Ch 1-3 Test Bank PDF
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This document contains a series of questions and answers focused on market-driven planning, nonmarket-driven planning, stakeholder groups, and other business strategy concepts.
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**Chapter: Chapter 01 -- Additional Quiz** 1. The sequence of the market-driven planning approach can best be summarized as: 1. inside to outside to inside. 1. outside to inside. 1. inside to outside to outside. 1. outside to inside to outside. ANSWER: D 2. In a market-driven plann...
**Chapter: Chapter 01 -- Additional Quiz** 1. The sequence of the market-driven planning approach can best be summarized as: 1. inside to outside to inside. 1. outside to inside. 1. inside to outside to outside. 1. outside to inside to outside. ANSWER: D 2. In a market-driven planning approach, market research occurs at what two points in the process? 1. Mission review and pretest 1. Needs assessment and pretest 1. Needs assessment and strategy formulation 1. Market research is an ongoing process in a market-driven approach. ANSWER: B 3. A nonmarket-driven planning approach can best be described as: 1. external to internal to external. 1. internal to external. 1. external to internal. 1. bilateral ANSWER: B 4. In a market-driven planning approach, the differential advantage is determined: 1. by the planning committee. 1. by strategy formulation. 1. in the pretest stage. 1. by market research. ANSWER: D 5. In which stage of marketing evolution is the primary goal to ensure that the market recognizes the high- quality services an organization provides that provide great value to the community? 1. Sales 1. Quality 1. Production 1. Marketing ANSWER: A 6\. How does the market-driven approach help minimize costs? 1. The organization only surveys a limited number of consumers. 1. The organization ensures that few people are allowed to sell their ideas internally. 1. It does not minimize costs due to the large financial investment in market research. 1. The organization does not spend resources on services that are not likely to succeed. ANSWER: D 6. A good target market is one that: 1. is as heterogeneous as possible. 1. is as large as possible. 1. contains a lot of young and older consumers who can be a broad patient base. 1. is as homogeneous as possible. ANSWER: D 7\. Which of the following is the most challenging stakeholder group for an organization to identify? 1. Functional 1. Normative 1. Diffused 1. Enabling ANSWER: C 3. Groups that provide necessary infrastructure, such as the media, but that do not engage in transactions with an organization are considered: 1. tertiary stakeholders. 1. external stakeholders. 1. constituent stakeholders. 1. secondary stakeholders. ANSWER: D 4. What is a major disadvantage when hospitals organize in a product line management approach? 1. The product line manager cannot focus on the planning as well as the operations. 1. The product line manager must supervise the staff and develop marketing plans at the same time. 1. Budget responsibilities often take the focus away from marketing strategy. 1. The product line manager has no direct operational control over how the service is delivered. ANSWER: D 1. In a clinical co-management structure, a hospital contracts with a group of physicians to provide daily management for an inpatient or outpatient component of a particular service line. What is the benefit of this type of structure? 1. Hospitals have physicians in place to provide the particular clinical service. 1. It helps to reduce clinical costs. 1. It solves the challenge of aligning physicians with organizational goals. 1. It helps reduce clinical costs and also solves the challenge of aligning physicians with organizational goals. ANSWER: C 2. A hospital that develops a structure that is organized around referral physicians, corporations, and employee assistance personnel: 1. has a customer-focused design. 1. is a market-oriented organization. 1. is a corporate organization. 1. is a multitiered organization. ANSWER: B 3. What is one of the hallmarks of a market-driven culture? 1. It tends to focus on the employees. 1. There is an awareness of the competition. 1. Data drives all decisions. 1. All of these are correct. ANSWER: D 4. An engaged customer offers multiple benefits to an organization. Which of the following is not a benefit? 1. Referring other prospects to the organization 1. Engaging in fewer online searches for other providers of similar services C. Encouraging others to buy from the organization C. Providing feedback to the organization 5. In the relationship paradigm versus the traditional marketing paradigm, the sales focus is on: 1. clinical skills versus process skills. 1. exceeding expectations versus meeting expectations. 1. customer retention versus the individual sale. 1. clinical efficiency versus seamless service. ANSWER: C 6. Some marketing experts have suggested that there is a fifth P to marketing, which is: 1. People. 1. Public relations. 1. Productivity. 1. Any of these could be considered a fifth P. ANSWER: D **Chapter: Chapter 02 -- Practice Activities** 1. True or False? The mission statement for an organization sets the broad direction for an organization. ANSWER: True 2. True or False? A foundation for resource and financial-based planning is developed through a SWOT analysis. ANSWER: False 3. True or False? The cost-based differential advantage is the hardest differential advantage to regain once it is lost. ANSWER: False 4. True or False? Trust is an essential differential advantage in the customer believing the price is fair. ANSWER: True 5. True or False? Invisible value is the value that is built into a product or service. ANSWER: True 6. True or False? Sustaining innovations are those that might be viewed as incrementally new products or services. ANSWER: True 7. True or False? The three attributes that are common to distributive innovations are that they tend to be cheaper, easy to get, and somewhat more expensive than existing alternatives. ANSWER: False 8. True or False? Large, established firms with the financial resources to innovate are the organizations that typically bring disruptive innovations to the market. ANSWER: False 9. True or False? When Intel places a sticker on computers showing that their chip is inside, they are demonstrating their visible value. ANSWER: False 10. True or False? Evidence management is an organized approach to presenting capabilities. ANSWER: True 11. True or False? Increasing sales of present products to present markets is a product development strategy. ANSWER: False 12. True or False? Taking new products to new markets is a diversification strategy. ANSWER: True 13. True or False? Taking existing products to new markets is a market penetrations strategy. ANSWER: False 14. True or False? John Hopkins is working with a private hospital in China to establish a new cancer center. This approach is an example of the market penetration strategy. ANSWER: False 15. True or False? A market penetration strategy can occur through a more aggressive pricing strategy or distribution strategy than a competitor. ANSWER: True 16. True or False? Many women's hospitals are now establishing specialized services for men as a market penetration strategy. ANSWER: False 17. True or False? A medical group deciding to build a hospital is an example of backwards vertical integration. ANSWER: True 18. True or False? A health system has decided to create its own accountable care organization and be responsible for the health status of a group of patients. This is an example of a product development strategy. ANSWER: True 19. True or False? In the pharmaceutical industry, one company often licenses its products to another so that the second firm can market the drug. This is referred to as a strategic affiliation. ANSWER: False 20. True or False? Reducing the number of services in the service line is referred to as divestment. ANSWER: False 21. True or False? A multispecialty group has many satellite locations. As the market changes in population distribution, the group decides to close some clinic locations. This strategy is referred to as retrenchment. ANSWER: True 22. True or False? Harvesting is allowing a product to gradually decline by withdrawing support until there is little or no market demand. ANSWER: True 23. True or False? In the BCG matrix, the underlying assumption is that cash flow and rate of return are closely related to sales volume. ANSWER: False 24. True or False? When growth is low but present value is high, the product is a cash cow. ANSWER: False 25. True or False? Problem children have great growth potential but low market share. ANSWER: True 26. True or False? Revenues generated by stars should go to the cash cows. ANSWER: False 27. True or False? Revenue that the cash cows generate should go to the problem children. ANSWER: True 28. True or False? A key factor in the Five Forces Model is the threat of new technology. ANSWER: False 29. True or False? When the cost of switching among providers is low, competition can be intense. ANSWER: True 30. True or False? In health care, nurse practitioners and pharmacists represent the threat of new entrants. ANSWER: True 31. True or False? The Five Forces Model and the Blue Ocean strategy perspective both consider strategy in light of existing competitors. ANSWER: False 32. True or False? Red Oceans represent the blood of companies fighting for market share among existing competitors. ANSWER: True 33. True or False? In terms of the Blue Ocean perspective, new service innovations differ on two dimensions of the types of benefits offered and the price level. ANSWER: False 34. True or False? A market concentration strategy focuses on the most geographically concentrated group of customers. ANSWER: False 35. True or False? Hospital ROI has been found to be related to market share. ANSWER: True 36. True or False? Specialty hospitals can be said to follow a niche strategy. ANSWER: True 37. True or False? Specialty hospitals could be said to follow a concentrated strategy. ANSWER: False 38. Johns Hopkins, a major academic healthcare organization located in Baltimore, Maryland, has multiple satellite clinics throughout the wider Washington D.C. metropolitan area. This strategy is a: 1. diversification strategy. 1. product-development strategy. 1. market-penetration strategy. 2. market-development strategy. ANSWER: C 2. Many women's hospitals are now offering specialized programs for men. This approach is an example of what type of strategy? 1. Diversification 1. Product development 1. Market development 1. Market penetration ANSWER: C 3. Scott & White Clinic in Texas and Aultman Hospital in Ohio have developed their own insurance products. These organizations have decided to pursue a strategy of: 1. market development. 1. diversification. 1. product development. 1. market penetration. ANSWER: C 4. Sharp Health Care has partnered with the CVS retail pharmacy chain to offer its services within CVS retail locations. This is an example of: 1. forward integration. 1. mass retailing. 1. mass distribution. 1. backward integration. ANSWER: A 5. In a backward integration strategy, an organization becomes: 1. a pharmaceutical company. 1. its own supplier. 1. its own buying entity. 1. a purchasing coalition. ANSWER: B 6. When growth in existing markets is slow or regulatory changes make it risky to remain in existing markets, organizations tend to pursue which of the following growth strategies? 1. Diversification 1. Product development 1. Market penetration 1. None of these is correct. ANSWER: A IBM has increasingly partnered with healthcare organizations interested in applying the Watson cloud technology for healthcare applications to assist physicians and researchers. For IBM, this approach is an example of which type of growth strategy? 1. Market penetration 1. Market development 1. Product development 1. Diversification ANSWER: D 8. Strategic alliances in which both corporate entities hold an equity position are: 1. usually successful given the fact that there is shared risk. 1. difficult to achieve, because it is difficult to get corporate agreement among both parties. 1. referred to as shared risk pooled entities. 1. defined as joint venture businesses. ANSWER: D 9. When there is a weak fit between a core business and a particular business line, organizations will typically follow what particular strategy? 1. They will consolidate the weak line into others. 1. The organization will attempt to divest the weak line. 1. The organization will try to refine the target marketing strategy. 1. They will attempt to try to reinvigorate the line with additional advertising. ANSWER: B 10. Increasingly, many hospitals are having to close service lines when the market is too small or costly to serve, such as the case in mental health. This is an example of which type of strategy? 1. Divestment 1. Pruning 1. Retrenchment 1. Harvesting ANSWER: B 11\. A pharmaceutical vice president has decided to gradually withdraw marketing and promotional support from a particular drug. She has instructed her sales force to no longer spend any time with physicians discussing this particular script, nor will any promotional support be provided. The number of generics competing against this formulary has increased, and the margins have declined precipitously. This is an example of: 1. retrenchment. 1. harvesting. 1. pruning. 1. divestment. ANSWER: B 12. In the BCG matrix, a marketing person can affect one of the two dimensions of this matrix as a function of their strategy. Which dimension could they possibly affect? 1. Population 1. Target size 1. Market growth rate 1. Market share ANSWER: D 13. In the BCG matrix, revenues generated by stars should be reinvested into: 1. dogs. 1. cows. 1. stars. 1. problem children. ANSWER: C 14. A product would be considered a cash cow if: 1. the product's market has matured, but the organization was able to retain its market share through the life cycle. 1. the product has a high market share and a high growth rate 1. the organization could generate cash but not capture share. 1. product has low relative market share, but high growth rate. ANSWER: A 15. Which of the following is true of a service that is a problem child? 1. It is a new service with little share or one that is generating a lot of cash. 1. It is a poor service but has a high share. 1. It is a new service but has quality problems. 1. It is a new service or one that has been in existence for some time, but there are strategy problems. ANSWER: D 16. Which of the following is not one of the four factors that affect the intensity of competition in Porter's Five Forces Model? 1. Intensity of competition 1. Bargaining power of buyers 1. Bargaining power of suppliers 1. Threat of new entrants ANSWER: A 17. In terms of Porter's Five Forces Model, the formation of physician/hospital networks is an attempt to: 1. develop a structure to create new medical technologies quickly. 1. mitigate the power of buyers with stronger suppliers. 1. mitigate the threat of new entrants. 1. All of these are correct. ANSWER: B 18. The foundation of the 7-S framework is: 1. the seven structural components of efficiency. 1. shared values. 1. shared service lines across merged systems. 1. system efficiencies. ANSWER: B 19. Suppliers can become a significant threat when they are able to: 1. forward integrate. 1. develop a system for technological interactivity. 1. systematize delivery online. 1. backward integrate. ANSWER: A 20. On a continuum of strategic perspectives, the Blue Ocean strategy is most dissimilar to: 1. the BCG matrix, because growth is not a major focus of this model. 1. the BCG matrix, because market share and growth are irrelevant in considering opportunities. 1. the Porter model, because Porter focuses on existing competitors, whereas Blue Ocean focuses on uncontested market space. 1. the Porter model, because Blue Ocean only has blue and red oceans, not five forces. ANSWER: C 21. Mass marketing is when an organization decides to treat the entire market as a: 1. group of people with very different needs. 1. heterogeneous group of patients. 1. group of patients who want to purchase the same services. 1. None of these is correct. ANSWER: C 22. Boutique medical practices in which patients pay a significant amount upfront to ensure that they have personalized concierge service with their doctor is an example of a: 1. mass marketing strategy. 1. high-income strategy. 1. market concentration strategy. 1. market elite strategy. ANSWER: C 23. In health care, it has been found that hospitals with higher profitability tend to be those with: 1. lower market share in niche markets. 1. higher market share. 1. more technological investments. 1. medical staff encompassing a wider age distribution. ANSWER: B **Chapter: Chapter 03 -- Additional Quiz** 1. True or False? Environmental assessment involves the acquisition and use of information about events, trends, and relationships in the environment. ANSWER: False 2. True or False? The decline in buying power when prices rise faster than income is called inflation. ANSWER: True 3. True or False? By the end of this decade, healthcare spending will reach almost 50% of the U.S. gross domestic product (GDP). ANSWER: False 4. True or False? Healthcare spending in the United States is higher than in all Western countries except Germany, and health outcomes are higher. ANSWER: False 5. True or False? Higher healthcare expenditures in the United States are attributed to technology, the fragmented health insurance system, and pharmaceutical costs. ANSWER: True 6. True or False? Although almost half of all adults search the Internet for health information, most still seek out medical attention after doing so. ANSWER: True 7. True or False? The vast majority of states are doing well in terms of either price or quality transparency information provided to consumers. ANSWER: False 8. True or False? The reviews of hospital quality provided on social media sites such as Yelp do not relate in any way to real, objective hospital quality ratings. ANSWER: False 9. True or False? As more women have entered the medical profession, the compensation gap between the genders has decreased substantially. ANSWER: False 10 True or False? The majority of the U.S. population is now composed of people of color. ANSWER: False 1. When price levels rise faster than income: 1. the result is pressure on reimbursement. 1. it is referred to as deflation. 1. it is referred to as inflation. 1. significant cost pressures occur. ANSWER: C 2. is the money a consumer has remaining after taxes and paying for necessities. 1. Net income 1. Discretionary income 1. Disposable income 1. Gross income ANSWER: A 3. Healthcare costs as a percentage of the gross domestic product (GDP): 1. is a significant proportion of the total GDP. 1. although large, is not a major component of the GDP. 1. has remained relatively flat since the 1980s. 1. has fluctuated rather dramatically each decade, from a high percentage to a relatively small proportion of the GDP. ANSWER: A 4. Compared to other Western economies, the United States spends more on health care. What is the outcome of this high spending on health care? 1. The U.S. population, on average, is healthier than that in other countries. 1. Life expectancies are lower than average compared to other OECD states. 1. The dollar return is greater with better mortality for all ages, except children younger than 5 years. 1. The United States is the healthiest Western population based on dollars spent per capita. ANSWER: B 5. Consumer income is composed of: 1. discretionary, gross, and defined income. 1. defined, gross, and determined income. 1. grand, gross, and discretionary income. 1. gross, discretionary, and disposable income. ANSWER: D 6. The amount of money a consumer has left after paying for food, clothing, and shelter is referred to as: 1. gross income. 1. discretionary income. 1. defined income. 1. disposable income. ANSWER: D 7. Surprise medical bills are: 1. bills for care that the patient did not understand that they were receiving. 1. bills for lab tests that the patient did not know were being ordered. 1. bills for care that was received from physicians who were not within the patient's health insurance contracted network. 1. bills for care received that the insurance company refuses to cover. ANSWER: C 8. Geotechnology will increasingly allow: 1. companies to track pandemics more efficiently. 1. seniors to age in place by signaling their movements. 1. encourage interactions between communities. 1. All of these are correct. ANSWER: B 9. In many metropolitan markets, the insurance provider competitive scenario could best be described as: 1. monopolistic competition. 1. pure competition. 1. a monopoly. 1. an oligopoly. ANSWER: D