Question 1

Regarding tangible and intangible resources:

Accepted Answer

A) Both can be sources of economies of scope 
B) Only tangible resources offer economies of scope; 
C) Only intangible resources offer economies of scope 
D) Both are sources of economies of scope, but not simultaneously 
A) Both can be sources of economies of scope 
B) Only tangible resources offer economies of scope; 
C) Only intangible resources offer economies of scope 
D) Both are sources of economies of scope, but not simultaneously

Question 2

CAPM stands for:

Accepted Answer

A) Compound Assessment of Portfolios and Markets 
B) Capital Assessment Per Module 
C) Capital Asset Pricing Model 
D) Capital Allocation in high Performing Markets 
A) Compound Assessment of Portfolios and Markets 
B) Capital Assessment Per Module 
C) Capital Asset Pricing Model 
D) Capital Allocation in high Performing Markets

Question 3

General management capabilities should be considered as:

Accepted Answer

A) Organizational resources 
B) Competitive resources 
C) Distinctive competencies 
D) Organizational capabilities 
A) Organizational resources 
B) Competitive resources 
C) Distinctive competencies 
D) Organizational capabilities

Question 4

Diversification into related industries is more likely to be profitable than diversification in unrelated industries:

Accepted Answer

A) Is a generally true statement 
B) Is a false statement 
C) Has never been tested 
D) Is not supported by empirical evidence 
A) Is a generally true statement 
B) Is a false statement 
C) Has never been tested 
D) Is not supported by empirical evidence

Question 5

Economies of scope are really just another term for economies of scale

Accepted Answer

A) True 
 B)False

Question 6

Leveraged buyouts happened because:

Accepted Answer

A) The 1980s saw the birth of the corporate raider
Such as KKR 
B) The time was ripe, since many conglomerates' market value was less than their break-up value 
C) Shareholders were fed up with poor CEOs 
D) It was the only way to get rid of underperforming corporate management 
A) The 1980s saw the birth of the corporate raider
Such as KKR 
B) The time was ripe, since many conglomerates' market value was less than their break-up value 
C) Shareholders were fed up with poor CEOs 
D) It was the only way to get rid of underperforming corporate management

Question 7

RJR Nabisco was taken over in 1989 for $31bn by:

Accepted Answer

A) The Blackstone Group 
B) Kohlberg Kravis Roberts 
C) The Carlyle Group 
D) CVC Capital Partners 
A) The Blackstone Group 
B) Kohlberg Kravis Roberts 
C) The Carlyle Group 
D) CVC Capital Partners

Question 8

Related diversification tends to produce better results than unrelated diversification

Accepted Answer

A) True 
 B)False

Question 9

Is it correct to claim that diversification provides a benefit of "risk spreading"?

Accepted Answer

A) Yes, in most cases, but it's of little interest or value to shareholders, since they can do that more easily and cheaply themselves 
B) No, usually that is not the case 
C) The answer is not that simplistic 
D) Risk spreading is not always a benefit 
A) Yes, in most cases, but it's of little interest or value to shareholders, since they can do that more easily and cheaply themselves 
B) No, usually that is not the case 
C) The answer is not that simplistic 
D) Risk spreading is not always a benefit

Question 10

The decision to diversify has probably led to the destruction of more value than any other corporate decision

Accepted Answer

A) True 
 B)False

Question 11

Does a firm need to diversify across different businesses in order to benefit from economies of scope?

Accepted Answer

Economies of scope are defined as cost s

Question 12

Where do general management capabilities generally reside?

Accepted Answer

A) At the corporate level 
B) At the divisional level 
C) At the operational entity level 
D) All of the above 
A) At the corporate level 
B) At the divisional level 
C) At the operational entity level 
D) All of the above

Question 13

Why is diversification such an important component of a firm's strategy?

Accepted Answer

Diversification is basically about the q

Question 14

Diversified firms remain popular in developing countries probably because:

Accepted Answer

A) In a fast growing economy, there are few senior managers with the skills required to run large companies well 
B) They operate in a high-growth environment akin to the West in 1950-80 
C) Both a and b 
D) Neither a or b 
A) In a fast growing economy, there are few senior managers with the skills required to run large companies well 
B) They operate in a high-growth environment akin to the West in 1950-80 
C) Both a and b 
D) Neither a or b

Question 15

The cost-of-entry test tries to:

Accepted Answer

A) Ensure that an acquirer does not spend more on diversifying than the estimated future cashflows are worth 
B) Assess the cost of entry for other firms if the focal firm is already in the industry 
C) Determine which revenues would be generated by the entry 
D) None of the above 
A) Ensure that an acquirer does not spend more on diversifying than the estimated future cashflows are worth 
B) Assess the cost of entry for other firms if the focal firm is already in the industry 
C) Determine which revenues would be generated by the entry 
D) None of the above

Question 16

Which factors influenced the "era of diversification" in 1950-80?

Accepted Answer

A) Stakeholders' greed, top managers' will, and risk reduction 
B) Risk reduction and growth 
C) Profitability, international competition, and stakeholders' greed 
D) Opportunities, availability of resources, and luck 
A) Stakeholders' greed, top managers' will, and risk reduction 
B) Risk reduction and growth 
C) Profitability, international competition, and stakeholders' greed 
D) Opportunities, availability of resources, and luck

Question 17

What are the consequences of diversification for corporate performance?

Accepted Answer

A) It rarely creates value 
B) It nearly always destroys value 
C) It may create or destroy value, depending largely on how sensible it is and how well it is executed 
D) None of the above 
A) It rarely creates value 
B) It nearly always destroys value 
C) It may create or destroy value, depending largely on how sensible it is and how well it is executed 
D) None of the above

Question 18

By leasing out space to specialist retailers and restaurants, airport and railroad station operators:

Accepted Answer

A) Always achieve above average returns 
B) Exploit their leaning curves 
C) Exploit economies of scope of their facilities 
D) Employ their assets to generate little value 
A) Always achieve above average returns 
B) Exploit their leaning curves 
C) Exploit economies of scope of their facilities 
D) Employ their assets to generate little value

Question 19

Synergies are opportunities for competitive advantage gained from linkages between different businesses in the same firm

Accepted Answer

A) True 
 B)False

Question 20

A supermarket chain would be a prime example of a business whose strategy is to exploit economies of scope.

Accepted Answer

A) True 
 B)False

Regarding tangible and intangible resources:

CAPM stands for:

General management capabilities should be considered as:

Diversification into related industries is more likely to be profitable than diversification in unrelated industries:

Economies of scope are really just another term for economies of scale

Leveraged buyouts happened because:

RJR Nabisco was taken over in 1989 for $31bn by:

Related diversification tends to produce better results than unrelated diversification

Is it correct to claim that diversification provides a benefit of "risk spreading"?

The decision to diversify has probably led to the destruction of more value than any other corporate decision

Does a firm need to diversify across different businesses in order to benefit from economies of scope?

Where do general management capabilities generally reside?

Why is diversification such an important component of a firm's strategy?

Diversified firms remain popular in developing countries probably because:

The cost-of-entry test tries to:

Which factors influenced the "era of diversification" in 1950-80?

What are the consequences of diversification for corporate performance?

By leasing out space to specialist retailers and restaurants, airport and railroad station operators:

Synergies are opportunities for competitive advantage gained from linkages between different businesses in the same firm

A supermarket chain would be a prime example of a business whose strategy is to exploit economies of scope.

The Concept of Strategy

Goals, Values and Performance

Industry Analysis: the Fundamentals

Further Topics in Industry and Competitive Analysis

Analyzing Resources and Capabilities

Developing Resources and Capabilities

Organization Structure and Management Systems: the Fundamentals of Strategy Implementation

The Nature and Sources of Competitive Advantage

Cost Advantage

Differentiation Advantage

Industry Evolution and Strategic Change

Technology-Based Industries and the Management of Innovation

Competitive Advantage in Mature Industries

Vertical Integration and the Scope of the Firm

Global Strategies and the Multinational Corporation

Implementing Corporate Strategy: Management of the Multibusiness Firm

Current Trends in Strategic Management

Filters

Exam 16: Diversification Strategy

Regarding tangible and intangible resources:

CAPM stands for:

General management capabilities should be considered as:

Diversification into related industries is more likely to be profitable than diversification in unrelated industries:

Economies of scope are really just another term for economies of scale

Leveraged buyouts happened because:

RJR Nabisco was taken over in 1989 for $31bn by:

Related diversification tends to produce better results than unrelated diversification

Is it correct to claim that diversification provides a benefit of "risk spreading"?

The decision to diversify has probably led to the destruction of more value than any other corporate decision

Does a firm need to diversify across different businesses in order to benefit from economies of scope?

Where do general management capabilities generally reside?

Why is diversification such an important component of a firm's strategy?

Diversified firms remain popular in developing countries probably because:

The cost-of-entry test tries to:

Which factors influenced the "era of diversification" in 1950-80?

What are the consequences of diversification for corporate performance?

By leasing out space to specialist retailers and restaurants, airport and railroad station operators:

Synergies are opportunities for competitive advantage gained from linkages between different businesses in the same firm

A supermarket chain would be a prime example of a business whose strategy is to exploit economies of scope.

The Concept of Strategy

Goals, Values and Performance

Industry Analysis: the Fundamentals

Further Topics in Industry and Competitive Analysis

Analyzing Resources and Capabilities

Developing Resources and Capabilities

Organization Structure and Management Systems: the Fundamentals of Strategy Implementation

The Nature and Sources of Competitive Advantage

Cost Advantage

Differentiation Advantage

Industry Evolution and Strategic Change

Technology-Based Industries and the Management of Innovation

Competitive Advantage in Mature Industries

Vertical Integration and the Scope of the Firm

Global Strategies and the Multinational Corporation

Implementing Corporate Strategy: Management of the Multibusiness Firm

Current Trends in Strategic Management

Filters