MNGT 301 - Chapter 6 Flashcards

Questions and Answers

What is trend analysis?

Trend analysis is the process of collecting data and identifying patterns or trends over time.

A grand strategy that involves expansion of things like sales revenues, market share, or number of employees is known as a _____ strategy.

growth

Hair Today/Gown Tomorrow increased its market share by using a(n) _____ strategy.

innovation

The creation of alternative hypothetical but equally likely future conditions is known as _____ planning.

contingency Signup and view all the answers

When Johnson & Johnson promoted its baby shampoo as a gentle cleanser suitable for adults, it exemplified a(n) _____ strategy.

stability Signup and view all the answers

Juanita is using the process of _____ to compare her company with others.

benchmarking Signup and view all the answers

What are two things a company might do when using a defensive strategy? (Select all that apply)

Declare bankruptcy Signup and view all the answers

A business that wants to reach more customers and hires more employees to get this done is focusing on a _____ strategy.

growth Signup and view all the answers

What does business growth rate refer to, as used in the BCG matrix?

Speed of industry growth Signup and view all the answers

A(n) _____ strategy requires little or no change to a company's product or service.

stability Signup and view all the answers

What strategy is American Tile Corp. using when it acquires a company that makes industrial cleaning products that it does not currently offer?

diversification Signup and view all the answers

When a company freezes hiring and tightens expenses due to decreased demand for its products or services, it is involved in a(n) _____ strategy.

defensive Signup and view all the answers

What type of strategy is Wisconsin Dairy using when it purchases Hydro Generator Corp.?

Unrelated diversification Signup and view all the answers

What does the BCG matrix evaluate? (Select all that apply)

Business growth rates Signup and view all the answers

Which strategy is a company pursuing when it expands into businesses that provide the supplies it needs to make its products or distribute and sell its products?

vertical integration Signup and view all the answers

Strategic Positioning attempts to achieve sustainable competitive advantage by ______.

preserve what is distinctive about the company Signup and view all the answers

The sources from which strategic position emerges are having _____.

Few needs and many customers Signup and view all the answers

Select all of the true statements regarding the trade-offs required in competing.

Companies must choose which strategy to follow Signup and view all the answers

Corporate-level strategy does which of the following?

Involves senior executives in planning Signup and view all the answers

The ______ strategy of a company is concerned with the individual business units or production and service lines of the business.

business-level Signup and view all the answers

Michael Porter defined _____ as an attempt to achieve sustainable competitive advantage by preserving what is distinct about a company.

strategic positioning Signup and view all the answers

To be successful, strategic planning requires a company to have a _____ orientation.

long-term Signup and view all the answers

Having (1) few needs and many customers, (2) broad needs and few customers, and (3) broad needs and many customers are the three sources from which _____ emerges.

strategic position Signup and view all the answers

The 'feedback loop' in the strategic-management process involves _____.

revising actions if necessary Signup and view all the answers

True or False: Since most strategic positions will fit with any company's products, a company doesn't need to be concerned about selecting the right strategy.

False Signup and view all the answers

Jordan plans to open a computer repair business. Which stage of the strategic management process is he in?

Establish the mission, vision, and values statements Signup and view all the answers

Which level of strategic management focuses on the organization as a whole?

Corporate-level Signup and view all the answers

In which step of the strategic management process would a company use a SWOT analysis?

Current reality assessment Signup and view all the answers

At what level of strategic management is Andrew, as senior vice president of marketing, responsible for determining budget allocations?

Business-level Signup and view all the answers

Strategy _______ is the process of choosing among different strategies and altering them to best fit the organization's needs.

formulation Signup and view all the answers

True or False: It is common practice today for most small business owners to engage in strategic planning.

False Signup and view all the answers

Put the steps in the strategic-management process in the correct order.

Execute the strategies Signup and view all the answers

Which of the following are accurate regarding Step 4 (Execute the Strategy) in the strategic management process?

This step poses the greatest challenge for managers Signup and view all the answers

In which step of the strategic-management process does an organization establish the mission and vision statements?

Step one Signup and view all the answers

In which step of the strategic-management process does the organization monitor progress and take corrective action?

Maintain strategic control Signup and view all the answers

The second step of the strategic management process involves _____

assessing the current reality Signup and view all the answers

When other companies cannot duplicate the value provided by a competitor, the competitor has established a(n) _____ competitive advantage.

sustainable Signup and view all the answers

Which are characteristics of strategy formulation?

It is the basis for determining long-term goals Signup and view all the answers

Within a SWOT analysis, the letter 'T' represents a company's _____.

threats Signup and view all the answers

To be successful, strategic planning requires a company to have a _____ orientation.

long-term Signup and view all the answers

Putting strategic plans into effect is referred to as _____.

strategy implementation Signup and view all the answers

The ABC car company has a superior reputation within the industry. In a SWOT analysis, this company's reputation is an example of a(n) _____.

Strength Signup and view all the answers

Louis owns an online clothing store. Which step in the strategic management process does customer feedback through surveys represent?

Maintain strategic control Signup and view all the answers

Peterson Electric Inc. has outdated manufacturing facilities. Within a SWOT analysis, this would be an example of an organizational _____.

Weakness Signup and view all the answers

Luxury Linens Inc. produces the highest thread-count sheets available and does so at a price that competitors cannot duplicate. This indicates that Luxury Linens has a(n) _____.

Sustainable competitive advantage Signup and view all the answers

Skate/24 had only one competitor in the local market, which just went out of business. This is an example of an organizational _________.

Opportunity Signup and view all the answers

A _____ analysis is an assessment of the strength, weakness, opportunities, and threats affecting the organization.

SWOT Signup and view all the answers

Newly-implemented government regulations have reduced the availability of raw materials for Blair Woodworking Corp. This would be considered an external organizational ______ in a SWOT analysis.

Threat Signup and view all the answers

Precise work processes and high-ranking customer service are examples of organizational ______ in a SWOT analysis.

Strengths Signup and view all the answers

The skills and capabilities that give an organization special competencies are called organizational _____.

Strengths Signup and view all the answers

What is an example of an organizational weakness based on a SWOT analysis?

Inferior product quality Signup and view all the answers

Which of these situations provides an external opportunity that the company may exploit to gain competitive advantage?

Monica's rare book company has weak competition Signup and view all the answers

After completing his competitor analysis, Justin realized his company was the only one with all-natural ingredients. What aspect of a SWOT analysis has Justin uncovered?

Opportunity Signup and view all the answers

In addition to value, what characteristics are being addressed in a VRIO analysis?

Organization Signup and view all the answers

In a SWOT analysis, an organizational threat will come from the company's _____ environment.

External Signup and view all the answers

Carlos is doing a VRIO analysis for a product. The first question he asks is, 'Does this new capability minimize the threat of the main competitor gaining more market share?' Which aspect of the VRIO analysis does this question answer?

Value Signup and view all the answers

When conducting a VRIO analysis, one question that must be asked is, 'Is the resource currently controlled by only a few firms or no others?' This would determine the _____ associated with the resource.

Rarity Signup and view all the answers

When considering SWOT analysis, what is an example of an organizational weakness?

Obsolete technology Signup and view all the answers

Sanjay knows it is costly for other companies to match the quality of his company's table linens. Which part of a VRIO analysis is he basing his opinion on?

Imitability Signup and view all the answers

In terms of a SWOT analysis, organizational _____ are environmental factors that hinder an organization from achieving a competitive advantage.

Weaknesses Signup and view all the answers

Miles is analyzing a new investment product and isn't sure the company has the right software in place. What aspect of the VRIO analysis is Miles considering?

Organization Signup and view all the answers

When would a company use a VRIO analysis?

When deciding whether a new product might work in the marketplace Signup and view all the answers

Leonore's Luxury Leather Footwear Corp. conducted a SWOT analysis and determined that 57% of consumers would demand high-end footwear. This vision is known as a _____.

forecast Signup and view all the answers

In the large city where Cassandra lives, many people are asking for her restaurant to deliver food. In a VRIO analysis, Cassandra has determined the _____ of this capability.

value Signup and view all the answers

At first, Rohan thought it was a good idea to offer a car repair pick-up service, but realized it would be difficult to match Tow-It-Now Inc.'s service. Which part of a VRIO analysis helped Rohan evaluate this idea?

Rarity Signup and view all the answers

One question within a VRIO analysis is, 'Is the resource costly for other companies to produce in the same manner?' Which aspect of the VRIO analysis does this represent?

Imitability Signup and view all the answers

Using statistical analysis of historical data to predict future events is called ____.

trend analysis Signup and view all the answers

When conducting VRIO analysis, what question should you ask when considering organization and its effect on a potential resource?

Is the firm organized to exploit the resource? Signup and view all the answers

A _____ is a vision or projection of the future that is made following a SWOT analysis.

forecast Signup and view all the answers

Contingency planning is also referred to as _____ analysis.

Scenario Signup and view all the answers

The process by which a company compares its performance with that of other high-performing organizations is known as _____.

Benchmarking Signup and view all the answers

What did Mallory use to determine the peak time for the sale of her flip-flops?

Analyzing sales reports from the past five years Signup and view all the answers

Study Notes

Strategic Positioning

Strategic positioning aims for sustainable competitive advantage by preserving the company's distinctiveness.
It involves understanding unique customer needs and preferences across various market segments.

Sources of Strategic Position

Strategic positions can emerge from several combinations regarding customer needs and the number of customers:
- Few needs and many customers
- Broad needs and few customers
- Broad needs and many customers

Trade-offs in Competing

Some strategies are incompatible, requiring firms to make choices about what strategies to pursue and which to avoid.
Companies choose narrow positioning strategies to enhance sales and operational efficiencies.

Corporate-level Strategy

Focuses on the organization as a whole, addressing fundamental questions like the business scope and product/service offerings.
Involves senior executives in strategic planning and decision-making.

Business-level Strategy

Concerns individual business units and their specific production and service lines.

Michael Porter’s Definition

Strategic positioning, as defined by Michael Porter, focuses on preserving what makes an organization distinct for achieving sustainable competitive advantage.

Strategic Planning Orientation

Successful strategic planning requires a long-term orientation to anticipate future challenges and opportunities.

Feedback Loop

Important in the strategic management process, the feedback loop ensures actions are revised as necessary based on performance evaluations and outcomes.

Steps in the Strategic Management Process

The process includes establishing the mission, assessing current realities, formulating strategies, executing strategies, and maintaining strategic control.

Using SWOT Analysis

A SWOT analysis identifies strengths, weaknesses, opportunities, and threats in the context of strategic planning and decision-making.

Characteristics of Strategy Formulation

It serves as a foundation for long-term goal determination and tends to be a time-consuming process.

Market Opportunities

External opportunities can arise from market dynamics, such as reduced competition or emerging consumer demands.

VRIO Analysis

VRIO stands for Value, Rarity, Imitability, and Organization, essential for assessing resources and capabilities that provide competitive advantages.

Trend Analysis

Involves using historical data analysis to forecast future trends and inform strategic decisions.

Benchmarking

The process of comparing an organization’s performance metrics with high-performing competitors to identify areas for improvement.

Growth Strategy

Involves expanding market share, customer base, or overall revenues, positioning the organization for increased competitiveness.

Contingency Planning

Also known as scenario analysis, it prepares organizations for various future scenarios and potential challenges.

Defensive Strategies

Implementing a defensive strategy can involve protecting market share and maintaining competitive advantages against potential threats.

Importance of Strategic Planning

Essential for organizations to assess their current position, forecast future conditions, and remain competitive in their respective industries.### Business Strategies
Phase Out Products or Services: The process of discontinuing a product line or service to cut losses or redirect focus.
Declare Bankruptcy: A legal process for businesses unable to repay debts, allowing for the restructuring or liquidation of assets.
Develop More Products: Actively creating additional offerings to meet customer needs and expand market share.
Expand Operations Overseas: Entering international markets to increase customer base and potential revenue.
Hire More Employees: Increasing workforce to support growth initiatives and meet demand.

Growth Strategy

A business focusing on increasing customer base and expanding operations is pursuing a growth strategy.

Business Growth Rate

Refers to the speed of industry growth, which is a key indicator of market dynamics in the BCG matrix.

Stability Strategy

A stability strategy involves minimal changes to products or services, often adopted during times of uncertainty or reduced growth.

Diversification Strategy

When American Tile Corp. acquires a company producing industrial cleaning products, it employs a diversification strategy, broadening its product offerings.

Defensive Strategy

A company implementing hiring freezes and tightening expenses due to decreased demand is enacting a defensive strategy to maintain stability.

Unrelated Diversification

Wisconsin Dairy, acquiring Hydro Generator Corp., is engaging in unrelated diversification, branching out beyond its primary industry to stimulate growth.

BCG Matrix Evaluation

The BCG matrix assesses a company's market share and business growth rates to inform strategic decisions.

Vertical Integration Strategy

Expanding into businesses that provide necessary supplies or distribution channels is an example of vertical integration, enhancing control over the supply chain.

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Test your knowledge on strategic positioning and competitive advantage with these flashcards from MNGT 301, Chapter 6. This quiz will help reinforce key concepts related to achieving sustainability in business. Perfect for students looking to deepen their understanding of management principles.