GROUP 3 - INTERNAL SCANNING: ORGANIZATIONAL ANALYSIS

IDENTIFICATION

1. Assumes that past developments in the given technology cannot be extrapolated into the future
because every technology has its limits?
Answer: CORPORATE PLANNING PROCESS

2. This is a support activities that is involve in machines and supplies

Answer: PROCUREMENT

3. System that can operate at relatively low production rates

Answer: Intermittent (Job Shop) Manufacturing System

4. In experience curve, what is declining by 20 30% every time production doubles?

Answer: PRODUCTION COSTS

5. Examine the potential synergies among the value chains of different product lines.
Answer: CORPORATE VALUE CHAIN ANALYSIS

6. Set of value-creating activities beginning with basic raw material and ending with distributors
getting final goods into hands of customers
Answer: VALUE CHAIN

7. This model has many buyers & sellers

Answer: SWITCHBOARD MODEL

8. Pertains to Intensity as degree of acceptance and Integration as shared values

Answer: ATTRIBUTES OF CORPORATE CULTURE

9. This is the right end of the Growth stage

Answer: COMPETITIVE TURBULENCE

10. The 4Ps are variables of what strategic marketing issue?

Answer: MARKETING MIX

TRUE OR FALSE

1. Internal strategic factors consist of critical strengths and weaknesses that are not unlikely to
determine if the firm will be able to take advantage of opportunities while avoiding threats. T

2. In the 5-Step Resource Approach to Strategy Analysis, the fifth step is Identify resource gaps
invest in strengths. F

3. Value chain is linked set of value-creating activities beginning with basic final goods and ending
with distributors getting raw materials into hands of customers. F

4. Strategic business unit is not always a unique mission. F

5. Strategic business unit has always unidentifiable competitors. F

 6. Corporate culture is a collection of beliefs, expectations, and values learned and keep by a
corporations members from one generation of employees to another. F

7. Corporate culture conveys a sense of identity for employers. F

8. Corporate culture reduces to the instability of the organization social system. T

9. Corporate culture serves as a frame of reference for employees to make sense of organizational
activities and as a guide for behavior. T

10. Market Position & Combination is one of the marketing issues. F

11. Financial leverage is the ratio of total debt to current assets. F

12. Technological Competence is the ability to move products from research to the market. F

13. Capital budgeting is the Analysis and ranking of investments in total assets based on a hurdle
rate. F

14. Sales and time are directly proportional in a product life cycle. F

15. Competency is something that the company does well. F

16. Core competency is the integration/coordination of capabilities. F

17. Distinctive competency is a core competency done better than competitors.t

18. VRIO Framework is used for defining Distinctive Competencies. T

19. Support activitiesinclude marketing and sales. F

20. Typical Value Chain for a Manufactured Product includes 6 stages. T

MULTIPLE CHOICE

1. This is a process in which it is generally assumed that incremental progress in technology will occur.

a. corporate planning progress d. corporate planning technology

b. corporate planning process e. none of the above

c. corporate incremental process

ANSWER: B
2. In corporations value chain, manufacturing firms primary activities would include all of the
following except

a. inbound logistics d.marketing and sales

b. outbound logistics e. none of the above

C human resources management

ANSWER: C

3. In a product life cycle, the right end of the growth stage is called

a. competitive growth d. competitive turbulence

b.competitive maturity e. none of the above

c. competitive product
ANSWER: D

4. Which of the following is not classified as a stage of the product life cycle?

a.decline d. maturity
b. adoslecence e. none of the above
c. growth
ANSWER: B

5. The information network within an organization that is available to key suppliers and
customers is called

a. extranet d. supermarket

b. intranet e. none of the above

c. internet
ANSWER: A

6. Strategic human resource management issues would include all of the following except

a. union relativity d. increasing use of teams

b. human diversity e. none of the above

c. quality of work life
ANSWER: A
7. In continuum of sustainability, which is not a level of resource sustainability?

a. slow-cycle resources d. standard-cycle resources

b. abnormal-cycle resources e. none of the above

c. fast-cycle resources
ANSWER: B

8. In experience curve, the production cost is declining by 20 30 % every time production __________?
a. decreases d. declines

b. doubles e. none of the above

c. triples
ANSWER: B

9. Which of the following is not classified as a type of a business model?

a. time model d.switchboard model

b. advertising model e. none of the above

c customer solutions model

ANSWER: E

10. Which is not a marketing mix variable?

a. price d. product

b. place e. none of the above

c. promotion

ANSWER: E
Strategy Formulation: Corporate Strategy

IDENTIFICATION

1. There are two most popular portfolio techniques, one is GE Business Screen and other one is
___________. (BCG GROWTH-SHARE MATRIX)
2. Under the BCG Growth-Share Matrix, it is the only one aspect of overall competitive position.
(MARKET SHARE)
3. It includes nine cells based on long-term industry attractiveness and business strength
competitive position. (GE BUSINESS SCREEN)
4. It focuses on the core competencies of the corporation and the value created by the relation
between the parent and its business. (CORPORATE PARENTING)
5. A competition in which firms are competing with each other not only in one business units, but
also in a number of business units. (MULTIPOINT COMPETITION)
6. It can be achieved by taking over a function previously provided by a supplier or by a distributor.
(VERTICAL GROWTH)
7. It is the degree by which a firm operates vertically in multiple locations on an industrys value
chain from extracting raw materials to manufacturing to retailing. (VERTICAL
INTEGRATION)
8. It could be an association of between a company and a firm in the host country or a government
agency in that country. (JOINT VENTURE)
9. It is shipping goods produced in the companys home country to other countries for marketing.
(EXPORTING)
10. It is a growth strategy which may be appropriate when a firm has a strong competitive positon but
the industry attractiveness is low. (CONCENTRIC (RELATED) DIVERSIFICATION)
11. It emphasizes the improvement of operational efficiency and is probably most appropriate when a
corporations problems are pervasive but not yet critical. (TURNAROUND STRATEGY)
12. A stability strategy in which a company has an opportunity to rest before continuing a growth or
retrenchment strategy. (PAUSE/PROCEED WITH CAUTION STRATEGY)
13. An analysis by which the top management views its product lines and business units as a series of
investments from which it expects a profitable return. (PORTFOLIO ANALYSIS)
14. A growth strategy in which resources are moved to more developing product lines in one
industry. (CONCENTRATION)
15. One of the growth strategies in which a firm internally makes 100% of its key supplies and
completely controls its distributors is called _________. (FULL INTEGRATION)
16. It is the process of combining the higher labor skills and technology available in developed
countries with the lower-cost labor available in developing countries. (PRODUCTION
SHARING)

17. It is a transaction involving two or more corporations in which stock is exchanged but only one
corporation survives. (MERGER)
18. It is the purchase of a company that is completely absorbed as an operating subsidiary or division of
the acquiring corporation. (ACQUISITION)
19. These strategies expand the companys activities. (GROWTH STRATEGIES)
 20. This strategy indicates that management coordinates activities and transfers resources.
(PARENTING STRATEGY)
21. The firm has overall orientation toward growth, stability or retrenchment. (DIRECTIONAL
STRATEGY)
22. It is the choice of direction for a firm as a whole and the management of its business or product
portfolio. (CORPORATE STRATEGY)

TRUE/FALSE

1. The use of highs and lows to form four categories in Boston Matrix is too complex and requires
additional factors other than market share and growth rate in portraying corporations portfolio of
investment. (FALSE)
2. In the Boston Matrix the link between the market share and profitability is questionable.
(FALSE)
3. Examining each business unit in terms of areas in which performance can be improved is the first step
in developing a corporate parenting strategy. (FALSE)
4. The nine-cell GE Business Screen is an improvement over the BCG Growth-Share Matrix.
(TRUE)
5. One of the shortcomings of GE Business Screen is that it effectively depicts the positions of new
products. (FALSE)
6. Acquisition is a way of partnering with another company already operating in a particular area.
(FALSE, Acquiring)
7. Diversification strategies involve moving resources to product lines in the same industries.
(FALSE, different)
8. Bankruptcy means the firm is giving up the management, hence the firm is totally terminated.
(FALSE)
9. The value-laden terms such as cash cow and dog can lead to self-fulfilling prophecies is one of the
shortcomings or limitations of portfolio analysis. (TRUE)
10. Portfolio analysis stimulates the use of externally oriented data to supplement managements
judgement. (TRUE)
11. The graphic depiction of portfolio analysis creates advantage but it does not facilitate communication.
(FALSE)
12. One of the limitations of portfolio analysis is that it is difficult to define product/market segments.
(TRUE)
13. A strategy in which a company diversifies into an industry unrelated to its current one is called
concentric diversification. (FALSE, Conglomerate (Unrelated) Diversification)
14. Portfolio analysis suggests the use of standard strategies that can miss opportunities or be impractical.
(TRUE)
15. Corporate strategy has five (5) key issues. (FALSE)
16. The industries or markets in which the firm competes through its products and business units pertains
to directional strategy. (FALSE, Portfolio analysis)
17. Stability strategies reduce the company's level. (FALSE)
18. Retrenchment strategies make no change to the company's current activities. (FALSE)
TRUE OR FALSE
1. Business-Level Strategy incorporated set of obligations that firm uses to gain a
competitive advantage. TRUE
2. Business-Level Strategy has a huge interest regarding the companys function in an
industry, relative to consumers and to the five forces of competition. FALSE -
COMPETITORS
3. Customers are the foundation or essence of an organization's business-level strategies.
TRUE
4. A cost leadership strategy may help to remain profitable even without rivalry, new
entrants, suppliers' power, substitute products, and buyers' power. FALSE WITH
5. Data integration can be time consuming and cheap if it is not planned carefully and if the
proper experts and equipment are not used. FALSE - EXPENSIVE
6. Effective differentiators can remain profitable even when the five forces appear
attractive. FALSE ATTRACTIVE
7. Preferences of niche market may change to match those of broad market. TRUE
8. These demographic market characteristics are often based on market size, region,
population density. FALSE GEOGRAPHIC MARKET
9. Cost leadership organization used this strategy to compete with broad market with price.
TRUE
10. Vertical integration occurs when companies bring in new systems to replace the old
ones or when companies merge and must integrate their computer networks, FALSE
DATA INTEGRATION
IDENTIFICATION

1. These are all the processes related to receiving, storing, and distributing inputs internally.
Your supplier relationships are a key factor in creating value here.
INBOUND LOGISTICS

2. Used to cross-train management and employees, reduce ineffective communication and

cut supplier costs.
INTEGRATION STRATEGY

3. This is what the organization does to get the resources it needs to operate. This includes
finding vendors and negotiating best prices.
PROCUREMENT OR PURCHASING

4. Differentiated products less price elastic. It is one of Porters Five Forces Model.
CUSTOMER

5. These are a company's support systems, and the functions that allow it to maintain
daily operations. Accounting, legal management are example of this.
INFRASTRUCTURE

MULTIPLE CHOICE

6. Cost leaders are able to absorb greater price increases before it must raise price to
customers.
 A. RIVALRY

B. CUSTOMERS

C. SUPPLIERS

D. ENTRANTS

E. SUBSTITUTE

7. Creating barriers by perceptions of uniqueness and reputation, creating high switching

costs through differentiation and uniqueness.
A. LOWERING BUYERS CHOICE
B. RAISING BUYERS PERFORMANCE
C. SUSTAINABILITY
D. LESS BREAKDOWNS
E. IMPLICATION
8. Maximizing human capital contributions
A. LOWERING BUYERS CHOICE
B. RAISING BUYERS PERFORMANCE
C. SUSTAINABILITY
D. LESS BREAKDOWNS
E. IMPLICATION
9. The company has control over quality and costs at the most important segments of its
product manufacturing and distribution model.
A. VERTICAL INTEGRATION
B. HORIZINTAL INTEGRATION
C. DIAGONAL INTEGRATION
D. DATA INTEGRATION
E. PERSONNEL INTEGRATION
10. This helps departments work together and increases efficiency. Integrating employees
means cross-training employees to do each others job.
A. VERTICAL INTEGRATION
B. HORIZINTAL INTEGRATION
C. DIAGONAL INTEGRATION
D. DATA INTEGRATION
E. PERSONNEL INTEGRATIO
 ESSAY
1-5 DRAW THE VALUE CHAIN WITH LABBELS. AND BRIEFLY EXPLAIN.
(THREE SENTENCES)

6-10 DRAW THE COMPARING SCOPE OF BUSINESS LEVEL STRATEGY AND

SOURCES OF ADVANTAGE. BRIEFLY EXPLAIN. (THREE SENTENCES.
ENUMERATION
1-2 TWO KINDS OF VERTICAL INTEGRATION
ANSWERS:
FORWARD INTEGRATION
BACKWARD INTEGRATION

3-5 WHAT ARE THE DIFFERENT BUSINESS LEVEL STRATEGIES

ANSWERS:
COST LEADERSHIP
DIFFERENTIATION
FOCUSED COST LEADERSHIP
FOCUSED DIFFERENTIATION
INTEGRATED
6-8 PRIMARY ACTIVITIES IN VALUE CHAIN
INBOUND LOGISTICS
OPERATIONS
OUTBOUND LOGISTICS
MARKETING AND SALES
SERVICES
9-10 SUPPORTING ACTIVITIES IN VALUE CHAIN
PROCUREMENT
TECHNOLOGY DEVELOPMENT
HUMAN RESOURCE MANAGEMENT
FIRM INFRASTRYCTURE
 FUNCTIONAL STRATEGY
TRUE OR FALSE

1. The orientation of a functional strategy is dictated by its parent business units

management. FALSE

2. Functional strategies may need to vary from region to region. TRUE

3. Line extension is the introduction of additional items in the same category under
the same brand name. TRUE

4. Skim pricing is more likely than penetration pricing to raise a units operating
profit in the long term. FALSE

5. A firms manufacturing strategy is often affected by a business life cycle. FALSE

6. The product becomes standardized into a commodity over time in conjunction

with increasing demand. TRUE

7. The key to continuous improvement is the acknowledgment that workers attitude

and behavior can help managers solve production problems and contribute to
tightening variances and reducing errors. FALSE

8. Fortunately, the common practice of accepting the lowest bid often compromises
quality. FALSE

9. The Internet is being increasingly used both to find new sources of supply and to
keep inventories replenished. TRUE

10. Each business unit has its own set of departments, each with its own functional
strategy. TRUE

11. A product strategy deals with pricing, selling, and distributing a product. FALSE

12. Using a market development strategy, a company can develop new products for
existing markets or develop new products for new markets. FALSE

13. The use of the Internet to market goods directly to the customer allows a
company to use dynamic pricing. TRUE

14. A financial strategy examines the financial implications of corporate and

business-level strategic options and identifies the best financial course of action.
TRUE
 15. In a leveraged buy-out, the acquired company, in effect, pays for its own
acquisition. TRUE

16. Two suppliers are the sole suppliers of two different parts, but they are also
backup suppliers for each others parts in multiple sourcing. FALSE

17. The follow-the-moon management philosophy allows project team members

living in one country to pass their work to team members in another country in
which the work day is just beginning. FALSE

18. The key to outsourcing is to purchase from outside only those activities that are
not key to the company's distinctive competencies. TRUE

19. 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. TRUE

20. Risk is composed not only of the probability that the strategy will be effective, but
also of the amount of assets the corporation must allocate to that strategy and
the length of time the assets will be unavailable for other uses. TRUE

FILL IN THE BLANKS

1. ________ define the broad guidelines for implementation. Policies

2. Devils Advocate is an individual or a group assigned to identify _____ and

problems with a proposed alternative strategy in a formal presentation. pitfalls

3. Strategic choice is the evaluation of alternative strategies and selection of the

_______. best alternative.

4. ____________ is a strategy that ignores the possibility that the leader may be
wrong. Follow the leader

5. ___________ is a plan to bring stakeholders into agreement with a corporations

actions. Political strategy

6. _____________ is a strategy that enters a battle for market share may reduce
profitability. Arms race

7. According to ________, when the future is highly uncertain, it pays to have a

broad range of options open. real-options approach
 8. _________ is the outsourcing of an activity or a function to a wholly owned
company or an independent provider in another country. Offshoring

9. __________ is a system in which employees will get feedback from all the
people they work with. 360 Degree Appraisal System

10. Kaizen is the practice of_______. continuous improvement

ENUMERATION

Major outsourcing errors that should be avoided:

1. Outsourcing activities that should not be outsourced
2. Selecting the wrong vendor
3. Writing a poor contract
4. Overlooking personnel issues
5. Losing control over the outsourced activity
6. Overlooking the hidden costs of outsourcing
7. Failing to plan an exit strategy

In determining functional strategy, the strategist must:

8. Identify the companys or business units core competencies
9. Ensure that the competencies are continually being strengthened
10. Manage the competencies in such a way that best preserves the
competitive advantage they create

Evaluation of strategic alternatives

11. Mutual Exclusivity
12. Success
13. Completeness
14. Internal Consistency

Subjective Factors Affecting Decisions

15. Managements attitude toward risk
16. Pressures from stakeholders
17. Pressures from corporate culture
18. Needs and desires of key managers
 DANS GROUP

1. The hiring of new people with new skills, firing of people with inappropriate or substandard
skills, and/or training existing employees to learn new skills. STAFFING

2. Executives with a particular mix of skills and experiences may be classified as an executive
type and paired with. A SPECIFIC CORPORATE STRATEGY

3. A type of chief executive officer with a great deal of experience in that particular industry
would be appropriate for a corporation following a concentration strategy emphasizing vertical
or horizontal growth. DYNAMIC INDUSTRY EXPERT

4. A type of chief executive officer who is highly knowledgeable in other industries and can
manage diverse product lines would be appropriate for a corporation following a diversification
strategy. ANALYTICAL PORTFOLIO MANAGER

5. A type of chief executive officer with a conservative style, a production or engineering

background, and experience with controlling budgets, capital expenditures, inventories, and
standardization procedures would be appropriate for a corporation following a stability strategy.
CAUTIOUS PROFIT PLANNER

6. Successful prospector firms tend to be headed by CEOs with backgrounds in the areas of.
RESEARCH/ENGINEERING AND GENERAL MANAGEMENT

7. Successful defender firms tend to be headed by CEOs with backgrounds in the areas of.
ACCOUNTING/FINANCE, MANUFACTURING/PRODUCTION, AND GENERAL
MANAGEMENT

8. Successful analyzer firms tend to be headed by CEOs with backgrounds in the areas of.
MARKETING/SALES

9. The process of replacing a key top manager is called. EXECUTIVE SUCCESSION

10. To ensure employees are gaining the appropriate mix of experience to prepare employees for
future responsibilities, many corporations move people from one job to another utilizing the
technique of. JOB ROTATION

11. The end result of activity is known as. PERFORMANCE

12. Controls that measure variables that influence future p[profitability are called. STEERING
CONTROLS

13. The inventory turnover ratio is an example of a(n). STEERING CONTROL

14. A type of control which specifies how something is to be done through policies, rules,
standard operating procedures, and orders from a superior. BEHAVIOR CONTROL

15. A type of control which specifies what is to be accomplished by focusing on the end result of
behaviors through the use of objectives and performance targets or milestones. OUTPUT
CONTROL

16. The ISO 9000 Standards Series is one example of. BEHAVIOR CONTROL

17. ________ is a corporate-wide, integrated process to manage the uncertainties that could
negatively or positively influence the achievement of the corporation's objectives. ENTERPRISE
RISK MANAGEMENT

18. The present value of the anticipated future stream of cash flows from the business plus the
value of the company if liquidated is referred to as. SHAREHOLDER VALUE

19. The measure which is after-tax operating income minus the total annual cost of capital is
called. EVA

20. The balanced scorecard approach to evaluation and control assigns to each goal/objective in
an area one or more measures that are each essential for achieving a desired strategic option.
These measures are called. KEY PERFORMANCE MEASURES

21. Staffing issues can involve hiring new people with new skills, firing people with
inappropriate or substandard skills, and/or training existing employees to learn new skills. TRUE

22. Staffing requirements are likely to follow a change in strategy. TRUE

23. A dynamic industry expert is someone with an analytical mind who is highly knowledgeable
in other industries and can manage diverse product lines. FALSE

24. Chandler proposed that the most appropriate CEO for a firm remains constant as the
company proceeds through its life cycle. FALSE

25. Analyzers tend to have CEOs with a marketing/sales background. TRUE

26. Executive succession is the process of replacing a key top manager. TRUE

27. Firms in trouble seldom choose outsiders to lead them. FALSE

28. Downsizing refers to the planned elimination of positions or jobs. TRUE

29. Research indicates that companies undertaking cost-cutting programs are four times more
likely than others to cut costs again, typically by reducing staff. TRUE
30. Research indicates that a multinational corporation performs at a higher level when its CEO
has international experience. TRUE

31. One of the obstacles to effective control is the difficulty in developing appropriate measures
of important activities and outputs. TRUE

32. Performance is the end result of activity. TRUE

33. One example of a steering control used by retail stores is the inventory turnover ratio, which
shows how hard an investment in inventory is working. TRUE

34. Behavior controls specify how something is to be done through policies, rules, standard
operating procedures, and orders from a superior. TRUE

35. ACB is an accounting method for allocating direct and fixed costs to individual products.
FALSE

36. ABC accounting allows accountants to charge costs more accurately than the traditional
method because it allocates overhead far more precisely. TRUE

37. Operating cash flow is also known as free cash flow. FALSE

38. Unlike ROI, managers cannot manipulate the numbers of EVA. FALSE

39. The balanced scorecard combines financial measures that tell the results of actions already
taken with operational measures on customer satisfaction, internal processes, and the
corporation's innovation and improvement activities. TRUE

40. The revenue center is measured in terms of efficiency. FALSE