robbins mgmt12 tb09

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Management, 12e (Robbins/Coulter)

Chapter 9 Strategic Management

1) A business model describes how a company is going to make money.Answer: TRUE

Page Re: !"#$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: 1-iiculty: Easy(lassiication: (onceptual

!) The irst step in the strategic management process is analy'ing the eternal en+ironment.Answer: /A$EPage Re: !"!

$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: (onceptual

) E+aluating an organi'ation2s intangible assets is part o conducting an internal analysis in thestrategic management process.Answer: TRUE

Page Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: (onceptual

") Acti+ities that an organi'ation does well or resources that it has a+ailable are calledcapabilities.Answer: /A$EPage Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: (onceptual

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5) Eceptional or uni6ue organi'ational resources are known as core capabilities.Answer: /A$EPage Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and business

strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: (onceptual

7) 8hen conducting a 8%T analysis4 threats are acti+ities the organi'ation doesn2t do well orresources it needs but doesn2t possess.Answer: /A$EPage Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy the

steps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: (onceptual

9) A 8%T analysis includes an analysis o an organi'ation2s en+ironmental opportunities andthreats.Answer: TRUEPage Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: (onceptual

) The inal step in the strategic management process is implementing the ob,ecti+es.Answer: /A$EPage Re: !""$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: (onceptual

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;) (orporate strategies determine what business a company is in or wants to be in4 and what itwants to do with those businesses.Answer: TRUEPage Re: !"5$earning %utcome: &dentiy the steps o the strategic management process and describe

common organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

1#) -i+ersiication is an eample o a corporate retrenchment strategy.Answer: /A$EPage Re: !"5$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

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1) A stability strategy is an organi'ational strategy in which an organi'ation maintains the status6uo.Answer: TRUEPage Re: !"7$earning %utcome: &dentiy the steps o the strategic management process and describe


1") A retrenchment strategy is a short>run renewal strategy that helps an organi'ation stabili'eoperations4 re+itali'e organi'ational resources and capabilities4 and prepare to compete onceagain.Answer: TRUEPage Re: !"7>!"9

$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

15) A turnaround strategy is a type o renewal strategy used when an organi'ation is in serioustrouble.Answer: TRUEPage Re: !"9$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

17) The *(? matri e+aluates an organi'ation2s +arious businesses to identiy which ones oerhigh potential and which ones drain organi'ational resources.Answer: TRUEPage Re: !"9$earning %utcome: -escribe the components o the management en+ironment0 &dentiy the

steps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

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19) tars4 one o the our business groups in the *(? matri4 are characteri'ed by low growthand low market share.Answer: /A$EPage Re: !"9$earning %utcome: -escribe the components o the management en+ironment0 &dentiy the


1) 8ithin an organi'ation4 the single independent businesses that ormulate their owncompetiti+e strategies are known as strategic business units.Answer: TRUEPage Re: !"

$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: "-iiculty: Easy(lassiication: (onceptual

1;) A company that competes by oering uni6ue products that are widely +alued by customers isollowing a dierentiation strategy.Answer: TRUEPage Re: !5#$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: "-iiculty: Easy(lassiication: (onceptual

!#) =anagers using the strategic management process always achie+e positi+e outcomes.Answer: /A$EPage Re: !5$earning %utcome: &dentiy the steps o the strategic management process and describe

common organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: 5-iiculty: Easy(lassiication: (onceptual

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!1) A @@@@@@@@ describes the rationale o how a company is going to make money.A) unctional strategy*) business model() 8%T analysis-) core competency

Answer: *Page Re: !"#$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: 1-iiculty: Easy(lassiication: (onceptual

!!) The irst our steps o the strategic management process describe the strategic @@@@@@@@ thatmust take place in an organi'ation.

A) e+aluation*) controlling() planning-) implementationAnswer: (Page Re: !"!$earning %utcome: -iscuss the processes and tools o de+eloping dierent types o plans0&dentiy the steps o the strategic management process and describe common organi'ational and business strategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: (onceptual

!) -eining the organi'ational mission orces managers to identiy @@@@@@@@.A) what the labor supply is like in the locations where the organi'ation operates*) what the organi'ation is in business to do() what the competitor is doing-) what pending legislation will aect the organi'ationAnswer: *Page Re: !"!$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategies

AA(*: Analytic kills(h. %b,ecti+e: !-iiculty: =oderate(lassiication: (onceptual

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!") =anagers do an eternal analysis so that they know about @@@@@@@@.A) the irm2s basic belies and ethical priorities*) what the competition is doing() resources the irm does not possess-) their organi'ation2s core competencies

Answer: *Page Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: (onceptual

!5) 8hen an organi'ation is analy'ing its labor supply4 it is studying its @@@@@@@@.

A) organi'ational culture*) internal en+ironment() eternal en+ironment-) organi'ational missionAnswer: (Page Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: (onceptual

!7) @@@@@@@@ are positi+e trends in the eternal en+ironment.A) trengths*) Threats() 8eaknesses-) %pportunitiesAnswer: -Page Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and business

strategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: (onceptual

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!9) (omputer peripherals pro+ider Ascent plans to enter a new market in another country. 8hicho the ollowing represents a threat or AscentA) Ascent2s proit margin in the pre+ious year was its lowest on record and it will re6uire long>term planning to impro+e margins.*) Ascent lacks the resources to enter the market on its own and has to ind a partner in the new

market.() Ascent will ha+e to plan its entry careully as the laws in the country do not a+or oreign businesses.-) Ascent needs to impro+e its ser+ice capabilities in the new country as this is an importantsource o re+enue.Answer: (Page Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills

(h. %b,ecti+e: !-iiculty: =oderate(lassiication: Application

!) A study o the eternal en+ironment allows a manager to understand the @@@@@@@@ and @@@@@@@@ or the organi'ation.A) threats0 weaknesses*) strengths0 weaknesses() strengths0 opportunities-) opportunities0 threatsAnswer: -Page Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: (onceptual

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!;) Belen4 the owner o (ra'y (upcakes4 is conducting a 8%T analysis o her company to indout where she can impro+e her business and to identiy possibilities or epansion. 8hich o theollowing represents an opportunity or epansionA) There has been a trend toward personali'ed cupcakes or a +ariety o occasions.*) The production process was ound to be highly eicient and wastage was kept to a minimum.

() &n a taste test4 (ra'y (upcakes products ranked higher than competitors in the taste andteture segments.-) (ra'y (upcakes decorators are among the best in their ield and design plays a ma,or role inthe popularity o the products.Answer: APage Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: !

-iiculty: =oderate(lassiication: Application

#) The third step in strategic management process is related to the analysis o the @@@@@@@@.A) eternal en+ironment*) internal en+ironment() threats and opportunities-) competiti+e strategyAnswer: *Page Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: (onceptual

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1) *ella Cista (lothing targets teenage girls with a range o aordable ready>to>wear clothing.The company is opening two new outlets4 as sales ha+e been ecellent. 8hich o the ollowingrepresents a strength or the companyA) The company2s in>house designers ha+e a knack or identiying and populari'ing ashiontrends.

*) -isposable income is rising and consumers will ha+e more money to spend on clothes.() %+erseas customers ha+e shown an interest in buying *ella Cista clothes through thecompany2s online store.-) A long>time competitor recently went out o business and *ella Cista can cut down on itsad+ertising budget.Answer: APage Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills

(h. %b,ecti+e: !-iiculty: =oderate(lassiication: Application

!) & a bank estimates the capabilities o its employees who pro+ide customer ser+ice prior toimplementing a new training program designed to change their method o pro+iding customerser+ice4 it is @@@@@@@@.A) conducting an eternal analysis*) ormulating its competiti+e strategies() doing an internal analysis-) ormulating its corporate strategiesAnswer: (Page Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: Application

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) An organi'ation2s inancial4 physical4 human4 and intangible assets are known as its @@@@@@@@.A) resources*) capabilities() opportunities

-) core competenciesAnswer: APage Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: (onceptual

") The ma,or +alue>creating capabilities o the organi'ation are known as its @@@@@@@@.A) strengths*) opportunities() core competencies-) resourcesAnswer: (Page Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: (onceptual

5) The combined eternal and internal analyses are called @@@@@@@@.A) competitor analysis*) industry analysis() market analysis-) 8%T analysisAnswer: -Page Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy the


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7) The inal step in the strategic management process allows an organi'ation to understand the @@@@@@@@.A) eecti+eness o the strategies used*) implementation o the strategies() ormulation o the strategies

-) resources and capabilities it possessesAnswer: APage Re: !""$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: (onceptual

9) Top>le+el managers are responsible or @@@@@@@@ strategies.

A) dierentiation*) corporate() competiti+e-) unctionalAnswer: *Page Re: !""$earning %utcome: -escribe the roles o managers and the skills they need to succeed within anorgani'ation0 &dentiy the steps o the strategic management process and describe commonorgani'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

) $ower>le+el managers are responsible or @@@@@@@@ strategies.A) unctional*) stability() corporate-) growthAnswer: APage Re: !""$earning %utcome: -escribe the roles o managers and the skills they need to succeed within anorgani'ation0 &dentiy the steps o the strategic management process and describe common

organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

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;) A @@@@@@@@ strategy determines what businesses a company is in or wants to be in4 and whatit wants to do with those businesses.A) competiti+e*) unctional() ocus

-) corporateAnswer: -Page Re: !"5$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

"#) 8hat are the three main types o corporate strategies

A) stability4 ocus4 and turnaround*) growth4 stability4 and renewal() growth4 cost leadership4 and dierentiation-) stability4 dierentiation4 and ocusAnswer: *Page Re: !"5$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

"1) A @@@@@@@@ strategy is when an organi'ation epands the number o markets ser+ed or the products oered.A) growth*) renewal() stability-) retrenchmentAnswer: APage Re: !"5$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategies

AA(*: Relecti+e Thinking kills(h. %b,ecti+e: -iiculty: =oderate(lassiication: (onceptual

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"!) %rgani'ations grow by using strategies o @@@@@@@@.A) concentration4 integration4 or di+ersiication*) concentration4 integration4 or stabili'ation() integration4 di+ersiication4 or dierentiation-) integration4 di+ersiication4 or unctionali'ation

Answer: APage Re: !"5$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

") An organi'ation that grows using @@@@@@@@ ocuses on its primary line o business andincreases the number o products oered or markets ser+ed in this primary business.

A) concentration*) hori'ontal integration() +ertical integration-) di+ersiicationAnswer: APage Re: !"5$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

"") &n @@@@@@@@4 the organi'ation becomes its own supplier so it can control its inputs.A) concentrated integration*) backward +ertical integration() orward +ertical integration-) hori'ontal integrationAnswer: *Page Re: !"5$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills

(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

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"5) &n @@@@@@@@4 the organi'ation gains control o its outputs by becoming its own distributor.A) di+ersiied integration*) concentrated integration() backward +ertical integration-) orward +ertical integration

Answer: -Page Re: !"5$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

"7) Ronald2s has been in the ast ood business or i+e years. Ater struggling or two years4 itinally broke e+en4 and the rench ries it oers are its most popular product. Bowe+er4 during

the past year4 its business has suered because the arm that used to supply it with potatoes hasincreased its prices drastically. 8hat should Ronald2s do to control its production costsA) Ronald2s should reorgani'e its organi'ational hierarchy to increase eiciency.*) Ronald2s should buy out the arm and become its own supplier.() Ronald2s should open more distribution outlets.-) Ronald2s should broaden its product range by introducing potato nuggets on its menu.Answer: *Page Re: !"5$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: =oderate(lassiication: Application

"9) &n @@@@@@@@4 a company grows by combining with competitors.A) concentrated integration*) hori'ontal integration() +ertical integration-) di+ersiied integrationAnswer: *Page Re: !"7$earning %utcome: &dentiy the steps o the strategic management process and describe


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") 8hen $2%real ac6uired The *ody hop4 it carried out @@@@@@@@.A) hori'ontal integration*) orward hori'ontal integration() backward hori'ontal integration-) di+ersiied integration

Answer: APage Re: !"7$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: Easy(lassiication: Application

";) An organi'ation that is di+ersiying its product line is ehibiting what type o corporatestrategy

A) turnaround strategy*) retrenchment strategy() growth strategy-) stability strategyAnswer: (Page Re: !"7$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

5#) @@@@@@@@ takes place when a company combines with other companies in dierent4 butassociated4 industries.A) tabili'ed di+ersiication*) Bori'ontal integration() Certical integration-) Related di+ersiicationAnswer: -Page Re: !"7$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategies

AA(*: Relecti+e Thinking kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

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51) 8hen a company combines with irms in dierent and dissimilar industries4 it indulges in @@@@@@@@.A) unrelated di+ersiication*) hori'ontal integration() +ertical integration

-) stabili'ed di+ersiicationAnswer: APage Re: !"7$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

5!) /lorance is a chain o lower shops in the (hicago area. The company recently ac6uired

knacks4 which owns three git shops. 8hich o the ollowing is most similar to thisac6uisitionA) (onstruction irm -onaldson ac6uired /abrica Tetiles as it seemed like a good in+estment.*) /aced with mounting raw material costs4 &DA Products took o+er its supplier4 *R(orporation.() -allas hoes buys out RunTime hoes and epands its distribution channels throughRunTime outlets.-) Toy 8orld ac6uired Unicorn (hildren2s *ooks and now retails both toys and books rom co> branded outlets.Answer: -Page Re: !"7$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: =oderate(lassiication: Application

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5) 8hen an organi'ation continues ser+ing the same clients by oering the same product orser+ice4 maintaining market share4 and sustaining the organi'ation2s current business operations4it is ollowing a @@@@@@@@ strategy.A) renewal*) stability

() retrenchment-) turnaroundAnswer: *Page Re: !"7$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

5") @@@@@@@@ strategies address declining perormance through retrenchment and turnaroundstrategies.A) Renewal*) tability() ?rowth-) /unctionalAnswer: APage Re: !"7$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

55) A @@@@@@@@ strategy is used to deal with minor perormance problems. &t helps anorgani'ation stabili'e operations4 re+itali'e organi'ational resources and capabilities4 and prepareto compete once again.A) turnaround*) stability() growth-) retrenchmentAnswer: -Page Re: !"7$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

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57) 8hich o the ollowing pro+ides a ramework or understanding di+erse businesses and helpsmanagers establish priorities or allocating resourcesA) a dierentiation strategy*) +ertical integration() a corporate portolio matri

-) a strategic business unitAnswer: (Page Re: !"9$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

59) &n the *oston (onsulting ?roup *(?) matri4 a business unit that has a low anticipatedgrowth rate but a high market share is known as a @@@@@@@@.A) cash cow*) star () dog-) 6uestion mark Answer: APage Re: !"9$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

5) &n the *(? matri4 a business unit that has a high anticipated growth rate but a low marketshare is known as a @@@@@@@@.A) star *) dog() cash cow-) 6uestion mark Answer: -Page Re: !"9$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

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5;) &n the *(? matri4 a @@@@@@@@ has a low anticipated growth rate and a low market share.A) 6uestion mark *) cash cow() dog-) star

Answer: (Page Re: !"9$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

7#) &n the *(? matri4 a @@@@@@@@ en,oys a high anticipated growth rate and a high market

share.A) 6uestion mark *) star () cash cow-) dogAnswer: *Page Re: !"9$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

71) @@@@@@@@ should be sold o or li6uidated as they ha+e low market share and low growth potential.A) (ash cows*) tars() Fuestion marks-) -ogsAnswer: -Page Re: !"9$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

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7!) =anagers should GmilkG cash cows or as much as they can4 limit any new in+estment inthem4 and use the large amounts o cash generated to in+est in @@@@@@@@ and @@@@@@@@.A) dogs0 stars*) cash cows0 dogs() stars0 6uestion marks

-) 6uestion marks0 dogsAnswer: (Page Re: !"9$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

7) Bea+y in+estment in @@@@@@@@ will help take ad+antage o the market2s growth and helpmaintain high market share.A) cash cows*) stars() 6uestion marks-) dogsAnswer: *Page Re: !"9$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: Easy(lassiication: (onceptual

7") &n an organi'ation4 the single independent businesses which ormulate their own competiti+estrategies are known as @@@@@@@@.A) strategic growth units*) strategic business units() ocus units-) ser+ice unitsAnswer: *Page Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: "-iiculty: Easy(lassiication: (onceptual

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75) commerce warehouse ulillment.A) design thinking*) competiti+e ad+antage

() strategic leibility-) e>business strategiesAnswer: APage Re: !"$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Analytic kills(h. %b,ecti+e: "-iiculty: =oderate(lassiication: Application

77) 8hich o the ollowing is a competiti+e orce under the i+e orces modelA) past ri+alry with competitors*) predictable changes in the market() +ertical integration-) threat o substitutesAnswer: -Page Re: !";$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: "-iiculty: Easy(lassiication: (onceptual

79) A cost leadership strategy re6uires a irm to @@@@@@@@.A) maintain the lowest cost structure*) be uni6ue in its product oering() aim at a cost ad+antage in a niche market-) match its competition in terms o costsAnswer: APage Re: !";$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: "-iiculty: Easy(lassiication: (onceptual

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7) A company that competes by oering uni6ue products that are widely +alued by customers isollowing a @@@@@@@@.A) leadership strategy*) dierentiation strategy() ocus strategy

-) unctional strategyAnswer: *Page Re: !5#$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: "-iiculty: Easy(lassiication: (onceptual

7;) 8hich o the ollowing strategies in+ol+es a cost ad+antage or a dierentiation ad+antage in

a narrow segmentA) leibility strategy*) ocus strategy() unctional strategy-) leadership strategyAnswer: *Page Re: !5#$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: "-iiculty: Easy(lassiication: (onceptual

9#) A irm that is Gstuck in the middleG cannot de+elop @@@@@@@@.A) a cost or dierentiation ad+antage*) a unctional strategy() a leadership strategy-) a leible strategyAnswer: APage Re: !5#$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: "-iiculty: Easy(lassiication: (onceptual

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91) /unctional>le+el strategy directly supports the @@@@@@@@.A) corporate strategy*) competiti+e strategy() growth strategy-) concentration strategy

Answer: *Page Re: !5#$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: "-iiculty: Easy(lassiication: (onceptual

9!) @@@@@@@@ is the ability to anticipate4 en+ision4 maintain leibility4 think strategically4 andwork with others in the organi'ation to initiate changes that will create a +iable and +aluable

uture or the organi'ation.A) trategic leadership*) cientiic management() trategic competence-) trategic leibilityAnswer: APage Re: !5!$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: 5-iiculty: Easy(lassiication: (onceptual

9) Bow can an organi'ation de+elop strategic leibilityA) &t should commit resources only ater thorough planning.*) &t should monitor and e+aluate its past strategies.() &t should depend on tried and tested perspecti+es rom senior employees.-) &t should ha+e multiple alternati+es when making strategic decisions.Answer: -Page Re: !5$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: 5-iiculty: Easy(lassiication: (onceptual

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9") @@@@@@@@ is the ability to recogni'e ma,or eternal changes4 to 6uickly commit resources4and to recogni'e when a strategic decision is not working.A) trategic apprenticeship*) trategic leibility() trategic leadership

-) trategic acceptabilityAnswer: *Page Re: !5$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: 5-iiculty: Easy(lassiication: (onceptual

95) Bow can a cost leader use e>business to reduce costs

A) &t could automate purchasing and payment systems so that customers ha+e detailed statusreports.*) &t could pro+ide rapid online responses to ser+ice re6uests.() &t could use &nternet>based knowledge systems to shorten customer response times.-) &t could use 8eb>based in+entory control systems that reduce storage costs.Answer: -Page Re: !5$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: 5-iiculty: Easy(lassiication: (onceptual

97) An &nternet>based knowledge management system that shortens customer response timeswould be an e>business techni6ue that contributes to the competiti+e ad+antage o a @@@@@@@@.A) cost leader *) dierentiator () ocuser -) brick Answer: *Page Re: !5$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: 5-iiculty: Easy(lassiication: (onceptual

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99) 8ho targets a narrow market segment with customi'ed productsA) a dierentiator *) an integrator () a ocuser -) a irst mo+er

Answer: (Page Re: !5"$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: 5-iiculty: Easy(lassiication: (onceptual

9) A @@@@@@@@ irm uses both online and traditional stand>alone locations.A) irst mo+er

*) clicks>and>bricks() ocuser -) brick>and>mortar Answer: *Page Re: !5"$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: 5-iiculty: Easy(lassiication: (onceptual

9;) An organi'ation that initially brings a product inno+ation to the market is known as the @@@@@@@@.A) irst mo+er *) ree rider () cash cow-) 6uestion mark Answer: APage Re: !55$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: 5-iiculty: Easy(lassiication: (onceptual

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#) 8hich o the ollowing is an ad+antage o being a irst mo+erA) certainty o+er the direction o technology and market*) low de+elopment costs() no inancial or strategic risks-) opportunity to begin building customer relationships

Answer: -Page Re: !55$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: 5-iiculty: Easy(lassiication: (onceptual

1) 8hat is a strategic disad+antage o being a irst mo+erA) least opportunity to build customer loyalty

*) risk o competitors imitating inno+ations() no cost and learning beneit-) no control o+er resourcesAnswer: *Page Re: !55$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: 5-iiculty: Easy(lassiication: (onceptual

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A Hew *usiness cenario)

Patrick ma,ored in entrepreneurship and computer science in college. Ater graduation4 hedecided to start his own business as an e>business entrepreneur4 ounding an online *!* re+erseauction company called (ompua+e.

!) Ater hiring se+eral employees4 Patrick re6uires that each person in this company bein+ol+ed in studying trends in+ol+ing new technology4 competitors4 and customers. Theseemployees are in+ol+ed in @@@@@@@@.A) eternal analysis*) internal analysis() ormulating strategies-) implementing strategiesAnswer: APage Re: !"!$earning %utcome: -escribe the components o the management en+ironment0 &dentiy the

steps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: Application

) Ater completing an eternal analysis4 Patrick will become aware o the @@@@@@@@ o thecompany.A) threats and weaknesses*) strengths and weaknesses() opportunities and threats-) strengths and opportunitiesAnswer: (Page Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: (onceptual

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") An internal analysis will help Patrick identiy the @@@@@@@@ o the company.A) strengths and weaknesses*) opportunities and threats() strengths and opportunities-) threats and weaknesses

Answer: APage Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: (onceptual

8%T Analysis cenario)

As a process o sel>eamination during her senior year o college4 (asey decides to de+elop a8%T analysis o her prospects relati+e to getting a ,ob.

5) (asey ma,ored in marketing and really en,oyed studying market research as a sub,ect.Through research on the &nternet and in the uni+ersity library4 she disco+ers that this industryappears to ha+e signiicant positi+e eternal trends. he interprets this as an) @@@@@@@@.A) weakness*) threat() strength-) opportunityAnswer: -Page Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: =oderate(lassiication: Application

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7) (asey reali'es that she has a personal characteristic that suggests she is not comortableinteracting with strangers. he interprets this as an) @@@@@@@@ i she is to get a ,ob as asalesperson.A) threat*) strength

() weakness-) opportunityAnswer: (Page Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: =oderate(lassiication: Application

Un Taco Pe6ueno cenario)

&magine that you are the president o Taco Rocket4 a new and successul chain o 1## =eicanast>ood restaurants in the United tates. The success you ha+e eperienced in the last i+e yearshas you thinking o what to do with the business net. hould you epand the business at thecurrent rate or open new and dierent restaurants

9) Hoting the growing popularity o outh>East Asian ood4 you decide to open a new outletcalled Rice Rocket. 8hich o the ollowing4 i true4 could pro+e to be a threat to this planA) Iou don2t ha+e the necessary epertise0 you will ha+e to recruit ches and sta amiliar withAsian ood preparation.*) A competitor4 Pan Asia4 has a similar product lineup and irst mo+er ad+antage in the market.() Rice Rocket will necessitate a complete o+erhaul o your eisting supply process.-) A sur+ey indicates that the Taco Rocket brand name e+okes trust and consumer loyalty.Answer: *Page Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: =oderate(lassiication: Application

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) Iou decide to concentrate on Taco Rocket2s primary business by only increasing the menu toinclude new items such as enchiladas and rice bowls. This is an eample o what type o growthstrategyA) +ertical integration*) hori'ontal integration

() concentration-) di+ersiicationAnswer: (Page Re: !"5$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: Easy(lassiication: Application

;) Iour oldest supplier4 Jorro -istributors4 is a amily>owned irm. Recently4 the irm2s president4 -iego -e $a Cega4 made the decision to retire. To his disappointment4 none o his i+echildren stepped orward to take his place at the helm o the irm. r. -e $a Cega is concernedthat i he sells his company to a larger distributor4 many o his employees will lose their ,obs.Iou approach your old riend with a generous oer to buy Jorro and continue its currentoperations. hould your oer be accepted4 Taco Rocket would be undertaking @@@@@@@@.A) hori'ontal integration*) unrelated di+ersiication() orward +ertical integration-) backward +ertical integrationAnswer: -Page Re: !"5$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: Application

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;#) Iou decide to purchase a local i+e>store hardware chain because it was a good in+estment.This is an eample o @@@@@@@@.A) concentration growth strategy*) stabili'ation strategy() related di+ersiication

-) unrelated di+ersiicationAnswer: -Page Re: !"7$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: Application

;1) *ecause o the good proits and a ear o growing too ast4 you decide to keep Taco Rocket inthe same business and do not change the menu. Iou hope to retain the same market share andreturn>on>in+estment record. This is considered a @@@@@@@@ strategy.A) stability*) renewal() retrenchment-) turnaroundAnswer: APage Re: !"7$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: !-iiculty: Easy(lassiication: Application

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;!) Iou decide to keep Taco Rocket in the same business and do not change the menu. 8hich othe ollowing4 i true4 would strengthen the argument or this course o actionA) A competitor4 Tacos D Tamales4 has begun selling similar products at much lower prices thanTaco Rocket.*) Taco Rocket2s perormance has declined signiicantly o+er the past our months.

() Though new competitors ha+e entered4 Taco Rocket2s market share has not been aected.-) -emand or =eican ood has been increasing steadily in the U..Answer: (Page Re: !"7$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: =oderate(lassiication: Application

Powerballs cenario)

(olleen in+ested a dollar in the Powerball $ottery and won K7# million. ubse6uently4 shedecides to start her own business selling lawn mowers.

;) (olleen is successul ater the irst years4 and she is approached by a competitor who isnearing retirement age. The competitor is interested in selling his business to (olleen. /or(olleen4 this would be an) @@@@@@@@ strategy.A) unrelated di+ersiication*) hori'ontal integration() +ertical integration-) retrenchmentAnswer: *Page Re: !"7$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: Easy(lassiication: Application

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;") A business broker hears that (olleen is interested in purchasing a business and approachesher with an oer to sell her a company that owns a patent on a new rooing product and whoinstalls this new rooing in the southwestern United tates. & she buys this irm4 she will beusing an) @@@@@@@@ strategy.A) unrelated di+ersiication

*) hori'ontal integration() +ertical integration-) related di+ersiicationAnswer: APage Re: !"7$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: Easy(lassiication: Application

;5) Ho matter which business (olleen decides to buy4 she intends that each company be astrategic business unit. This means that @@@@@@@@.A) each company will continue to do what it is currently doing*) each business will be independent and will ha+e its own competiti+e strategies() the companies will use concentration strategies that ocus on their primary business lines-) the companies will merge by means o +ertical integrationAnswer: *Page Re: !"$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills(h. %b,ecti+e: "-iiculty: Easy(lassiication: (onceptual

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El Taco ?rande cenario)

As the original owner o Taco Rocket4 you ha+e seen your business holdings grow substantiallyo+er the last 1# years. The number o stores you own and ranchise has grown by !## percentand you own a number o companies in related and unrelated areas.

;7) Iour oldest holding4 Taco Rocket4 has not grown much in recent years4 but due to low debt4 itgenerates a huge amount o cash. According to *(?4 Taco Rocket would be considered a @@@@@@@@.A) cash cow*) star () 6uestion mark -) dogAnswer: APage Re: !"9$earning %utcome: -escribe the components o the management en+ironment0 &dentiy the

steps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: Easy(lassiication: Application

;9) Recently4 you also purchased a company that manuactures a new satellite dish4 allowing youto enter into the cable tele+ision market. The business is proitable and growing4 but thetechnological unknowns make it risky. *(? considers it a @@@@@@@@.A) cash cow*) star () 6uestion mark -) dogAnswer: (Page Re: !"9$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: Easy(lassiication: Application

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=egabyte (enter4 .A. cenario)

Iour old riend4 Ariel Eskena'i4 is the owner and general manager o =egabyte (enter4 acomputer reseller and systems integrator located in Panama (ity4 Panama. ince lea+ing &*= tostart a business in his home country4 Ariel2s company has steadily grown4 due in large part to the

business partnerships he has established o+er the years with large oreign computer and sotwareirms4 such as ?oldstar and =icrosot. These relationships ha+e helped his company winconsiderable market share in Panama4 as well as in other parts o $atin America. Bowe+er4 sincethe 1;;; turno+er o the Panama (anal to the Panamanian go+ernment4 there has been a hugeinlu o oreign capital into Panama. /or eample4 se+eral large Asian irms ha+e made Panamaa beachhead or their American operations. Tourism is on the rise4 with o+er a score o newhotels built in the metropolitan area alone o+er the past three years. As a result4 demand or=egabyte2s products and ser+ices has increased markedly4 but so has the le+el and di+ersity o itscompetition. 8hile =egabyte2s customer base has remained airly loyal4 many longtimecustomers are beginning to demand price concessions and enhanced ser+ice le+els in return ortheir continued business. Additionally4 Ariel has learned recently that se+eral o his ormer

suppliers and business partners are considering establishing local sales oices o their own inPanama (ity. Ariel knows you are +ery knowledgeable about competiti+e strategy and calls youasking or ad+ice.

;) 8ith all the changes occurring in the computer reseller market4 you ad+ise him to stay withhis present course until the market calms down. Iou are recommending that Ariel use a @@@@@@@@ strategy.A) renewal*) stability() growth-) retrenchmentAnswer: *Page Re: !"7$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Analytic kills(h. %b,ecti+e: -iiculty: Easy(lassiication: Application

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;;) *ecause his customers are demanding price concessions and enhanced ser+ice le+els inreturn or their continued business4 Ariel decides that he wants to compete by oering uni6ue products that are widely +alued by customers. 8hat strategy is Ariel ollowingA) ocus*) cost leadership

() dierentiation-) stabilityAnswer: (Page Re: !5#$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Analytic kills(h. %b,ecti+e: "-iiculty: Easy(lassiication: Application

1##) Ariel is considering orgoing the retail side o his business entirely. &nstead4 he will redirecthis resources toward reselling hardware and sotware and pro+iding systems integration ser+icesto the $atin American go+ernmental and industrial sectors. uch a mo+e would be mostrepresentati+e o which one o the ollowing strategiesA) cost leadership*) leadership() ocus-) unctionalAnswer: (Page Re: !5#$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Analytic kills(h. %b,ecti+e: "-iiculty: Easy(lassiication: Application

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1#1) &n a short essay4 eplain strategic management and why it is important.Answer: trategic management is what managers do to de+elop the organi'ation2s strategies. &tis an important task in+ol+ing all the basic management unctionsLplanning4 organi'ing4leading4 and controlling.There are three reasons as to why strategic management is important.

The most signiicant one is that it can make a dierence in how well an organi'ation perorms.?enerally4 there is a positi+e relationship between strategic planning and perormance. ?enerally4organi'ations that use strategic management ha+e higher le+els o perormance.Another reason it is important has to do with the act that managers in organi'ations o all typesand si'es ace continually changing situations. They cope with this uncertainty by using thestrategic management process to eamine rele+ant actors and decide what actions to take./inally4 strategic management is important because organi'ations are comple and di+erse. Each part needs to work together toward achie+ing the organi'ation2s goals0 strategic managementhelps do this.Today4 strategic management has become so important that both business organi'ations and not>or>proit organi'ations use it.

Page Re: !"#>!"!$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills0 (ommunication Abilities(h. %b,ecti+e: 1-iiculty: =oderate(lassiication: (onceptual

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1#!) -escribe the strategic management process and identiy the si stages in the process.Answer: The strategic management process is a si>step process that encompasses strategy planning4 implementation4 and e+aluation. The irst our steps describe the planning that musttake place.tep 1: &dentiying the %rgani'ation2s (urrent =ission4 ?oals4 and trategies > E+ery

organi'ation needs a missionLa statement o its purpose. -eining the mission orces managersto identiy what it2s in business to do. These statements pro+ide clues to what these organi'ationssee as their purpose.tep !: -oing an Eternal Analysis: =anagers do an eternal analysis so they know4 or instance4what the competition is doing4 what pending legislation might aect the organi'ation4 or whatthe labor supply is like in locations where it operates. &n an eternal analysis4 managers shouldeamine the economic4 demographic4 politicalMlegal4 sociocultural4 technological4 and globalcomponents to see the trends and changes. %nce they ha+e analy'ed the en+ironment4 managersneed to pinpoint opportunities that the organi'ation can eploit and threats that it must counteractor buer against. %pportunities are positi+e trends in the eternal en+ironment0 threats arenegati+e trends.

tep : -oing an &nternal Analysis > This pro+ides important inormation about an organi'ation2sspeciic resources and capabilities. Ater completing an internal analysis4 managers should beable to identiy organi'ational strengths and weaknesses. Any acti+ities the organi'ation doeswell or any uni6ue resources that it has are called strengths. 8eaknesses are acti+ities theorgani'ation does not do well or resources it needs but does not possess.The combined eternal and internal analyses are called the 8%T analysis4 which is an analysiso the organi'ation2s strengths4 weaknesses4 opportunities4 and threats. Ater completing the8%T analysis4 managers are ready to ormulate appropriate strategiesLthat is4 strategies that1) eploit an organi'ation2s strengths and eternal opportunities4 !) buer or protect theorgani'ation rom eternal threats4 or ) correct critical weaknesses.tep ": /ormulating trategies > As managers ormulate strategies4 they should consider therealities o the eternal en+ironment and their a+ailable resources and capabilities in order todesign strategies that will help an organi'ation achie+e its goals. The three main types ostrategies managers will ormulate include corporate4 competiti+e4 and unctional.tep 5: &mplementing trategies > %nce strategies are ormulated4 they must be implemented. Homatter how eecti+ely an organi'ation has planned its strategies4 perormance will suer i thestrategies are not implemented properly.tep 7: E+aluating Results > The inal step in the strategic management process is e+aluatingresults.Page Re: !"!>!""$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: (ommunication Abilities0 Analytic kills(h. %b,ecti+e: !-iiculty: =oderate(lassiication: (onceptual

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1#) $ist and discuss the three le+els o strategy that a large organi'ation must de+elop.Answer:a. (orporate trategy > This strategy determines what businesses a company is in or wants to bein4 and what it wants to do with those businesses. &t is based on the mission and goals o theorgani'ation and the roles each business unit o the organi'ation will play. &t also helps top

managers decide what to do with the businesses: grow them4 keep them the same4 or renew them. b. (ompetiti+e trategy > This is a strategy or how an organi'ation will compete in its businesses. /or a small organi'ation in only one line o business or the large organi'ation thathas not di+ersiied into dierent products or markets4 its competiti+e strategy describes how itwill compete in its primary or main market. /or organi'ations in multiple businesses4 howe+er4each business will ha+e its own competiti+e strategy that deines its competiti+e ad+antage4 the products or ser+ices it will oer4 and the customers it wants to reach.c. /unctional trategy > This is the strategy used by an organi'ation2s +arious unctionaldepartments to support the competiti+e strategy.Page Re: !"5>!5#$earning %utcome: &dentiy the steps o the strategic management process and describe

common organi'ational and business strategiesAA(*: Relecti+e Thinking kills0 (ommunication Abilities(h. %b,ecti+e: 0 "-iiculty: =oderate(lassiication: (onceptual

1#") $ist and discuss the dierent types o corporate strategies.Answer: The three main types o corporate strategies are growth4 stability4 and renewal.a. ?rowth > A growth strategy is when an organi'ation epands the number o markets ser+ed or products oered4 either through its current businesses) or through new businesses). *ecause oits growth strategy4 an organi'ation may increase re+enues4 number o employees4 or marketshare. %rgani'ations grow by using concentration4 +ertical integration4 hori'ontal integration4 ordi+ersiication. b. tability > A stability strategy is a corporate strategy in which an organi'ation continues to dowhat it is currently doing. Eamples o this strategy include continuing to ser+e the same clients by oering the same product or ser+ice4 maintaining market share4 and sustaining theorgani'ation2s current business operations. The organi'ation does not grow4 but does not all behind4 either.c. Renewal > 8hen an organi'ation is in trouble4 something needs to be done. =anagers need tode+elop strategies4 called renewal strategies4 that address declining perormance. The twomain types o renewal strategies are retrenchment and turnaround strategies.Page Re: !"5>!"9$earning %utcome: &dentiy the steps o the strategic management process and describe

common organi'ational and business strategiesAA(*: Relecti+e Thinking kills0 (ommunication Abilities(h. %b,ecti+e: -iiculty: =oderate(lassiication: (onceptual

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1#5) -iscuss the methods by which an organi'ation grows. ?i+e rele+ant eamples.Answer: %rgani'ations grow by using concentration4 +ertical integration4 hori'ontal integration4or di+ersiication.An organi'ation that grows using concentration ocuses on its primary line o business andincreases the number o products oered or markets ser+ed in this primary business. /or

instance4 *ose (orporation o /ramingham4 =assachusetts4 which ocuses on de+elopinginno+ati+e audio products has become one o the world2s leading manuacturers o speakers orhome entertainment4 automoti+e4 and pro audio markets with sales o more than K! billion byusing this strategy.A company also might choose to grow by +ertical integration4 either backward4 orward4 or both.&n backward +ertical integration4 the organi'ation becomes its own supplier so it can control itsinputs. /or instance4 e*ay owns an online payment business that helps it pro+ide more securetransactions and control one o its most critical processes. &n orward +ertical integration4 theorgani'ation becomes its own distributor and is able to control its outputs. /or eample4 Applehas more than !9 retail stores worldwide to distribute its product.&n hori'ontal integration4 a company grows by combining with competitors. /or instance4 /rench

cosmetics giant $2%real ac6uired The *ody hop./inally4 an organi'ation can grow through di+ersiication4 either related or unrelated. Relateddi+ersiication happens when a company combines with other companies in dierent4 but related4industries. /or eample4 American tandard (os.4 based in Piscataway4 Hew Nersey4 is in a+ariety o businesses including bathroom itures4 air conditioning and heating units4 plumbing parts4 and pneumatic brakes or trucks. Although this mi o businesses seems odd4 thecompany2s Gstrategic itG is the eiciency>oriented manuacturing techni6ues de+eloped in its primary business o bathroom itures4 which it has transerred to all its other businesses.Unrelated di+ersiication is when a company combines with irms in dierent and unrelatedindustries. /or instance4 the Tata ?roup o &ndia has businesses in chemicals4 communicationsand &T4 consumer products4 energy4 engineering4 materials4 and ser+ices. &n this case4 there is nostrategic it among the businesses.Page Re: !"5>!"7$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills0 (ommunication Abilities(h. %b,ecti+e: -iiculty: =oderate(lassiication: Application

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1#7) -iscuss the corporate portolio matri and the *oston (onsulting ?roup *(?) matri.Answer: 8hen an organi'ation2s corporate strategy encompasses a number o businesses4managers can manage this collection4 or portolio4 o businesses using a tool called a corporate portolio matri. This matri pro+ides a ramework or understanding di+erse businesses andhelps managers establish priorities or allocating resources.

The irst portolio matriLthe *(? matriLwas de+eloped by the *oston (onsulting ?roupand introduced the idea that an organi'ation2s +arious businesses could be e+aluated and plottedusing a ! O ! matri to identiy which ones oered high potential and which were a drain onorgani'ational resources. The hori'ontal ais represents market share low or high) and the+ertical ais indicates anticipated market growth low or high). A business unit is e+aluated usinga 8%T analysis and placed in one o the our categories: dogs4 cash cows4 stars4 and 6uestionmarks.a. -ogs > They should be sold o or li6uidated as they ha+e low market share in markets withlow growth potential. b. (ash (ows > These ha+e low anticipated growth rate but high market share. =anagers shouldGmilkG them or as much as they can4 limit any new in+estment in them4 and use the large

amounts o cash generated to in+est in stars and 6uestion marks with strong potential to impro+emarket share.c. tars > These ha+e high anticipated growth rate and high market share. Bea+y in+estment instars will help take ad+antage o the market2s growth and help maintain high market share. Thestars e+entually de+elop into cash cows as their markets mature and sales growth slows.d. Fuestion =arks > These ha+e high anticipated growth rate but low market share. The hardestdecision or managers relates to the 6uestion marks. Ater careul analysis4 some will be sold o and others strategically nurtured into stars.Page Re: !"9$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: (ommunication Abilities0 Analytic kills(h. %b,ecti+e: -iiculty: =oderate(lassiication: (onceptual

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1#9) -iscuss the concept o competiti+e ad+antage and eplain how 6uality is a competiti+ead+antage.Answer: &n order to de+elop an eecti+e competiti+e strategy4 managers should understand theircompetiti+e ad+antage4 which is what sets their organi'ation apartLthat is4 the organi'ation2sdistincti+e edge. The distincti+e edge can come rom the organi'ation2s core competencies by

doing something that others cannot do or by doing it better than others. /or eample4 outhwestAirlines has a competiti+e ad+antage because o its skills at gi+ing passengers what they want>con+enient and inepensi+e air passenger ser+ice. %r competiti+e ad+antage can come rom thecompany2s resources because the organi'ation has something that its competitors do not ha+e./or instance4 8almart2s state>o>the>art inormation system allows it to monitor and controlin+entories and supplier relations more eiciently than its competitors4 which 8almart hasturned into a cost ad+antage.Fuality as a competiti+e ad+antage: & implemented properly4 6uality can be a way or anorgani'ation to create a sustainable competiti+e ad+antage. That is why many organi'ationsapply 6uality management concepts in an attempt to set themsel+es apart rom competitors. & a business is able to continuously impro+e the 6uality and reliability o its products4 it may ha+e a

competiti+e ad+antage that cannot be taken away.Page Re: !"$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: Relecti+e Thinking kills0 (ommunication Abilities(h. %b,ecti+e: "-iiculty: =oderate(lassiication: (onceptual

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1#) -iscuss the i+e orces model and the +arious competiti+e strategies that an organi'ationmay use.Answer: &n any industry4 i+e competiti+e orces dictate the rules o competition. Together4 thesei+e orces determine industry attracti+eness and proitability4 which managers assess using thesei+e actors:

1. Threat o new entrants. Bow likely is it that new competitors will come into the industry!. Threat o substitutes. Bow likely is it that other industries2 products can be substituted or ourindustry2s products. *argaining power o buyers. Bow much bargaining power do buyers customers) ha+e". *argaining power o suppliers. Bow much bargaining power do suppliers ha+e5. (urrent ri+alry. Bow intense is the ri+alry among current industry competitors%nce managers ha+e assessed the i+e orces and done a 8%T analysis4 they are ready to selectan appropriate competiti+e strategyLthat is4 one that its the competiti+e strengths resourcesand capabilities) o the organi'ation and the industry it2s in. According to Porter4 no irm can besuccessul by trying to be all things to all people. Be proposed that managers select a strategythat will gi+e the organi'ation a competiti+e ad+antage4 either rom ha+ing lower costs than all

other industry competitors or by being signiicantly dierent rom competitors.a. (ost $eadership trategy > 8hen an organi'ation competes on the basis o ha+ing the lowestcosts costs or epenses4 not prices) in its industry4 it2s ollowing a cost leadership strategy. Alow>cost leader is highly eicient. %+erhead is kept to a minimum4 and the irm does e+erythingit can to cut costs. b. -ierentiation trategy > A company that competes by oering uni6ue products that arewidely +alued by customers is ollowing a dierentiation strategy. Product dierences mightcome rom eceptionally high 6uality4 etraordinary ser+ice4 inno+ati+e design4 technologicalcapability4 or an unusually positi+e brand image.c. /ocus trategy > This in+ol+es a cost ad+antage cost ocus) or a dierentiation ad+antagedierentiation ocus) in a narrow segment or niche. egments can be based on product +ariety4customer type4 distribution channel4 or geographical location.Page Re: !";>!5#$earning %utcome: -escribe the components o the management en+ironment0 &dentiy thesteps o the strategic management process and describe common organi'ational and businessstrategiesAA(*: (ommunication Abilities0 Analytic kills(h. %b,ecti+e: "-iiculty: =oderate(lassiication: (onceptual

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1#;) -iscuss how managers can ormulate e>business strategies that contribute to thede+elopment o a sustainable competiti+e ad+antage in today2s en+ironment.Answer: =anagers use e>business strategies to de+elop a sustainable competiti+e ad+antage.A cost leader can use e>business to reduce costs in a +ariety o ways. &t might use online biddingand order processing to eliminate the need or sales calls and to decrease sales orce epenses0 it

could use 8eb>based in+entory control systems that reduce storage costs0 or it might use onlinetesting and e+aluation o ,ob applicants.A dierentiator needs to oer products or ser+ices that customers percei+e and +alue as uni6ue./or instance4 a business might use &nternet>based knowledge systems to shorten customerresponse times4 pro+ide rapid online responses to ser+ice re6uests4 or automate purchasing and payment systems so that customers ha+e detailed status reports and purchasing histories./inally4 because the ocuser targets a narrow market segment with customi'ed products4 it might pro+ide chat rooms or discussion boards or customers to interact with others who ha+e commoninterests0 design niche 8eb sites that target speciic groups with speciic interests4 or use 8ebsites to perorm standardi'ed oice unctions such as payroll or budgeting.Page Re: !5>!5"

$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills0 (ommunication Abilities(h. %b,ecti+e: 5-iiculty: =oderate(lassiication: (onceptual

11#) Eplain the term Girst mo+erG and then list some o the ad+antages and disad+antages o being a irst mo+er in the market.Answer: An organi'ation that is irst to bring a product inno+ation to the market or to use a new process inno+ation is called a irst mo+er.ome o the ad+antages o being a irst mo+er are:a. Reputation or being inno+ati+e and industry leader b. (ost and learning beneitsc. (ontrol o+er scarce resources and keeping competitors rom ha+ing access to themd. %pportunity to begin building customer relationships and customer loyaltyome o the disad+antages o being a irst mo+er are:a. Uncertainty o+er eact direction technology and market will go b. Risk o competitors imitating inno+ationsc. /inancial and strategic risksd. Bigh de+elopment costsPage Re: !55$earning %utcome: &dentiy the steps o the strategic management process and describecommon organi'ational and business strategiesAA(*: Relecti+e Thinking kills0 (ommunication Abilities(h. %b,ecti+e: 5-iiculty: =oderate(lassiication: (onceptual

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