Chapter - Strategy Implementation MCQ

Chapter 5: Strategies in Action
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
70) Long-term objectives are needed at which level(s) in an organization?
A. Functional
B. Divisional
C. Corporate
D. All of the above
E. None of the above
Diff: 1 Page Ref: 195
Topic: Long-Term Objectives
Objective: 5.01 Discuss the value of establishing long-term objectives.
71) Financial objectives involve all of the following except:

A. growth in revenues.
B. larger market share.
C. a rising stock price.
D. greater return on investment.
E. higher dividends.
Objective: 5.09 Compare and contrast financial with strategic objectives.
72) What principle is based on the belief that the true measure of a really good strategist is the ability to solve
problems?
A. Managing by extrapolation
B. Managing by crisis
C. Managing by exception
D. Managing by objectives
E. Managing by hope
73) What principle is built on the idea that there is no general plan for which way to go and what to do?
A. Managing by extrapolation
B. Managing by hope
C. Managing by objectives
D. Managing by subjectives
E. Managing by crisis
74) All of the following are listed among the "softer" factors in the Balanced Scorecard except:
A. customer service.
B. product quality.
C. business ethics.
D. stockholder equity.
E. employee morale.
Objective: 5.08 Discuss the Balanced Scorecard.
75) Which level of strategy is most likely not present in small firms?
A. Divisional
B. Functional
C. Corporate/company
D. Operational
E. All of the above are present in small firms.
Objective: 5.10 Discuss the levels of strategies in large versus small firms.
76) Microsoft opening its own retail stores is an example of which type of strategy?
A. Horizontal integration
B. Backward integration
C. Forward integration
D. Related diversification
E. Unrelated diversification
Objective: 5.03 Identify numerous examples of organizations pursuing different types of strategies.
77) Cadbury PLC selling its Australian drinks business to Asahi Breweries Ltd. of Japan is an example of which
type of strategy?
A. Liquidation
B. Related diversification
C. Retrenchment
D. Unrelated diversification
E. Divestiture
78) Burger King opening its first restaurant in Japan is an example of which type of strategy?
A. Forward integration
C. Product development
D. Market development
E. Horizontal integration
79) Which of the following is most likely not included in the functional level of a small company?
A. Department managers
B. Human resource managers
C. R&D
D. Marketing
E. Finance
80) Integration strategies are sometimes collectively referred to as which of the following categories of strategies?
A. Vertical integration
B. Hierarchical integration
C. Diversification
D. Stuck-in-the-middle
Topic: Integration Strategies
Objective: 5.02 Identify 16 types of business strategies.
81) Web sites that sell products directly to consumers are examples of which type of strategy?
A. Conglomerate diversification
B. Product development
D. Backward integration
82) The percent of McDonalds' restaurants actually owned by the McDonalds corporation is approximately
A. 43 percent. B. 55 percent. C. 23 percent. D. 35 percent. E. 63 percent.
83) Which of these strategies is effective when the number of suppliers is small and the number of competitors is
large?
A. Conglomerate diversification
C. Concentric diversification
D. Forward integration
E. Horizontal diversification
Objective: 5.04 Discuss guidelines when particular strategies are most appropriate to pursue.
84) Backward integration is effective in all of these except

A. when the advantage of stable prices are not important.
B. when an organization needs to acquire a needed resource quickly.
C. when an organization has both capital and human resources to manage the new business of supplying
its own raw materials.
D. when an organization competes in an industry that is growing rapidly.
E. when present suppliers have high profit margins.
Diff: 1 Page Ref: 172-173
85) What refers to a strategy of seeking ownership of, or increased control over a firm's competitors?
A. Concentric diversification
B. Horizontal integration
D. Conglomerate diversification
E. Backward integration
86) In which situation would horizontal integration be an especially effective strategy?

A. When an organization can gain monopolistic characteristics in a particular area or region without being
challenged by the federal government for "tending substantially" to reduce competition.
B. When decreased economies of scale provide major competitive advantages.
C. When an organization competes in a slowing industry.
D. When an organization has neither the capital nor human talent needed to successfully manage an
expanded organization.
E. When competitors are succeeding due to managerial expertise or having particular resources an
organization possesses.
87) Which strategy seeks to increase market share of present products or services in present markets through
greater marketing efforts?
A. Market development
B. Product development
C. Backward integration
E. Market penetration
Topic: Intensive Strategies
88) When a domestic company first begins to export to India, it is an example of

A. forward integration.
B. horizontal integration.
C. backward integration.
D. market development.
E. concentric diversification.
89) Which strategy generally entails large research and development expenditures?
A. Forward integration
B. Market penetration
C. Divestiture
D. Retrenchment
E. Product development
90) All of the following situations are conducive to market development except:
A. when an organization has excess production capacity.
B. when an organization is very successful at what it does.
C. when an organization competes in a high-growth industry.
D. when new untapped or unsaturated markets exist.
E. when an organization's basic industry is becoming rapidly global in scope.
91) Which strategy is appropriate when an organization competes in an industry characterized by rapid
technological developments?
A. Product development
B. Market penetration
C. Retrenchment
D. Liquidation
92) Adding new, related products or services for present customers is called
A. forward integration.
B. backward integration.
C. related diversification.
D. unrelated diversification.
E. conglomerate diversification.
Topic: Diversification Strategies
93) Which strategy should an organization use if it competes in a no-growth or a slow-growth industry?
A. Unrelated diversification
B. Retrenchment
C. Related diversification
D. Divestiture
94) Qualcomm Inc.'s recent expansion beyond cell phones into desktop hardware is an example of
A. unrelated diversification.
B. forward integration.
C. divestiture.
D. backward integration.
E. retrenchment.
95) Which of the following is not an example of when an organization should use an unrelated diversification
strategy?
A. When existing markets for an organization's present products are not yet saturated.
B. When an organization's present channels of distribution can be used to market the new products to
current customers.
C. When revenues derived from an organization's current products or services would increase significantly
by adding the new unrelated, products.
D. When an organization competes in a highly competitive and/or a no-growth industry.
E. When the new products have counter-cyclical sales patterns compared to an organization's present
products.
96) Many more firms have failed at ________ than have succeeded due to the immense challenge of managing
businesses in many industries rather than in a single industry.
A. unrelated diversification
B. forward integration
C. related diversification
D. backward integration
E. related diversification
97) Smithfield Foods laying off 1,800 employees, closing 6 of its 40 plants, and cutting production by 10 percent in
2009 in efforts to stop the liquidity drain on the firm is an example of
A. backward integration.
B. forward integration.
C. liquidation.
D. divestiture.
E. retrenchment.
Topic: Defensive Strategies
98) What kind of strategy is retrenchment?
A. An expansion strategy
B. An offensive strategy
C. A conglomerate strategy
D. An intensive strategy
E. A turnaround or reorganization strategy
99) Bankruptcy
A. should only be used for large firms.
B. can be an effective type of retrenchment strategy.
C. should be used only when one is legally forced to do so.
D. should never be used as a strategy.
E. should only be used for small, private firms.
100) Which chapter of the bankruptcy code applies to municipalities?

A. Chapter 8 B. Chapter 7 C. Chapter 13 D. Chapter 9 E. Chapter 12
101) The Family Farmer Bankruptcy Act of 1986 created which type of bankruptcy?
A. Chapter 12 B. Chapter 8 C. Chapter 7 D. Chapter 13 E. Chapter 9
102) The form of bankruptcy in which all the organization's assets are sold in parts for their tangible worth is
A. Chapter 8. B. Chapter 9. C. Chapter 11. D. Chapter 7. E. Chapter 13.
103) Retrenchment would be an effective strategy when an organization

A. has decided to capitalize on opportunities, maximize threats, take advantage of strengths and overcome
weaknesses.
B. is one of the stronger competitors in a given industry.
C. is plagued by inefficiency, low profitability, poor employee morale and pressure from stockholders to
improve performance.
D. does not have a clearly distinctive competence and has failed to meet its objectives and goals
consistently over time.
E. has shrunk so quickly that major internal reorganization is needed.
104) Which term refers to selling a division of an organization?

A. Horizontal integration
B. Joint venture
C. Concentric diversification
D. Divestiture
E. Liquidation
105) Which strategy should be implemented when a division is responsible for an organization's overall poor
performance?
A. Related diversification
C. Cost leadership
E. Divestiture
106) Selling all of a company's assets in parts for their tangible worth is called
A. joint venture.
B. concentric diversification.
C. unrelated integration.
D. divestiture.
E. liquidation.
107) Which strategy would be effective when the stockholders of a firm can minimize their losses by selling the
organization's assets?
A. Integration
B. Diversification
C. Differentiation
D. Cost leadership
E. Liquidation
108) Under which strategy would you offer products or services to a wide range of customers at the lowest price
available on the market?
A. Cost Leadership – Low Cost
B. Differentiation
C. Cost Leadership – Best Value
D. Focus – Best Value
E. Focus – Low Cost
Topic: Michael Porter's Five Generic Strategies
Objective: 5.05 Discuss Porter's five generic strategies.
109) According to Porter, which strategy offers products or services to a niche group of customers at the lowest
price available on the market?
A. Differentiation
B. Cost Leadership – Low Cost
C. Focus – Best Value
D. Focus – Low Cost
E. Cost Leadership – Best Value
110) Under which condition would a cost leadership strategy be especially effective?
A. When technological change is fast paced and competition revolves around rapidly evolving product
features.
B. When few rival firms are following a similar approach
C. When there are many ways to differentiate the product or service and many buyers perceive these
differences as having value.
D. When buyer needs and uses are diverse.
E. When the products of rival sellers are essentially identical and supplies are readily available from any of
several eager sellers.
111) Under which condition would a differentiation strategy be especially effective?

A. When technological change is fast paced and competition revolves around rapidly evolving product
features.
B. When few, if any, other rivals are attempting to specialize in the same target segment.
C. When the target market niche is large, profitable and growing.
D. When the industry has many different niches and segments, thereby allowing a company to pick a
competitively attractive niche suited to its own resources.
E. When industry leaders do not consider the niche to be crucial to their own success.
112) What occurs when two or more companies form a temporary partnership or consortium for the purpose of
capitalizing on some opportunity?
A. Liquidation
B. A joint venture
D. Retrenchment
E. Divestiture
Topic: Means for Achieving Strategies
Objective: 5.07 Discuss joint ventures as a way to enter the Russian market.
113) All of the following are cooperative arrangements except:

A. cross-licensing agreements.
B. joint-bidding consortia.
C. marketing plans.
D. cross-manufacturing agreements.
E. R&D partnerships.
114) Which of the following is not a reason joint ventures fail?

A. Managers who must collaborate daily in operating the venture are not involved in forming or shaping
the venture.
B. The venture may benefit the partnering companies but may not benefit the customers who then
complain about poorer service or criticize the companies in other ways.
C. Stakeholders from both partners are equally satisfied.
D. The venture may not be supported equally by both partners.
E. The venture may begin to compete more with one of the partners than the other.
115) Which strategy would be most appropriate when the distinctive competencies of two or more firms
complement each other especially well?
A. Retrenchment
B. Divestiture
C. Integration
D. Conglomerate diversification
E. Joint venture
116) When two organizations of about equal size unite to form one enterprise, which of these occurs?
A. Merger
B. Divestiture
C. LBO
D. Acquisition
E. Hostile takeover
Topic: Merger/Acquisition
117) Mergers and acquisitions are created for all of the following reasons except to:
A. smooth out seasonal trends in sales.
B. reduce tax obligations.
C. gain economies of scale.
D. gain new technology.
E. increase the number of employees.
118) There are annually more than 10,000 mergers in the United States that total more than
A. $975 billion. B. $1 trillion. C. $3 trillion. D. $700 billion. E. $825 billion.
119) When companies take over functional operations of other firms, such as human resources, information
systems, payroll, accounting, or customer service, this is called
A. outsourcing. B. marketing. C. licensing. D. divestiture. E. franchising.
Objective: 5.12 Discuss recent trends in outsourcing.
120) According to journalists' findings, what is a serious obstacle for many small business owners?
A. Having too many suppliers
B. A lack of business ethics
C. A lack of strategic-management knowledge
D. An excess of employees and managerial staff
E. A lack of experience in networking
Topic: Strategic Management in Small Firms

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Chapter 5: Strategies in Action

71) Financial objectives involve all of the following except:

84) Backward integration is effective in all of these except

86) In which situation would horizontal integration be an especially effective strategy?

88) When a domestic company first begins to export to India, it is an example of

100) Which chapter of the bankruptcy code applies to municipalities?

103) Retrenchment would be an effective strategy when an organization

104) Which term refers to selling a division of an organization?

111) Under which condition would a differentiation strategy be especially effective?

113) All of the following are cooperative arrangements except:

114) Which of the following is not a reason joint ventures fail?

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