b. False
ANSWER: False
75. A “harvest” strategy can also be conceptualized as a “retrenchment” strategy because the goal is to restructure and not grow.
a. True
b. False
ANSWER: True
76. Emergent strategy is the plan that changes incrementally due to environmental changes.
a. True
b. False
ANSWER: True
77. An acquisition is seen as two organizations joining to gain economies of scale, whereas a merger occurs when one company acquires another.
a. True
b. False
ANSWER: False
78. Dynamic capabilities are the abilities of an organization to adapt and renew its competencies in accordance with a changing business environment.
a. True
b. False
ANSWER: True
79. Competitive advantage of an organization includes the characteristics that enable it to earn higher rates of interest on its investments than its competitors.
a. True
b. False
ANSWER: False
80. Opportunities and threats are environmental conditions external to the firm that have limited benefit and are harmful to the organization.
a. True
b. False
ANSWER: False
81. “Core competencies” refers to the integrated knowledge sets within an organization that distinguish it from its competitors and deliver value to customers.
a. True
b. False
ANSWER: True
82. SWOT analysis refers to the systematic and regular monitoring of environmental factors influencing the organization.
a. True
b. False
ANSWER: True
83. Establishing the mission, vision, and values is the first step in strategic planning.
a. True
b. False
ANSWER: True
84. Examples of tangible assets are human capital, reputation, goodwill, trust, and copyright.
a. True
b. False
ANSWER: True
85. Business strategies are concerned with the long-term view of the organization.
a. True
b. False
ANSWER: False
86. A strategy is a planned process whereby organizations can map out a set of objectives and methods of meeting those objectives.
a. True
b. False
ANSWER: True
87. Corporate strategies focus on one line of business: building a strong competitive position.
a. True
b. False
ANSWER: False
88. What is a corporate strategy? Identify the three major corporate or organization-wide strategies outlined by the authors in your textbook and discussed in class and provide examples of each.
ANSWER: Corporate Strategies are focused on overall strategy for the company and its businesses or interests. These strategies are usually focused on long-term growth and survival goals.
There are three corporate strategy options:
∙ Restructuring (turnaround, divestiture, liquidation, bankruptcy)
∙ Growth (incremental growth, international growth, mergers and acquisitions)
∙ Stability (maintain the status quo)
89. Compare and contrast corporate and business strategy. What is the difference between the two?
ANSWER: Business strategy focuses on one line of business as opposed to the overall corporation. Business strategy involves building a strong competitive position as opposed to determining if this is the business to be in. Business strategy is an action plan for managing one line of business. Corporate strategy asks, “Should we be in business? What business should we be in?” Business strategy asks, “How should we compete? Should we compete by offering products at prices lower than those of the competition or by offering the best service?”
90. List the steps (from initial planning to end stages) in strategic planning.
ANSWER: ∙ Establish the mission, vision, and values
∙ Develop objectives
∙ Analyze the external environment
∙ Identify the competitive advantage
∙ Determine the competitive position
∙ Implement the strategy
∙ Evaluate the performance
91. What are some of the benefits of strategy formulation to organizations? Identify and briefly describe five benefits.