MGT603 Quiz Dated Jul 01, 2010

Solved By vuZs Team
 
 
All of the following situations are conducive to market development EXCEPT: 
Select correct option:
 

When new untapped or unsaturated markets exist
When new channels of distribution are expensive
When an organization has excess production capacity
When an organization’s basic industry is becoming rapidly global
Ref:
Guidelines for Market Development
Six guidelines when market development may be an especially effective strategy are:
New channels of distribution that are reliable, inexpensive, and good quality
Firm is very successful at what it does
Untapped or unsaturated markets
Capital and human resources necessary to manage expanded operations
 
All of the specified approaches could be used to determine R&D budget allocation EXCEPT: 
Financing as many projects as possible
Using percentage-of-sales method
Budgeting irrelative to competitors
Deciding how many successful new products are needed
Ref:
Four approaches to determining R&D budget allocations commonly are used: 
(1)  Financing as many project proposals as possible, 
(2)  Using a percentage-of-sales method, 
(3)  Budgeting about the same amount that competitors spend for R&D, or 
(4)  Deciding how many successful new products are needed and working backward to estimate the required R&D investment.

Which statement is CORRECT about strategic-management process? 
It occurs once a year
It is a continuous process
It applies mostly to large business
It applies mostly to small businesses
Ref:
The strategic-management process is dynamic and continuous.
 
Internal analysis involves gathering and analyzing the information about all areas of a firm EXPECT: 
Research and development
Management information system
Marketing
Competitors
 
Establishing and implementing ways of making things work is known as: 
Planning
Organizing
Leading
Controlling

To whom a planning horizon of two to five years applies? 
Top management
Middle management
Lower management
All levels5
Ref: The time horizon for planning decreases from two to five years for top-level to less than six months for lower-level managers.
 
Which of the following is the benefit of strategic management? 
Fewer complexes 
More complex 
Less static
More profitable
Ref: Research indicates that organizations using strategic-management concepts are more profitable and successful than those that do not.
 
The analysis of industry’s major competitors’ strengths may give an insight of which one of these?
Select correct option:
Key threats for the firm
Key opportunities for the firm
Both opportunities and strengths for the firm
None of the given options
 
Identify the term that is known as a “mean of providing guidance to actions and procedures, including how resources are to be allocated and how tasks assigned to the organization might be accomplished”.
Select correct option:
Aspirations
Objectives
Policies
Goals
 
Which of these is the allocation and reallocation of capital and resources to projects, products, assets and divisions of an organization?
Select correct option:
Investment decision
Financing decisions
Restructuring decisions
Strategic decision
Ref: The  investment decision, also called capital budgeting, is the allocation and reallocation of capital and resources to projects, products, assets, and divisions of an organization.
 
A chance for advancement, progress or profit prevailing in external environment of a company is known as:
Select correct option:
Strength
Weakness
Opportunity
Threat
 
A firm should practice Joint Venture strategy in which of the following cases?
Select correct option:
When the SPACE matrix vector lies in defensive quadrant
When the SPACE matrix vector lies in aggressive quadrant
When the SPACE matrix vector lies in conservative quadrant
When the SPACE matrix vector lies in competitive quadrant
Ref: Quadrant-4  contains that company’s strong competitive situation and slow market growth. Quadrant IV firms also may pursue joint ventures
 
The social factors that affect a firm involve all of the following EXCEPT:
Select correct option:
Attitudes of people in the external environment
Lifestyles of people
Per capita income
Values and beliefs of persons outside the firm
Ref:Per capita income is an economic factor.
 
Which of the following is not a strategy-implementation activity?
Select correct option:
Long term goals and objectives
Developing strategy supportive culture
Redirecting marketing efforts
Developing and utilizing information system
Ref: Strategy implementation requires a firm to establish annual objectives, devise policies, motivating employees and allocate resources so that formulated strategies can be executed. Strategy implementation includes developing strategy supportive culture, creating an effective organizational structure, redirecting marketing efforts, preparing budgets, developing and utilizing information system and linking employee compensation to organizational performance.
 
Adding new but unrelated products or services for appealing present customers is known as:
Select correct option:
Forward integration
Backward integration
Conglomerate diversification
Horizontal diversification
Ref: Conglomerate Diversification 
Adding new, unrelated products or services is called  conglomerate diversification. Some firms pursue conglomerate diversification based in part on an expectation of profits from breaking up acquired firms and selling divisions piecemeal.
 
Financial ratios are helpful in analyzing the relationship among which of the following?
Select correct option:
All assets and liabilities
Profits and costs
All functional areas of business
Sales and profitability
Ref: Page no. 65
 
Which of the following is an example of Intensive strategies?
Select correct option:
Conglomerate strategy
Forward integration
Market penetration
Retrenchment
Ref: Intensive Strategies
Market penetration, market development, and product development are sometimes referred to as
intensive strategies because they require intensive efforts to improve a firm's competitive position with existing products.
 
Which one of the following dimensions is NOT a recommended component of a mission statement?
Select correct option:
Self-concept
Markets
Strategies
Customers
Ref:
1.  Customers: Who are the firm's customers?
2.  Products or services: What are the firm's major products or services?
3.  Markets: Geographically, where does the firm compete?
4.  Technology: Is the firm technologically current?
5.  Concern for survival, growth, and profitability: Is the firm committed to growth and financial soundness?
6.  Philosophy: What are the basic beliefs, values, aspirations, and ethical priorities of the firm?
7.  Self-concept: What is the firm's distinctive competence or major competitive advantage?
8.  Concern for public image: Is the firm responsive to social, community, and environmental concerns?
9.  Concern for employees: Are employees a valuable asset of the firm?
 
“A Good mission statement identifies the utility of a firm's products to its customers”; which of the following represents this statement?
Select correct option:
Organization’s philosophy
Customer orientation
Social policy
Declaration of attitude
Ref:
A Customer Orientation Good mission  statements identify the utility of a firm's products to its customers.
 
Strategic management integrates all of the following areas EXCEPT:
Select correct option:
Management
Marketing
Research and development
Human resource management
Ref: Strategic management – A route to success:
The study of strategic management integrates different  topics. Different courses are integrated due to the
study of this course so that businesses become successful in every sector. It integrates the following:
¾  Marketing 
¾  Management
¾  Finance
¾  Research and development
 
Which of the following are the five forces that affect the level of competition in an industry?
Select correct option:
Threat of entrants; power of buyers; power of suppliers; threat of substitutes; competitive rivalry
Threat of buyers; power of entry; power of substitutes; threat of suppliers; threat of recession
Threat of recession; power of buyers; power of suppliers; threat of management failure; competitive rivalry
Threat of entry; power of buyers; power of suppliers; threat of substitutes; government action
Ref: Five forces -- the bargaining power of customers, the bargaining power of suppliers, the threat of new entrants, and the threat of substitute products -- combine with other variables to influence a fifth force, the level of competition in an industry.
ABC firm is facing high production costs in Pakistan due to expensive raw material. The firm is formulating a strategy of capturing European market because of low priced raw material and high demand of their products in Europe. Keeping in view the mentioned situation which of the following strategies ABC firm must pursue? 
Select correct option: 

WO Strategy
SW Strategy
ST Strategy
WT Strategy
Principles of conduct that guide decision-making are known as: 
Select correct option: 

Human rights
Business ethics
The constitution
Social responsibility
Ref:
Business ethics can be defined as principles of conduct within organizations that guide decision making and behavior. 
 
What are the four dimensions of a SPACE matrix? 
Environmental stability; Industrial strength; Competitive advantage; Market growth rate
Environmental stability; Industrial strength; Competitive advantage; Financial strength
Industrial strength; Competitive advantage; financial strength; Market share
Environmental stability; Industrial strength; Market growth rate; Market share
Ref:
Page no. 100
What kind of strategy retrenchment is? 
Select correct option: 

A reorganization strategy
An expansion strategy
A diversification strategy
An integration strategy
Ref:
Retrenchment
Retrenchment occurs when an organization regroups through cost and asset reduction to reverse declining sales and profits. Sometimes called a turnaround or reorganization strategy, retrenchment is designed to fortify an organization's basic distinctive competence.
 
Which stage of the strategy-formulation framework focuses on generating feasible alternative strategies? 
Input
Output
Decision
Matching
Ref: Stage 2, called the  Matching Stage, focuses upon generating feasible alternative strategies by
aligning key external and internal factors.
 
Ethnic balance is affected due to which of the following? 
Change in ethnic values
Awareness of ethnic norms
Migration of the people towards different areas
Introduction of new laws relating to ethnicity
Ref: Ethnic balance changes due to the migration of the people from different areas to different areas. This affects the ethical behavior very much.
 
All of the following are the types of Profitability ratios EXCEPT: 
Net profit margin 
Inventory turnover
Return on total assets
Earnings per share
Ref:
Profitability ratios measure management's overall effectiveness as shown by the returns generated on
sales and investment. 
¾  Gross profit margin 
¾  Operating profit margin 
¾  Net profit margin 
¾  Return on total assets (ROA) 
¾  Return on stockholders' equity (ROE) 
¾  Earnings per share 
¾  Price-earnings ratio
 
Effective mission statements don’t have one of the following features: 
Generate range of feasible strategic alternatives
Reconcile interests among diverse stakeholders
What does the firm want to become
Provide criteria for selecting strategies
Ref:This question is asked in VISION statement rather than mission statement.

All of the following are the types of cooperative arrangements EXCEPT: 
R&D partnerships
Joint-bidding consortia
Cross-licensing agreements
Diversification
Ref:
Cooperative Arrangements 
¾  Research and development partnerships
¾  Cross-distribution agreements
¾  Cross-licensing agreements
¾  Cross-manufacturing agreements
¾  Joint-bidding consortia
 
Total weighted scores of IFE matrix below 2.5 characterizes an organizations as: 
Organization is externally weak
Organization is internally weak 
Organization is internally strong
Organization is externally strong
Ref: Total weighted scores well below 2.5 characterize organizations that are weak internally,
 
 Which of the following are Porter's generic strategies? 
Low price, differentiation, focus
Cost leadership, differentiation, focus
Price leadership, differentiation, focus
Low cost, differentiation, focus differentiation
Ref: Michael Porter's generic strategies: cost leadership, differentiation, and focus.
 
Rehman industries is analyzing the technological forces for the firm which may provide it opportunities and threats for which of the following stage/s of strategic management process? 
Strategy formulation
Strategy implementation
Strategy evaluation
All of the given options