Vocabulary training

1. Vocabulary training Prof. Dr. E. Vatchkova

2. 1. Characteristically strategic decisions usually include decisions which: • Have long term effects • Involve significant change • Often require significant change • Are not easily reversed • All of the above

3. 2. `Strategy Context` refers to: • Issues in the internal and external setting of the organization which shape the strategy and its formulation • The strategy formulation processes used by managers • The significant components of business and corporate strategy • None of the above • All of the above

4. 3. When managers try to develop strategy by identifying opportunities arising from an understanding of the environmental forces acting upon the firm and adapting resources so as to take advantage of these opportunities, this is referred to as: • Proactive development of strategy process • Strategy development by `stretch` • SWOT analysis • A `strategic fit` approach to developing strategy • None of the above

5. 4. When managers try to develop strategy by identifying and leveraging the resources and competences of the organization to yield new opportunities or provide competitive advantage, this is referred to as: • Proactive development of strategy process • Strategy development by `stretch` • A positioning strategy • A `strategic fit` approach to developing strategy • Only two of A, B, C and D above

6. 5. Strategy Process is concerned with: • How strategy is formulated, by what sort of process • The decision making processes that are used by managers involved in developing strategy • Business Process Re-engineering strategies • All of the above • Only two of A, B and C above

7. 6. `Strategy is the outcome of the continuing evolution of corporate activity. It is identifiable from the pattern of steps and changes made within the organization in a changing environment` • Implies that a rational planned strategy process is desirable • Describes an emergent/incrementalist view of strategy process • Is only applicable to large corporations • Only some of the above • All of A, B and C above

8. 7. Gerry Johnson`s view that, `Strategy is shaped by senior manager`s interpretations of events and actions, and is deeply influenced by the perspectives they use to make sense of situations`, suggests that: • Strategy is a product of the organizational paradigm • Strategic Drift should not occur • Past experience and received wisdom do NOT influence strategy • All of the above • Only two of A, B and C above

9. 8. Strategic Drift occurs when an organisation`s strategy becomes gradually less relevant to its: • Its core competences • Its business objectives • Its business environment • Its shareholders interests • None of the above

10. 9. The technique of ****** is particularly useful in dynamic business environments where the future may evolve in any one of a number of different directions • Business Process Engineering • Strategic Group Analysis • Scenario Planning • Balanced Scorecard Planning

11. 10. If all 5 of Porter’s forces are favourable we can say that: • The industry is likely to be profitable • The industry is NOT very attractive • Rivalry amongst existing firms is high • Bargaining power of buyers is high • The threat of new entrants is high

12. 11. If all 5 of Porter’s forces are unfavorable we can say that: • The industry is likely to be profitable • The industry is NOT very attractive • The threat of new entrants is low • The threat of substitutes is high • More than one of the above

13. 12. We can try to define the ‘Industry” to be considered in an industry analysis using? • Differentiation analysis • Stakeholder segmentation • Strategic Groups • The BCG matrix • Only two of A, B, C and D above

14. 13. Analysis of linkages in the Value Chain and Value System, can identify: • Potential cost advantages • Potential differentiation advantages • Both potential cost advantages and potential differentiation advantages E. Potential focus advantages D. Both C and E above

15. 14. A ******** is set of linked business processes (activities) that deliver superior value to customers (based on Stalk 1992): • Value System • Strategic Capability • Business Process System • Core Competence

16. 15. The extent of the competitive advantage capable of being established from Resources and Capabilities depends on: • The scarcity of the resource/capability • The relevance of the resource/capability for meeting customer needs • The extent to which the resource/capability can be easily imitated • All of the above • Only two of A, B, and C above

17. 16. According to the Johnson and Scholes definition, Core Competences are those which are : • Better than competitors and difficult to imitate • Better than competitors and easy to imitate • Same as competitors and difficult to imitate • Same as competitors and easy to imitate • None of the above

18. 17. Business level strategic choices are primarily concerned with: • Generic competitive strategies • Decisions on alternative directions for development • Alternative methods for development • All of the above

19. 18. Which of the following is NOT true for a cost leadership strategy? • Competition is based on offering the lowest price • The company must be the lowest cost producer in the industry • Market leadership is an important objective • High volume production of a standard product is needed • Both C and D above are not true

20. 19. ****** states: ‘The unit cost of value added to a standard product declines at a constant % each time cumulative output doubles’ • The Law of Experience • The Law of Economies of Scale • The Law of Product Value Added • Grant’ s Principle of Unit Production Costs • None of the above

21. 20. Differentiation is a generic strategy based on: • Focusing on specific parts of a market • Entering different markets with your products or services • Providing something unique that adds value in the eyes of the customer • Having different operations processes allowing very low costs and prices • Two of A, B, C and D above

22. 21. How many of the following are Drivers of Cost Advantage? Economies of Scale, Product design, Complementary services, Capacity Utilisation, Economies of Learning • 2 are Drivers of Cost Advantage • 3 are Drivers of Cost Advantage • 4 are Drivers of Cost Advantage • 5 are Drivers of Cost Advantage • None are Drivers of Cost Advantage

23. 22. Which of the following is NOT true of the ‘Strategy Clock’ approach to generic strategy options: • There is a Hybrid position involving both low cost and differentiation • There are a total of 8 possible positions on the clock • Strategy Clock is considered to be a LESS market oriented approach than Porter’s generic strategy model • 3 of the positions on the clock are ‘strategies destines for failure’ • All of the above are true

24. 23. Focused Differentiation: • Appeals to what distinguishes different customer groups • Appeals to what is common between different customers • Focuses on the whole industry • All of the above • Only two of A, B and C above

25. 24. Growth, Spreading risk, and Profit are all management motives for diversification. Which of these will always enhance shareholder value? • Spreading risk • Profit • Growth • All of the above • Both B and C above

26. 25. Porter’s essential tests for diversification decisions are: • The attractiveness test • The cost of entry test • The better off test • All of the above • Only two of A, B and C above

27. 26. The corporate parent’s quest for synergy should always be balanced against: • Increased central administration and overheads • Loss of SBU responsiveness through imposed central co-ordination • Increased SBU responsiveness through imposed central co-ordination • All of the above • Only two of A, B and C above

28. 27. The corporate centre (or parent) can add value to the corporation through: • Providing central administration, expertise and services • Fostering innovation, coaching and learning • Providing investment for new ventures • Only two of A, B and C above • All of A, B and C above

29. 28. When the corporate parent acts in a ‘Synergy (or competence) Manager’ role, which of the following ARE true? • The parent adds value primarily by transferring skills and competences between SBUs • The parent adds value primarily by balancing resources and finance between SBUs • The parent adds value acquiring and divesting SBUs wisely • None of the above • All of the above

30. 29. Potential problems (or disadvantages) for vertically integrated corporations include: • Problems in the management of diverse business activities • Increased dependency on one industry • Increased control over suppliers and markets • Better access to information • Only two of the above

31. 30. The ‘Strategic Relatedness’ of two businesses refers to relatedness or similarity in terms of: • The span for investment, and risk • Key success factors • Competitive positions • All of the above • Only two of A, B and C above

32. 31. Portfolio planning models used in Strategic management include the following: • BCG Growth-Share Matrix • GE/McKinsey Matrix • Porter’s Industry Analysis Model • All of the above • Only two of A, B and C above

33. 32. The following are potential problems/difficulties to be considered when using Portfolio planning models: • The models assume that there are NO linkages (synergies) between SBUs • The maximum number of SBUs considered on any one matrix should generally not exceed 5 • These models assume that there ARE important linkages (synergies) between SBUs • Business School graduates tend to rely on these models too much • Only two of the above

34. 33. The Strategic Planning style of corporate parenting. Goold and Campbell (1988) is one in which: • All strategic planning is carried out at SBU level with very little involvement of the corporate parent • The primary corporate influence is through budget and performance controls • There is substantial corporate involvement in SBU planning • None of the above

35. 34. Evaluating and selecting from strategic options involves assessments of: • Suitability and feasibility • Profitability, plan-ability and plausibility • Strategic logic • All of the above • Only two of A, B and C above

36. 35. The Balanced Scorecard (Kaplan & Norton) is: • A technique of balancing financial statements • A systematic approach to linking strategy to performance indicators • A method of balancing resources across the organization • All of the above • None of the above

37. 36. Generally a Balanced Scorecard approach will set objectives (goals) and measures from the following perspective: • Customer perspective • Financial perspective • Innovation and learning perspective • Internal business perspective • All of the above

38. 37. In the ZOCD and ZOUD framework, used to identify the need for change, ZOCD stands for: • Zone of Continuous Development • Zone of Complete Debate • Zone of Capital Development • Zone of Comfortable Debate

39. 38. ‘ It should be borne in mind that there is nothing more difficult to handle, more doubtful of success, and more dangerous to carry through, than initiating changes in a state’s constitution’ is a quote from ******** on political processes • Niccolo Machiavelli 1513 • Tony Blair 1998 • George Washington 1785 • Winston Churchill 1940 • Margaret Thatcher 1980

40. 39. The following are elements of the Cultural Web: • Control and reward systems • Power structure and distribution • Market segments • All of the above • Only two of A, B and C above

41. 40. The following are NOT ‘Levers of Change’ acting on the Cultural Web: • Create new myths • Change routines and start new rituals • Enter new market segments • Take symbolic action – ‘walk and talk’ • Change power structure, positions and signals

42. 41. When Adding Value through acquiring another organization, the ‘Sweat’ value is normally defends as: • The value released through pure cost reduction, or asset sales • The value generated by additional work from employees fearing redundancy • The additional value in the acquisitions market opportunities • All of the above • Only two of A, B and C above

43. 42. Which of the following is NOT normally considered to be a stage in the acquisition process: • Strategy and objectives – clarification • Search – for possible targets • The deal and negotiation • Integration • Launch

44. 43. Which of the following is NOT one of the 6 alliance objectives identified by Preece (1995)? • Learning • Leading • Leaning • Leveraging • Leaping

45. 44. Good practice in managing innovation risks includes which of the following: • Co-operation with key future uses • Limiting exposure to costs • Minimizing flexibility (eg in response to new information) • All of the above • Only two of A, B and C above

46. 45. The emergence of technical ‘standards’ and dominant product design is a key point in the innovation/diffusion process because: • Network effects can dramatically increase the cost to costumers of switching • Innovation tends to become less radical and more incremental • There is a change of emphasis with ‘process’ innovation increasing in importance • All of the above • Only two of A, B and C above

47. 46. The theory of ******** states that: ‘A country is relatively efficient in the production of those products which make intensive use of resources which are available in relative abundance within the country’: • Competitive advantage • International trade • Globalization • Comparative advantage

48. 47. The effect of the ‘national environment’ on international competitive advantage includes factors such as : • National resources and capabilities • Government policies • Related and supporting industries (national) • Only two of A, B and C above • All of A, B and C above

49. 48. Shareholder value can be assessed though measuring: • EVA – Economic Value Added • MVA – Market Value Added • CVA – Corporate growth Value Added • All of the above • Only two of A, B and C above

50. 49. Calculate Market Value Added (MVA) from some of the following variables and select the correct answer: Variables: Operating profit =200M Tax =£75M Interest cost = £25M Shareholders equity = £400M Cost of equity is estimated at 15% Current stock price = £90 Number of shares issued = 1MShareholder’s original equity investment =£40M • MVA = £130M • MVA = £40M • MVA = £50M D. MVA = £300M E. None of the above