Deck 7: Innovation Entrepreneurship

Question 1

According to the directional policy matrix, what strategy guideline applies to a business unit with medium business strength in an industry with low attractiveness?

A) Selective growth
B) Selectivity
C) Harvest/divest
D) Investment and growth

Answer 1

C

Question 2

Which of the following terms in the Ansoff matrix is used for developing new products for new markets?

A) Market penetration
B) Market development
C) Product development
D) Diversification

Answer 2

D

Question 3

According to the Ashridge Portfolio Display, what type of business has a high 'feel' and a high 'benefit'?

A) Ballast
B) Heartland
C) Value trap
D) Alien

Answer 3

B

Question 4

Which of the following is not one of the basic roles of subsidiaries according to Bartlett and Ghoshal?

A) Implementer
B) Black hole
C) Value creator
D) Strategic leader
E) Contributor

Question 5

What is the primary aim of market penetration?

A) To develop new products.
B) To defend market share.
C) To gain market share.
D) To fight off competitor retaliation.

Question 6

Which three of the following are most likely to be effective value- creating benefits from diversification?

A) Efficiency gains
B) Spreading risk
C) Increasing market power
D) Stretching corporate parenting capabilities

Question 7

Which of the following is not a way in which the corporate parent can add value?

A) Coaching and facilitating
B) Providing central services and resources
C) Adding management costs
D) Envisioning

Question 8

Which authors developed the parenting matrix?

A) Goold and Campbell
B) Mintzberg and Waters
C) Hamel and Prahalad
D) Balogun and Hope Hailey

Question 9

Why did some car manufacturers withdraw from forward integration in the late 1990s?

A) Because their loss of value links did not outweigh the benefits in capabilities.
B) Because their lack of capabilities did not outweigh the benefits in value links.
C) Because their loss of value links did not outweigh the loss of benefits in capabilities.
D) Because the level of synergy was too high.

Question 10

Which of the following is not one of the key criteria for assessing the corporate portfolio?

A) Balance
B) Fit
C) Maturity
D) Attractiveness

Question 11

Which of the following is not a value adding activity of the corporate parent?

A) Actively seeking to challenge and develop the strategic ambitions of the business units
B) Investment, especially in the early days of new ventures
C) Buffering managers from the realities of the financial markets by providing a financial safety net
D) Providing expertise and services not available within smaller units
E) Providing clarity and focus in envisioning the overall role and expectations of the organisation

Question 12

Who developed the concept of strategic intent?

A) Burgelman
B) Mintzberg
C) Hamel and Prahalad
D) Ansoff
E) Porter

Question 13

What term is used for a situation in which a company develops into activities concerned with the inputs into the company's business?

A) Unrelated diversification
B) Backward integration
C) Backward integration
D) Synergy

Question 14

Which of the following terms in the Ansoff matrix is used for focusing on existing products in existing markets?

A) Product development
B) Diversification
C) Market development
D) Market penetration

Question 15

Which of the following are not key concerns of corporate level strategy?

A) Portfolio management
B) Diversification
C) Marketing planning
D) Corporate parenting

Question 16

Which of the following is not a way in which the corporate parent can destroy value?

A) Adding bureaucratic complexity
B) Providing central services and resources
C) Adding management costs
D) Obscuring financial performance

Question 17

Which of the following is not one of the strategic requirements for a synergy manager?

A) Identification of benefits which outweigh costs
B) Sharing activities/resources or transferring skills/competences to enhance competitive advantage of SBUs
C) Identifying and acquiring undervalued assets
D) Identification of appropriate bases for sharing or transferring

Question 18

Which are the two axes of the BCG matrix?

A) Growth and attractiveness
B) Long term market attractiveness and SBU strength
C) Growth and market share
D) Fit between business unit CSFs and the parent's skills resource and characteristics; fit between business unit parenting opportunities and the parent's skills, resources and characteristics

Question 19

What term is used to describe a business unit which has high market growth but low market share?

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

Question 20

Which of the following is a circumstance in which a conglomerate strategy may be effective?

A) In developed markets
B) In commodities
C) In developing markets
D) In the energy industry

Question 21

The corporate parent is:

A) The management of subsidiaries
B) The management level above SBUs
C) The Board of Directors
D) The shareholders' representative

Question 22

What term is used for the levels of management above that of the business unit , which have no direct interaction with buyers and competitors?

A) Strategy planners
B) Synergism team
C) Corporate parent
D) Portfolio managers

Question 23

Who is primarily responsible for the development of corporate level strategy?

A) Senior management team
B) Middle management team
C) Shareholders
D) Supervisors

Question 24

Which three of the following are most likely to be useful methods of market development?

A) New products
B) New production techniques
C) New geographies
D) New users
E) New segments

Question 25

Which of the following is not a type of diversification?

A) Horizontal
B) Backward
C) Downward
D) Related
E) Forward

Question 26

A company has started to develop complementary products. What type of related diversification is this?

A) Unrelated integration
B) Backward integration
C) Horizontal integration
D) Forward integration

Question 27

What term is used for organisations focusing defensively on their current markets with current products?

A) Market development
B) Market penetration
C) Diversification
D) Consolidation
E) Product development

Question 28

What term is used for a strategy that takes an organisation away from both its existing markets and its existing products?

A) Market development
B) Market penetration
C) Consolidation
D) Product development
E) Diversification

Question 29

In which two of the following situations could an unrelated diversification strategy be most likely to be useful?

A) Where the parent can also forward integrate.
B) In countries with underdeveloped markets.
C) Where the parent can exploit dominant logics.
D) Where there is great business unit complexity.

Question 30

What are the four elements of the BCG matrix?

A) Heartland, value trap, alien businesses, ballast businesses
B) Stars, question marks, cash cows and dogs
C) New products, new markets, market penetration and diversification
D) Stars, sun, moon and planets

Question 31

Which of the following is not an indicator of SBU strength compared with competition?

A) Competitive position in terms of e.g. image, breadth of product line
B) Managerial competence
C) Market share
D) Financial resources
E) Competitive structure

Question 32

What term is used for a situation where a company has diversified beyond its current products and markets, but within its existing capabilities?

A) Related diversification
B) Market penetration
C) Stretched capability
D) Synergy

Question 33

What type of integration occurred when Google diversified into news, images and maps?

A) Forward
B) Horizontal
C) Backward
D) Unrelated

Question 34

Which of the following is not a value- creating reason for diversification?

A) A diverse range of products/services can diffuse management effort
B) A diverse range of products/services can increase market power
C) Gains from applying corporate managerial capabilities to new markets and products/services
D) Efficiency gains from applying existing resources and competences to new markets and products/services
E) Need to respond to environmental change

Question 35

What term is used to describe a business unit which has low market growth but high market share?

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

Question 36

Which of the following is not a framework for analysing the corporate portfolio?

A) The Ashridge portfolio display
B) The BCG matrix
C) The directional policy matrix
D) The value chain

Question 37

Which two of the following are reasons why related diversification may be problematic?

A) There are significant corporate- level time and cost implications.
B) There may be significant synergy benefits from links between the various business units.
C) Business- unit complexity may mean that business unit managers are unable to focus on their own business- unit needs.
D) It may enable the parent to exploit dominant logics.

Question 38

Another way of describing a strategy of unrelated diversification is:

A) A transnational strategy
B) A differentiated strategy
C) A conglomerate strategy
D) A multiple business strategy

Question 39

A company has started to produce machinery for use in the production of its main product range. What type of related diversification is this?

A) Backward integration
B) Forward integration
C) Unrelated integration
D) Horizontal integration

Question 40

Which of the following is not one of the strategic directions identified in the Ansoff matrix?

A) Product development
B) Corporate parenting
C) Market penetration
D) Diversification
E) Market development

Question 41

The logic of the synergy manager is that:

A) There is little value creation at SBU level.
B) The parent acts as an agent for financial markets.
C) The parent can employ its own competences to add value to the businesses.
D) Value can be enhanced across business units.

Question 42

An unrelated diversification strategy is often described as a conglomerate strategy.

Question 43

What is the approach of Warren Buffet of Berkshire Hathaway to conglomerate management?

A) Exploiting dominant logic by focusing on mature, well understood industries
B) Exploiting transformational change
C) Exploiting breakthrough technology
D) Exploiting the Internet to develop a portfolio of virtual businesses

Question 44

Horizontal integration is:

A) Development into activities concerned with the outputs from the company's current business
B) Development into activities which are complementary to present activities
C) Development into activities concerned with the inputs into the company's current business
D) Development into new geographical markets

Question 45

Research into diversification has shown that:

A) Related diversification outperforms compared to specialisation and unrelated diversification.
B) Diversification is too risky and always fails.
C) Related diversification underperforms compared to specialisation and unrelated diversification.
D) The performance of conglomerates is consistently good over long time periods.

Question 46

Corporate parenting seeks to analyse:

A) Value adding and value destroying activities of corporate parents
B) Employee relations
C) Corporate strategy
D) Relationships between head office and subsidiaries

Question 47

What term is used for the benefits that are gained where an organisations activities or assets complement each other so the overall effect is greater than the sum of the parts?

A) Empathy
B) Diversification
C) Synergy
D) Corporate parenting

Question 48

Corporate level strategy is concerned with:

A) Competitive strategy of SBUs
B) Directions of growth e.g. Ansoff matrix
C) Addressing threats and opportunities in the macroenvironment and leveraging strategic capability to create and sustain competitive advantage
D) The scope of an organisation and how value is added (or destroyed) at corporate level

Question 49

Corporate parents that wish to avoid value destruction should keep a close eye on financial centre costs, but can assume that bureaucratic costs can be controlled quite easily.

Question 50

Which of the following is generally most successful, according to research findings?

A) Unrelated diversifiers
B) Specialists
C) Related diversifiers
D) There is no discernable difference