Question 1

What are the strategic recommendations for strategic business units categorized under cash cows?

Accepted Answer

The earnings of cash cows are

Question 2

_____ are best described as costs that occur due to political maneuvering by managers to control capital and resource allocation and the resulting inefficiencies stemming from suboptimal allocation of scarce resources.

Accepted Answer

A)  Fixed costs 
B)  Influence costs 
C)  Coordination costs 
D)  Opportunity costs 
A)  Fixed costs 
B)  Influence costs 
C)  Coordination costs 
D)  Opportunity costs

Question 3

A(n)_____ is best used to depict the transformation of raw materials into finished goods and services along distinct vertical stages.

Accepted Answer

A)  encrypt 
B)  chain of command 
C)  industry value chain 
D)  scatter chart 
A)  encrypt 
B)  chain of command 
C)  industry value chain 
D)  scatter chart

Question 4

Grace Apparel Inc.has decided to procure fabrics required for its garments from external suppliers instead of maintaining its own dyeing and weaving facilities.How will this decision affect the firm?

Accepted Answer

A)  The firm will be protected against the principal-agent problem. 
B)  The firm's administrative costs will be low because of necessary bureaucracy. 
C)  The firm will have more flexibility in purchasing and comparing prices of goods and services. 
D)  The firm will have high-powered incentives, such as hourly wages and salaries. 
A)  The firm will be protected against the principal-agent problem. 
B)  The firm's administrative costs will be low because of necessary bureaucracy. 
C)  The firm will have more flexibility in purchasing and comparing prices of goods and services. 
D)  The firm will have high-powered incentives, such as hourly wages and salaries.

Question 5

In the context of the Boston Consulting Group (BCG)growth-share matrix, if one of the strategic business units of a conglomerate is categorized under dogs, the management should:

Accepted Answer

A)  infuse more capital into the strategic business unit. 
B)  provide more human resource to the business. 
C)  hold the business till it turns into a star. 
D)  divest the strategic business unit. 
A)  infuse more capital into the strategic business unit. 
B)  provide more human resource to the business. 
C)  hold the business till it turns into a star. 
D)  divest the strategic business unit.

Question 6

List the benefits of vertical integration.

Accepted Answer

Vertical integration, either backward or

Question 7

Elaborate on the parent-subsidiary relationship.

Accepted Answer

The parent-subsidiary relationship descr

Question 8

When executives of a firm consider business opportunities only where they can leverage their existing competencies and resources, it can be concluded that the firm is using _____.

Accepted Answer

A)  related-constrained diversification 
B)  related-linked diversification 
C)  strategic outsourcing 
D)  offshore outsourcing 
A)  related-constrained diversification 
B)  related-linked diversification 
C)  strategic outsourcing 
D)  offshore outsourcing

Question 9

A drawback of short-term contracting as an alternative to making a component in-house is that:

Accepted Answer

A)  it is the most-integrated alternative to performing an activity so the principal company has no control over the agent. 
B)  the supplying firm has no incentive to make any transaction-specific investments to increase performance or quality. 
C)  it fails to allow a long planning period that individual market transactions provide. 
D)  the buying firm cannot demand lower prices due to the lack of a competitive bidding process. 
A)  it is the most-integrated alternative to performing an activity so the principal company has no control over the agent. 
B)  the supplying firm has no incentive to make any transaction-specific investments to increase performance or quality. 
C)  it fails to allow a long planning period that individual market transactions provide. 
D)  the buying firm cannot demand lower prices due to the lack of a competitive bidding process.

Question 10

A strategy of _____ will be most beneficial for a firm to enhance its overall corporate performance.

Accepted Answer

A)  unrelated level of diversification 
B)  single-business level of diversification 
C)  dominant-business level of diversification 
D)  related-linked diversification 
A)  unrelated level of diversification 
B)  single-business level of diversification 
C)  dominant-business level of diversification 
D)  related-linked diversification

Question 11

_____ is best described as changes in an industry value chain that involve moving ownership of activities closer to the end (customer)point of the value chain.

Accepted Answer

A)  Forward vertical integration 
B)  Corporate divestiture 
C)  Reverse engineering 
D)  Closed innovation 
A)  Forward vertical integration 
B)  Corporate divestiture 
C)  Reverse engineering 
D)  Closed innovation

Question 12

If a strategic business unit is recognized as a cash cow, it is advisable to:

Accepted Answer

A)  harvest the business. 
B)  invest into the business to hold its current position. 
C)  divest the business due to its low market share. 
D)  maintain it till turns into a dog. 
A)  harvest the business. 
B)  invest into the business to hold its current position. 
C)  divest the business due to its low market share. 
D)  maintain it till turns into a dog.

Question 13

The solar-powered car division of a large automobile company has been experiencing negative cash flows though the market growth for such cars is predicted to be high.If the company invests further resources into this division, it can increase its relative market share in the future.However, if due to technological changes the car cannot create sufficient consumer demand, then the division can prove to be unprofitable.In the Boston Consulting Group (BCG)growth-share matrix, the solar-powered car division will be categorized under:

Accepted Answer

A)  dogs. 
B)  question marks. 
C)  stars. 
D)  underdogs. 
A)  dogs. 
B)  question marks. 
C)  stars. 
D)  underdogs.

Question 14

Marva Industries, a U.S.-based large conglomerate, competes in the hospitality, education, telecommunications, entertainment, airlines, and chemical industries.It currently operates in about 30 nations, and is planning to expand its portfolio by investing in rapidly developing countries.Which of the following strategies is Marva Industries pursuing?

Accepted Answer

A)  Zone pricing 
B)  Niche marketing 
C)  Product-market diversification strategy 
D)  Process diversification strategy 
A)  Zone pricing 
B)  Niche marketing 
C)  Product-market diversification strategy 
D)  Process diversification strategy

Question 15

Divina Pharma Inc.and MF Electronics Inc.have together invested and created a new organization, FirstHealth Inc., to focus on developing diagnostic devices.Through this new firm, both companies are attempting to combine their core competencies to innovate and reduce their risks associated with transaction-specific investments.However, the new organization operates independent of Divina Pharma and MF Electronics.Which of the following alternatives to integration does this scenario best illustrate?

Accepted Answer

A)  A joint venture 
B)  A franchisee 
C)  A licensing contract 
D)  A corporate acquisition 
A)  A joint venture 
B)  A franchisee 
C)  A licensing contract 
D)  A corporate acquisition

Question 16

Elaborate on corporate strategy.

Accepted Answer

Corporate strategy comprises the decisio

Question 17

PepsiCo operates in many countries and sells a wide variety of aerated drinks, other beverages, different types of chips, and Quaker Oats goods to achieve continuous growth.From this data, we can conclude that PepsiCo has been involved in _____.

Accepted Answer

A)  strategic outsourcing 
B)  lean manufacturing 
C)  product-market diversification 
D)  process diversification 
A)  strategic outsourcing 
B)  lean manufacturing 
C)  product-market diversification 
D)  process diversification

Question 18

In the market for used cars, which of the following is a reason behind the crowding out of desirable cars by lemons or inferior ones?

Accepted Answer

A)  Experience-curve effects 
B)  Time compression diseconomies 
C)  Principal-agent problem 
D)  Information asymmetry 
A)  Experience-curve effects 
B)  Time compression diseconomies 
C)  Principal-agent problem 
D)  Information asymmetry

Question 19

TrueAutos Inc.is a large automobile company.The company's petrol cars strategic business unit (SBU)has been recognized as a cash cow, and its hybrid electric cars SBU has been categorized under stars.Which of the following can be inferred from this scenario?

Accepted Answer

A)  The petrol cars SBU operates in a low-growth market, whereas the hybrid electric cars SBU operates in a high-growth market. 
B)  The petrol cars SBU will have a relatively low market share in its industry, whereas the hybrid electric cars SBU will have the least market share in its industry. 
C)  The strategic recommendation for the hybrid electric cars SBU will be to harvest it, whereas for the petrol cars SBU, the company should just maintain it. 
D)  The petrol cars SBU is more important than the hybrid electric cars SBU in terms of future growth for the company. 
A)  The petrol cars SBU operates in a low-growth market, whereas the hybrid electric cars SBU operates in a high-growth market. 
B)  The petrol cars SBU will have a relatively low market share in its industry, whereas the hybrid electric cars SBU will have the least market share in its industry. 
C)  The strategic recommendation for the hybrid electric cars SBU will be to harvest it, whereas for the petrol cars SBU, the company should just maintain it. 
D)  The petrol cars SBU is more important than the hybrid electric cars SBU in terms of future growth for the company.

Question 20

What are the three types of specialized assets?

Accepted Answer

Specialized assets can come in several f

What are the strategic recommendations for strategic business units categorized under cash cows?

_____ are best described as costs that occur due to political maneuvering by managers to control capital and resource allocation and the resulting inefficiencies stemming from suboptimal allocation of scarce resources.

A(n)_____ is best used to depict the transformation of raw materials into finished goods and services along distinct vertical stages.

Grace Apparel Inc.has decided to procure fabrics required for its garments from external suppliers instead of maintaining its own dyeing and weaving facilities.How will this decision affect the firm?

In the context of the Boston Consulting Group (BCG)growth-share matrix, if one of the strategic business units of a conglomerate is categorized under dogs, the management should:

List the benefits of vertical integration.

Elaborate on the parent-subsidiary relationship.

When executives of a firm consider business opportunities only where they can leverage their existing competencies and resources, it can be concluded that the firm is using _____.

A drawback of short-term contracting as an alternative to making a component in-house is that:

A strategy of _____ will be most beneficial for a firm to enhance its overall corporate performance.

_____ is best described as changes in an industry value chain that involve moving ownership of activities closer to the end (customer)point of the value chain.

If a strategic business unit is recognized as a cash cow, it is advisable to:

Elaborate on corporate strategy.

PepsiCo operates in many countries and sells a wide variety of aerated drinks, other beverages, different types of chips, and Quaker Oats goods to achieve continuous growth.From this data, we can conclude that PepsiCo has been involved in _____.

In the market for used cars, which of the following is a reason behind the crowding out of desirable cars by lemons or inferior ones?

TrueAutos Inc.is a large automobile company.The company's petrol cars strategic business unit (SBU)has been recognized as a cash cow, and its hybrid electric cars SBU has been categorized under stars.Which of the following can be inferred from this scenario?

What are the three types of specialized assets?

What Is Strategy

Strategic Leadership: Managing the Strategy Process

External Analysis: Industry Structure, Competitive Forces, and Strategic Groups

Internal Analysis: Resources, Capabilities, and Core Competencies

Competitive Advantage, Firm Performance, and Business Models

Business Strategy: Differentiation, Cost Leadership, and Blue Oceans

Business Strategy: Innovation, Entrepreneurship, and Platforms

Corporate Strategy: Strategic Alliances, Mergers and Acquisitions

Global Strategy: Competing Around the World

Organizational Design: Structure, Culture, and Control

Corporate Governance and Business Ethics

Filters

Exam 8: Corporate Strategy: Vertical Integration and Diversification

What are the strategic recommendations for strategic business units categorized under cash cows?

_____ are best described as costs that occur due to political maneuvering by managers to control capital and resource allocation and the resulting inefficiencies stemming from suboptimal allocation of scarce resources.

A(n)_____ is best used to depict the transformation of raw materials into finished goods and services along distinct vertical stages.

Grace Apparel Inc.has decided to procure fabrics required for its garments from external suppliers instead of maintaining its own dyeing and weaving facilities.How will this decision affect the firm?

In the context of the Boston Consulting Group (BCG)growth-share matrix, if one of the strategic business units of a conglomerate is categorized under dogs, the management should:

List the benefits of vertical integration.

Elaborate on the parent-subsidiary relationship.

When executives of a firm consider business opportunities only where they can leverage their existing competencies and resources, it can be concluded that the firm is using _____.

A drawback of short-term contracting as an alternative to making a component in-house is that:

A strategy of _____ will be most beneficial for a firm to enhance its overall corporate performance.

_____ is best described as changes in an industry value chain that involve moving ownership of activities closer to the end (customer)point of the value chain.

If a strategic business unit is recognized as a cash cow, it is advisable to:

Elaborate on corporate strategy.

PepsiCo operates in many countries and sells a wide variety of aerated drinks, other beverages, different types of chips, and Quaker Oats goods to achieve continuous growth.From this data, we can conclude that PepsiCo has been involved in _____.

In the market for used cars, which of the following is a reason behind the crowding out of desirable cars by lemons or inferior ones?

TrueAutos Inc.is a large automobile company.The company's petrol cars strategic business unit (SBU)has been recognized as a cash cow, and its hybrid electric cars SBU has been categorized under stars.Which of the following can be inferred from this scenario?

What are the three types of specialized assets?

What Is Strategy

Strategic Leadership: Managing the Strategy Process

External Analysis: Industry Structure, Competitive Forces, and Strategic Groups

Internal Analysis: Resources, Capabilities, and Core Competencies

Competitive Advantage, Firm Performance, and Business Models

Business Strategy: Differentiation, Cost Leadership, and Blue Oceans

Business Strategy: Innovation, Entrepreneurship, and Platforms

Corporate Strategy: Strategic Alliances, Mergers and Acquisitions

Global Strategy: Competing Around the World

Organizational Design: Structure, Culture, and Control

Corporate Governance and Business Ethics

Filters