Question 1

The first step in constructing a corporate scenario is to

Accepted Answer

A)  develop a common-sized financial statement.
B)  construct detailed pro forma financial statements.
C)  decide upon how much risk management is willing to accept.
D)  analyze the societal environment.
E)  use industry scenarios to develop a set of assumptions about the task environment.F) A) and C)
G) B) and C)

Question 2

Which type of pricing takes advantage of the demand curve while the product is still novel and competitors are few?

Accepted Answer

A)  demand pricing
B)  competitive pricing
C)  skim pricing
D)  penetration pricing
E)  loss-leader pricingF) A) and E)
G) B) and E)

Question 3

When Colgate-Palmolive and Unilever take a successful product that they marketed in one part of the world and market it elsewhere, they are following a market development strategy.

Accepted Answer

A) True 
 B)False

Question 4

The concept of ________ was taken one step further in JITII, in which vendor sales representatives usually have desks next to the purchasing company's factory floor, attend production status meetings, visit the R&D lab, and analyze the purchasing company's sales forecasts.

Accepted Answer

A)  multiple sourcing
B)  outsourcing
C)  sole sourcing
D)  parallel sourcing
E)  all of the aboveF) A) and B)
G) A) and E)

Question 5

According to the text, which one of the following is NOT one of the reasons why innovations seem to occur more often in small firms rather than in large, established corporations?

Accepted Answer

A)  An entrepreneur in a small firm is more willing to accept greater risk than would a larger firm.
B)  Small firms are completely ignorant of risk management.
C)  The greater the assets involved and the longer they are tied up, the more likely top management in large firms is to demand a high probability of success.
D)  Companies operating in global industries must deal with a greater amount of risk than firms operating only in one country.
E)  If the corporation's stock is widely held as in the case of large firms and experiences stock price declines due to some external assessment, it places the firm in jeopardy of being acquired.F) A) and B)
G) A) and C)

Question 6

The flow of products into and out of the manufacturing process is a factor when developing a ________ strategy.

Accepted Answer

A)  marketing
B)  logistics
C)  operations
D)  financial
E)  human resource managementF) B) and D)
G) A) and B)

Question 7

Three trends are evident in logistics: outsourcing, the use of the Internet, and

Accepted Answer

A)  centralization.
B)  downsizing.
C)  logistical partnerships.
D)  computerization.
E)  containerized shipping.F) B) and C)
G) D) and E)

Question 8

Logistics strategy deals with the flow of products into and out of the manufacturing process.

Accepted Answer

A) True 
 B)False

Question 9

If there is little fit between a strategic alternative under consideration and the corporate culture, which of the following is one of the considerations that must be taken into account?

Accepted Answer

A)  Take a chance on ignoring the culture by implementing the strategic alternative.
B)  Manage around the culture and change the implementation plan.
C)  Try to change the culture to fit the strategy.
D)  Change the strategy to fit the culture.
E)  All of the above.F) B) and E)
G) D) and E)

Question 10

According to an American Management Association survey, the most heavily outsourced activities were

Accepted Answer

A)  manufacturing and marketing.
B)  customer service and sales.
C)  finance and manufacturing.
D)  R&D and customer service.
E)  general and administrative.F) B) and D)
G) A) and D)

Question 11

Give an example of a technological leader and a technological follower.

Accepted Answer

A technological leader is a company that...

Question 12

A company may use which of the following trade promotions to "push" their products through the distribution system?

Accepted Answer

A)  discounts
B)  in-store special offers
C)  advertising allowances
D)  coupons
E)  brand advertisingF) B) and E)
G) A) and D)

Question 13

When a company deals with obtaining raw materials, parts, and supplies needed to perform the operations function, the company is developing its ________ strategy.

Accepted Answer

A)  operations
B)  purchasing
C)  R&D
D)  financial
E)  human resource managementF) A) and D)
G) All of the above

Question 14

The key to outsourcing is to purchase from the outside only those activities that

Accepted Answer

A)  are not key to the company's distinctive competence.
B)  are very expensive.
C)  provide the company competitive advantage.
D)  are provided by an important supplier.
E)  are not very expensive.F) C) and E)
G) B) and C)

Question 15

A company which pioneers an innovation is called a(n)

Accepted Answer

A)  technological follower.
B)  technological opportunist.
C)  technological leader.
D)  technological manufacturer.
E)  technological entrepreneur.F) A) and B)
G) A) and E)

Question 16

When Intel opened four small-scale research facilities adjacent to universities to promote the cross-pollination of ideas, they were using which approach to R&D?

Accepted Answer

A)  open innovation
B)  differentiation
C)  technology scouts
D)  continuous improvement
E)  technological leadershipF) A) and D)
G) C) and D)

Question 17

When a company exchanges 100 shares of stock worth $10 each for 50 shares worth $20 each, they are using

Accepted Answer

A)  tracking stock.
B)  holding stock.
C)  an LBO.
D)  reverse stock split.
E)  split stock.F) A) and E)
G) D) and E)

Question 18

Which strategy is developed to pull together the various activities and competencies of each department so that corporate and business unit performance improves and resource productivity is maximized?

Accepted Answer

A)  business strategy
B)  competitive strategy
C)  generic strategy
D)  enterprise strategy
E)  functional strategyF) D) and E)
G) A) and C)

Question 19

Outsourcing is the reverse of vertical integration.

Accepted Answer

A) True 
 B)False

Question 20

Corporate scenarios are pro forma balance sheets and income statements that forecast the effect each alternative strategy and its various programs will likely have on division and corporate return on investment.

Accepted Answer

A) True 
 B)False

Exam 8: Strategy Formulation: Functional Strategy and Strategic Choice

Corporate scenarios are pro forma balance sheets and income statements that forecast the effect each alternative strategy and its various programs will likely have on division and corporate return on investment.

Correct AnswerverifiedShow Answer

Three trends are evident in logistics: outsourcing, the use of the Internet, and

Correct AnswerverifiedShow Answer

Logistics strategy deals with the flow of products into and out of the manufacturing process.

Correct AnswerverifiedShow Answer

Which strategy is developed to pull together the various activities and competencies of each department so that corporate and business unit performance improves and resource productivity is maximized?

Correct AnswerverifiedShow Answer

According to an American Management Association survey, the most heavily outsourced activities were

Correct AnswerverifiedShow Answer

According to the text, which one of the following is NOT one of the reasons why innovations seem to occur more often in small firms rather than in large, established corporations?

Correct AnswerverifiedShow Answer

If there is little fit between a strategic alternative under consideration and the corporate culture, which of the following is one of the considerations that must be taken into account?

Correct AnswerverifiedShow Answer

When a company deals with obtaining raw materials, parts, and supplies needed to perform the operations function, the company is developing its ________ strategy.

Correct AnswerverifiedShow Answer

Which type of pricing takes advantage of the demand curve while the product is still novel and competitors are few?

Correct AnswerverifiedShow Answer

Give an example of a technological leader and a technological follower.

Correct AnswerverifiedA technological leader is a company that...View AnswerShow Answer

The flow of products into and out of the manufacturing process is a factor when developing a ________ strategy.

Correct AnswerverifiedShow Answer

When Intel opened four small-scale research facilities adjacent to universities to promote the cross-pollination of ideas, they were using which approach to R&D?

Correct AnswerverifiedShow Answer

The key to outsourcing is to purchase from the outside only those activities that

Correct AnswerverifiedShow Answer

A company may use which of the following trade promotions to "push" their products through the distribution system?

Correct AnswerverifiedShow Answer

A company which pioneers an innovation is called a(n)

Correct AnswerverifiedShow Answer

Outsourcing is the reverse of vertical integration.

Correct AnswerverifiedShow Answer

When Colgate-Palmolive and Unilever take a successful product that they marketed in one part of the world and market it elsewhere, they are following a market development strategy.

Correct AnswerverifiedShow Answer

The concept of ________ was taken one step further in JITII, in which vendor sales representatives usually have desks next to the purchasing company's factory floor, attend production status meetings, visit the R&D lab, and analyze the purchasing company's sales forecasts.

Correct AnswerverifiedShow Answer

The first step in constructing a corporate scenario is to

Correct AnswerverifiedShow Answer

When a company exchanges 100 shares of stock worth $10 each for 50 shares worth $20 each, they are using

Correct AnswerverifiedShow Answer

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A technological leader is a company that...
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