1 The first step in the strategic management process is usually to set objectives so the organization knows what to do.

[Hint]

True False

2.

The strategic management process is comprised of five interrelated steps. [Hint]

True False

3.

Value creation is the ultimate outcome of successful strategic management. [Hint]

True False

4.

The vision statement addresses the question "Who are we?" [Hint]

True False

5.

The situation analysis has one component part-the internal audit. [Hint]

True False

6.

One of the questions answered by an internal audit would be "How well does the firm manage

customer relationships?" [Hint]

True False

7.

If a company examines its business scope, it constructs a statement about its future. [Hint]

True False

8. To carry out strategic choices, managers must make three types of resource decisions-financing, investing, and operations. [Hint]

True False

9. A realized strategy is the result of formal and structured planning and, because it is often a pessimistic forecast, cannot be changed. [Hint]

True False

10 . Corporate governance is responsible (among other things) for reviewing and approving the use of resources. True False One of the questions answered in the C-E-O cycle is how are the C-E-O types of value interrelated? [Hint]

True False

2.

According to the text, satisfaction is equivalent to rising demand. [Hint]

True False

3.

Customer satisfaction can be broadly classified as value-in-use or possession value. [Hint]

True False

4 . One of the three paths to market leadership, as described in the chapter, is a bold Internet presence. [Hint]

True False

5 . Operational excellence means providing customers with reliable products or services at competitive prices and delivered with minimal difficulty or inconvenience. [Hint]

True False

6.

Value comes from low prices and research has shown that such trick techniques as self-managed

teams, information sharing, or pay tied to organizational performance are largely fluff and do not contribute to value creation substantially. [Hint]

True False

Profit sharing is a program whereby employees are rewarded for new programs or initiatives that result in measurable improvements in productivity. [Hint]

7.

True False

8 . Companies install stock-based compensation plans to create value for employees and for the company. [Hint]

True False

9.

One of the nonfinancial programs that creates value for employees is extensive training. [Hint]

True False

10 . From 1997 through 2002, travel and PC hardware have been the top two online sales categories for those that purchase via the Internet. [Hint]

True False Corporate visions are the fundamental beliefs and ideals of an organization. [Hint]

True False

A corporate mission is most likely to be a topic of concern in the situation analysis stage of the strategic management framework model. [Hint]

2.

True False

3 . A clear mission statement is needed to guide and set parameters for the strategic management process. [Hint]

True False

4 . One of the common components of a mission statement is a statement about the firm's selfimage. [Hint]

True False

5.
[Hint]

A vision statement should address only one key variable-what the CEO thinks about business.

True False

6 . With respect to expansion strategies, branching into new products for new markets is called product development. [Hint]

True False

7.

Integration strategies can be either vertical or horizontal. [Hint]

True False

8.

Cost cutting is normally considered to be a diversification strategy. [Hint]

True False

9.

One of Porter's generic strategies is cost leadership. [Hint]

True False

10 .

Priceline and Lendingtree e-commerce businesses would be good illustrations of consumer to

business (C2B) e-business strategies. [Hint]

True False A situation analysis for a firm consists of performing an internal audit and an external audit. [Hint]

True False

The stage of the strategic management framework that follows develop mission and vision is to perform a situation analysis. [Hint]

2.

True False

3.

The first stage of the internal audit process is to analyze value chain activities. [Hint]

True False

4 . During the internal auditing process, once a manager has examined and analyzed value chain activities, the manager proceeds to understanding core competencies of the organization. [Hint]

True False

5.

A correct description of the term leverage would be that it is a measure of how many sales were

generated by each dollar of assets. [Hint]

True False

6 . The average length of time it takes a firm to collect credit sales is measured by inventory turnover. [Hint]

True False

7 . With respect to the value chain, a firm can lose its competitive advantage and ability to create value when even one key value chain activity is not functioning properly. [Hint]

True False

One of the key tests, according to Hamel and Prahalad, that a skill must pass to be considered to be a core competency is the test of profitability. [Hint]

8.

True False

9 . If a skill provides customer value, then it is likely to be considered to be a core competency according to Hamel and Prahalad. [Hint]

True

False

An important characteristic of a firm's final list of strengths and weaknesses is that they must be competitively relevant. [Hint]

10 .

True False Another term for environmental scanning is an external audit. [Hint]

True False

Organizations are characterized in the chapter as being open systems which means that internal environments interact within the organizational body. [Hint]

2.

True False

3.
[Hint]

One of the goals of an external audit is to identify strengths and weaknesses of the organization.

True False

4 . There are two main segments of the external environment: the macro environment and the microenvironment. [Hint]

True False

5 . The macro environment includes such variables as the demographic/sociocultural cluster and the political/legal cluster. [Hint]

True False

6 . According to information found in the technology cluster of the macro environment, diffusions are a means of transforming knowledge into a prototype form. [Hint]

True False

An industry is a collection of firms offering similar products and services, thereby sharing customers. [Hint]

7.

True False

8 . The dimension of industry scope that is concerned with how much of the total processing involved in a particular good/service is typically performed within a single company is known as vertical scope. [Hint]

True False

9 . One of the five forces described by Porter in his Five Forces Model of Competition would be elimination of global competitors. [Hint]

True False

10 . Typical entry barriers faced by new competitors in an industry include such barriers as economies of scale and regulation and/or licensing requirements. [Hint]

True False