CH 6 Flashcards
1) Long-term objectives represent the results expected from pursuing certain strategies.
T
2) Objectives provide direction and allow for organizational synergy.
T
Strategic objectives include those associated with growth in revenues, growth in earnings, higher dividends, larger profit margins, and improved cash flow.
F
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.
T
5) “If it ain’t broke, don’t fix it” refers to managing by crisis.
F
The overall aim of the Balanced Scorecard is to balance financial objectives with strategic objectives.
F
Since a combination strategy bears no risk, many organizations pursue a combination of two or more strategies simultaneously.
F
9) Divestiture is selling all of a company’s assets, in parts, for their tangible worth.
F
8) Horizontal integration is seeking ownership or increased control over competitors.
T
10) A chief executive officer is located in the divisional level of a large firm.
F
Gaining ownership or increased control over distributors or retailers is called forward integration strategy.
T
12) Franchising is an effective means of implementing forward integration.
T
13) A growing trend is for franchisers to buy out their part of the business from their franchisees.
F
14) McDonalds currently owns more than 50 percent of its restaurants.
F
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.
T
A strategy of seeking ownership or increased control of a firm’s suppliers is backward integration
T
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.
F
Horizontal integration is an appropriate strategy when the competitors of an organization are doing poorly.
F
19) Market penetration, market development, and product development are intensive strategies.
T
When the correlation between dollar sales and dollar marketing expenditures has historically been low, market penetration is an appropriate strategy.
F
21) Market development includes introducing present products into new geographic areas.
T
) An appropriate strategy when an organization has excess production capacity is market development.
T
23) PepsiCo is the largest food-and-beverage firm in Russia.
T
Product development is a strategy that seeks increased sales by improving or modifying present products or services.
T