Question 1

Economies of scope and synergy are collectively referred to as revenue-enhancement opportunities.

Accepted Answer

A) True 
 B)False  False

Question 2

The profit pool reminds us that profit and revenue concentration usually occur at the same place in an industry.

Accepted Answer

A) True 
 B)False  False

Question 3

Managers can squander value through diversification.

Accepted Answer

A) True 
 B)False  True

Question 4

When strategists think about a proposed diversification move, they must assess the extent to which their firm's resources and capabilities match the ________.

Accepted Answer

A)  needs of potential subsidiaries 
B)  needs of their own firm 
C)  production schedule 
D)  capabilities of potential subsidiaries 
A)  needs of potential subsidiaries 
B)  needs of their own firm 
C)  production schedule 
D)  capabilities of potential subsidiaries

Question 5

The success with which diversified firms are managed in harmony with key organizational features has a significant effect on the level of value that can be created through their portfolios.

Accepted Answer

A) True 
 B)False

Question 6

When there are many businesses and they are largely unrelated, the firm is referred to as a conglomerate.

Accepted Answer

A) True 
 B)False

Question 7

The corporate strategy involves operating in a singular arena.

Accepted Answer

A) True 
 B)False

Question 8

Expanding a firm's scope does not necessarily create value for shareholders.

Accepted Answer

A) True 
 B)False

Question 9

As a result of the Sherman Antitrust Act of 1890, many large firms began expanding into areas unrelated to their core businesses.

Accepted Answer

A) True 
 B)False

Question 10

Whenever a common resource can be used across more than one business unit, the company will always generate enhanced shareholder value.

Accepted Answer

A) True 
 B)False

Question 11

Increased horizontal scope is attractive to firms because it offers opportunities by reducing costs through exploiting possible economies of scope and by ________.

Accepted Answer

A)  increasing the customer base 
B)  decreasing production costs 
C)  decreasing competition between similar business units 
D)  increasing revenues through synergies 
A)  increasing the customer base 
B)  decreasing production costs 
C)  decreasing competition between similar business units 
D)  increasing revenues through synergies

Question 12

Portfolio planning was not initially intended to help managers achieve a balanced portfolio of large stable businesses.

Accepted Answer

A) True 
 B)False

Question 13

At the ________ level, competitive advantage reflects management's success in creating more value from the firm's business units than those units could create as stand-alone enterprises.

Accepted Answer

A)  industry 
B)  corporate 
C)  business 
D)  subsidiary 
A)  industry 
B)  corporate 
C)  business 
D)  subsidiary

Question 14

Some of the more important levers to achieve successful diversification include knowledge-transfer mechanisms, coordination mechanisms, rewards, and corporate oversight. Discuss the benefits of knowledge transfer.

Accepted Answer

Knowledge transfer enables a diversified

Question 15

The profit pool incorporates key complementary businesses near the point at which a firm is directly involved in customer transactions.

Accepted Answer

A) True 
 B)False

Question 16

Diversification into upstream or downstream industries is called ________.

Accepted Answer

A)  synergistic integration 
B)  vertical integration 
C)  horizontal integration 
D)  related diversification 
A)  synergistic integration 
B)  vertical integration 
C)  horizontal integration 
D)  related diversification

Question 17

Businesses can be related along several different dimensions including all of the following except ________.

Accepted Answer

A)  similarity in markets 
B)  use of resources 
C)  reliance on comparable dominant logic 
D)  reliance on contextual economic logic 
A)  similarity in markets 
B)  use of resources 
C)  reliance on comparable dominant logic 
D)  reliance on contextual economic logic

Question 18

Business strategy and corporate strategy have very similar objectives.

Accepted Answer

A) True 
 B)False

Question 19

The economic logic of diversification incorporates levers to achieve synergy and transfer knowledge between business units.

Accepted Answer

A) True 
 B)False

Question 20

The maximum opportunities to exploit potential economies of scope and revenue enhancement synergies lie at the intersection of the two dimensions of fit among parent-subsidiary ________ and ________.

Accepted Answer

A)  products; services 
B)  similarities; dissimilarities 
C)  managers; employees 
D)  resources; strategies 
A)  products; services 
B)  similarities; dissimilarities 
C)  managers; employees 
D)  resources; strategies

Economies of scope and synergy are collectively referred to as revenue-enhancement opportunities.

The profit pool reminds us that profit and revenue concentration usually occur at the same place in an industry.

Managers can squander value through diversification.

When strategists think about a proposed diversification move, they must assess the extent to which their firm's resources and capabilities match the ________.

The success with which diversified firms are managed in harmony with key organizational features has a significant effect on the level of value that can be created through their portfolios.

When there are many businesses and they are largely unrelated, the firm is referred to as a conglomerate.

The corporate strategy involves operating in a singular arena.

Expanding a firm's scope does not necessarily create value for shareholders.

As a result of the Sherman Antitrust Act of 1890, many large firms began expanding into areas unrelated to their core businesses.

Whenever a common resource can be used across more than one business unit, the company will always generate enhanced shareholder value.

Increased horizontal scope is attractive to firms because it offers opportunities by reducing costs through exploiting possible economies of scope and by ________.

Portfolio planning was not initially intended to help managers achieve a balanced portfolio of large stable businesses.

At the ________ level, competitive advantage reflects management's success in creating more value from the firm's business units than those units could create as stand-alone enterprises.

Some of the more important levers to achieve successful diversification include knowledge-transfer mechanisms, coordination mechanisms, rewards, and corporate oversight. Discuss the benefits of knowledge transfer.

The profit pool incorporates key complementary businesses near the point at which a firm is directly involved in customer transactions.

Diversification into upstream or downstream industries is called ________.

Businesses can be related along several different dimensions including all of the following except ________.

Business strategy and corporate strategy have very similar objectives.

The economic logic of diversification incorporates levers to achieve synergy and transfer knowledge between business units.

The maximum opportunities to exploit potential economies of scope and revenue enhancement synergies lie at the intersection of the two dimensions of fit among parent-subsidiary and .

Introducing Strategic Management

Leading Strategically Through Effective Vision and Mission

Examining the Internal Environment: Resources

Exploring the External Environment: Macro Industry and Dynamics

Creating Business Strategies

Crafting Business Strategy of Dynamic Contexts

Looking at International Strategies

Understanding Alliances and Cooperative Strategies

Studying Merges and Acquisitions

Organizational Structure, Systems, and Processes

Considering New Ventures and Corporate Renewal

Corporate Governance in the Twenty-First Century

Filters

Exam 7: Developing Corporate Strategy

Economies of scope and synergy are collectively referred to as revenue-enhancement opportunities.

The profit pool reminds us that profit and revenue concentration usually occur at the same place in an industry.

Managers can squander value through diversification.

When strategists think about a proposed diversification move, they must assess the extent to which their firm's resources and capabilities match the ________.

The success with which diversified firms are managed in harmony with key organizational features has a significant effect on the level of value that can be created through their portfolios.

When there are many businesses and they are largely unrelated, the firm is referred to as a conglomerate.

The corporate strategy involves operating in a singular arena.

Expanding a firm's scope does not necessarily create value for shareholders.

As a result of the Sherman Antitrust Act of 1890, many large firms began expanding into areas unrelated to their core businesses.

Whenever a common resource can be used across more than one business unit, the company will always generate enhanced shareholder value.

Increased horizontal scope is attractive to firms because it offers opportunities by reducing costs through exploiting possible economies of scope and by ________.

Portfolio planning was not initially intended to help managers achieve a balanced portfolio of large stable businesses.

At the ________ level, competitive advantage reflects management's success in creating more value from the firm's business units than those units could create as stand-alone enterprises.

Some of the more important levers to achieve successful diversification include knowledge-transfer mechanisms, coordination mechanisms, rewards, and corporate oversight. Discuss the benefits of knowledge transfer.

The profit pool incorporates key complementary businesses near the point at which a firm is directly involved in customer transactions.

Diversification into upstream or downstream industries is called ________.

Businesses can be related along several different dimensions including all of the following except ________.

Business strategy and corporate strategy have very similar objectives.

The economic logic of diversification incorporates levers to achieve synergy and transfer knowledge between business units.

The maximum opportunities to exploit potential economies of scope and revenue enhancement synergies lie at the intersection of the two dimensions of fit among parent-subsidiary ________ and ________.

Introducing Strategic Management

Leading Strategically Through Effective Vision and Mission

Examining the Internal Environment: Resources

Exploring the External Environment: Macro Industry and Dynamics

Creating Business Strategies

Crafting Business Strategy of Dynamic Contexts

Looking at International Strategies

Understanding Alliances and Cooperative Strategies

Studying Merges and Acquisitions

Organizational Structure, Systems, and Processes

Considering New Ventures and Corporate Renewal

Corporate Governance in the Twenty-First Century

Filters

The maximum opportunities to exploit potential economies of scope and revenue enhancement synergies lie at the intersection of the two dimensions of fit among parent-subsidiary and .