Chapter 7

Question 1

a comprehensive plan guiding resource allocation to achieve long-term organization goals.

Answer 1

strategy

Question 2

focuses organizational energies on achieving a compelling goal.

Answer 2

Strategic intent

Question 3

an ability to outperform rivals.

Answer 3

competitive advantage

Question 4

achieved in ways that are difficult to imitate.

Answer 4

sustainable competitive advantage

Question 5

sets long-term direction for the total enterprise.

Answer 5

corporate strategy

Question 6

identifies how a division or strategic business unit will compete in its product or service domain.

Answer 6

business strategy

Question 7

guides activities within one specific area of operations.

Answer 7

functional strategy

Question 8

involves expansion of the organization’s current operations.

Answer 8

growth strategy

Question 9

Growth through __________means expansion within an

existing business area.

Answer 9

concentration

Question 10

Growth through _________ means expansion by entering related or new business areas.

Answer 10

diversification

Question 11

Growth through ___________ occurs by acquiring suppliers or distributors.

Answer 11

vertical integration

Question 12

seeks to correct weaknesses by making radical changes to current ways of operating.

Answer 12

retrenchment strategy

Question 13

occurs when a business closes and sells its assets to pay creditors.

Answer 13

Liquidation

Question 14

involves making major changes to cut costs, gain short-term efficiencies, and buy time to try new strategies to improve future success.

Answer 14

Restructuring

Question 15

protects an insolvent firm from creditors during a period of reorganization to restore profitability.

Answer 15

Chapter 11 bankruptcy

Question 16

decreases the size of operations.

Answer 16

Downsizing

Question 17

involves selling off parts of the organization to refocus attention on core business areas.

Answer 17

Divestiture

Question 18

adopts standardized products and advertising for use worldwide.

Answer 18

globalization strategy

Question 19

tries to operate globally without having a strong national identity.

Answer 19

transnational firm

Question 20

organizations join together in partnership to pursue an area of mutual interest.

Answer 20

strategic alliance

Question 21

the strategy of working with rivals on projects of mutual benefit.

Answer 21

Co-opetition

Question 22

strategically uses the Internet to gain competitive advantage.

Answer 22

e-business strategy

Question 23

uses ITand Web portals to link organizations vertically in supply chains.

Answer 23

B2B business strategy

Question 24

Advertising model
Brokerage model
Community model
Freemium model
Infomediary model
Merchant model
Referral model
Subscription model

Answer 24

Web-Based Business Models

Question 25

Provide free information or services and then generate revenues from paid advertising to viewers (e.g., Yahoo!, Google)

Answer 25

Advertising model

Question 26

Bring buyers and sellers together for online business transactions and take a percentage from the sales (e.g., eBay, Priceline)

Answer 26

Brokerage model

Question 27

Provide a meeting point sold by subscription or supported by advertising (e.g., eHarmony, Facebook)

Answer 27

Community model

Question 28

Offer a free service and encourage users to buy extras (e.g., Skype, Zynga)

Answer 28

Freemium model

Question 29

Provide a free service while collecting information on users and selling it to other businesses (e.g., Epinions, Yelp)

Answer 29

Infomediary model

Question 30

Sell products direct to customers through the Web—e-tailing (e.g., Amazon, Apple iTunes Store)

Answer 30

Merchant model

Question 31

Provide free listings and get referral fees from online merchants after directing customers to them (e.g., Shopzilla, PriceGrabber)

Answer 31

Referral model

Question 32

Sell access to high-value content through a subscription Web site (e.g., Netflix, Wall Street Journal Interactive)

Answer 32

Subscription model

Question 33

uses IT and Web portals to link businesses with customers.

Answer 33

B2C business strategy

Question 34

uses social media to better engage with an organization’s | customers, clients, and external audiences in general.

Answer 34

social media strategy

Question 35

uses the Internet to engage customers and potential customers in providing opinions and suggestions on products and their designs.

Answer 35

crowdsourcing strategy

Question 36

the process of formulating and implementing strategies.

Answer 36

Strategic management

Question 37

the process of creating strategies.

Answer 37

Strategy formulation

Question 38

the process of putting strategies into action.

Answer 38

Strategy implementation

Question 39

the organization’s reason for existence in society.

Answer 39

mission

Question 40

are specific results that organizations try to accomplish.

Answer 40

Operating objectives

Question 41

examines organizational strengths and weaknesses, as well as environmental opportunities and threats.

Answer 41

SWOT analysis

Question 42

a special strength that gives an organization a competitive advantage.

Answer 42

core competency

Question 43

Force 1: Competitors—intensity of rivalry among firms in the industry Force 2: New entrants—threats of new competitors entering the market Force 3: Suppliers—bargaining power of suppliers Force 4: Customers—bargaining power of buyers Force 5: Substitutes—threats of substitute products or services

Answer 43

Porter’s five forces model

Question 44

offers products that are unique and different from those of the competition.

Answer 44

differentiation strategy

Question 45

seeks to operate with lower costs than competitors.

Answer 45

cost leadership strategy

Question 46

offers a unique product to a special market segment.

Answer 46

focused differentiation strategy

Question 47

seeks the lowest costs of operations within a special market segment.

Answer 47

focused cost leadership strategy

Question 48

analyzes business opportunities according to market growth rate and market share.

Answer 48

BCG Matrix

Question 49

inspires people to implement organizational strategies.

Answer 49

Strategic leadership

Question 50

makes sure strategies are well implemented and that poor strategies are scrapped or changed.

Answer 50

Strategic control