not occur as expected.
a.Scenario
b.Evaluation
c.Contingency
d.Forecast
e.Agile
100. There are four basic types of diversification: concentric, conglomerate, forward, and
backward.
a.TRUE
b.FALSE