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You can read the details below. By accepting, you agree to the updated privacy policy. Thank you! View updated privacy policy We've encountered a problem, please try again. Strategic Management: Concepts and Cases, 13e (David) Strategic Management: Concepts and Cases, 13e (David) Chapter 6 Strategy Analysis and Choice 1) An organization's present strategies, objectives and mission provide a basis for generating and evaluating feasible alternative strategies, coupled with the external and internal audit information. Answer: TRUE 2) Alternative strategies don't come out of the blue; they are derived from the firm's vision, mission and objectives. Answer: TRUE 3) It is vital that strategists always consider all feasible alternatives that could benefit the firm. Answer: FALSE 4) The first stage of the strategy-formulation framework is the input stage, and it is directly followed by the decision stage. Answer: FALSE 5) Stage 2 in the strategy-formulation framework involves the Quantitative Strategic Planning Matrix. Answer: FALSE 6) The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix, the Strategic Position and Action Evaluation (SPACE) Matrix, the Boston Consulting Group (BCG) Matrix, the Internal-External (IE) Matrix and the Grand Strategy Matrix are included in stage two of the strategy-formulation framework. Answer: TRUE 7) Good intuitive judgment is always needed to determine appropriate weights and ratings in the input stage matrices. Answer: TRUE 8) When completing the matching stage of the strategy-formulation framework, the SWOT Matrix needs to be completed before the SPACE Matrix. Answer: FALSE 9) The purpose of matching key factors is to generate feasible alternative strategies. Answer: TRUE 10) Strengths-opportunities strategies are based on using a firm's internal strengths to take advantage of external opportunities and threats. Answer: FALSE 11) A SWOT Matrix is composed of four cells for the four types of strategies it creates. Answer: FALSE 12) One of the steps of the SWOT Matrix is to list the firm's key external opportunities. Answer: TRUE 13) The SWOT matrix is widely used as an organizational tool and, if used appropriately, does not have any limitations. Answer: FALSE 14) The most important determinants of an organization's overall strategic position are considered to be the two internal dimensions, financial position (FP) and competitive position (CP), and the two external dimensions, industry position (IP) and stability position (SP). Answer: TRUE 15) The four strategies of the SPACE Matrix are aggressive, conservative, offensive and defensive. Answer: FALSE 16) Market penetration can be classified as either a conservative, aggressive, or competitive strategy. Answer: TRUE 17) The SP and CP dimension variables in a SPACE Matrix are assigned a numerical value ranging from -1 (best) to -7 (worst). Answer: TRUE 18) Conservative strategies in a SPACE Matrix most often include product development, market development, market penetration and related diversification. Answer: TRUE 19) The firm should pursue conservative strategies if the coordinates of a SPACE directional vector are (1,+4). Answer: TRUE 20) A firm should pursue defensive strategies if the coordinates of a SPACE directional vector are (+2,+3). Answer: FALSE 21) The firm should pursue aggressive strategies if the coordinates of a SPACE directional vector are (+5,+4). Answer: TRUE 22) Relative market share position is given on the x-axis of the BCG Matrix. Answer: TRUE 23) The midpoint on the x-axis of a BCG Matrix is typically set at 0.05. Answer: FALSE 24) The size of the circle in a BCG Matrix corresponds to the proportion of corporate revenue generated by that business unit. Answer: TRUE 25) In a BCG Matrix the pie slice indicates the proportion of corporate profits generated by that division. Answer: TRUE 26) Stars, Question Marks, Cash Cows and Dogs are the four quadrants exhibited by the SPACE Matrix. Answer: TRUE 27) Cash Cows represent the organization's best long-run opportunities for growth and profitability. Answer: FALSE 28) The major overall benefit of the BCG Matrix is that it draws attention to the cash flow, investment characteristics and needs of an organization's various divisions. Answer: TRUE 29) Viewing every business as either a Star, Cash Cow, Dog or Question Mark is an oversimplification. Answer: TRUE 30) The BCG Matrix does not reflect whether or not various divisions or their industries are growing over time. Answer: TRUE 31) Having no temporal qualities, the BCG Matrix is a snapshot of an organization at a given point in time. Answer: TRUE 32) Both IE and BCG Matrices are called portfolio matrices. Answer: TRUE 33) The BCG Matrix requires more information about the divisions than the IE Matrix. Answer: FALSE 34) On the x-axis of the IE Matrix, an internal factor evaluation score of 2.5 represents a weak internal position. Answer: FALSE 35) The IE Matrix can be divided into three major regions that have different strategy implications: grow and build, hold and maintain, and harvest or divest. Answer: TRUE 36) The Grand Strategy Matrix is based on two evaluative dimensions, market share and market growth. Answer: FALSE 37) According to the Grand Strategy Matrix, when a Quadrant I firm is too heavily committed to a single product, then related diversification may reduce the risks associated with a narrow product line. Answer: TRUE 38) According to the Grand Strategy Matrix, Quadrant III organizations compete in rapid-growth industries and have weak competitive positions. Answer: FALSE 39) To objectively evaluate feasible alternative strategies identified in Stage 2, the QSPM uses input information derived from Stage 1. Answer: TRUE 40) Step 1 of a QSPM assigns weights to each key external and internal factor. Answer: FALSE 41) Total attractiveness scores are defined as the sum of the attractiveness scores in a given column of the QSPM and are computed in the second step of the QSPM. Answer: FALSE 42) A positive feature of QSPM is that sets of strategies can be examined sequentially or simultaneously. Answer: TRUE 43) One positive feature of QSPM is that it does not require intuitive judgments and educated assumptions. Answer: FALSE 44) Culture includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes and heroines that describe a firm. Answer: TRUE 45) Strategy changes may be highly effective and productive if a supportive culture does not exist. Answer: FALSE46) Whenever two firms merge, it becomes especially important to evaluate and consider culture-strategies linkages. Answer: TRUE 47) Successful strategists minimize their own political exposure on issues that are highly controversial and in circumstances where opposition from major power centers is likely. Answer: TRUE 48) The tactic of focusing on higher-order issues involves recognizing that it is often possible to achieve similar results using different means or paths. Answer: FALSE 49) Shifting focus from specific issues to more general ones may increase strategists' options for gaining organizational commitment. Answer: TRUE 50) The trend in the U.S. is toward larger boards, with an average of 18 members being the norm. Answer: FALSE 51) Today boards of directors are composed mostly of outsiders who are becoming more involved in an organization's strategic management. Answer: TRUE 52) The Sarbanes-Oxley Act put an end to the "country-club" atmosphere of most boards and has shifted power from CEOs to directors. Answer: TRUE 53) Strategy analysis and choice largely involves making ________ decisions based on ________ information. B) subjective; objective Answer: B 54) Which stage in the strategy-formulation framework focuses on generating feasible alternative strategies? E) Matching Answer: E 55) Which stage of the strategy-formulation framework involves the Quantitative Strategic Planning Matrix? C) Stage 3 Answer: C 56) Which strategy-formulation technique reveals the relative attractiveness of alternative strategies and thus provides an objective basis for selecting specific strategies? C) QSPM Answer: C 57) Each of the nine techniques included in the strategy formulation framework rely on the use of D) intuition and analysis. Answer: D 58) Which stage of the strategy-formulation framework includes an Internal-Factor Evaluation Matrix and a Competitive Profile Matrix? A) Input Answer: A 59) Which stage of the strategy-formulation framework contains the Internal-Factor Evaluation Matrix? A) Input stage Answer: A 60) The match an organization makes between its internal resources and skills and the opportunities and risks created by its external factors can be defined as C) strategy. Answer: C 61) Which section of the SWOT Matrix involves matching internal strengths with external opportunities?E) The SO cell Answer: E 62) Which strategies aim at improving internal weaknesses by taking advantage of external opportunities? B) WO Answer: B 63) Which strategies use a firm's strengths to avoid or reduce the impact of external threats? D) ST Answer: D 64) Which strategies are defensive tactics directed at reducing internal weaknesses and avoiding external threats? E) WT Answer: E 65) How many cells are in a SWOT Matrix? E) Nine Answer: E 66) Which of the following is not one of the steps involved in constructing a SWOT Matrix? D) List the firm's external weaknesses. Answer: D 67) Which of the following is a limitation associated with a SWOT Matrix? C) The matrix has no temporal qualities. Answer: C 68) Which of these is not a SPACE Matrix quadrant? D) Offensive Answer: D 69) What type of strategy would divestiture be classified as? B) Defensive Answer: B 70) The two internal dimensions represented on the axes of the SPACE Matrix are D) competitive position and financial position. Answer: D 71) What are the two external dimensions of the SPACE Matrix? A) Stability position and industry position Answer: A 72) The two positive-rated dimensions on the SPACE Matrix are C) FP and IP. Answer: C 73) What type of strategies would you recommend when a firm's SPACE Matrix directional vector has the coordinates (-2, +3)? B) Conservative Answer: B 74) In the SPACE analysis, what does a (+6, +3) strategy profile portray? A) A strong industry position Answer: A 75) The BCG Matrix is designed specifically to enhance which type of firm's efforts to formulate strategies? A) Companies with more than one division Answer: A 76) In the BCG Matrix, which element represents the industry growth rate in sales, measured in percentage terms? B) y-axis Answer: B77) How would a division with a low relative market share position in a high growth industry be described? A) Question Mark Answer: A 78) When a division of an organization has a high relative market share and is in a fast-growing industry, it is called a A) Star. Answer: A 79) A division with a high relative market share position in a low-growth industry can be described as a B) Cash Cow. Answer: B 80) Which strategy would be most appropriate for a division classified as a Dog? D) Retrenchment Answer: D 81) Forward integration would be an appropriate strategy for which of the following types of divisions? E) Star Answer: E 82) A division that has a low relative market share position and competes in a slow-growth industry is referred to as a A) Dog. Answer: A 83) All of the following are limitations of the BCG Matrix except: B) the Matrix requires at least three years worth of data. Answer: B 84) Which of the following analytical tools consists of a nine-cell matrix? E) Internal-External Matrix Answer: E 85) What analytical tool has four quadrants based on two dimensions: competitive position and market growth? D) Grand Strategy MatrixANSWER:D86) Firms located in which quadrant of the Grand Strategy Matrix are in an excellent strategic position? A) I Answer: A 87) According to the Grand Strategy Matrix, which strategy is recommended for a firm with rapid market growth and a strong competitive position? A) Market penetration Answer: A 88) For companies located in Quadrant III of the Grand Strategy Matrix, the first strategy recommended is A) extensive cost and asset reduction. Answer: A 89) Although Quadrant ________ companies are growing, according to the Grand Strategy Matrix they are unable to compete effectively, and they need to determine why the firm's current approach is ineffective and how the company can best change to improve its competitiveness. B) II Answer: B 90) According to the Grand Strategy Matrix, organizations in which quadrant have a strong competitive position but are in a slow-growth industry? D) IV Answer: D 91) Which matrix is included in the decision stage of the strategy formulation framework? B) Quantitative Strategic Planning Matrix Answer: B 92) The top row of a QSPM consists of alternative strategies derived from all of the following except: D) CPM Matrix Answer: D 93) Which analytical tool determines the relative attractiveness of various strategies based on the extent to which key external and internal critical success factors are capitalized? E) QSPM Answer: E 94) Which of the following is the first step in developing a QSPM? E) Make a list of the firm's key external opportunities/threats and internal strengths/weaknesses in the left column of the QSPM. Answer: E95) What term is defined as the product of multiplying the weights by the Attractiveness Scores in each row of the QSPM? A) Total Attractiveness Scores Answer: A 96) What is the highest number of strategies that can be examined at one time with the QSPM? E) There is no limit. Answer: E 97) Which of these is a limitation of QSPM? C) It requires intuitive judgments and educated guesses are required. Answer: C 98) What includes the set of shared values, beliefs, attitudes, customs, norms, personalities, heroes and heroines that describe a firm? B) Culture Answer: B 99) What tactic involves shifting focus from specific issues to more general ones? C) Generalization Answer: C 100) Which tactic emphasizes that a successful outcome is more important than imposing the method of achieving it? D) Equifinality Answer: D 101) The act of oversight and direction for an organization is referred to as E) governance. Answer: E 102) Today, boards of directors are composed mostly of A) outsiders. Answer: A 103) All of the following are principles of good organizational governance, as established by Business Week, except: D) at least two directors are current or former company executives. Answer: D PAGE 1Copyright 2011 Pearson Education, Inc. What type of strategies would you recommend when a firm's SPACE Matrix?SPACE Matrix:
Financial position and competitive position are internal dimensions and stability position and industry position are external quadrant. Aggressive, conservative, defensive, or competitive are four strategies suitable for four different quadrants.
What type of strategies would you recommend when a firm's SPACE matrix directional vector has the coordinates (A firm should pursue defensive strategies if the coordinates of a SPACE directional vector are (2,3). The firm should pursue aggressive strategies if the coordinates of a SPACE directional vector are (5,4). Relative market share position is given on the x-axis of the BCG Matrix.
What is the highest number of strategies that can be examined at one time with the QSPM group of answer choices 1 2 5 10 there is no limit?The answer is E) There is no limit. There is no limit to the number of strategies that can be examined at one time with the QSPM.
What are the differences of grand strategy quadrants?Generally, strategies listed in the first quadrant of Grand Strategy Matrix are intended to maintain a firm's competitive edge and boost rapid growth, while the other three quadrants represent appropriate actions to take to reach the best position, which is the first quadrant.
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The four strategies of the space matrix are aggressive, conservative, offensive and defensive.
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