Deck 7: Corporate Strategy

Question 1

The corporate head office has no real _______________.

Answer 1

customers

Question 2

The concept of _______________ can be explained using the sum 2+2=5.

Answer 2

synergy

Question 3

Using Ansoff's matrix, if a firm enters new markets using existing products it is using the growth strategy of:

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

Answer 3

B

Question 4

An organization pursuing diversification seeks to increase the market share in its existing markets by using its existing products.

Question 5

Product developing strategy will be successful when: Please select all that apply.

A) A new product is to apply to a new market.
B) The ability to innovate is crucial in developing products for rapidly changing consumer markets.
C) A strategy of product development is necessary where organizations are faced with shorter product life cycles.
D) An organization that actively monitors consumers is more likely to develop products that meet consumers' needs.

Question 6

If there is a high degree of relatedness between a business and its corporate parent, it means:

A) The corporate parent is more likely to add value to the business.
B) The corporate parent is less likely to add value to the business.
C) The corporate parent is more likely to add synergies to the business.
D) The corporate parent is less likely to add synergies to the business.

Question 7

A firm acquires or merges with a competitor. This is an example of:

A) Vertical integration upstream
B) Vertical integration downstream
C) Horizontal integration
D) Complementary integration

Question 8

There is sound evidence to back up the claim that related diversification is more successful than unrelated diversification.

Question 9

Why did the Daimler-Benz Chrysler merger fail? Please select all that apply.

A) It was related diversification.
B) The expected synergies did not materialize.
C) The American and German cultures were not compatible.
D) It took place during a world recession.

Question 10

Which of the following are descriptions of acquisition strategy? Please select all that apply.

A) Two organizations join together to share their combined resources.
B) One organization seeks to acquire another, often smaller, organization.
C) The acquired shareholders will no longer be owners.
D) Shareholders from each organization become shareholders in the new combined organization.

Question 11

What reasons are there for an organization to seek to implement a M&A route to growth? Please select all that apply.

A) To possess proprietary technology.
B) To enter new markets quickly or acquire capabilities it does not possess.
C) To increase market share.
D) To seek diversified management team.

Question 12

Porter suggests three criteria for deciding whether to acquire a particular business. The test which looks at whether the corporate parent can add value to the business is called the ______________ test.

Question 13

Which of the following are advantages of organic growth? Please select all that apply.

A) It is a quick method of growth.
B) Intellectual property stays within the firm.
C) Integration of cultures is not required.
D) It overcomes barriers to entry.

Question 14

Porter suggests three criteria for increasing shareholder value in acquisitions: Please select all that apply.

A) Premium price
B) Attractiveness
C) Cost of entry
D) Barriers to entry

Question 15

The main disadvantages of internal development are: Please select all that apply.

A) With product cycle times reducing, a firm developing internally may not be able to exploit market opportunities
B) The time it takes the organization to build up necessary strategic capabilities
C) The organization does not need to use valuable resources trying to manage different cultures
D) It grows at a rate that it is able to control

Question 16

A __________exists when two organizations form a separate independent company in which they own shares equally.

Question 17

The benefits that each partner may gain within the strategic alliance are: Select all that apply.

A) The partner gains access to knowledge it would not otherwise possess
B) It reduces competitive rivalry
C) The partner gains access to knowledge that would be expensive for it to develop
D) The partner gains access to new markets

Question 18

A _________________ is simply the different mix of businesses that an organization possesses.

Question 19

Organizations with a balanced portfolio perform better than those that do not.

Question 20

The strategic options facing a question mark are to: Please select all that apply.

A) Generate cash flow
B) Immediately divest
C) Wait for the industry to become mature
D) Make the investment necessary to increase market share and manage the business to a star

Question 21

In 1990 Prahalad and Hamel argued that firms were ignoring core competences at corporate level and instead treating their portfolio of businesses as separate from each other. They use the phrase "______________________" to describe this problem.

Question 22

What are criticisms of the BCG matrix? Please select all that apply.

A) It uses only industry growth rate and market share to assess a business unit's current performance.
B) It overemphasizes the importance of market share and market dominance.
C) It does not require managers' judgement.
D) It provides analysis of core competences of firms.

Question 23

In what ways does the GE McKinsey Matrix differ from the BCG matrix? Please select all that apply.

A) It includes an assessment of strengths and weaknesses.
B) It has nine cells rather than four.
C) It does not include market share.
D) It should be done for one business at a time.

Question 24

Corporate parents are not always a positive influence on the businesses in their portfolio. Some of the negative influences can include: Please select all that apply.

A) Increased transaction costs
B) Increased bureaucracy
C) Increased agility
D) Leveraging

Question 25

Goold et al (1994) describe four ways that a corporate parent can add value. These are; standalone influence, functional services influence, corporate development influence and:

A) Relatedness influence.
B) Synergy influence.
C) Linkage influence.
D) Portfolio influence.

Question 26

Businesses are businesses which appear attractive to the corporate parent on the surface but, in reality, there exist areas of misfit with the parent.

Question 27

In assessing a number of strategic options, the 'suitability' criterion is to do with the degree to which the organization has the appropriate resources at its disposal.

Question 28

In assessing a number of strategic options, the three criteria of suitability, acceptability and _____________________ can be used to judge which strategy should be implemented.

Question 29

When evaluating strategic options, a particular strategy should satisfy all three tests of suitability, acceptability, and feasibility.

Question 30

Ricahrd Rumelt proposes four tests to evaluate a strategy.

A) Consistency
B) Sustainability
C) Feasibility
D) Adaptability