York University

• ADMS 4900

• Chapter 1 What is Strategy and the Strategic Management Process? 1. A firm's ________ is defined as its theory about how to gain competitive advantages. A) objective B) mission C) vision D) strategy 2. A sequential set of analyses and choices that can increase the likelihood that a firm willchoose a strategy that generates competitive advantages is the A) organizational change process. B) strategic management process. C) mission statement process. D) goal setting process. 3. A firm's ________ is its long-term purpose that defines both what it aspires to be in the longrun and what it wants to avoid in the meantime. A) mission B) strategy C) objective D) goal 4. The strategic management process begins when a firm A) determines its objectives. B) defines its mission. C) makes a strategic choice. D) implements its strategy. 5. Firms whose mission is central to all they do are known as ________ firms. A) missionary B) emergent C) parity D) visionary 6. From 1926 to 1995, visionary firms earned ________ returns compared to firms that were not visionary firms. A) substantially lower B) substantially higher C) marginally lower D) equivalent 7. The mission statements of visionary firms A) suggest that profit maximizing, while an important corporate objective, is not their primary reason for existence. B) suggest that profit maximizing is neither an important corporate objective nor their primary reason for existence. C) suggest that profit maximizing is their primary reason for existence. D) suggest that value maximizing is their primary reason of existence. 8. Which of the following statements regarding firm mission is accurate? A) While some firms have used their missions to develop strategies that create significant competitive advantages, firm missions can hurt a firm's performance as well. B) Virtually all firms have used missions to develop strategies that create significant competitive advantages, while very few firms have used missions that can hurt their performance. C) It is very rare for firms to be able to use their missions to develop strategies that create significant competitive advantages, and most firm missions actually hurt their performance. D) Missions tend to have very little impact on a firm's ability to create significant competitive advantages. 9. ________ are specific measurable targets a firm can use to evaluate the extent to which it isrealizing its mission. A) Strategies B) Missions C) Competitive advantages D) Objectives 10. High quality objectives are those that are A) tightly connected to elements of a firm's mission and are relatively easy to measure and trackover time. B) difficult to measure and track over time. C) non-existent. D) not quantitative. 11. By conducting a(n) ________, a firm identifies the critical threats and opportunities in itscompetitive environment. A) internal analysis B) competitive analysis C) external analysis D) strategic choice 12. ________ helps a firm understand which of its resources and capabilities are likely to besources of competitive advantage. A) Competitive analysis B) Internal analysis C) Strategic choice D) External analysis 13. Actions firms take to gain competitive advantages in a single market or industry are known as A) business level strategies. B) corporate level strategies. C) diversification strategies. D) strategy implementation. 14. Actions firms take to gain competitive advantages by operating in multiple markets or industries simultaneously are known as A) corporate level strategies. B) diversification strategies. C) business level strategies. D) strategic alliance strategies. 15. ________ occurs when a firm adopts organizational policies and practices that are consistent with its strategy. A) Strategy formulation B) Strategic choice C) Strategy implementation D) Strategic control 16. Green Frog is an environmentally friendly firm in the cosmetics industry that has decided to undertake a strategic planning project. It wants to ensure that it performs the process correctly and so intends to start the process with the first step of the strategic planning process, which is A) defining its mission. B) setting objectives. C) measuring performance. D) defining its business level strategy. 17. Green Frog is an environmentally friendly firm in the cosmetics industry. Even though Green Frog is environmentally friendly, the strategic planning team had decided that financial performance is one of the company's top priorities. Which of the following is the best example of an objective the company might use to help it achieve its goal of superior financial performance? A) increasing profitability B) growing market share annually C) improving product quality every quarter D) growth in earnings per share averaging 15% or better annually for the next five years 18. Green Frog is an environmentally friendly firm in the cosmetics industry. If during the strategic planning process Green Frog tried to determine the critical threats and opportunities in its competitive environment, it would be performing a(n) A) internal analysis. B) external analysis. C) WACC analysis. D) economic analysis. 19. Green Frog is an environmentally friendly firm in the cosmetics industry. If Green Frog undertook an analysis to help it understand which of its resources and capabilities are likely to be sources of competitive advantage and which are less likely to sources of such advantages it would be performing a(n) A) internal analysis. B) external analysis. C) WACC analysis. D) economic analysis. 20. Green Frog is an