Question 1

Which of the following is not a guideline for a successful acquisition?

Accepted Answer

A)  Good bidding strategy 
B)  A clear strategic rationale for making the acquisition 
C)  Completing the acquisition quickly 
D)  Thorough preacquisition screening 
E)  Postacquisition audit to review the process and discuss ways to improve it 
A)  Good bidding strategy 
B)  A clear strategic rationale for making the acquisition 
C)  Completing the acquisition quickly 
D)  Thorough preacquisition screening 
E)  Postacquisition audit to review the process and discuss ways to improve it

Question 2

At Burger King,multiple items such as a cheeseburger,french fries,and a drink are combined together to create a complete meal.This is an example of diversification.

Accepted Answer

A) True 
 B)False

Question 3

Research evidence suggests that small-scale entry into a new business is the best way for an internal venture to succeed.

Accepted Answer

A) True 
 B)False

Question 4

The three main types of diversification strategies are

Accepted Answer

A)  Acquisitions, joint ventures, and divestments. 
B)  Acquisitions, mergers, and buy outs. 
C)  Acquisitions, internal new ventures, and joint ventures. 
D)  Related acquisitions, unrelated acquisitions, and mergers. 
E)  Joint ventures, strategic alliances, and long-term contracts. 
A)  Acquisitions, joint ventures, and divestments. 
B)  Acquisitions, mergers, and buy outs. 
C)  Acquisitions, internal new ventures, and joint ventures. 
D)  Related acquisitions, unrelated acquisitions, and mergers. 
E)  Joint ventures, strategic alliances, and long-term contracts.

Question 5

Internal new ventures can generally be executed far more quickly than acquisitions.

Accepted Answer

A) True 
 B)False

Question 6

A laundromat and a pool hall together invest in a new store,where customers can wash their clothes and play pool while waiting.This is an example of an internal new venture.

Accepted Answer

A) True 
 B)False

Question 7

In 2007,Google bought YouTube.This is an example of which of the following?

Accepted Answer

A)  Partnership 
B)  Strategic alliance 
C)  Joint venture 
D)  Acquisition 
E)  Merger 
A)  Partnership 
B)  Strategic alliance 
C)  Joint venture 
D)  Acquisition 
E)  Merger

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

When one or more components of a company's value chain are applicable to a wide variety of industrial and commercial situations,which of the following strategies should a company pursue?

Accepted Answer

A)  Unrelated diversification 
B)  Related diversification 
C)  A focus strategy 
D)  Taper integration 
E)  Backward integration 
A)  Unrelated diversification 
B)  Related diversification 
C)  A focus strategy 
D)  Taper integration 
E)  Backward integration

Question 10

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 cost leadership 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 cost leadership instead of differentiation.

Question 11

Which of the following statements is false?

Accepted Answer

A)  Acquisitions are preferable to joint ventures when the new business is unrelated 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)  Acquisitions are preferable to joint ventures when the new business is unrelated 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 12

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

Accepted Answer

A) True 
 B)False

Question 13

A 100-year-old industrial giant,3M serves as an example of how a company can leverage technology to create successful new business.

Accepted Answer

A) True 
 B)False

Question 14

A company should pursue unrelated diversification instead of related diversification when

Accepted Answer

A)  its core skills are highly specialized and have few applications outside its core business. 
B)  the company's top managers are skilled at acquiring and turning around poorly run enterprises. 
C)  its core technological skills are applicable to a wide variety of industrial and commercial situations. 
D)  it wants to maximize growth. 
E)  the bureaucratic costs of implementation do not exceed the value that can be created by realizing economies of scope. 
A)  its core skills are highly specialized and have few applications outside its core business. 
B)  the company's top managers are skilled at acquiring and turning around poorly run enterprises. 
C)  its core technological skills are applicable to a wide variety of industrial and commercial situations. 
D)  it wants to maximize growth. 
E)  the bureaucratic costs of implementation do not exceed the value that can be created by realizing economies of scope.

Question 15

Which of the following is not a reason for the failure of an acquisition to generate the gains originally expected of it?

Accepted Answer

A)  Poor postacquisition integration 
B)  Overestimation of the potential gains to be derived from synergy 
C)  The high cost of making acquisitions 
D)  Lack of preacquisition screening 
E)  Overestimation of the potential costs of realizing synergies 
A)  Poor postacquisition integration 
B)  Overestimation of the potential gains to be derived from synergy 
C)  The high cost of making acquisitions 
D)  Lack of preacquisition screening 
E)  Overestimation of the potential costs of realizing synergies

Which of the following is not a guideline for a successful acquisition?

At Burger King,multiple items such as a cheeseburger,french fries,and a drink are combined together to create a complete meal.This is an example of diversification.

Research evidence suggests that small-scale entry into a new business is the best way for an internal venture to succeed.

The three main types of diversification strategies are

Internal new ventures can generally be executed far more quickly than acquisitions.

A laundromat and a pool hall together invest in a new store,where customers can wash their clothes and play pool while waiting.This is an example of an internal new venture.

In 2007,Google bought YouTube.This is an example of which of the following?

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

When one or more components of a company's value chain are applicable to a wide variety of industrial and commercial situations,which of the following strategies should a company pursue?

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

Which of the following statements is false?

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

A 100-year-old industrial giant,3M serves as an example of how a company can leverage technology to create successful new business.

A company should pursue unrelated diversification instead of related diversification when

Which of the following is not a reason for the failure of an acquisition to generate the gains originally expected of it?

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Distinctive Competencies, Competitive Advantage, and Profitability

Building Competitive Advantage Through Functional-Level Strategy

Building Competitive Advantage Through 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 in Companies That Compete in a Single Industry

Implementing Strategy in Companies That Compete Across Industries and Countries

Filters

Exam 10: Corporate-Level Strategy: Related and Unrelated Diversification

Which of the following is not a guideline for a successful acquisition?

At Burger King,multiple items such as a cheeseburger,french fries,and a drink are combined together to create a complete meal.This is an example of diversification.

Research evidence suggests that small-scale entry into a new business is the best way for an internal venture to succeed.

The three main types of diversification strategies are

Internal new ventures can generally be executed far more quickly than acquisitions.

A laundromat and a pool hall together invest in a new store,where customers can wash their clothes and play pool while waiting.This is an example of an internal new venture.

In 2007,Google bought YouTube.This is an example of which of the following?

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

When one or more components of a company's value chain are applicable to a wide variety of industrial and commercial situations,which of the following strategies should a company pursue?

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

Which of the following statements is false?

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

A 100-year-old industrial giant,3M serves as an example of how a company can leverage technology to create successful new business.

A company should pursue unrelated diversification instead of related diversification when

Which of the following is not a reason for the failure of an acquisition to generate the gains originally expected of it?

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Distinctive Competencies, Competitive Advantage, and Profitability

Building Competitive Advantage Through Functional-Level Strategy

Building Competitive Advantage Through 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 in Companies That Compete in a Single Industry

Implementing Strategy in Companies That Compete Across Industries and Countries

Filters