Question 1

Intel is an example of a company that moved from a related diversification strategy to a concentration strategy.

Accepted Answer

A) True 
 B)False

Question 2

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.

Accepted Answer

A) True 
 B)False

Question 3

General organizational competencies are found

Accepted Answer

A) in the skills of a company's top managers and functional experts. 
B) at low levels in the organization. 
C) among technology professionals. 
D) within a company's strategic core. 
E) in an organization's tangible resources. 
A) in the skills of a company's top managers and functional experts. 
B) at low levels in the organization. 
C) among technology professionals. 
D) within a company's strategic core. 
E) in an organization's tangible resources.

Question 4

Product bundling refers to

Accepted Answer

A) preparation of products for shipment. 
B) a complete package of related products. 
C) a method of stocking products efficiently. 
D) an inventory procedure for ensuring effective counting of products. 
E) a package of unrelated products. 
A) preparation of products for shipment. 
B) a complete package of related products. 
C) a method of stocking products efficiently. 
D) an inventory procedure for ensuring effective counting of products. 
E) a package of unrelated products.

Question 5

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 6

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 7

A joint venture allows a company to share the risks and costs associated with establishing a new business unit with another company.

Accepted Answer

A) True 
 B)False

Question 8

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 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

If a company is to increase the probability of a new product's commercial success,the company must foster close links between

Accepted Answer

A) marketing and sales. 
B) engineering and advertising. 
C) quality assurance and inventory management. 
D) research and development (R&
D) and marketing. 
E) accounting and industrial engineering. 
A) marketing and sales. 
B) engineering and advertising. 
C) quality assurance and inventory management. 
D) research and development (R&
D) and marketing. 
E) accounting and industrial engineering.

Question 11

In the joint venture between Stephanie's dressmaking shop and Kevin's fabric factory,the partners argue constantly about how to schedule tasks and reward workers.Which of the following disadvantages is Stephanie and Kevin's joint venture experiencing?

Accepted Answer

A) Joint ventures risk the loss of proprietary information to a partner. 
B) Joint venture partners must split the profits of the business. 
C) Joint venture partners must share control and decision-making power. 
D) Joint ventures are slower to reach profitability than are acquisitions. 
E) Joint ventures require less up-front investment than do internal new ventures. 
A) Joint ventures risk the loss of proprietary information to a partner. 
B) Joint venture partners must split the profits of the business. 
C) Joint venture partners must share control and decision-making power. 
D) Joint ventures are slower to reach profitability than are acquisitions. 
E) Joint ventures require less up-front investment than do internal new ventures.

Question 12

Which of the following is not a general organizational competency?

Accepted Answer

A) Entrepreneurial capabilities 
B) Capabilities in organizational design 
C) Superior strategic capabilities 
D) Product bundling 
E) All of these choices 
A) Entrepreneurial capabilities 
B) Capabilities in organizational design 
C) Superior strategic capabilities 
D) Product bundling 
E) All of these choices

Question 13

New ventures are likely to be preferred compared to acquisitions when

Accepted Answer

A) entry barriers are high. 
B) exit barriers are high. 
C) a company's business model is based on using its technology to innovate new kinds of products for related markets. 
D) the company needs more mega-opportunities. 
E) the industry is in the mature stage of the industry life cycle. 
A) entry barriers are high. 
B) exit barriers are high. 
C) a company's business model is based on using its technology to innovate new kinds of products for related markets. 
D) the company needs more mega-opportunities. 
E) the industry is in the mature stage of the industry life cycle.

Question 14

What is perhaps the most important reason why acquisitions made by a company fail?

Accepted Answer

A) The expense of the acquisition 
B) The timing of the acquisition 
C) Management's unwillingness to expend the necessary effort to make the acquisition work effectively 
D) Incompetence on the part of workers in the acquired firm 
E) Difficulties in coordinating manufacturing activities 
A) The expense of the acquisition 
B) The timing of the acquisition 
C) Management's unwillingness to expend the necessary effort to make the acquisition work effectively 
D) Incompetence on the part of workers in the acquired firm 
E) Difficulties in coordinating manufacturing activities

Question 15

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 16

Free cash flow refers to additional funds from a government stimulus program.

Accepted Answer

A) True 
 B)False

Question 17

Diversification is sometimes pursued by a company for the wrong reasons.Which of the following is a faulty justification for diversification?

Accepted Answer

A) Risk pooling 
B) Rescuing the core business from difficulty 
C) Growth for growth's sake 
D) All of the above 
E) None of these choices 
A) Risk pooling 
B) Rescuing the core business from difficulty 
C) Growth for growth's sake 
D) All of the above 
E) None of these choices

Question 18

When a company has cash in excess of the amount needed to maintain a competitive advantage in its core business,it will most likely pursue

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.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

In which of the following industry environments are new ventures most likely to be favored over acquisitions as a means of entering a new business area?

Accepted Answer

A) An embryonic industry 
B) An industry in its later stages of growth 
C) An industry passing through the shakeout stage 
D) A mature industry 
E) A declining industry 
A) An embryonic industry 
B) An industry in its later stages of growth 
C) An industry passing through the shakeout stage 
D) A mature industry 
E) A declining industry

Intel is an example of a company that moved from a related diversification strategy to a concentration strategy.

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.

General organizational competencies are found

Product bundling refers to

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

Joint ventures

A joint venture allows a company to share the risks and costs associated with establishing a new business unit with another company.

A company should pursue unrelated diversification instead of related diversification when

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.

If a company is to increase the probability of a new product's commercial success,the company must foster close links between

In the joint venture between Stephanie's dressmaking shop and Kevin's fabric factory,the partners argue constantly about how to schedule tasks and reward workers.Which of the following disadvantages is Stephanie and Kevin's joint venture experiencing?

Which of the following is not a general organizational competency?

New ventures are likely to be preferred compared to acquisitions when

What is perhaps the most important reason why acquisitions made by a company fail?

Which of the following statements is false?

Free cash flow refers to additional funds from a government stimulus program.

Diversification is sometimes pursued by a company for the wrong reasons.Which of the following is a faulty justification for diversification?

When a company has cash in excess of the amount needed to maintain a competitive advantage in its core business,it will most likely pursue

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

In which of the following industry environments are new ventures most likely to be favored over acquisitions as a means of entering a new business area?

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

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

Intel is an example of a company that moved from a related diversification strategy to a concentration strategy.

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.

General organizational competencies are found

Product bundling refers to

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

Joint ventures

A joint venture allows a company to share the risks and costs associated with establishing a new business unit with another company.

A company should pursue unrelated diversification instead of related diversification when

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.

If a company is to increase the probability of a new product's commercial success,the company must foster close links between

In the joint venture between Stephanie's dressmaking shop and Kevin's fabric factory,the partners argue constantly about how to schedule tasks and reward workers.Which of the following disadvantages is Stephanie and Kevin's joint venture experiencing?

Which of the following is not a general organizational competency?

New ventures are likely to be preferred compared to acquisitions when

What is perhaps the most important reason why acquisitions made by a company fail?

Which of the following statements is false?

Free cash flow refers to additional funds from a government stimulus program.

Diversification is sometimes pursued by a company for the wrong reasons.Which of the following is a faulty justification for diversification?

When a company has cash in excess of the amount needed to maintain a competitive advantage in its core business,it will most likely pursue

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

In which of the following industry environments are new ventures most likely to be favored over acquisitions as a means of entering a new business area?

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