mgt - chapter 6

Question 1

often referred to as strategic planning or long-range planning, is concerned with developing a corporation’s mission, objectives, strategies, and policies

Answer 1

STRATEGY FORMULATION

Question 2

the process of finding a strategic fit between external opportunities and internal strengths while working around external threats and internal weaknesses

Answer 2

SITUATION ANALYSIS

Question 3

summarizes an organization’s strategic factors by combining the external factors from the EFAS Table with the
internal factors from the IFAS Table

Answer 3

SFAS (STRATEGIC FACTORS ANALYSIS
SUMMARY) MATRIX

Question 4

an extremely favorable niche that is so well suited to the firm’s internal and external environment that other corporations are not likely to challenge or dislodge it

Answer 4

PROPITIOUS NICHE

Question 5

illustrates how the external opportunities and threats facing a particular corporation can be matched with that company’s internal strengths and weaknesses to result in four sets of possible strategic alternatives.

Answer 5

TOWS MATRIX - (TOWS is just another way of
saying SWOT)

Question 6

are generated by thinking of ways in which a company or business unit could use its strengths to take advantage of opportunities

Answer 6

SO STRATEGIES

Question 7

consider a company’s or unit’s strengths as a way to avoid threats

Answer 7

ST STRATEGIES

Question 8

attempt to take advantage of
opportunities by overcoming weaknesses

Answer 8

WO STRATEGIES

Question 9

are basically defensive and primarily act to minimize weaknesses and avoid threats

Answer 9

WT STRATEGIES

Question 10

focuses on improving the competitive position of a company’s or business unit’s products or services within the specific industry or market segment that the company or business unit serves

Answer 10

BUSINESS STRATEGY

Question 11

is the ability of a company or a business unit to design, produce, and market a comparable product more efficiently than its competitors

Answer 11

LOWER COST STRATEGY

Question 12

is the ability of a company to provide unique and superior value to the buyer in terms of product quality, special features, or after-sale service

Answer 12

DIFFERENTIATION STRATEGY

Question 13

that is, the breadth of the
company’s or business unit’s target market.

Answer 13

COMPETITIVE SCOPE

Question 14

is a lower-cost competitive strategy that aims at the broad mass market and requires aggressive construction of efficient-scale facilities, vigorous pursuit of cost reductions from experience, tight cost and overhead control, avoidance of marginal customer accounts, and cost minimization in areas like R&D, service, sales force, advertising, and so on.

Answer 14

COST LEADERSHIP

Question 15

is aimed at the broad mass market and involves the creation of a product or service that is perceived throughout its industry as unique

Answer 15

DIFFERENTIATION

Question 16

is a low-cost competitive strategy that focuses on a particular buyer group or geographic market and attempts to serve only this niche, to the exclusion of others.

Answer 16

COST FOCUS

Question 17

like cost focus, concentrates on a particular buyer group, product line segment, or geographic market

Answer 17

DIFFERENTIATION FOCUS

Question 18

where many small and medium-sized local companies compete for relatively small shares of the total market, focus strategies will likely predominate. Fragmented industries are typical for products in the early stages of their life cycles

Answer 18

FRAGMENTED INDUSTRY

Question 19

dominated by a
few large companies.

Answer 19

CONSOLIDATED INDUSTRY

Question 20

was developed in the mid 1990s as an efficient way to quickly consolidate a fragmented industry

Answer 20

STRATEGIC ROLLUP

Question 21

is a specific operating plan that details how a strategy is to be implemented in terms of when and where it is to be put into action.

Answer 21

TACTIC

Question 22

deals with when a company
implements a strategy

Answer 22

TIMING TACTIC

Question 23

first company to manufacture and
sell a new product or service

Answer 23

FIRST MOVER

Question 24

may be able to imitate the technological advances of others (and thus keep R&D costs low), keep risks down by waiting until a new technological standard or market is established, and take advantage of the first mover’s natural inclination to ignore market segments

Answer 24

LATE MOVERS

Question 25

deals with where a company implements a strategy

Answer 25

MARKET LOCATION TACTIC

Question 26

usually takes place in an established competitor’s market location.

Answer 26

OFFENSIVE TACTIC

Question 27

usually takes place in the firm’s own current market position as a defense against possible attack by a rival.

Answer 27

DEFFENSIVE TACTIC

Question 28

aim to lower the probability of attack, divert attacks to less threatening avenues, or lessen the intensity of an attack

Answer 28

DEFFENSIVE TACTIC

Question 29

The attacking firm goes head to head with its competitor. It matches the competitor in every category from price to promotion to distribution channel

Answer 29

FRONTAL ASSAULT

Question 30

Rather than going straight for a competitor’s position of strength with a frontal assault, a firm may attack a part of the market where the competitor is weak.

Answer 30

FLANKING MANEUVER

Question 31

Rather than directly attacking the established competitor frontally or on its flanks, a company or business unit may choose to change the rules of the game.

Answer 31

BYPASS ATTACK

Question 32

Usually evolving out of a frontal assault or flanking maneuver, encirclement occurs as an attacking company or unit encircles them competitor’s position in terms of products or markets or both

Answer 32

ENCIRCLEMENT

Question 33

Instead of a continual and extensive resource-expensive attack on a competitor, a firm or business unit may choose to "hit and run"

Answer 33

GUERILLA WARFARE

Question 34

This tactic is any action that increases the perceived threat of retaliation for an attack

Answer 34

INCREASED EXPECTED RETALIATION

Question 35

A company can also used to gain competitive advantage within an industry by working with other firms.

Answer 35

COOPERATIVE STRATEGIES

Question 36

is the active cooperation of firms within an industry to reduce output and raise prices in order to get around the normal economic law of supply and demand

Answer 36

COLLUSION

Question 37

in which case firms cooperate through direct communication and negotiation, or tacit, in which case firms cooperate indirectly through an informal system of signals.

Answer 37

EXPLICIT COLLUSION

Question 38

in which case there is no direct communication among competing firms.

Answer 38

TACIT COLLUSION

Question 39

is a long-term cooperative arrangement between two or more independent firms or business units that engage in business activities for mutual economic gain.

Answer 39

STRATEGIC ALLIANCE

Question 40

is a partnership of similar companies in similar industries that pool their resources to gain a benefit that is too expensive to develop alone, such as access to advanced technology.

Answer 40

MUTUAL SERVICE CONSORTIUM

Question 41

the most popular form of strategic alliance

Answer 41

JOINT VENTURE

Question 42

is a "cooperative business activity, formed by two or more separate organizations for strategic purposes, that creates an independent business entity and allocates ownership, operational responsibilities, and financial risks and rewards to each member, while preserving their separate identity/autonomy

Answer 42

JOINT VENTURE

Question 43

is an agreement in which the licensing firm grants rights to another firm in another country or market to produce and/or sell a product

Answer 43

LICENSING ARRANGEMENT

Question 44

is a strong and close alliance in which one company or unit forms a long-term arrangement with a key supplier or distributor for mutual advantage.

Answer 44

VALUE CHAIN PARTNERSHIP