Deck 15: Setting Priorities for Businesses and Brandsthe Exit, Milk, and Consolidate Options

Question 1

Confirmation bias occurs when the objective information cast doubt on the sales projections of a business.

Answer 1

False

Question 2

An exit decision should be considered if the market demand, competitive intensity, or strategic fit is regarded unfavorably.

Answer 2

True

Question 3

A milk or harvest strategy aims to generate cash flow by reducing investment and operating expenses to a minimum.

Answer 3

True

Question 4

A hold strategy will be superior to a milk strategy when the market prospects and/or the business position is not as grim.

Question 5

Exit strategies should be considered in all of the following situations except:

A) When the business position is weak.
B) When a firm's reputation is at stake.
C) When demand is diminishing quickly with no impending resurgence.
D) When the strategic direction of the firm has changed.

Question 6

Motivations for exiting include avoidance of drain on profits by dog businesses in portfolio and purging businesses that do not fit the strategy of the firm.

Question 7

The GE model is less complex than the BCG model.

Question 8

A hold strategy may prevent a firm from making investments that would help retain product relevance.

Question 9

Strategic brand consolidation process includes five distinct steps: identifying the relevant brand set, assessing the brands, ______________, creating a revised brand portfolio strategy and ______________.

Question 10

Implementing an exit decision is often delayed by managers who attempt to turn around a struggling business.

Question 11

Andy Grove made the decision to get out of memory by pretending he was a new CEO brought in from the outside.

Question 12

____________ would be disciplined about minimizing the expenditures toward the brand and maximizing the short-term cash flow, while ___________ would sharply reduce long-term investment, but continue to support marketing and service operating areas.

Question 13

Biases inhibiting exit decisions are ______________ and ______________.

Question 14

Centurion organized its brands into four groupings labeled blue, green, yellow and black.

Question 15

Cash cows are units that should no longer absorb investments aimed at growing the business.

Question 16

Some of the conditions that favor a milking strategy include a price structure that is stable at a level that is profitable for efficient firms.

Question 17

Business portfolio analysis provides a structured way to evaluate business units on two key dimensions: the attractiveness of the market involved and the strengths of competitor's in that market.