Question 1

Sharing core competencies is one of the primary potential advantages of diversification. In order for diversification to be most successful, it is important that

Accepted Answer

A)  the similarity required for sharing core competencies must be in the value chain, not in the product. 
B)  the products use similar distribution channels. 
C)  the target market is the same, even if the products are very different. 
D)  the methods of production are the same.

Question 2

The potential advantages of strategic alliances and joint ventures include entering new markets as well as developing and diffusing new technologies.

Accepted Answer

A) True 
 B)False

Question 3

A publishing company that purchases a chain of bookstores to sell its books is an example of unrelated diversification.

Accepted Answer

A) True 
 B)False

Question 4

Through joint ventures, firms can directly acquire the assets and competencies of other firms.

Accepted Answer

A) True 
 B)False

Question 5

Portfolio management should be considered as the primary basis for formulating corporate-level strategies.

Accepted Answer

A) True 
 B)False

Question 6

Explain how consolidating an industry can increase a firm's market power.

Accepted Answer

The answer of Explain how consolidating an industry can increase...

Question 7

Risk reduction in and of itself is rarely a viable way to create shareholder value.

Accepted Answer

A) True 
 B)False

Question 8

Summarize the disadvantages of mergers and acquisitions as a means of diversification.

Accepted Answer

The answer of Summarize the disadvantages of mergers and acquisitions...

Question 9

It may be advantageous to vertically integrate when

Accepted Answer

A)  lower transaction costs and improved coordination are vital and achievable. 
B)  the minimum efficient scales of two corporations are different. 
C)  flexibility is reduced, providing a more stationary position in the competitive environment. 
D)  various segregated specializations will be combined.

Question 10

In terms of strategy evaluation, which of the following terms refers to the fit between the corporate-level strategy and the external environment?

Accepted Answer

A)  Consistency 
B)  Consonance 
C)  Advantage 
D)  Feasibility

Question 11

Cooperative relationships such as _______ have potential advantages such as entering new markets, reducing manufacturing (or other) costs in the value chain, and developing and diffusing new technologies.

Accepted Answer

A)  joint ventures 
B)  mergers and acquisitions 
C)  strategic alliances 
D)  joint ventures and strategic alliances

Question 12

When using the BCG matrix, a business that currently holds a large market share in a rapidly growing market and that has minimal or negative cash flow is described as a:

Accepted Answer

A)  cow. 
B)  dog. 
C)  problem child. 
D)  star.

Question 13

An anti-takeover tactic called a ___________ is when a firm offers to buy shares of their stock from a company planning to acquire their firm at a higher price than the unfriendly company paid for it.

Accepted Answer

A)  golden parachute 
B)  greenmail 
C)  poison pill 
D)  scorched earth

Question 14

Carefully explain 'greenmail' as an anti-takeover tactic..

Accepted Answer

The answer of Carefully explain 'greenmail' as an anti-takeover tactic.....

Question 15

Carefully explain 'poison pills' as an anti-takeover tactic.

Accepted Answer

The answer of Carefully explain 'poison pills' as an anti-takeover...

Question 16

For a core competence to be a viable basis for the corporation strengthening a new business unit, there are three requirements. Which one of the following is not one of these requirements?

Accepted Answer

A)  The competence must help the business gain strength relative to its competition. 
B)  The new business must be similar to existing businesses to benefit from a core competence. 
C)  The collection of competencies should be unique, so that they cannot be easily imitated. 
D)  The new business must have an established large market share.

Exam 6: Corporate-Level Strategy: Creating Value Through Diversification

Sharing core competencies is one of the primary potential advantages of diversification. In order for diversification to be most successful, it is important that

The potential advantages of strategic alliances and joint ventures include entering new markets as well as developing and diffusing new technologies.

A publishing company that purchases a chain of bookstores to sell its books is an example of unrelated diversification.

Through joint ventures, firms can directly acquire the assets and competencies of other firms.

Portfolio management should be considered as the primary basis for formulating corporate-level strategies.

Explain how consolidating an industry can increase a firm's market power.

Risk reduction in and of itself is rarely a viable way to create shareholder value.

Summarize the disadvantages of mergers and acquisitions as a means of diversification.

It may be advantageous to vertically integrate when

In terms of strategy evaluation, which of the following terms refers to the fit between the corporate-level strategy and the external environment?

Cooperative relationships such as _______ have potential advantages such as entering new markets, reducing manufacturing (or other) costs in the value chain, and developing and diffusing new technologies.

When using the BCG matrix, a business that currently holds a large market share in a rapidly growing market and that has minimal or negative cash flow is described as a:

An anti-takeover tactic called a ___________ is when a firm offers to buy shares of their stock from a company planning to acquire their firm at a higher price than the unfriendly company paid for it.

Carefully explain 'greenmail' as an anti-takeover tactic..

Carefully explain 'poison pills' as an anti-takeover tactic.

For a core competence to be a viable basis for the corporation strengthening a new business unit, there are three requirements. Which one of the following is not one of these requirements?