Question 1

Portfolio management frameworks,such as the BCG matrix,share which of the following characteristics?

Accepted Answer

A)   Businesses are plotted on a 3-dimensional grid.
B)   Grid dimensions are based on external environments and internal capabilities/market positions.
C)   Position in the matrix suggests a need for sharing synergies.
D)   They are most helpful in helping businesses develop types of competitive advantage.E) A) and B)
F) B) and D)

Question 2

Diversification initiatives include all of the following except ___________________.

Accepted Answer

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

Question 3

Among the advantages of acquisitions are the expensive premiums that are frequently paid to acquire a business.

Accepted Answer

A) True 
 B)False

Question 4

Many acquisitions ultimately result in divestiture.

Accepted Answer

A) True 
 B)False

Question 5

Creating value within business units can happen when a firm tries to find and acquire either poorly performing firms with unrealized potential or firms in industries on the threshold of significant,positive change.This is action is known as ______.

Accepted Answer

A)   parenting
B)   leveraging core competencies
C)   restructuring
D)   sharing activitiesE) A) and B)
F) A) and C)

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Divesting of businesses can accomplish many different objectives,except _______.

Accepted Answer

A)   enabling managers to focus their efforts more directly on the core businesses of the firm
B)   providing the firm with more resources to spend on more attractive alternatives
C)   dispersing manager focus
D)   raising cash to help fund existing businessesE) None of the above
F) A) and D)

Question 8

Vertical integration is attractive when ____________.

Accepted Answer

A)   internal administrative costs are higher than transaction costs
B)   transaction costs are higher than internal administrative costs
C)   transaction costs and internal administrative costs are equal
D)   search costs are higher than monitoring costsE) B) and D)
F) C) and D)

Question 9

The downsides or limitations of mergers and acquisitions include all of the following EXCEPT:

Accepted Answer

A)   Premiums that are frequently paid to acquire a business are expensive.
B)   Difficulties exist in integrating the activities and resources of the acquired firm into on-going operations.
C)   There can be many cultural issues that can doom an otherwise promising acquisition.
D)   It is a slow means to enter new markets and acquire skills and competences.E) A) and B)
F) A) and C)

Question 10

According to Michael Porter,there is a tremendous allure to _________.It is the big play,the dramatic gesture.With one stroke of the pen you can add billions to size,get a front-page story,and create excitement in markets.

Accepted Answer

A)   strategic alliances and joint ventures
B)   internal development
C)   mergers and acquisitions
D)   differentiation strategiesE) A) and B)
F) A) and C)

Question 11

At Cooper Industries,there are few similarities in the products it makes or the industries in which it completes.The corporate office adds value through such activities as superb human resource practices and budgeting systems.This is an example of __________________.

Accepted Answer

A)   using related diversification to achieve value by leveraging core competencies to attain economies of scope
B)   using related diversification to achieve value by leveraging core competencies to acquire market power
C)   using unrelated diversification to achieve value through portfolio management in order to acquire financial synergies
D)   using unrelated diversification to achieve value through restructuring and parentingE) A) and D)
F) B) and D)

Question 12

Strategic alliances are arrangements in which two firms join forces and form a cooperative partnership.Discuss the advantages and disadvantages of strategic alliances as well as guidelines for reducing conflict between the partners.

Accepted Answer

Strategic alliances can offer several ad...

Question 13

All of the following are limitations (or downsides) of the BCG (Boston Consulting Group) matrix EXCEPT:

Accepted Answer

A)   Every business cannot be accurately measured and compared on the two dimensions.
B)   It takes a dynamic view of competition which can lead to overly complex analyses.
C)   It views each business as a stand-alone entity and ignores the potential for synergies across businesses.
D)   While easy to comprehend, the BCG matrix can lead to some troublesome and overly simplistic prescriptions.E) None of the above
F) A) and D)

Question 14

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.E) A) and B)
F) C) and D)

Question 15

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

Accepted Answer

Mergers and acquisitions can be an effec...

Question 16

Discuss some of the potential benefits of divestment.

Accepted Answer

Divestment can have several potential be...

Question 17

When sharing activities across business units,a company can attain the highest cost savings when it acquires another from the same industry in the same country.

Accepted Answer

A) True 
 B)False

Question 18

Discuss how the potential benefits of diversification may be adversely affected by conflicts between manager interests and stockholder interests.Hint: Egotism,growth for the sake of growth,antitakeover tactics.

Accepted Answer

Diversification is a strategy that invol...

Question 19

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 20

Market power refers to cost savings from leveraging core competencies or sharing activities among the businesses in a corporation.

Accepted Answer

A) True 
 B)False

Exam 6: Corporate-Level Strategy: Creatingvalue Through Diversification

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

Correct AnswerverifiedShow Answer

Discuss how the potential benefits of diversification may be adversely affected by conflicts between manager interests and stockholder interests.Hint: Egotism,growth for the sake of growth,antitakeover tactics.

Correct AnswerAnswered by ExamLex AIDiversification is a strategy that invol...View AnswerShow Answer

Discuss some of the potential benefits of divestment.

Correct AnswerAnswered by ExamLex AIDivestment can have several potential be...View AnswerShow Answer

All of the following are limitations (or downsides) of the BCG (Boston Consulting Group) matrix EXCEPT:

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Vertical integration is attractive when ____________.

Correct AnswerverifiedShow Answer

Diversification initiatives include all of the following except ___________________.

Correct AnswerverifiedShow Answer

According to Michael Porter,there is a tremendous allure to _________.It is the big play,the dramatic gesture.With one stroke of the pen you can add billions to size,get a front-page story,and create excitement in markets.

Correct AnswerverifiedShow Answer

Many acquisitions ultimately result in divestiture.

Correct AnswerverifiedShow Answer

At Cooper Industries,there are few similarities in the products it makes or the industries in which it completes.The corporate office adds value through such activities as superb human resource practices and budgeting systems.This is an example of __________________.

Correct AnswerverifiedShow Answer

Creating value within business units can happen when a firm tries to find and acquire either poorly performing firms with unrealized potential or firms in industries on the threshold of significant,positive change.This is action is known as ______.

Correct AnswerverifiedShow Answer

Market power refers to cost savings from leveraging core competencies or sharing activities among the businesses in a corporation.

Correct AnswerverifiedShow Answer

The downsides or limitations of mergers and acquisitions include all of the following EXCEPT:

Correct AnswerverifiedShow Answer

Portfolio management frameworks,such as the BCG matrix,share which of the following characteristics?

Correct AnswerverifiedShow Answer

Among the advantages of acquisitions are the expensive premiums that are frequently paid to acquire a business.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Strategic alliances are arrangements in which two firms join forces and form a cooperative partnership.Discuss the advantages and disadvantages of strategic alliances as well as guidelines for reducing conflict between the partners.

Correct AnswerAnswered by ExamLex AIStrategic alliances can offer several ad...View AnswerShow Answer

Divesting of businesses can accomplish many different objectives,except _______.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

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

Correct AnswerAnswered by ExamLex AIMergers and acquisitions can be an effec...View AnswerShow Answer

When sharing activities across business units,a company can attain the highest cost savings when it acquires another from the same industry in the same country.

Correct AnswerverifiedShow Answer

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Answered by ExamLex AI
Diversification is a strategy that invol...
View Answer

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Answered by ExamLex AI
Divestment can have several potential be...
View Answer

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Correct Answer
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verified

Correct Answer
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Correct Answer
Answered by ExamLex AI
Strategic alliances can offer several ad...
View Answer

Correct Answer
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Correct Answer
verified

Correct Answer
Answered by ExamLex AI
Mergers and acquisitions can be an effec...
View Answer

Correct Answer
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