Exam 7: Developing Corporate Strategy

What are the pitfalls of increased vertical scope?

Depths of profit pools are stable within a given value-chain segment.

Where can synergies in business come from?

When strategies differ significantly, managers will generally be slower and less decisive.

When a firm achieves economies of scope across its portfolio by bundling two outlets in a single facility, it is using ________ store strategy.

The degree to which a company conducts business in more than one arena is called ________.

Financial markets will recognize the existence of a parenting advantage when the collective market value is less than the independent market value of a portfolio of business units.

Corporate strategy addresses issues-related decisions about entering or exiting an industry.

The harmful side effects of too little diversification include increasing transaction costs and managerial complexity.

A tool that helps managers identify the size of value-chain segments and the attractiveness of each segment is called the ________ pool.

Transferring capabilities is a special case of resource sharing that can create cost savings and revenue enhancement.

The form of diversification in which the business units operated by a firm are highly related is called ________.

At the ________ level, competitive advantage reflects the relative position of a firm compared to positions of industry rivals.

When unrelated diversification is taken to the extreme and there are many unrelated businesses, the firm is referred to as a ________.

Managerial know-how is a general resource that could be exploited in any number of contexts.

To secure needed resources, large firms often move "downstream" in the industry value chain.

Portfolio planning dictated that "cash cows" should not be maintained, but "dogs" should be.

When executives embark on diversification because they desire to build a larger company, they are said to be engaging in ________.

A "cash cow" is a business that has a strong competitive position in a fast-growth industry.

It is easier to manage a firm that requires dissimilar dominant logics across business units.