Strategy Formulation: Functional Strategy and Strategic Choice

Question 1

An approach taken by a functional area to achieve corporate and
business unit objectives and strategies by
maximizing resource productivity

Answer 1

Functional Strategy

Question 2

A functional strategy that
deals with pricing, selling, and distributing a
product.

Answer 2

Marketing Strategy

Question 3

A marketing
strategy in which a company or unit develops
new products for existing markets or develops
new products for new markets.

Answer 3

Product Development Strategy

Question 4

A successful brand name to
market other products and it is a good way to
appeal to a company’s current customers.

Answer 4

Brand Extension

Question 5

A marketing strategy in which a
company charges a high price while a product is
novel and competitors are few.

Answer 5

Skim pricing

Question 5

: A marketing strategy in which
advertising pulls the products through the
distribution channels.

Answer 5

Pull strategy

Question 5

A marketing strategy in which a
large amount of money is spent on trade
promotion in order to gain or hold shelf space in
retail outlets.

Answer 5

Push strategy

Question 6

A marketing pricing
strategy to obtain dominant market share by
using low price.

Answer 6

Penetration pricing

Question 7

A marketing practice in
which different customers pay different prices
for the same product or service.

Answer 7

Dynamic pricing

Question 8

A functional strategy to
make the best use of corporate monetary assets.

Answer 8

Financial Strategy

Question 8

A corporate growth
strategy that expands product lines by moving
into another industry.

Answer 8

Diversification Strategy

Question 9

An acquisition in which a
company is acquired in a transaction financed
largely by debt—usually obtained from a third
party, such as an insurance company or an
investment banker.

Answer 9

Leveraged buy-out

Question 10

A stock split in which an
investor’s shares are reduced for the same total
amount of money.

Answer 10

Reverse stock split

Question 11

A functional strategy that deals
with product and process innovation.

Answer 11

R&D strategy

Question 12

: A company that pioneers
an innovation.

Answer 12

Technological leader:

Question 12

It also deals with the appropriate mix of different
types of R&D:

Answer 12

Basic,
Product, or
Process

Question 13

A company that
imitates the products of competitors

Answer 13

Technological follower

Question 13

And with the question of how new technology
should be accessed—through:

Answer 13

Internal development,
External acquisition, or
Strategic alliances

Question 14

A new approach to R&D in
which a firm uses alliances and connections with
corporate, government, and academic labs to
learn about new developments.

Answer 14

Open innovation

Question 15

A functional strategy that
determines how and where a product or service
is to be manufactured, the level of vertical
integration in the production process, and the
deployment of physical resources.

Answer 15

Operations strategy

Question 16

One-of-a-kind production using
skilled labor.

Answer 16

Job shop

Question 16

A part of a
corporation’s manufacturing strategy in which
components are standardized and each machine
functions like a job shop but is positioned in the
same order as the parts are processed.

Answer 16

Connected line batch flow

Question 17

A type of
manufacturing that permits the low-volume
output of custom-tailored products at relatively
low unit costs through economies of scope.

Answer 17

Flexible manufacturing

Question 18

A highly automated
assembly line making one mass-produced
product using little human labor.

Answer 18

Dedicated transfer line

Question 19

A system in which
employees work on narrowly defined, repetitive
tasks under close supervision in a bureaucratic
and hierarchical structure to produce a large
amount of low-cost, standard goods and
services.

Answer 19

Mass production

Question 20

A system developed
by Japanese firms in which teams strive
constantly to improve manufacturing processes

Answer 20

Continuous improvement

Question 21

A system in which
preassembled subassemblies are delivered as
they are needed to a company’s assembly-line
workers who quickly piece the modules together
into finished products

Answer 21

Modular manufacturing

Question 22

The low-cost production
of individually customized goods and services.

Answer 22

Mass customization

Question 23

The Basic Purchasing Choices: A purchasing strategy in
which a company orders a particular part from
several vendors.

Answer 23

Multiple sourcing

Question 24

The use of
business practices to reduce a company’s impact
upon the natural, physical environment.

Answer 24

Environmental sustainability

Question 24

A functional strategy that
deals with obtaining the raw materials, parts, and supplies needed to perform the operations
functions.

Answer 24

Purchasing strategy

Question 24

The Basic Purchasing Choices:

Answer 24

Multiple sourcing: A purchasing strategy in
which a company orders a particular part from
several vendors.
Sole sourcing: Relying on only one supplier for
a particular part.
Parallel sourcing: A process in which two
suppliers are the sole suppliers of two different
parts, but they are also backup suppliers for each
other’s parts.
Just-In-Time: A purchasing concept in which
parts arrive at the plant just when they are
needed rather than being kept in inventories.

Question 25

The Basic Purchasing Choices: Relying on only one supplier for
a particular part.

Answer 25

Sole sourcing

Question 25

The Basic Purchasing Choices: A process in which two
suppliers are the sole suppliers of two different
parts, but they are also backup suppliers for each
other’s parts.

Answer 25

Parallel sourcing

Question 26

The Basic Purchasing Choices:
: A purchasing concept in which
parts arrive at the plant just when they are
needed rather than being kept in inventories.

Answer 26

Just-In-Time

Question 27

A functional strategy that
deals with the flow of products into and out of
the manufacturing process.

Answer 27

Logistics strategy

Question 28

(HRM)

Answer 28

Human resource management (HRM)
strategy

Question 29

A functional strategy that makes the
best use of corporate human assets.

Answer 29

Human resource management (HRM)
strategy

Question 30

A group of people who work together without a supervisor to plan, coordinate, and evaluate their
own work

Answer 30

Autonomous (self-managing) work teams

Question 30

An evaluation technique in which input is gathered
from multiple sources.

Answer 30

360-degree performance appraisal

Question 31

Diverse Workforce:

Answer 31

Information technology strategy
Follow-the-sun-management

Question 32

A functional
strategy that uses information systems
technology to provide a competitive advantage.

Answer 32

Information technology strategy

Question 33

A management
technique in which modern communication
enables project team members living in one
country to pass their work to team members in
another time zone so that the project is
continually being advanced

Answer 33

Follow-the-sun-management