Question 1

Acquisitions often fail because of:

Accepted Answer

A) poor commercialization. 
B) pre-acquisition screening that increases the time it takes to enter a market. 
C) large-scale entry. 
D) differences in corporate culture. 
E) slowness in establishing significant market presence. 
A) poor commercialization. 
B) pre-acquisition screening that increases the time it takes to enter a market. 
C) large-scale entry. 
D) differences in corporate culture. 
E) slowness in establishing significant market presence.

Question 2

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 3

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 4

What are the two general types of diversification and when would one be preferred over the other?

Accepted Answer

Diversification can take one of two form

Question 5

The coordination required to realize value from a diversification strategy based on transferring, sharing, or leveraging competencies is a major source of bureaucratic costs.

Accepted Answer

A) True 
 B)False

Question 6

Transferring competencies across industries involves taking a distinctive competency developed in one industry and implanting it in an existing business unit in another industry.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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 9

Economies of scope arise when one or more of a diversified company's business units are able to realize cost-saving or differentiation advantages because they can more effectively pool, share, and utilize resources or capabilities.

Accepted Answer

A) True 
 B)False

Question 10

What is the process of transferring resources to and creating a new business unit in a new industry called?

Accepted Answer

A) External new venturing 
B) Exportation of resources 
C) Intrapreneuring 
D) Risk avoidance 
E) Internal new venturing 
A) External new venturing 
B) Exportation of resources 
C) Intrapreneuring 
D) Risk avoidance 
E) Internal new venturing

Question 11

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 12

In which of the following cases are bureaucratic costs likely to be lowest?

Accepted Answer

A) A vertically integrated company with five divisions that pursues full integration 
B) A company with five divisions that pursues related diversification based on economies of scope 
C) A company with five divisions that pursues related diversification based on transferring competencies 
D) A company with five divisions that pursues unrelated diversification based on acquisitions and restructuring 
E) A company with twenty divisions that pursues taper integration 
A) A vertically integrated company with five divisions that pursues full integration 
B) A company with five divisions that pursues related diversification based on economies of scope 
C) A company with five divisions that pursues related diversification based on transferring competencies 
D) A company with five divisions that pursues unrelated diversification based on acquisitions and restructuring 
E) A company with twenty divisions that pursues taper integration

Question 13

Stanley's services finn wants to enter an embryonic market, but it doesn't have enough cash to purchase the required assets.Which of the following strategies would you recommend to Stanley?

Accepted Answer

A) DiversifY through acquisition 
B) Do not diversifY at all 
C) DiversifY with an internal new venture 
D) DiversifY with a joint venture 
E) DiversifY through vertical integration 
A) DiversifY through acquisition 
B) Do not diversifY at all 
C) DiversifY with an internal new venture 
D) DiversifY with a joint venture 
E) DiversifY through vertical integration

Question 14

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 15

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

Accepted Answer

A) A good bidding strategy 
B) A clear strategic rationale for making the acquisition 
C) Quick completion of the acquisition 
D) Thorough pre-acquisition screening 
E) Post-acquisition audit to review the process and discuss ways to improve it 
A) A good bidding strategy 
B) A clear strategic rationale for making the acquisition 
C) Quick completion of the acquisition 
D) Thorough pre-acquisition screening 
E) Post-acquisition audit to review the process and discuss ways to improve it

Question 16

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

Question 17

An advantage of a joint venture is that it allows a company to quickly gain entry into a new industry where barriers are high.

Accepted Answer

A) True 
 B)False

Question 18

Diversification may dissipate value if it is wrongly based on:

Accepted Answer

A) realizing economies of scope. 
B) rescuing core business. 
C) transferring competencies. 
D) acquisitions and restructuring. 
E) leveraging existing competencies. 
A) realizing economies of scope. 
B) rescuing core business. 
C) transferring competencies. 
D) acquisitions and restructuring. 
E) leveraging existing competencies.

Question 19

involves taking a distinctive competency developed by a business unit in one industry and implanting it in a business unit operating in another industry.

Accepted Answer

A) Sharing resources and capabilities 
B) Leveraging competencies 
C) Transferring competencies 
D) Product bundling 
E) Strategic management capabilities 
A) Sharing resources and capabilities 
B) Leveraging competencies 
C) Transferring competencies 
D) Product bundling 
E) Strategic management capabilities

Question 20

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.

Acquisitions often fail because of:

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

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

What are the two general types of diversification and when would one be preferred over the other?

The coordination required to realize value from a diversification strategy based on transferring, sharing, or leveraging competencies is a major source of bureaucratic costs.

Transferring competencies across industries involves taking a distinctive competency developed in one industry and implanting it in an existing business unit in another industry.

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

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

Economies of scope arise when one or more of a diversified company's business units are able to realize cost-saving or differentiation advantages because they can more effectively pool, share, and utilize resources or capabilities.

What is the process of transferring resources to and creating a new business unit in a new industry called?

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.

In which of the following cases are bureaucratic costs likely to be lowest?

Stanley's services finn wants to enter an embryonic market, but it doesn't have enough cash to purchase the required assets.Which of the following strategies would you recommend to Stanley?

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

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

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

An advantage of a joint venture is that it allows a company to quickly gain entry into a new industry where barriers are high.

Diversification may dissipate value if it is wrongly based on:

involves taking a distinctive competency developed by a business unit in one industry and implanting it in a business unit operating in another industry.

The three main types of diversification strategies are:

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

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

Acquisitions often fail because of:

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

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

What are the two general types of diversification and when would one be preferred over the other?

The coordination required to realize value from a diversification strategy based on transferring, sharing, or leveraging competencies is a major source of bureaucratic costs.

Transferring competencies across industries involves taking a distinctive competency developed in one industry and implanting it in an existing business unit in another industry.

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

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

Economies of scope arise when one or more of a diversified company's business units are able to realize cost-saving or differentiation advantages because they can more effectively pool, share, and utilize resources or capabilities.

What is the process of transferring resources to and creating a new business unit in a new industry called?

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.

In which of the following cases are bureaucratic costs likely to be lowest?

Stanley's services finn wants to enter an embryonic market, but it doesn't have enough cash to purchase the required assets.Which of the following strategies would you recommend to Stanley?

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

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

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

An advantage of a joint venture is that it allows a company to quickly gain entry into a new industry where barriers are high.

Diversification may dissipate value if it is wrongly based on:

involves taking a distinctive competency developed by a business unit in one industry and implanting it in a business unit operating in another industry.

The three main types of diversification strategies are:

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

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