LESSON 6

1. There is a limit to the number of strategies that can be evaluated or the

number of sets of strategies that can be examined at once using the
QSPM.
- False
2. The Boston Consulting Group (BCG) Matrix and the SPACE Matrix
are designed specifically to enhance a multidivisional firm’s efforts to
formulate strategies.
- False
3. The IE Matrix is similar to the SWOT Matrix in that both tools involve
plotting organization divisions in a schematic diagram; this is why they
are both called “portfolio matrices.”
- False
4. Although the SWOT matrix is widely used in strategic planning, the
analysis does have some limitations.
- True
5. The Internal-External (IE) Matrix positions an organization’s various
divisions in a six-cell display.
- False
6. Over time, in a BCG Matrix, the organizations should strive to achieve
a portfolio of divisions that are Dogs.
- False
7. The essence of strategy formulation is an assessment of whether an
organization is doing the right things and how it can be more effective in
what it does.
- True
8. Strategy is sometimes defined as the match an organization makes
between its internal resources and skills and the opportunities and risks
created by its external factors.
- True
9. Another positive feature of the QSPM is that it requires strategists to
integrate pertinent external and internal factors into the decision
process.
- True
10.Alternative strategies do not come out of the wild blue yonder; they are
derived from the firm’s vision, mission, objectives, external audit, and
 internal audit; they are consistent with, or build on, past strategies that
have worked well.
- True
11.All nine techniques included in the strategy-formulation framework do
not require the integration of intuition and analysis.
- False
12.The input tools require strategists to quantify subjectivity during
advance stages of the strategy-formulation process.
- False
13.All participants in the strategy analysis and choice activity should have
the firm’s external and internal audit information by their sides.
- True
14.Important strategy-formulation techniques can be integrated into a
four-stage decision making framework.
- False
15.Grand Strategy Matrix is based on two evaluative dimensions
competitive position and market growth.
- True
16.A firm’s culture can become sympathetic to new strategies, and the
result of that antagonism may be confusion and disarray.
- False
17.A negative feature of the QSPM is that sets of strategies can be
examined sequentially or simultaneously
- False
18.An organization with no sense of direction and no coherent strategy
precipitates its own demise.
- True
19.The firm’s present strategies, objectives, and mission, coupled with the
external and internal audit information, provide a basis for generating
and evaluating feasible alternative strategies.
- True
20.Successful organizations are able to achieve a portfolio of businesses
positioned in or around cell IX in the IE Matrix.
- False
21.Strategists never consider all feasible alternatives that could benefit the
firm because there are an infinite number of possible actions and an
infinite number of ways to implement those actions.
 - True
22.All organizations are political.
- True
23.All organizations have a culture.
- True
24.Matching external and internal critical success factors is the key to
effectively generating feasible alternative strategies.
- True
25.Strategies that require fewer cultural changes may be more attractive
because extensive changes can take considerable time and effort.
- True
26.These include the set of shared values, beliefs, attitudes, customs, norms,
personalities, heroes, and heroines that describe a firm.
- Culture
27.In the SPACE matrix, the quadrant wherein an organization is in an
excellent position to use its internal strengths…
- Aggressive Quadrant
28.In the Internal-External (IE) Matrix, the divisions fall into cells I, II, or
IV; intensive or integrative…
- Grow and Build (124)
29.In the IE Matrix, the divisions that fall into cells III, V, or VII; market
penetration and product development…
- Hold and Maintain (357)
30.In the BCG Matrix, they are identified as low relative market share
position, yet they compete in a high-growth industry…..
- Question Marks
31.In the BCG Matrix, they represent the organization’s best long-run
opportunities for growth and profitability….
- Stars
32.In the BCG Matrix, they have high relative market share position but
compete in a low-growth industry….
- Cash Cows
33.In the IE Matrix, the divisions that fall into cells VI, VIII, or IX;
retrenchment and divestiture…
- Harvest or Divest (689)
34.It is an important matching tool that helps managers develop four types
of strategies…
 - SWOT Matrix
35.A strategy that aims at improving internal weaknesses by taking
advantage of external opportunities.
- WO Strategies
36.It is the stage of the formulation framework that involves a single
technique, the Quantitative Strategic Planning Matrix (QSPM)
- Decision Stage
37.This graphically portrays differences among divisions in terms of
relative market share position and industry growth rate.
- BCG Matrix
38.In the Grand Strategy Matrix, firms located are in an excellent strategic
position…
- Quadrant I
39.In the Grand Strategy Matrix, businesses have a strong competitive
position but are in a slow growth industry…
- Quadrant IV
40.Its four-quadrant framework indicates whether aggressive,
conservative, defensive, or competitive strategies are most appropriate
for a given organization.
- SPACE Matrix
41.In the SPACE Matrix, the quadrant that suggests that the firm should
focus on rectifying internal weaknesses and avoiding external threats…
- Defensive Quadrant
42.It was rated by Fortune magazine in 2009 as their number one “Most
Admired Company in the World” in terms of their management and
performance.
- Apple
43.A strategy that uses a firm’s strengths to avoid or reduce the impact of
external threats.
- ST Strategies
44.In the Grand Strategy Matrix, firms need to evaluate their present
approach to the marketplace seriously…
- Quadrant II
45.In the SPACE Matrix, the quadrant that implies staying close to the
firm’s basic competencies and not taking excessive risks…
- Conservative Quadrant
 46.It is based on two key dimensions: the IFE total weighted scores on the
x-axis and the EFE total weighted scored on the y-axis.
- IE Matrix
47.Are defensive tactics directed at reducing internal weakness and
avoiding external threats.
- WT Strategies
48.In the SPACE Matrix, the quadrant strategies may include backward,
forward and horizontal integration…
- Competitive Quadrant
49.In the Grand Strategy Matrix, organizations compete in slow-growth
industries and have weak competitive positions…
- Quadrant III
50.The first stage of the formulation framework that summarizes the basic
input information needed to formulate strategies.
- Input Stage

SWOT – strengths, weaknesses, opportunities, and threats

SPACE MATRIX
 Competitive Quadrant - may include backward, forward and horizontal
integration
 Defensive Quadrant - firm should focus on rectifying internal
weaknesses and avoiding external threats
 Conservative Quadrant - implies staying close to the firm’s basic
competencies and not taking excessive risks
 Aggressive Quadrant - excellent position to use its internal strengths
BCG
 Cash Cows - high relative market share position but compete in a low-
growth industry
 Stars - organization’s best long-run opportunities for growth and
profitability
 Question Marks - low relative market share position, yet they compete
in a high-growth industry
IE
 Harvest or divest - cells VI, VIII, or IX (689)
 Hold and Maintain - cells III, V, or VII (357)
 Grow and Build - cells I, II, or IV (124)
GRAND STRATEGY MATRIX
 Quadrant I - firms located are in an excellent strategic position
 Quadrant II - firms need to evaluate their present approach to the
marketplace seriously
 Quadrant III - organizations compete in slow-growth industries and
have weak competitive positions
 Quadrant IV - businesses have a strong competitive position but are in a
slow growth industry