Deck 9: Multibusiness Strategy

Question 1

When using the BCG growth-share matrix,the dividing point for the growth rate of an industry in constant dollars is typically:

A)The market's growth rate
B)The consumer price index
C)The growth rate of the gross domestic product (GDP)
D)The growth rate of the gross national product (GNP)

Answer 1

D

Question 2

Zeon Plus Company requires substantial investment to maintain and expand their dominant position in the growing electronic zeonites market.In fact,this investment is often in excess of the funds that the firm can generate internally.However,Zeon Plus does have a very large market share.What type of company is this,according to the BCG growth-share matrix?

A)Cash cow
B)Dog
C)Question mark
D)Star

Answer 2

D

Question 3

For the ABC Company,the Alpha business is in a dominant market share position in a mature market.As per the BCG matrix,Alpha is a

A)Star
B)Question mark
C)Cash cow
D)Dog

Answer 3

C

Question 4

Which of the following is NOT a reason for the emergence of multi-business companies?

A)Companies can enter businesses with greater growth potential
B)Companies can enter businesses with different cyclical considerations
C)Companies can diversify inherent risks
D)Companies can slow their internal growth

Question 5

In the past ________ years,we have seen a virtual explosion in the extent to which single-business companies seek to acquire other businesses to grow and diversify.

A)5
B)50
C)30
D)100

Question 6

The ________ is the projected rate of sales growth for the market being served by a particular business.

A)Market share
B)Market projection
C)Market growth rate
D)Relative competitive position

Question 7

In the BCG matrix,which of these businesses often generate cash in excess of their needs?

A)Stars
B)Question marks
C)Cash cows
D)Dogs

Question 8

________ is the current foundation of corporate portfolios-they sustain corporate overhead,dividends and provide debt capacity.

A)Cash cows
B)Dogs
C)Stars
D)Question marks

Question 9

Which of the following firms pioneered the portfolio approach to strategic analysis and choice?

A)Bain Consulting
B)Boston Consulting Group
C)Booz Allen Hamilton
D)McKinsey & Company

Question 10

Businesses with high market share in low-growth industries are called:

A)Stars
B)Cash cows
C)Question marks
D)Dogs

Question 11

In the BCG growth-share matrix,the ________ are businesses in rapidly growing markets with large market shares.

A)Cash cows
B)Question marks
C)Stars
D)Dogs

Question 12

For the ABC Company,the Theta business is in a low market share position in a slow growing market.As per the BCG matrix,Theta is a

A)Cash cow
B)Question mark
C)Dog
D)Star

Question 13

__________ usually is expressed as market share of a business divided by the market share of its largest competitor.

A)Relative competitive position
B)Relative market share
C)Market growth rate
D)Growth-share rate

Question 14

For the ABC Company,the Omega business is in a dominant market share position in a fast growing market.As per the BCG matrix,Omega is a

A)Cash cow
B)Question mark
C)Star
D)Dog

Question 15

The _______ approach was one of the early approaches for charting strategy and allocating resources in multi-business companies.It was particularly popular in the 1960s and 1970s.

A)Case
B)Matrix-management
C)Portfolio
D)Patching

Question 16

What was the key challenge as companies jumped on the diversification bandwagon?

A)Making the business profitable
B)Finding businesses to buy
C)Managing the resource needs of diverse businesses
D)Financing acquisitions

Question 17

For the ABC Company,the Delta business has a lowmarket share position in a fast growing market.As per the BCG matrix,Delta is a

A)Cash cow
B)Star
C)Question mark
D)Dog

Question 18

________ attempt to help managers "balance" the flow of cash resources among their various businesses while also identifying the overall strategic purpose within the group of businesses.

A)Growth techniques
B)Market share techniques
C)Portfolio techniques
D)Environment techniques

Question 19

The ______ serves as an indicator of the relative attractiveness of the markets served by each business in the firm's portfolio of businesses.

A)Market share
B)Market projection
C)Market growth rate
D)Relative competitive position

Question 20

__________ provides a basis for comparing the relative strengths of the businesses in the firm's portfolio in terms of their positions in their respective markets.

A)Relative competitive position
B)Relative market share
C)Market growth rate
D)Growth-share rate

Question 21

As per the BCG matrix,which of these businesses should be divested or liquidated?

A)Cash cows
B)Guzzlers
C)Dogs
D)Stars

Question 22

Corporate strategists found the growth-share matrix's singular axes

A)Limiting in their ability to reflect the complexity of a business's situation
B)A good way to simplify the complexity of a business's situation
C)A good reflection of the simplistic nature of most corporate-level decisions
D)To difficult to manipulate

Question 23

Which of the following factors is considered in determining a business's strength for the industry attractiveness-business strength matrix?

A)Threat of substitute products
B)Economic factors
C)Sociopolitical considerations
D)Response time

Question 24

Which of the following is NOT a strategic approach suggested by the industry attractiveness-business strength matrix?

A)Outsource management
B)Invest to grow
C)Invest selectively and manage for earnings
D)Harvest or divest for resources

Question 25

Crabtree Soup has been facing intense competition and suffering low profit margins for a year now.The market for their specialty soups has matured and the firm is being managed for short-term cash flow to supplement SwissCo's corporate-level resource needs.Which type of firm is Crabtree Soup?

A)Star
B)Dog
C)Cash cow
D)Question mark

Question 26

Low market share businesses in low market growth industries are called:

A)Stars
B)Cash cows
C)Dogs
D)Question marks

Question 27

The Industry Attractiveness-Business Strength matrix has ____ cells,while the BCG matrix has ___ cells.

A)6,4
B)4,6
C)9,4
D)4,9

Question 28

The ______ decisions of the industry attractiveness-business strength matrix remain quite similar to those of the BCG growth-share matrix.

A)Management approach
B)Resource allocation
C)Business strategy
D)Functional strategy

Question 29

How many strategic approaches are suggested by the Industry Attractiveness-Business Strength matrix?

A)2
B)4
C)3
D)5

Question 30

The _________ matrix was developed by McKinsey & Company at General Electric.

A)Industry awareness
B)Growth-share
C)Industry attractiveness-business strength
D)Strategic environments

Question 31

Cash cows are yesterday's

A)Problem children
B)Question marks
C)Stars
D)Dogs

Question 32

As per the BCG matrix,which of these are cash guzzlers because of their uncertain profit potential?

A)Cash cows
B)Stars
C)Question marks
D)Dogs

Question 33

In the industry attractiveness-business strength matrix,the position of a business is calculated by _______ its rating along the two dimensions of the matrix.

A)Subjectively qualifying
B)Objectively qualifying
C)Subjectively quantifying
D)Objectively quantifying

Question 34

Which of the following factors is NOT considered in determining industry attractiveness?

A)Nature of competitive rivalry
B)Bargaining power of suppliers/customers
C)Firm's level of differentiation
D)Financial norms

Question 35

Which matrix makes fine distinctions among business portfolio positions with the inclusion of high/medium/low axes?

A)Industry strength matrix
B)Growth-share matrix
C)Strategic environments matrix
D)Industry attractiveness-business strength matrix

Question 36

The industry attractiveness-business strength matrix improves on the BCG matrix in some fundamental ways.Which of the following is NOT one of these?

A)The terminology associated with the industry attractiveness-business strength matrix is preferable because it is less offensive
B)The terminology associated with the industry attractiveness-business strength matrix can be much more complicated than the BCG matrix
C)The multiple measures associated with each division of the industry attractiveness-business strength matrix tap many factors relevant to business strength and market attractiveness besides market share and market growth
D)There is broader assessment during the planning process of the industry attractiveness-business strength matrix

Question 37

In the BCG matrix,which of these are managed for short-term cash flow?

A)Cash cows
B)Question marks
C)Dogs
D)Stars

Question 38

_______ are businesses whose high growth rate gives them considerable appeal,but whose low market share makes their profit potential uncertain.

A)Dogs
B)Stars
C)Question marks
D)Cash cows

Question 39

How many cells are in the industry attractiveness-business strength matrix?

A)4
B)9
C)12
D)16

Question 40

As per the BCG matrix,which of these should be selectively divested?

A)Cash cows
B)Stars
C)Question marks
D)Dogs

Question 41

Which matrix allows one way for multi-business companies to rationalize what businesses they are in--businesses that share core competencies and associated competitive advantages.

A)Growth-share matrix
B)Portfolio attractiveness matrix
C)Strategic environments matrix
D)Business strength matrix

Question 42

The most compelling reason companies should diversify can be found in situations when:

A)Core competencies are not similar
B)Core competencies can be leveraged with other products or into other markets
C)Management is similar in various businesses
D)Cash resources can be leveraged

Question 43

_________ has many sources of advantage.However,these are all small.

A)Stalemate businesses
B)Fragmented businesses
C)Specialization businesses
D)Volume businesses

Question 44

Which of the following represents an operating opportunity to build value or sharing?

A)Shared inbound or outbound shipping and materials handling
B)Shared management know-how
C)Shared after-sales service
D)Shared brand name

Question 45

Skills in achieving differentiation in product design,branding expertise,innovation,first-mover and sometimes scale characterize winners in:

A)Stalemate businesses
B)Specialization businesses
C)Volume businesses
D)Fragmented businesses

Question 46

The only relationship between business units with the portfolio matrix is:

A)Creation of competitive advantage
B)Internally synergies
C)Cash
D)Core competencies

Question 47

The ______ portrays the notion that firms need to be self-sufficient in capital.

A)Environmental approach
B)Parenting approach
C)Portfolio approach
D)Patching approach

Question 48

_________ has few sources of advantage,with most of them small.This results in very competitive situations.

A)Fragmented businesses
B)Volume businesses
C)Stalemate businesses
D)Specialization businesses

Question 49

Opportunities to build value via diversification,integration or joint venture strategies are usually NOT found in which of the following?

A)Market-related activities
B)Operations-related activities
C)Management activities
D)Non-value chain activities

Question 50

The most compelling reason companies should diversify can be found in situations where _______ can be leveraged with other products or into markets that are not a part of where they were created.

A)cash
B)disruptive competencies
C)core competencies
D)finances

Question 51

The two dimensions in the BCG's Strategic Environments matrix are ____ and _____ of competitive advantage.

A)length,timing
B)yes and no
C)sources,size
D)many,few

Question 52

Which matrix involves a framework that can help ensure that businesses' strategies are consistent with strategies appropriate to their strategic environment?

A)Strategic choice matrix
B)Growth-share matrix
C)Industry attractiveness-business strength matrix
D)Strategic environments matrix

Question 53

Skills in achieving differentiation characterize winners in ________ businesses

A)Volume
B)Stalemate
C)Specialization
D)Fragmented

Question 54

_________ has many sources of advantage and fined those advantages potentially sizable.

A)Specialization businesses
B)Stalemate businesses
C)Fragmented businesses
D)Volume businesses

Question 55

__________ is concerned with whether or not the potential competitive advantages expected to arise from each value opportunity have materialized.

A)Strategic choice
B)Strategic analysis
C)Strategic evaluation
D)Strategic growth

Question 56

Enhanced bargaining power with distributors and retailers to gain shelf space,shelf positioning,stronger push,more dealer attention and better profit margins represents which of the following sources of value building in multi-business companies?

A)Market-related opportunities
B)Functional-related opportunities
C)Potential competitive advantage
D)Operating opportunities

Question 57

Which type of business involves differentiated products with low brand loyalty,easily replicated technology and minimal scale economies?

A)Fragmented businesses
B)Specialization businesses
C)Volume businesses
D)Stalemate businesses

Question 58

Which of the following is a factor in the cost position that helps determine business strength?

A)Delivery times
B)Manufacturing flexibility
C)Brand awareness
D)Economies of scale

Question 59

Which of the following is NOT a limitation of the portfolio approaches?

A)Identifying individual businesses or distinct markets was not often as precise as the underlying assumptions required
B)The underlying assumption about the relationship between
C)The approach did not emphasize that market share and profitability are the same across different industries and market segments
D)The portfolio approach limited strategic options,which were seen mostly as basic strategic missions rather than descriptions of the flow of resources in a company

Question 60

_________ are those that have few sources of advantage,but the size is large--typically the result of scale economies.

A)Volume businesses
B)Stalemate businesses
C)Specialization businesses
D)Fragmented businesses

Question 61

According to the patching approach,strategic analysis should:

A)Focus on strategic processes alone
B)Focus on strategic processes more than strategic positioning
C)Focus on strategic positioning more than strategic planning
D)Focus on strategic positioning more than strategic processes

Question 62

Under the ________ approach,establishing a vision,building resources and leveraging across markets are all strategic steps to be taken by the firm.

A)Patching
B)Parenting
C)Resources
D)Position

Question 63

_______ is the process by which corporate executives routinely remap businesses to match rapidly changing market opportunities.

A)Parenting
B)Patching
C)Portfolio matching
D)Environmental strategy

Question 64

Realizing ____ from shared capabilities and core competencies is a key way value is added in multibusiness companies.

A)competencies
B)profits
C)synergies
D)resources

Question 65

The fact that ______ may exist in classifying sources of parenting opportunity is a minor consideration,relative to the value of the parenting framework for strategic analysis in multi-business companies.

A)Overlap or redundancy
B)Turbulent markets
C)Major changes
D)Common capabilities

Question 66

For competitive advantage to be sustainable,any combination of competencies must be:

A)Expensive
B)Easily imitated
C)Unique
D)Sustainable themselves

Question 67

Whether apparent or not,_______ among business units within or outside the parent company may be complex or difficult to establish without parent company help.

A)Capabilities
B)Expertise
C)Sales
D)Linkages

Question 68

When markets are turbulent and rapidly changing,_______ is seen as critical to the creation of economic value in a multi-business company.

A)Positioning
B)Leveraging resources
C)Patching
D)Parenting

Question 69

Ensuring that certain issues are addressed,objectively assessed and assisting in any resolution may be a parenting opportunity that could add value.These issues--like attracting and keeping people with specialized skills--are:

A)Marketing-based
B)Management-based
C)Age-based
D)Part of the business definition

Question 70

Governments,regulators,unions and suppliers represent ________ who potentially could be managed more effectively by the parent,than by the individual business units.

A)Specialized expertise
B)Predictable errors
C)External stakeholders
D)Internal stakeholders

Question 71

The core competency must represent a major source of value to be a basis for competitive advantage.Furthermore,the core competence:

A)Must be negotiable
B)Must be financial
C)Must be diversified
D)Must be transferable

Question 72

In the parenting framework,the corporate office of a multibusiness company is the

A)"child"
B)"brother"
C)"parent"
D)"sister"

Question 73

Situations that involve _______ occur when no real overlapping capabilities or products exist other than financial resources.

A)Financial diversification
B)Unrelated diversification
C)Related diversification
D)Leveraged businesses

Question 74

The _________ perspective sees multi-business companies as creating value by influencing the businesses they own.

A)Strategic environment
B)Growth-share matrix
C)Patching
D)Parenting

Question 75

Lengthy product life cycles can lead to over reliance on old products.This is an example of:

A)External relations
B)Linkage
C)Predictable error
D)Specialized expertise

Question 76

The least profitable firms are:

A)Broadly diversified firms whose strategies are build around very general resources such as money
B)Ones that involve combining resources into competitive advantage
C)Rigidly specialized in an attractive industry
D)Flexible

Question 77

The duration of an advantage in patching is:

A)Unpredictable
B)Sustained
C)Short-term
D)Dependent on resources

Question 78

Consider Vepco,a company that began as a rocket propulsion development firm and grew through vertical integration.The firm is trying to figure out how to keep pace with the accelerated trends toward outsourcing that has developed in the last 10 years.Which type of parenting opportunity does this represent?

A)Business definition/redefinition
B)Management
C)Specialized expertise
D)Predictable errors

Question 79

_______ is those that rely on the same or similar capabilities to be successful and attain competitive advantage in their respective product markets.

A)Leveraged businesses
B)Networked businesses
C)Related businesses
D)Unrelated businesses

Question 80

The strategic logic of patching is to:

A)Pursue more resources
B)Leverage resources
C)Establish a defensible position
D)Pursue opportunities