Exam 10: Corporate Level Strategy: Related and Unrelated Diversification

Product bundling refers to:

Which of the following statements concerning research and development is correct?

Which of the following is not a general organizational competency?

An advantage of unrelated diversification is that competencies can be shared and leveraged throughout the value chain activities.

If a company generates free cash flow,that money technically belongs to shareholders.

General organizational competencies are found:

What is the process of transferring resources to and creating a new business unit in a new industry called?

One way a diversified company can increase its profitability is by acquiring inefficient or poorly managed companies and then restructuring them to improve their performance.

Research suggests that companies that acquire many businesses over time become expert in this process and so can generate significant value from their acquisitions.

Company leaders that base their diversification strategy on transferring competencies tend to acquire new businesses that are ____ to their existing business activities.

Diversification is the process of a company entering new industries distinct from its core industry,using a multibusiness model.

To be commercially successful,new products must be developed with ____ in mind.

When a firm does not pay out its free cash flow to its shareholders,the shareholders bear an opportunity cost equal to their next best use of those funds.

_____ involves taking a distinctive competency developed by a business unit in one industry and implanting it in a business unit operating in another industry.

Which diversification strategy is based on the idea that the company creates value by applying the distinctive competencies it developed in one line of business to another business activity?

Sara Lee Corp.,a clothing firm,purchased Platex Apparel Inc.This purchase helped to make Sara Lee Corp.one of the largest makers of women's apparel in the United States.Sara Lee Corp.utilized an acquisition strategy.

A company's top managers do not need to have entrepreneurial capabilities for diversification to increase profitability.

Which of the following statements is not generally true of a diversification strategy based on the realization of economies of scope?

Economies of scope typically involve:

An appropriate reason to diversify is to pool the risk from several business ventures to create a more stable income stream.