Question 1

Real options analysis helps managers make investment decisions involving large irreversible commitments of financial resources.

Accepted Answer

A) True 
 B)False

Question 2

Similar businesses working together or the affiliation of a business with a strong parent can strengthen a firm's bargaining position relative to suppliers and customers.

Accepted Answer

A) True 
 B)False

Question 3

An advantage of mergers and acquisitions is that they can enable a firm to rapidly enter new product markets.

Accepted Answer

A) True 
 B)False

Question 4

Portfolio management matrices are applied to what level of strategy?

Accepted Answer

A)  departmental level 
B)  business level 
C)  corporate level 
D)  international level

Question 5

A company offering local telecommunications service combines resources with an international company that manufactures digital switching equipment to research a new type of telecommunications technology.This is an example of

Accepted Answer

A)  joint diversification. 
B)  strategic alliance. 
C)  divestment. 
D)  global integration.

Question 6

Explain the limitations of portfolio management matrices such as the growth-share matrix developed by the Boston Consulting Group (BCG).

Accepted Answer

The answer of Explain the limitations of portfolio management matrices...

Question 7

A golden parachute is a prearranged contract with managers specifying that in the event of a hostile takeover,the target firm's managers will be paid a significant severance package.

Accepted Answer

A) True 
 B)False

Question 8

The two principal means by which firms achieve synergy through market power are: pooled negotiating power and corporate parenting.

Accepted Answer

A) True 
 B)False

Question 9

One of the risks of vertical integration is that there may be problems associated with unbalanced capacities or unfilled demands along a firm's value chain.

Accepted Answer

A) True 
 B)False

Question 10

In the BCG (Boston Consulting Group)matrix,a business that has a low market share in an industry characterized by high market growth is termed a

Accepted Answer

A)  star. 
B)  question mark. 
C)  cash cow. 
D)  dog.

Question 11

What is Real Options Analysis (ROA)and how can it be used by strategic decision makers?

Accepted Answer

The answer of What is Real Options Analysis (ROA)and how...

Question 12

A firm should consider vertical integration when

Accepted Answer

A)  the competitive situation is highly volatile. 
B)  customer needs are evolving. 
C)  the firm's suppliers willingly cooperate with the firm. 
D)  the firm's suppliers of raw materials are often unable to maintain quality standards.

Question 13

Transaction costs include all of the following costs except

Accepted Answer

A)  search costs. 
B)  negotiating costs. 
C)  monitoring costs. 
D)  agency costs.

Question 14

Options exist when the owner of the option has

Accepted Answer

A)  the obligation, but not the right to engage in a transaction. 
B)  the right, but not the obligation to engage in a transaction. 
C)  the right and obligation to engage in a transaction. 
D)  neither the right nor the obligation to engage in a transaction.

Question 15

An anti-takeover tactic called greenmail is

Accepted Answer

A)  encouraged in Canada. 
B)  prohibited in Canada. 
C)  only allowed in Quebec. 
D)  borrowed from NAFTA.

Question 16

Greenmail is an offer by a company,threatened by takeover,to offer its stock at a reduced price to a third party.

Accepted Answer

A) True 
 B)False

Question 17

__________ reflect the collective learning in organizations,such as,how to coordinate production skills,integrate multiple streams of technologies,and market and merchandise diverse products and services.

Accepted Answer

A)  Primary value chain activities 
B)  Cultures 
C)  Core competencies 
D)  Horizontal integrations

Question 18

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.

Question 19

Corporate-level strategy addresses two related issues

Accepted Answer

A)  how to compete in a given business; the application of technology. 
B)  what businesses to compete in; how these businesses can achieve synergy. 
C)  how to integrate primary activities; increase shareholder wealth. 
D)  how to improve a firm's infrastructure; how to maintain ethical behaviour.

Question 20

Strategic alliances are arrangements in which two firms join forces and form a cooperative partnership.Discuss the potential advantages of strategic alliances.

Accepted Answer

The answer of Strategic alliances are arrangements in which two...

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

Real options analysis helps managers make investment decisions involving large irreversible commitments of financial resources.

Similar businesses working together or the affiliation of a business with a strong parent can strengthen a firm's bargaining position relative to suppliers and customers.

An advantage of mergers and acquisitions is that they can enable a firm to rapidly enter new product markets.

Portfolio management matrices are applied to what level of strategy?

A company offering local telecommunications service combines resources with an international company that manufactures digital switching equipment to research a new type of telecommunications technology.This is an example of

Explain the limitations of portfolio management matrices such as the growth-share matrix developed by the Boston Consulting Group (BCG).

A golden parachute is a prearranged contract with managers specifying that in the event of a hostile takeover,the target firm's managers will be paid a significant severance package.

The two principal means by which firms achieve synergy through market power are: pooled negotiating power and corporate parenting.

One of the risks of vertical integration is that there may be problems associated with unbalanced capacities or unfilled demands along a firm's value chain.

In the BCG (Boston Consulting Group) matrix,a business that has a low market share in an industry characterized by high market growth is termed a

What is Real Options Analysis (ROA)and how can it be used by strategic decision makers?

A firm should consider vertical integration when

Transaction costs include all of the following costs except

Options exist when the owner of the option has

An anti-takeover tactic called greenmail is

Greenmail is an offer by a company,threatened by takeover,to offer its stock at a reduced price to a third party.

__________ reflect the collective learning in organizations,such as,how to coordinate production skills,integrate multiple streams of technologies,and market and merchandise diverse products and services.

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?

Corporate-level strategy addresses two related issues

Strategic alliances are arrangements in which two firms join forces and form a cooperative partnership.Discuss the potential advantages of strategic alliances.