Question 1

High levels of diversification can be very effective strategies in countries with developing capital markets.

Accepted Answer

A) True 
 B)False

Question 2

A ________ is a business that has a weak competitive position and is in a slow-growth industry.

Accepted Answer

A)  cash cow 
B)  dog 
C)  star 
D)  question mark 
A)  cash cow 
B)  dog 
C)  star 
D)  question mark

Question 3

Compare related and unrelated diversification. Give an example of each.

Accepted Answer

Two things increase a firm's level of di

Question 4

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

Accepted Answer

A)  synergy 
B)  competitive advantage 
C)  diversification 
D)  corporate strategy 
A)  synergy 
B)  competitive advantage 
C)  diversification 
D)  corporate strategy

Question 5

Define profit pool. What is its purpose?

Accepted Answer

One tool managers can use to evaluate ad

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Both unrelated and related diversification can create serious managerial problems.

Accepted Answer

A) True 
 B)False

Question 8

The profit to be gained from buying a parent firm and selling off its portfolio piecemeal gives potential buyers a significant ________.

Accepted Answer

A)  pre-sale profit 
B)  consolidation discount 
C)  diversification discount 
D)  competitive advantage 
A)  pre-sale profit 
B)  consolidation discount 
C)  diversification discount 
D)  competitive advantage

Question 9

In relatively stable environments, synergies are typically conceived as functions of static business-unit arenas and the formal structural links among them.

Accepted Answer

A) True 
 B)False

Question 10

By which formula can the concept of economies of scope be represented?

Accepted Answer

A)  Average Costs (X,Y)  Average Costs (X) + Average Costs (Y) 
D)  Total Revenues (X,Y) > Total Revenues (X) + Total Revenues (Y) 
A)  Average Costs (X,Y)  Average Costs (X) + Average Costs (Y) 
D)  Total Revenues (X,Y) > Total Revenues (X) + Total Revenues (Y)

Question 11

________ is the process by which diversification causes two or more interdependent businesses to adapt not only to their environment, but to each other.

Accepted Answer

A)  Synergy 
B)  Coexistence 
C)  Coevolution 
D)  Competitive adaptation 
A)  Synergy 
B)  Coexistence 
C)  Coevolution 
D)  Competitive adaptation

Question 12

Explain the three dimensions of arena expansion including vertical, horizontal, and geographic.

Accepted Answer

The first dimension of arena expansion i

Question 13

________ resources can be exploited across a wide range of activities.

Accepted Answer

A)  Specific 
B)  General 
C)  Unique 
D)  Uncommon 
A)  Specific 
B)  General 
C)  Unique 
D)  Uncommon

Question 14

Mutual gains may be derived from either ________ or ________ synergies.

Accepted Answer

A)  cost savings; low revenue 
B)  high price; economy of scale 
C)  economy of scale; low price 
D)  cost savings; revenue-enhancement 
A)  cost savings; low revenue 
B)  high price; economy of scale 
C)  economy of scale; low price 
D)  cost savings; revenue-enhancement

Question 15

Most global firms approach their corporate strategies from the perspective of their domestic market.

Accepted Answer

A) True 
 B)False

Question 16

Because segments in closely related industries often use similar assets and resources, a firm can frequently achieve cost savings by sharing them among businesses in different segments.

Accepted Answer

A) True 
 B)False

Question 17

The extent to which a firm participates in related market segments or industries outside its existing value-chain activities is called ________.

Accepted Answer

A)  vertical scope 
B)  horizontal scope 
C)  geographic scope 
D)  vertical differentiation 
A)  vertical scope 
B)  horizontal scope 
C)  geographic scope 
D)  vertical differentiation

Question 18

Sometime firms entering new geographic markets discover that they must adapt certain components of their strategies to accommodate local environments.

Accepted Answer

A) True 
 B)False

Question 19

A conglomerate is a corporation consisting of many companies in different businesses or industries.

Accepted Answer

A) True 
 B)False

Question 20

The starting point in the portfolio planning process requires the firm to analyze businesses in terms of their ________.

Accepted Answer

A)  similarity and stability 
B)  dissimilarity and market share 
C)  market share and growth prospects 
D)  customer base and employee credentials 
A)  similarity and stability 
B)  dissimilarity and market share 
C)  market share and growth prospects 
D)  customer base and employee credentials

High levels of diversification can be very effective strategies in countries with developing capital markets.

A ________ is a business that has a weak competitive position and is in a slow-growth industry.

Compare related and unrelated diversification. Give an example of each.

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

Define profit pool. What is its purpose?

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

Both unrelated and related diversification can create serious managerial problems.

The profit to be gained from buying a parent firm and selling off its portfolio piecemeal gives potential buyers a significant ________.

In relatively stable environments, synergies are typically conceived as functions of static business-unit arenas and the formal structural links among them.

By which formula can the concept of economies of scope be represented?

________ is the process by which diversification causes two or more interdependent businesses to adapt not only to their environment, but to each other.

Explain the three dimensions of arena expansion including vertical, horizontal, and geographic.

________ resources can be exploited across a wide range of activities.

Mutual gains may be derived from either or synergies.

Most global firms approach their corporate strategies from the perspective of their domestic market.

Because segments in closely related industries often use similar assets and resources, a firm can frequently achieve cost savings by sharing them among businesses in different segments.

The extent to which a firm participates in related market segments or industries outside its existing value-chain activities is called ________.

Sometime firms entering new geographic markets discover that they must adapt certain components of their strategies to accommodate local environments.

A conglomerate is a corporation consisting of many companies in different businesses or industries.

The starting point in the portfolio planning process requires the firm to analyze businesses in terms of their ________.

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

High levels of diversification can be very effective strategies in countries with developing capital markets.

A ________ is a business that has a weak competitive position and is in a slow-growth industry.

Compare related and unrelated diversification. Give an example of each.

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

Define profit pool. What is its purpose?

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

Both unrelated and related diversification can create serious managerial problems.

The profit to be gained from buying a parent firm and selling off its portfolio piecemeal gives potential buyers a significant ________.

In relatively stable environments, synergies are typically conceived as functions of static business-unit arenas and the formal structural links among them.

By which formula can the concept of economies of scope be represented?

________ is the process by which diversification causes two or more interdependent businesses to adapt not only to their environment, but to each other.

Explain the three dimensions of arena expansion including vertical, horizontal, and geographic.

________ resources can be exploited across a wide range of activities.

Mutual gains may be derived from either ________ or ________ synergies.

Most global firms approach their corporate strategies from the perspective of their domestic market.

Because segments in closely related industries often use similar assets and resources, a firm can frequently achieve cost savings by sharing them among businesses in different segments.

The extent to which a firm participates in related market segments or industries outside its existing value-chain activities is called ________.

Sometime firms entering new geographic markets discover that they must adapt certain components of their strategies to accommodate local environments.

A conglomerate is a corporation consisting of many companies in different businesses or industries.

The starting point in the portfolio planning process requires the firm to analyze businesses in terms of their ________.

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

Mutual gains may be derived from either or synergies.