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2. A strategic group is a task force within a company that analyzes the company's own weaknesses to determine how
competitors could exploit them for competitive advantage.
a. True
b. False
ANSWER: False
3. A competitive advantage becomes a sustainable competitive advantage when other companies start duplicating the
value a firm is providing to customers.
a. True
b. False
ANSWER: False
4. Growth, stability, and retrenchment are all types of portfolio strategiesthat companies use to decide which businesses
they should be in.
a. True
b. False
ANSWER: False
5. Focus strategies typically work in saturated markets that competitors have large market shares or have complete
monopoly in.
a. True
b. False
ANSWER: False
6. The threat of new entrants is a measure of the degree to which barriers to entry make it easy or difficult for new
companies to get started in an industry.
a. True
b. False
ANSWER: True
7. Imperfectly imitable resources are those resources that are impossible or extremely costly or difficult to duplicate.
a. True
b. False
ANSWER: True
8. Rare resources are resources that are not controlled or possessed by many competing firms and are necessary to sustain
a competitive advantage.
a. True
b. False
ANSWER: True
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9. Strategic reference points are the less visible, internal decision-making routines, problem-solving processes, and
organizational cultures that determine how efficiently inputs can be turned into outputs.
a. True
b. False
ANSWER: False
10. According to portfolio strategy, the more businesses in which a corporation competes, the larger its overall chances of
failing.
a. True
b. False
ANSWER: False
11. Sanfase, a technology company in Rockbourne, manufactures microprocessors for computers. Its product is a lot more
powerful than its competitors. This scenario is an example of competitive inertia.
a. True
b. False
ANSWER: False
12. BlinkDream has four strategic business units (SBUs)—accommodation, insurance, music, and publishing. Its
publishing unit has always made large profits and holds a large market share in its slow-growing market. In the context of
the BCG matrix, which of the following categories of SBUs best describes the publishing unit?
a. Stars
b. Cash cows
c. Question marks
d. Dogs
ANSWER: b
13. In the context of portfolio strategy, _____ is the purchase of a company by another company.
a. divestiture
b. demerger
c. acquisition
d. restructuring
ANSWER: c
14. Ian Auto manufactures agricultural equipment. Its agricultural equipment is very popular in countries that have
majority of their income coming from agricultural products. In the context of industry-level strategy, Ian Auto is most
likely using a(n) _____.
a. diversification strategy
b. focus strategy
c. divestment strategy
d. adaptive strategy
ANSWER: b
15. FreeSpirit is a global consumer products company. It manufactures a number of new products ranging from personal
care to food and beverages. Its products are sold all across the world, and it continuously keeps searching for new markets
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16. Hankson Corp. has five strategic business units (SBUs)—information technology, insurance, publishing, fine arts, and
tourism. It invests the majority of its funds in the information technology unit as the unit has a large market share and
generates large amounts of its profits in a fast-growing market. In the context of the BCG matrix, which of the following
categories of SBUs best describes the information technology unit?
a. Stars
b. Cash cows
c. Question marks
d. Dogs
ANSWER: a
17. Bennyson Corp. has five strategic business units (SBUs)—information technology, construction, education, consumer
products, and energy. Its energy unit has a large market share in the industry and generates the majority of its profits.
Bennyson is also considering investing more funds into the unit as the industry has been rapidly growing. In the context of
the BCG matrix, which of the following categories of SBUs best describes the energy unit?
a. Stars
b. Cash cows
c. Question marks
d. Dogs
ANSWER: a
18. TagWear, a company that manufactures shoes, offers customized lightweight and durable shoes in different colors and
sizes to compete with its rival company's shoes. In this scenario, which of the following strategies is TagWear using to
reduce its rival's market share?
a. A response strategy
b. An attack strategy
c. A recovery strategy
d. An acquisition strategy
ANSWER: b
19. TinkTV, PopoNet, and Kreti Broadcast are merging together to form a large television network called Tale Broadcast.
This was done in an attempt to increase profitability by combining the customers and services owned by the three
companies. Which of the following grand strategies does the given scenario best exemplify?
a. The stability strategy
b. The retrenchment strategy
c. The growth strategy
d. The acquisition strategy
ANSWER: c
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20. Stenikson has three strategic business units (SBUs)—video games, fashion, and electronics. The company is planning
to invest more money into its video games unit because it is a fast-growing market, even though the company has a very
small share in the market. In the context of the BCG matrix, which of the following categories of SBUs best describes the
video games unit?
a. Stars
b. Cash cows
c. Question marks
d. Dogs
ANSWER: c
21. Andersen Major has five strategic business units (SBUs)—technology, fashion, food and beverage, consumer
products, and electronics. Its food and beverage unit has a small share in a rapidly growing sector, and the company
believes that investing more money into the unit could lead to large profits in the future. In the context of the BCG matrix,
which of the following categories of SBUs best describes the food and beverage unit?
a. Stars
b. Cash cows
c. Question marks
d. Dogs
ANSWER: c
22. Cajemp Inc. is a real estate developer that has been in the market for several years. Most real estate developers are
now constructing their projects using concrete blocks as they are more durable and easier to lay out when compared to
traditional brick and mortar. Cajemp, however, has been reluctant to use concrete blocks because its brick and mortar
houses have been selling well so far. They will continue to sell the same even if new competitors and better products enter
the market. Which of the following concepts is illustrated in this scenario?
a. Strategic dissonance
b. Competitive inertia
c. Competitive advantage
d. Strategic alliance
ANSWER: b
23. Masceo, an oil and gas company, suffered major losses due to damaged oil pipelines. In an attempt to cover its costs, it
laid off several employees and closed down three of its refineries. Which of the following grand strategies was used by
Masceo in this scenario?
a. The stability strategy
b. The growth strategy
c. The retrenchment strategy
d. The acquisition strategy
ANSWER: c
24. _____ is a measure of the intensity of competitive behavior among companies in an industry.
a. Bargaining power of firms
b. Character of the rivalry
c. Threat of new entrants
d. Threat of substitute products
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ANSWER: b
25. In the context of the BCG matrix, which of the following businesses would be classified as a question mark?
a. PrimeSmart, a smartphone manufacturer that is the market leader in a rapidly growing industry
b. RainTech, an electronics company that is struggling for market share in a fast-growing industry
c. HappyTot, a children's toy company that has been earning steady profits in a slow-growing industry
d. RigsWheels, a tire manufacturer that has negligible market share in a slow-growing industry
ANSWER: b
27. Kensei Corp. has three strategic business units (SBUs)—pharmaceutical, publishing, and consulting. Its
pharmaceutical unit is relatively new in the sector and does not have a large market share. The pharmaceutical sector is a
fast-growing sector, and companies with a large market share in the sector have been earning large profits. In the context
of the BCG matrix, which of the following categories of SBUs best describes the pharmaceutical unit?
a. Stars
b. Cash cows
c. Question marks
d. Dogs
ANSWER: c
28. Operop Inc., a technology company in Brookeep, manufactures digital cameras. Its cameras have the highest pixel
density, multiple zoom options, and a variety of picture effects that none of its competitors can match up to. This ability of
producing superior quality cameras is the company's _____.
a. strategic reference point
b. strategic alternative
c. distinctive competence
d. competitive resonance
ANSWER: c
29. Jake Lamps manufactures lamps, lights, shades, and bulbs. Its lighting lasts long and saves power, and it is superior in
quality when compared to all its competitors. Its products are being sold at the lowest price in the market. In the context of
industry-level strategy, the company is most likely using a(n) _____.
a. cost leadership strategy
b. focus strategy
c. divestment strategy
d. adaptive strategy
ANSWER: a
30. In the context of direct competition,__________is defined as the degree to which two companies have overlapping
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31. _____ is a competitive advantage that other companies have tried unsuccessfully to duplicate and have, for the
moment, stopped trying to duplicate.
a. Sustainable competitive advantage
b. Comparative advantage
c. Revealed competitive advantage
d. Core competency advantage
ANSWER: a
32. Brenden Corp. has five strategic business units (SBUs)—telecommunication, trucking, electronics, energy, and oil
exploration. The telecommunication unit has slowed down in terms of growth and is now dominated mainly by a few
large companies. Brenden Corp. has a low market share in the industry and does not generate enough revenue to even
cover its costs. In the context of the BCG matrix, which of the following categories of SBUs best describes the
telecommunication unit?
a. Stars
b. Cash cows
c. Question marks
d. Dogs
ANSWER: d
33. Klivinich is a manufacturer of oral hygiene products. In addition to manufacturing and selling oral hygiene products,
Klivinich also focuses on educating its customers on oral hygiene and dental problems. All its employees are trained to
answer questions and help customers with oral hygiene and dental problems. This has helped Klivinich _____.
a. produce low-cost products
b. procure rare resources
c. achieve a competitive advantage
d. form a strategic alliance
ANSWER: c
34. DramPharma is a company that manufactures and sells medicine to treat Huntington's disease, a rare genetic disorder.
The company controls 80 percent of the world's industry in its segment. The company aims to seek steady growth in the
industry. In terms of adaptive strategies, DramPharma would most likely be categorized as a(n) _____.
a. reactor
b. defender
c. analyzer
d. prospector
ANSWER: b
35. Smarty Tots manufactures children's clothing and prices them at twice the price of other children's clothing brands.
36. Winston Corp. manufactures and sells toy cars. These toy cars are perfect imitational miniature versions of real cars.
Inspired by the success of Winston Corp., Neil Danon, a plastic ware manufacturer in Orowella also started manufacturing
toy cars. Which of the following adaptive strategies is used by Neil Danon?
a. Defenders adaptive strategy
b. Prospectors adaptive strategy
c. Analyzers adaptive strategy
d. Reactors adaptive strategy
ANSWER: c
37. __________is a measure of the intensity of competitive behavior among companies in an industry.
a. The threat of new entrants
b. Character of the rivalry
c. The threat of substitute products or services
d. Bargaining power of suppliers
ANSWER: b
39. In the context of the BCG matrix, which of the following businesses would be classified as a star?
a. PrimeSmart, a smartphone manufacturer that is the market leader in a rapidly growing industry
b. RainTech, an electronics company that is struggling for market share in a fast-growing industry
c. HappyTot, a children's toy company that has been earning steady profits in a slow-growing industry
d. RigsWheels, a tire manufacturer that has negligible market share in a slow-growing industry
ANSWER: a
40. In the context of the BCG matrix, which of the following businesses would be classified as a dog?
a. Ultimo Phone, a smartphone manufacturer that is the market leader in a rapidly growing industry
b. Brain Cash, a finance company that is struggling for market share in a fast-growing industry
c. Cleep Sweep, a detergent company that has been earning steady profits in a slow-growing industry
d. Bigs Steel, a metal manufacturer that has negligible market share in a slow-growing industry
ANSWER: d
41. Break Technologies has five strategic business units (SBUs)—computers, refrigerators, washing machines, air
conditioners, and televisions. Its computers unit is quite profitable in spite of operating in a slow-growing market, and it is
profitable enough to provide funds for the operation of the other business units as well. In the context of the BCG matrix,
which of the following categories of SBUs best describes the computers unit?
a. Stars
b. Cash cows
c. Question marks
d. Dogs
ANSWER: b
42. Zinfizz is a beverage manufacturer. It presents WYB, a zero-calorie drink to compete with MoodFresh's Shire, a low-
calorie drink. When WYB is released in the market, MoodFresh cuts down the price on Shire to match WYB's price.
Identify the strategic move that is most likely being implemented by MoodFresh in this scenario.
a. Rejoinder
b. Attack
c. Recovery
d. Acquisition
ANSWER: b
43. Jen&Durand has three strategic business units (SBUs)—entertainment and recreation, food and beverage, and apparel
and accessories. Its apparel & accessories unit is extremely successful and has been in the market for many years, and it
has acquired a large market share in its time. The market growth of the apparel & accessories sector has saturated, and
new companies are reluctant to enter it. In the context of the BCG matrix, which of the following categories of SBUs best
describes the computers unit?
a. Stars
b. Cash cows
c. Question marks
d. Dogs
ANSWER: b
44. __________are companies using an adaptive strategy that seeks to minimize risk and maximize profits by following
or imitating the proven successes of prospectors.
a. Defenders
b. Analyzers
c. Prospectors
d. Reactors;
ANSWER: b
d. It is a corporate-level strategy that minimizes risk by diversifying investment among various businesses or
product lines.
ANSWER: a
46. SkyScape, a company that manufactures computer processors, launched a new product called ChipOne. This launch
was a countermove against another product launched by GreenChip, SkyScape's competitor. Which of the following
strategies was used by SkyScape to defend its market share?
a. A response strategy
b. An amalgamation strategy
c. A recovery strategy
d. An acquisition strategy
ANSWER: a
47. Cardwire Inc. has decided to lower the price of all its products to keep up with its competitors. To achieve this, the
company needed to lower its overall costs. However, the procurement department at Cardwire has been spending twice its
allotted budget to buy raw materials. Which of the following best illustrates the situation at Cardwire?
a. Competitive inertia
b. Job deskilling
c. Strategic dissonance
d. Price fixing
ANSWER: c
48. JDB Cars has launched a new range of premium cars in Lakamba. The citizens of Lakamba are extremely wealthy and
often spend a lot of their earnings on premium cars and houses. In this scenario, the company is most likely using a(n)
_____.
a. diversification strategy
b. focus strategy
c. divestment strategy
d. adaptive strategy
ANSWER: b
52. Heeleo Inc. is a television manufacturer that has been in the market for several years. Most television companies are
now manufacturing LED and smart televisions as they provide more utility and a better viewing experience when
compared to direct view televisions. Heeleo, however, has been reluctant to adopt new strategies because it thinks that its
direct view televisions were selling well when it first started and will continue to sell the same way even if new
competitors and better products enter the market. Which of the following concepts is illustrated in this scenario?
a. Strategic dissonance
b. Competitive inertia
c. Competitive advantage
d. Strategic alliance
ANSWER: b
53. Organizations can achieve a competitive advantage by using their resources to:
a. create strategies that are simultaneously being implemented by competitors.
b. duplicate the value a competitor firm provides to its customers.
c. provide greater value for customers than competitors can.
d. foster competitive inertia.
ANSWER: c
54. __________is a strategy for reducing risk by buying a variety of items so that the failure of one stock or one business
does not doom the entire portfolio.
a. Restructuring
b. Diversification
c. Retrenchment
d. Exit planning
ANSWER: b
55. Which of the following can help managers improve the speed and accuracy with which they determine the need for
strategic change?
a. Fostering competitive inertia
b. Promoting strategic alliances with leading firms
c. Looking for signs of strategic dissonance
d. Limiting design iterations
ANSWER: c
56. FasterRides Inc. has introduced a new bike in the market. Majority of its profits come from the sale of bikes. The
company is recognized worldwide for its ability to design and produce bikes with superior handling, smooth transmission,
57. JoeChoe and SanPants are two popular clothing companies. Whenever JoeChoe launches a new range of clothing,
SanPants also launches something similar, and vice versa. This ensures that neither company gets a massive lead over the
other in terms of market share. Which of the following strategies is being used by JoeChoe and SanPants in this scenario?
a. A response strategy
b. An amalgamation strategy
c. A recovery strategy
d. An acquisition strategy
ANSWER: a
58. In the context of direct competition between firms _____ largely affects response capability, that is, how quickly and
forcefully a company can respond to an attack.
a. diversification
b. cost leadership
c. differentiation
d. resource similarity
ANSWER: d
59. Renee Farm grows genetically modified fruits and vegetables by using nutrient enriched soil and chemically enhanced
fertilizers. Its products are extremely popular among health conscious individuals who believe that natural fruits and
vegetables do not have adequate amount of nutrients. Renee Farm's products are popular even though their market is very
niche. In the context of industry-level strategy, Renee Farm is most likely using a(n) _____.
a. diversification strategy
b. focus strategy
c. divestment strategy
d. adaptive strategy
ANSWER: b
60. __________is creating or acquiring companies that share similar products, manufacturing, marketing, technology, or
cultures.
a. Product positioning
b. Retrenchment
c. Market targeting
d. Related diversification
ANSWER: d
production costs than competitors can so that a firm can offer the product or service at the lowest price in the
industry.
b. It is the positioning strategy of providing a product or service that is sufficiently different from competitors'
offerings that customers are willing to pay a premium price for it.
c. It is the positioning strategy to produce a specialized product or service for a limited, specially targeted group
of customers in a particular geographic region or market segment.
d. It is the positioning strategy to grow brand performance by reacting to changes in the external environment
after they occur instead of following a consistent adaptive strategy.
ANSWER: a
62. Jameson&Dawson has four strategic business units (SBUs)—agriculture, auto, advertising, and accommodations. The
agriculture industry is a rapidly growing industry, and Jameson&Dawson's SBU holds majority of the market share in the
industry. Hence, the company earns large profits from its agriculture unit and invests majority of its funds in it. In the
context of the BCG matrix, which of the following categories of SBUs best describes the agriculture unit?
a. Stars
b. Cash cows
c. Question marks
d. Dogs
ANSWER: a
63. PeoplePapers, a greeting cards manufacturing company, has retail stores in most parts of the country. It hires its
employees from the best universities around the world and uses the best equipment in its manufacturing processes. In this
scenario, the organization's processes, its employees, and its equipment are examples of its:
a. reserves.
b. resources.
c. variable costs.
d. overheads.
ANSWER: b
64. BoundStar and ClipKlik are two of the biggest companies in the smartphone industry. When BoundStar launched a
new ultra-slim smart phone, ClipKlik also shortly launched a super-sleek smartphone. Phones launched by both the
companies are similar in quality and build. ClipKlik will be able to remain competitive in the market though BoundStar
launched its phone before ClipKlik. Which of the following strategies was used by ClipKlik to defend its market share?
a. A response strategy
b. An amalgamation strategy
c. A recovery strategy
d. An acquisition strategy
ANSWER: a
67. A(n) _____ is a countermove, prompted by a rival's attack, that is designed to defend or improve a company's market
share or profit.
a. response
b. attack
c. recovery
d. acquisition
ANSWER: a
68. Spade and Marcher Corp. manufactures and sells toy guns. These toy guns are a perfect imitation of real weapons.
Inspired by Spade and Marcher's success, Hudy & Sons, an arms manufacturer in Korowlla, starts to manufacture toy
guns too. Which of the following adaptive strategies is used by Hudy & Sons?
a. Defenders
b. Prospectors
c. Analyzers
d. Reactors
ANSWER: c
69. Tots County manufactures clothing and apparel exclusively for children in the age group of one to six years. In this
scenario, the company is most likely using a(n) _____.
a. diversification strategy
b. focus strategy
c. divestment strategy
d. adaptive strategy
ANSWER: b
70. In the context of Porter's five industry forces, the threat of new entrants can be defined as
a. a measure of the degree to which barriers to entry make it easy or difficult for new companies to get started in
an industry.
b. a measure of the intensity of competitive behavior among companies in an industry.
c. a measure of the ease with which customers can find substitutes for an industry's products or services.
d. a measure of the influence that customers have on the firm's prices.
ANSWER: a
71. Brenden Industries has five strategic business units (SBUs)—petroleum extraction, groceries, jewelry,
telecommunication, and oil clothing. The petroleum extraction unit is costing the company a huge amount of money. It
72. Serrano, a clothing and apparel company, suffered major losses when one of its warehouses was destroyed in a fire
mishap. In an attempt to make up for these losses, it had to sell one of its product lines to a rival company. Which of the
following grand strategies was used by Serrano in this scenario?
a. The stability strategy
b. The growth strategy
c. The retrenchment strategy
d. The acquisition strategy
ANSWER: c
73. SweetCream is an ice cream manufacturer. It sells Guilt-Free, a zero-calorie ice cream, which competes with
FlavorBell's MooSweet, a low-calorie ice cream. FlavorBell reduces MooSweet's prices to match Guilt-Free's prices.
Identify the strategic move that is most likely being implemented by FlavorBell in this scenario.
a. Rejoinder
b. Attack
c. Recovery
d. Acquisition
ANSWER: b
74. A__________is the positioning strategy of using cost leadership or differentiation to produce a specialized product or
service for a limited, specially targeted group of customers in a particular geographic region or market segment.
a. focus strategy
b. retrenchment strategy
c. growth strategy
d. portfolio strategy
ANSWER: a
75. Bob's Assembly is a hardware manufacturer. It specializes in builders' hardware for doors, cabinets, windows, and
bathrooms. Bob's Assembly products are economical and more durable than 95% of its competitors' products. This
scenario illustrates the concept of _____.
a. core capability
b. distinctive competence
c. competitive inertia
d. strategic dissonance
ANSWER: b
76. Maymart Inc. sells its products at the lowest prices in the industry, and it believes that this is the best way to stay
77. __________refers to the strategic actions taken after retrenchment to return to a growth strategy.
a. Acquisition
b. Stability
c. Recovery
d. Normalization
ANSWER: c
78. Keplem has a business unit in the insurance sector. The insurance sector is a slow-growing industry, and Keplem does
not have a large market share in the industry. In the context of the BCG matrix, which of the following categories of
SBUs best describes Keplem's business unit?
a. Stars
b. Cash cows
c. Question marks
d. Dogs
ANSWER: d
80. Which of the following best defines cash cows in the BCG matrix?
a. They are the companies that have a large share of a fast-growing market.
b. They are the companies that have a small share of a fast-growing market.
c. They are the companies that have a large share of a slow-growing market.
d. They are the companies that have a small share of a slow-growing market.
ANSWER: c
81. Brickwall Builders is a real estate builder and developer. It specializes in building premium villas, office spaces,
warehouses, and retail stores. Buildings of Brickwall Builders are economical, have a high resale value, and are available
at very low down payment when compared to its competitors' buildings. This scenario illustrates the concept of _____.
a. core capability
b. distinctive competence
c. competitive inertia
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d. strategic dissonance
ANSWER: b
82. Which of the following conditions must be met if a firm's resources are to be used to achieve a sustainable competitive
advantage?
a. The resources must be low-cost and commutable.
b. The resources must be controlled by other competing firms.
c. The resources must be perfectly imitable.
d. The resources must be valuable, rare, and nonsubstitutable.
ANSWER: d
84. Arboral Inc., an auto manufacturing company, has been extremely successful in its home country. In an attempt to
increase its profitability, it has opened up new manufacturing plants and showrooms in three more countries. Which of the
following grand strategies was used by Arboral in this scenario?
a. The stability strategy
b. The retrenchment strategy
c. The growth strategy
d. The acquisition strategy
ANSWER: c
87. In the context of direct competition between firms, _____ affects the likelihood of an attack or a response to an attack.
a. diversification
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b. cost leadership
c. differentiation
d. market commonality
ANSWER: d
88. __________is one of the grand strategies that focuses on increasing profits, revenues, market share, or the number of
places in which a company does business.
a. Retrenchment strategy
b. Stability strategy
c. Recovery strategy
d. Growth strategy
ANSWER: d
89. SmartHand, a company that manufactures wrist watches, has started manufacturing and selling sunglasses in the
American market. The products turn out to be a huge success. Inspired by SmartHand's success, Jeremy & Daniel,
manufacturers of wrist watches in Europe, start selling sunglasses in the European market. In the context of adaptive
strategies, Jeremy & Daniel would most likely be categorized as a(n) _____.
a. defender
b. prospector
c. analyzer
d. reactor
ANSWER: c
90. Ren's Cakes, a bakery, is extremely successful and is always full of customers in the location it is currently set up in. It
wants to increase its profitability, and it believes that opening up more bakeries in the country will be the best way to go
about it. Which of the following grand strategies is Ren's Cakes planning to use in this scenario?
a. The stability strategy
b. The retrenchment strategy
c. The growth strategy
d. The acquisition strategy
ANSWER: c
91. Prime Loader has three strategic business units (SBUs)—railway lines, banking, and coal mining. Because of a small
market share, the company is not earning a profit in the banking sector, even though the banking sector is a fast-growing
market. In the context of the BCG matrix, which of the following categories of SBUs best describes the banking unit?
a. Stars
b. Cash cows
c. Question marks
d. Dogs
ANSWER: c
92. According to the BCG matrix,__________are companies that have a small share of a fast-growing market.
a. question marks
b. cash cows
c. stars
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d. dogs
ANSWER: a
93. __________are used by managers to measure whether their firm has developed the core competencies that it needs to
achieve a sustainable competitive advantage.
a. Strategic reference points
b. Corporate-level strategies
c. Distinctive competencies
d. Core capabilities
ANSWER: a
94. Jem Dons has three strategic business units (SBUs)—smartphones, healthcare, and accounting. Its smartphone unit is
its most profitable unit and is the current market leader in the rapidly growing industry. In the context of the BCG matrix,
which of the following categories of SBUs best describes the smartphones unit?
a. Stars
b. Cash cows
c. Question marks
d. Dogs
ANSWER: a
95. Ziff Corp. was a leading electronics firm for about three decades. As new competitors entered the industry, Ziff Corp's
market share dropped. The managers at Ziff Corp. refuse to change any of their strategies, as they believe that their
existing strategies will help them become one of the market leaders as they did in the past. This scenario is an example of
_____.
a. distinctive competence
b. strategic dissonance
c. strategic uncertainty
d. competitive inertia
ANSWER: d
96. __________are companies using an adaptive strategy aimed at protecting strategic positions by seeking moderate,
steady growth and by offering a limited range of high-quality products and services to a well-defined set of customers.
a. Reactors
b. Prospectors
c. Defenders
d. Analyzers
ANSWER: c
97. In the context of the BCG matrix, which of the following businesses would be classified as a cash cow?
a. PrimeSmart, a smartphone manufacturer that is the market leader in a rapidly growing industry
b. Brain Cash, a finance company that is struggling for market share in a fast-growing industry
c. HappyTot, a children's toy company that has been earning steady profits in a slow-growing industry
d. Bigs Steel, a metal manufacturer that has negligible market share in a slow-growing industry
ANSWER: c
99. __________is the positioning strategy of providing a product or service that is sufficiently different from competitors'
offerings that customers are willing to pay a premium price for it.
a. Differentiation
b. Retrenchment
c. Commonality
d. Diversification
ANSWER: a
100. Chimera Inc., a chemical company, has been facing a loss in business. In an attempt to stop the declining
profitability, it removed petrochemical products from its product list and concentrated on specialty chemicals, a less
capital-intensive business. Which of the following grand strategies was used by Chimera in this scenario?
a. The stability strategy
b. The growth strategy
c. The retrenchment strategy
d. The acquisition strategy
ANSWER: c
101. Limeria Inc., an industrial paint manufacturing company, has been incurring losses. In an attempt to stop this, it
removed synthetic distempers from its product list and concentrated on enamel paints, a less capital-intensive business.
Which of the following grand strategies was used by Limeria in this scenario?
a. The stability strategy
b. The growth strategy
c. The retrenchment strategy
d. The acquisition strategy
ANSWER: c
102. In the context of adaptive strategies, which of the following is true of defenders?
a. They aggressively hold their current strategic position by doing the best job they can to hold on to customers
in a particular market segment.
b. They seek fast growth by searching for new market opportunities, encouraging risk taking, and being the first
to bring innovative new products to market.
c. They try to simultaneously minimize risk and maximize profits by following or imitating the proven successes
of prospectors.
d. They do not follow a consistent strategy and tend to react to changes in their external environment after they
occur.
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Name: Class: Date:
ANSWER: a
§ 5. Chaldæan Sculpture.