21) A company's ________ strategy identifies the portfolio of businesses that comprise a firm and the ways in which these businesses relate to each other.
A) functional
B) business unit
C) corporate-level
D) competitive
E) departmental
22) A diversification corporate strategy implies that a firm will ________.
A) become an industry's low-cost leader
B) expand by adding new product lines
C) reduce the company's size to increase market share
D) save money by producing its own raw materials
E) increase profits by offering one popular product
23) Harley-Davidson sells a line of boots, helmets, and leather jackets indicating that the the firm is pursuing which of the following strategies?
A) cost leadership
B) conglomerate diversification
C) geographic expansion
D) related diversification
E) horizontal integration
24) Acquiring control of competitors in the same or similar markets with the same or similar products is known as ________.
A) market penetration
B) product development
C) vertical integration
D) geographic expansion
E) horizontal integration
25) Winchester Rugs operates a web site called www.buyrugsdirect.com, so Winchester Rugs is most likely using a strategy of ________.
A) consolidation
B) conglomerate diversification
C) geographic expansion
D) vertical integration
E) horizontal integration
26) Which of the following activities most likely indicates that a firm is implementing a vertical integration strategy?
A) selling unprofitable divisions
B) offshoring low-skill jobs
C) producing raw materials
D) aggressively selling a new product
E) purchasing a competitor's firm
27) The 2008 announcement by Starbucks that it would be closing approximately 600 of its stores suggests the firm was using a ________ strategy.
A) consolidation
B) diversification
C) geographic expansion
D) vertical integration
E) product development
28) Sweet Leaf Tea, a Texas-based maker of bottled iced tea, is a small but fast-growing firm that has gained a loyal following for its use of fresh, organic ingredients in its beverages. Although beverage industry experts recommended that Sweet Leaf replace the organic cane sugar and honey it uses with less costly high-fructose corn syrup, Sweet Leaf refused because of the company's mission to provide a high-quality, organic beverage to consumers. The 11-year old company has 50 employees, and its products are available in 30% of the U.S. market. Sweet Leaf Tea recently received multi-million dollar investments which will enable the business to expand its national presence.
Which of the following, if true, would best support the argument that Sweet Leaf Tea should implement a corporate-level strategy of market penetration?
A) Sweet Leaf Tea can expand its customer base and reduce costs by selling its products directly at Sweet Leaf stores.
B) Sweet Leaf Tea can develop a national name by adding new product lines, such as organic snack foods and organic coffee.
C) Sweet Leaf Tea's marketing research indicates that customers would purchase the organic beverages more frequently if the prices were lower.
D) Sweet Leaf Tea can achieve growth by aggressively selling its beverages in current markets where loyal customers will help boost word-of-mouth.
E) Sweet Leaf Tea's competitors primarily focus their marketing and distribution efforts on regional grocery-store chains rather than big box national retailers.
29) Sweet Leaf Tea, a Texas-based maker of bottled iced tea, is a small but fast-growing firm that has gained a loyal following for its use of fresh, organic ingredients in its beverages. Although beverage industry experts recommended that Sweet Leaf replace the organic cane sugar and honey it uses with less costly high-fructose corn syrup, Sweet Leaf refused because of the company's mission to provide a high-quality, organic beverage to consumers. The 11-year old company has 50 employees, and its products are available in 30% of the U.S. market. Sweet Leaf Tea recently received multi-million dollar investments which will enable the business to expand its national presence.
Which of the following, if true, would most likely undermine the argument that Sweet Leaf Tea should
implement a corporate-level strategy of vertical integration?
A) Sweet Leaf Tea lacks the facilities or knowledge to produce the raw ingredients for its beverages.
B) Market research suggests that Sweet Leaf Tea customers primarily purchase only one flavor of tea.
C) Most loyal customers of Sweet Leaf Tea purchase the beverage at neighborhood convenience stores.
D) Sweet Leaf Tea has decided to lower its prices by replacing cane sugar with corn syrup in some of its beverages.
E) Sugar farmers used by Sweet Leaf Tea have agreed to a fixed price for the next 5 years so that the company can keep prices low.
30) Sweet Leaf Tea, a Texas-based maker of bottled iced tea, is a small but fast-growing firm that has gained a loyal following for its use of fresh, organic ingredients in its beverages. Although beverage industry experts recommended that Sweet Leaf replace the organic cane sugar and honey it uses with less costly high-fructose corn syrup, Sweet Leaf refused because of the company's mission to provide a high-quality, organic beverage to consumers. The 11-year old company has 50 employees, and its products are available in 30% of the U.S. market. Sweet Leaf Tea recently received multi-million dollar investments which will enable the business to expand its national presence.
Which of the following, if true, best supports the idea that Sweet Leaf Tea has implemented a competitive strategy of differentiation?
A) New Sweet Leaf Tea customers are initially attracted to the unique labels and logo on the bottles.
B) Loyal customers of Sweet Leaf Tea seek products that are USDA certified organic despite the associated higher costs.
C) Other brands of bottled iced tea compete with Sweet Leaf Tea by offering new flavors at competitive prices.
D) Sweet Leaf Tea sells both lemonade and teas in a variety of flavors that appeal to consumers of all ages.
E) Sweet Leaf Tea has not raised its prices in several years due to fears of losing regional customers.