Answer Key-Updated May 2013
KEY
Ag Decision Maker Activity
Strategic Planning Terms
File C6-40
Name ________________________
Barriers to entry
Barriers to exit
Business planning
Competitive enterprises
Complementary enterprise
Concentric diversification
Conglomerate diversification
Economies of integration
Economies of scope
Economies of size
Enterprise
Environmental scanning
Excess capacity
Experience curve
Internal scanning
Minimum efficient scale
Operations management
Portfolio management
Strategic management
Strategic planning
Vertical merger
Using the terms above, answer the following statements.
Experience curve
1.
Systematic cost reductions that occur over the life of a
product. Product costs typically decline by a specific amount
each time accumulated output is doubled.
Barriers to exit
2.
Strategic planning
3.
A comprehensive planning process designed to
determine how the firm will achieve its mission, goals, and
objectives over the next five or ten years or longer.
Conglomerate diversification 4.
Factors that impede exit from an industry.
Diversification into an unrelated industry.
Strategic management
5.
The act of identifying markets and assembling the
resources needed to compete in these markets. The set of
managerial decisions and actions that determine the longrun performance of the firm.
Economies of size
6.
Economies of scope
7.
The products of two or more enterprises produced
from shared resources which allows for cost reductions.
Operations management
8.
Focuses on the performance and efficiency of the
production process. It involves the day-to-day decisions of
the business.
9.
The production of a single crop or type of livestock,
such as wheat or dairy. A responsibility center.
Enterprise
Fixed costs decline as output increases.
Answer Key-Updated May 2013
Ag Decision Maker Activity Continued...
Strategic Planning Terms
Competitive enterprises
File C6-40
10. Enterprises for which the output level of one can be
increased only by decreasing the output level of the other.
Complementary enterprise 11.
Enterprises for which increasing the output level of
one also increased the output level of the other.
Excess capacity
12. The ability to produce additional units of output without
increasing fixed capacity.
Barriers to entry
13.
Internal scanning
14. Looking inside the business and identifying strengths
and weaknesses of the firm.
Environmental scanning
15. To monitor, evaluate and disseminate information
from the external environment to key people within the firm.
Concentric diversification 16.
Factors that reduce entry into an industry.
Diversification into a related industry.
Vertical merger
17. Firms in different stages of the production and
distribution chain are linked together.
Business planning
18. A plan that determines how a strategic plan will be
implemented. It specifies how, when, and where a strategic
plan will be put into action.
Economies of integration
19. Cost savings generated from joint production,
purchasing, marketing or control.
Portfolio management
20. Management of a firm’s individual enterprises and
resources across these enterprises.
Minimum efficient scale 21.
The smallest output for which unit costs are
minimized.
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