Question 1

Firms can create profitable new business units by leveraging their competencies.

Accepted Answer

A) True 
 B)False

Question 2

Miller Brewing,which was acquired by Philip Morris,was related to the parent company's tobacco business because it was possible to create important marketing commonalities: both beer and tobacco are mass market consumer goods in which brand positioning,advertising,and product development skills are crucial to create successful new products.This is an example of which of the following?

Accepted Answer

A) Transferring competencies 
B) Leveraging competencies 
C) General organizational competencies 
D) Economies of scope 
E) Organizational design skills 
A) Transferring competencies 
B) Leveraging competencies 
C) General organizational competencies 
D) Economies of scope 
E) Organizational design skills

Question 3

When McDonald's introduced the McCafe,it began offering a new product that was not available in traditional McDonald's stores.The introduction of the McCafe is an example of which of the following?

Accepted Answer

A) Transferring competencies 
B) Diversification 
C) Commonality 
D) Economies of scope 
E) Bureaucratic costs 
A) Transferring competencies 
B) Diversification 
C) Commonality 
D) Economies of scope 
E) Bureaucratic costs

Question 4

Differentiate between joint venture and acquisition as a method to enter new industries.Discuss the advantages and disadvantages associated with each.

Accepted Answer

Acquisition is when a company uses its c

Question 5

A strategy based on diversification may fail to add value because companies:

Accepted Answer

A) seek to achieve differentiation instead of low cost. 
B) diversify into areas in which they have some knowledge and miss out on profitable opportunities in other areas. 
C) make acquisitions rather than develop new technologies on their own. 
D) incur bureaucratic costs that exceed the value created by the strategy. 
E) seek to achieve a low-cost position instead of differentiation. 
A) seek to achieve differentiation instead of low cost. 
B) diversify into areas in which they have some knowledge and miss out on profitable opportunities in other areas. 
C) make acquisitions rather than develop new technologies on their own. 
D) incur bureaucratic costs that exceed the value created by the strategy. 
E) seek to achieve a low-cost position instead of differentiation.

Question 6

Identify and discuss the profitability justifications for pursuing a multibusiness model based on diversification.

Accepted Answer

Diversification is the process of enteri

Question 7

New ventures:

Accepted Answer

A) should be killed if they don't make a profit within three years. 
B) are often preferred by technology-based companies. 
C) are more attractive compared to acquisitions when entry barriers are high. 
D) are less risky than acquisitions. 
E) are best when the company is entering the industry on a small scale. 
A) should be killed if they don't make a profit within three years. 
B) are often preferred by technology-based companies. 
C) are more attractive compared to acquisitions when entry barriers are high. 
D) are less risky than acquisitions. 
E) are best when the company is entering the industry on a small scale.

Question 8

A company can pursue relative diversification to enhance the competitive position of its core business.

Accepted Answer

A) True 
 B)False

Question 9

If a company's core skills are highly specialized and have few applications outside the core business,then a company should pursue a related diversification strategy.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements is false?

Accepted Answer

A) Joint ventures are preferable to acquisitions when the new business is related to the existing business. 
B) Acquisitions are preferable to new ventures when speed is important. 
C) Joint ventures are generally preferable to acquisitions when entry barriers are high. 
D) Acquisitions can be both a reason for corporate decline and part of a turnaround strategy. 
E) New ventures are preferable to acquisitions in the embryonic stage of the industry life cycle. 
A) Joint ventures are preferable to acquisitions when the new business is related to the existing business. 
B) Acquisitions are preferable to new ventures when speed is important. 
C) Joint ventures are generally preferable to acquisitions when entry barriers are high. 
D) Acquisitions can be both a reason for corporate decline and part of a turnaround strategy. 
E) New ventures are preferable to acquisitions in the embryonic stage of the industry life cycle.

Question 11

Joint ventures:

Accepted Answer

A) are an alternative to new ventures. 
B) are attractive when speed is important. 
C) are attractive when entry barriers are high. 
D) should be done on a small scale. 
E) reduce the risk of loss of proprietary knowledge. 
A) are an alternative to new ventures. 
B) are attractive when speed is important. 
C) are attractive when entry barriers are high. 
D) should be done on a small scale. 
E) reduce the risk of loss of proprietary knowledge.

Question 12

An internal new venture is the most appropriate strategic choice when:

Accepted Answer

A) an industry is mature. 
B) the firm will enter on a small scale. 
C) the firm has competencies that can be leveraged. 
D) speed of entry is the most important consideration. 
E) there is strong pressure for quick profitability. 
A) an industry is mature. 
B) the firm will enter on a small scale. 
C) the firm has competencies that can be leveraged. 
D) speed of entry is the most important consideration. 
E) there is strong pressure for quick profitability.

Question 13

The managers of most companies often consider _____ when they are generating free cash flow.

Accepted Answer

A) taper integration 
B) full integration 
C) diversification 
D) long-term contracts 
E) strategic alliances 
A) taper integration 
B) full integration 
C) diversification 
D) long-term contracts 
E) strategic alliances

Firms can create profitable new business units by leveraging their competencies.

When McDonald's introduced the McCafe,it began offering a new product that was not available in traditional McDonald's stores.The introduction of the McCafe is an example of which of the following?

Differentiate between joint venture and acquisition as a method to enter new industries.Discuss the advantages and disadvantages associated with each.

A strategy based on diversification may fail to add value because companies:

Identify and discuss the profitability justifications for pursuing a multibusiness model based on diversification.

New ventures:

A company can pursue relative diversification to enhance the competitive position of its core business.

If a company's core skills are highly specialized and have few applications outside the core business,then a company should pursue a related diversification strategy.

Which of the following statements is false?

Joint ventures:

An internal new venture is the most appropriate strategic choice when:

The managers of most companies often consider _____ when they are generating free cash flow.

Strategic Leadership: Managing the Strategy Making Process for Competitive Advantage

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Resources and Competitive Advantage

Building Competitive Advantage Through Functional Level Strategies

Business Level Strategy

Business Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate Performance, Governance, and Business Ethics

Implementing Strategy Through Organization

Filters

Exam 10: Corporate Level Strategy: Related and Unrelated Diversification

Firms can create profitable new business units by leveraging their competencies.

When McDonald's introduced the McCafe,it began offering a new product that was not available in traditional McDonald's stores.The introduction of the McCafe is an example of which of the following?

Differentiate between joint venture and acquisition as a method to enter new industries.Discuss the advantages and disadvantages associated with each.

A strategy based on diversification may fail to add value because companies:

Identify and discuss the profitability justifications for pursuing a multibusiness model based on diversification.

New ventures:

A company can pursue relative diversification to enhance the competitive position of its core business.

If a company's core skills are highly specialized and have few applications outside the core business,then a company should pursue a related diversification strategy.

Which of the following statements is false?

Joint ventures:

An internal new venture is the most appropriate strategic choice when:

The managers of most companies often consider _____ when they are generating free cash flow.

Strategic Leadership: Managing the Strategy Making Process for Competitive Advantage

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Resources and Competitive Advantage

Building Competitive Advantage Through Functional Level Strategies

Business Level Strategy

Business Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate Performance, Governance, and Business Ethics

Implementing Strategy Through Organization

Filters