Deck 13: Competitive Dynamics

Question 1

The assessment of a target firm by a potential acquirer is known as benchmarking.

Answer 1

False

Question 2

Divestment is a form of investment that diverges funds from older projects to new, high risk projects.

Answer 2

False

Question 3

Subsidiaries that have a leading role within an MNE to develop new products or technology are also known as:

A)centres of excellence
B)centres of excel
C)centres of hubs
D)centres of hubris

Answer 3

A

Question 4

Small private firms that prosper in a market niche while keeping a low profile are also known as:

A)SMEs
B)single line businesses
C)niche prospectors
D)hidden champions

Question 5

Risk diversification is the reduction of the risk profile of a company by investing only in one country or industry.

Question 6

An 'acquisition premium' is:

A)The increase in the stock price of the acquirer associated with the acquisition.
B)The pay-off to the directors of the acquired company in return for their cooperation with the acquiring firm.
C)The difference between stock prices of the acquirer and the acquired company.
D)The difference between the market price of the acquired firm before the acquisition and the price offered by the acquirer.

Question 7

Global key accounts are:

A)cost positions that are aggregated globally
B)distribution channels that cover multiple countries
C)customers that are served at multiple sites but with central negotiation of contracts
D)suppliers that have established production facilities in several countries

Question 8

Strategic alliances do not involve foreign direct investment.

Question 9

Which of the following is not an element of Ghemawat's AAA typology of global strategies?

A)acquisition
B)adaptation
C)aggregation
D)arbitrage

Question 10

Synergies don't arise in the form of new values created, or in the form of cost savings.

Question 11

In the context of mergers and acquisitions, organizational fit refers to the cultural and structural characteristics of the two organizations that affect the ability to integrate the acquired company.