Chapter 5 study guide

Topics: Bankruptcy in the United States, Strategic management, Bankruptcy Pages: 19 (3318 words) Published: October 27, 2013
Chapter 5 Strategies in Action

1) Long-term objectives represent the results expected from pursuing certain strategies.

2) Objectives provide direction and allow for organizational synergy.

3) Strategic objectives include those associated with growth in revenues, growth in earnings, higher dividends, larger profit margins, and improved cash flow.

4) Strategic objectives include larger market share, quicker on-time delivery than rivals, shorter design-to-market times than rivals, lower costs than rivals, and wider geographic coverage than rivals.

5) "If it ain't broke, don't fix it" refers to managing by crisis.

6) The overall aim of the Balanced Scorecard is to balance financial objectives with strategic objectives.

7) Since a combination strategy bears no risk, many organizations pursue a combination of two or more strategies simultaneously.

8) Horizontal integration is seeking ownership or increased control over competitors.

9) Divestiture is selling all of a company's assets, in parts, for their tangible worth.

10) A chief executive officer is located in the divisional level of a large firm.

11) Gaining ownership or increased control over distributors or retailers is called forward integration strategy.

12) Franchising is an effective means of implementing forward integration.

13) A growing trend is for franchisers to buy out their part of the business from their franchisees.

14) McDonalds currently owns more than 50 percent of its restaurants.

15) Forward integration strategy is especially effective when the availability of quality distributors is so limited as to offer a competitive advantage to those firms that integrate forward.

16) A strategy of seeking ownership or increased control of a firm's suppliers is backward integration.

17) If a firm's present suppliers are expensive and unreliable in meeting the firm's needs for parts, components, and/or raw materials, the firm should pursue a horizontal integration strategy.

18) Horizontal integration is an appropriate strategy when the competitors of an organization are doing poorly.

19) Market penetration, market development, and product development are intensive strategies.

20) When the correlation between dollar sales and dollar marketing expenditures has historically been low, market penetration is an appropriate strategy.

21) Market development includes introducing present products into new geographic areas.

22) An appropriate strategy when an organization has excess production capacity is market development.

23) PepsiCo is the largest food-and-beverage firm in Russia.

24) Product development is a strategy that seeks increased sales by improving or modifying present products or services.

25) Product development is an appropriate strategy when an organization has successful products that are in the maturity stage of the product life cycle.

26) There are four basic types of diversification: concentric, conglomerate, forward, and backward.

27) Most companies favor related diversification strategies in order to exploit common use of a well-known brand name.

28) Diversification strategies are becoming more popular as organizations are finding it easier to manage diverse business activities.

29) The acquisition of security-software company McAfee by Intel Corp. is an example of related diversification.

30) Unrelated diversification is an appropriate strategy when an organization's present channels of distribution can be used to market the new products to current customers.

31) Deutsche Bank's entrance into the casino business in Las Vegas is an example of related diversification.

32) Unrelated diversification may be an especially effective strategy when an organization's basic industry is experiencing increasing annual sales and profits.

33) Retrenchment and turnaround are the same strategy.

34) Although bankruptcy can be an effective type of retrenchment strategy,...
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