497 Test 2 – Flashcards
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-Expanding a company's geographic coverage, creating a more cost-efficient operation out of the combined companies, and/or extending the company's business into new product categories.
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1) Mergers and Acquisitions typically aim at achieving such objectives as:
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-Involves abandoning efforts to beat out competitors in existing markets and, instead, inventing a new industry or distinctive market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand.
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2) A blue ocean type of offensive strategy:
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-Becoming dependent on other companies for essential expertise and capabilities.
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3) The Achilles heel (or biggest disadvantage/danger/pitfall) of relying heavily on strategic alliances and partnerships is:
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-Is a formal agreement between two or more companies in which there is strategically relevant collaboration of some sort, joint contribution of resources, shared risk, shared control and mutual dependence.
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4) A Strategic Alliance
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-Cooperative arrangements with other companies are very helpful in racing against rivals for global market leadership and/or racing to stakeout a strong position in an industry of the future.
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5) Many companies find strategic alliances particularly valuable when:
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-When there are no barriers to adopting a blue ocean strategy in the near future
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6) Which of the following conditions do NOT constitute a late-mover advantage (or first-mover disadvantage)?
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-Deliberately attacking those market segments where a key rival makes big profits
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7) Which one of the following is NOT a defensive option for protecting a company's market share and competitive position?
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-Whether to improve the quality of the company's product
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8) Which one of the following is NOT a strategic decision that needs to be made in choosing how best to complement a company's choice of one of the 5 basic competitive strategy options and thereby maximize the power of its overall strategy?
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-Gain better access to end users and build stronger brand awareness.
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9) The Strategic impetus for forward vertical integration is to
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-To carefully weigh the first-mover advantages against the first-mover disadvantages and act accordingly.
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10) Because when to make a strategic move can be just as important as what move to make, a company's best option with respect to timing is
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-Creating as much channel conflict as possible so as to quickly learn whether all customer-related transactions should be conducted at the company's Web site or whether the company needs to continue selling through traditional wholesalers, distributers and retailers.
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11) Which of the following is NOT one of the strategic options that companies have for using their Web sites?
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-Reducing its risk exposure to changing technology or shifting buyer preferences and enabling a company to concentrate on its core business, leverage its key resources, and do even better what it already does best.
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12) Outsourcing strategies can offer such advantages as
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-Strengthen the company's competitive position and/or boost its profitability
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13) The 2 best reasons for investing company resources in vertical integration (either forward or backward) are to:
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-A company that refines crude oil into gasoline purchasing a firm engaged in drilling and exploring for oil.
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14) A good example of vertical integration is:
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-Pursuing continuous product innovation to draw sales and market share away from less innovative rivals
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15) which of the following is an examle of an offensive strategy?
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-Can be an excellent initial strategy to test the international waters and limit the amount of capital required to enter the international arena and begin selling in the markets of foreign countries.
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1) Using Domestic Plants as a production base for exporting goods to selected foreign country markets
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- A multiple cross-country strategy involving strategic alliances, joint ventures, and other cooperative agreements with foreign companies
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2) Which of the following is NOT one of the primary strategy options for competing in the markets of foreign countries
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-Whether to vary the company's competitive approach to fit specific market conditions and buyer preferences in each host country or whether to employ essentially the same strategy in all countries.
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3) When a company operates in the markets of two or more different countries, its foremost strategic issue is:
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-Greater ability to employ a global strategy (as opposed to a multicounty strategy).
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4) Which of the following is not a potential benefit of collaborative strategies involving alliances and/or joint ventures with foreign partners?
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-Companies operating in a global marketplace must wrestle with whether and how much to customize their offerings in each different country market to match the tastes and preferences of local buyers or whether to pursue a strategy of offering a mostly standardized product worldwide.
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5) Because buyer tastes for a particular product or service sometimes differ substantially from country to country,
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-Which foreign country markets will prove to be the best and most well protected profit sanctuary.
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6) Which of the following is NOT among the important strategic issues associated with competing across national boundaries?
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-To build the profit sanctuaries necessary to wage guerilla offensives against global challengers endeavoring to invade its home market.
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7) Which one of the following is not a reason why a company decides to enter foreign markets?
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-A global strategy involves striving to be the global low-cost provider by economically producing and marketing a mostly standardized product worldwide whereas multicounty strategy entails pursuing broad different ion and striving to strongly differentiate its products in one country from the products it sells in other countries.
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8) According to figure 7.2, which of the following does NOT accurately characterize the differences between a localized multicounty strategy and a global strategy?
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-Attacking the profit sanctuaries of rival companies
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9) Which of the following qualifies as an offensive strategy for companies competing internationally or globally?
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-Derives substantial profits because of its strong or protected market position
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10) A profit sanctuary refers to a country market (or geographic region) where a company,
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-Pursues a competitive strategy that is essentially the same in all country markets where it operates but it may nonetheless give local managers room to make minor variations where necessary to better satisfy local buyers and to better match local market conditions
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11) A firm pursuing a "think global, act local" approach to strategy making,
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-Becomes more cost competitive in selling its exported goods in foreign markets when the U.S. dollar declines in value against the currencies of the countries to which it is exporting.
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12) A U.S. manufacturer that exports goods made at its US plants for shipment to foreign markets.
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-Efficiently and effectively transferring competitively valuable competencies and capabilities from one country to another
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13) A firm can endeavor to gain competitive advantage or counteract disadvantages in foreign country markets by
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-A market situation where competitive conditions across national markets are linked strongly enough to form a true international or world market and where leading competitors compete head to head in many different countries
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14) The defining characteristic of global competition is
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- The risks of adverse shifts in currency exchange rates and the presence of important cross-country differences in buyer tastes, market sizes, and growth potential.
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15) Competing in one or more countries or regions of the world makes strategy-making because of
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-Actions over the past few years to substitute global strategies for multi-country strategies in one or more business units
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1) Based on the information presented in figure 8.1, which of the following would NOT be something to look for in identifying a diversified company's strategy?
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-For cross-business use of potent brand name and/or cross-business collaboration to build new or stronger competitive capabilities.
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2) Strategic fit between two or more businesses exists whenever one or more activities comprising the value chains of different businesses are sufficiently similar to present opportunities
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-Demanding managerial requirements and no potential for competitive advantage beyond what each individual business can generate on its own.
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3) The two biggest drawbacks of pursuing unrelated diversification strategies are
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-Deciding which of the 5 basic competitive strategies that each of the company's different businesses should employ
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4) The top-level executive task of crafting a diversified company's overall or corporate strategy does not include which one of the following?
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-Being able to eliminate or reduce costs by combining related value-chain activities of different businesses into a single operation
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5) Which of the following best illustrates economy of scope?
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-Determining whether some business units have value chain match-ups that offer opportunities to transfer skills or technology or intellectual capital from one business to another.
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6) Which of the following is NOT part of the task of checking a diversified company's business line-up for adequate financial and nonfinancial resource fit?
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-A digital camera manufacturer acquiring a maker of athletic footwear.
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7) Which of the following is the best example of unrelated diversification?
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-Any company that can be acquired on good financial terms and that has satisfactory growth and earnings potential represents a good acquisition and a good business opportunity.
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8) The basic premise of unrelated diversification is that
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-Diversifying into closely related businesses opens new avenues for reducing costs
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9) Diversification ought to be considered when
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-Divesting cash hog businesses and using the proceeds to fund capital investments in promising cash cow businesses.
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10) According to figure 8.6, which one of the following is not a reasonable option for deploying a diversified company's financial resources?
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-When the company lacks a strong global brand name and lacks the managerial know-how and technological expertise needed to achieve economies of scope.
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11) Which one of the following is not among the conditions that make restructuring a diversified company's business lineup an appealing strategic option?
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-The attractiveness test, the cost-of-entry test, and the better-off test.
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12) The three tests for judging whether a particular diversification move can create added long-term value shareholders are
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-Generates positive cash flows over and above its internal requirements, thus providing a corporate parent with funds that can be used for financing new acquisitions, investing in cash hog businesses and/or paying dividends.
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13) A "cash cow" type of business
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-Is what fuels 1+1=3 gains in shareholder value—the necessary outcome for satisfying the better-off test and proving the business merit of a company's diversification effort.
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14) Diversifying into related businesses where competitively valuable strategic fit benefits can be captured and turned into a competitive advantage over undiversified competitors and competitors whose own diversification efforts don't offer equivalent strategic-fit benefits.
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-Checking for conflicts/incompatibility among the competitive strategies of the company's different businesses
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15) Which of the following is NOT part of the procedure for evaluating the pluses and minuses of a diversified company's strategy and deciding what actions to take to improve the company's performance?
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-Ranking the company's business units from competitively strongest to competitively weakest and thereby learns which business units are strong, average, or weak market contenders in their respective industries.
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16) The basic purpose of calculating competitive strength scores for each of a diversified company's business units is to use the competitive strength scores as a means of
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-Provides valuable guidance in deploying corporate resources to the various business units—in general, a diversifying company's prospects for good overall performance are enhanced by concentrating corporate resources and strategic attention on those business units positions in the three cells in the upper left portion of the attractiveness-strength matrix.
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17) Using quantitative measures of industry attractiveness and competitive strength to plot each business's location on the 9-cell industry attractiveness-competitive strength matrix
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-A manufacturer of dining room furniture acquiring a maker of patio furniture.
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18) Which of the following is the best example of related diversification?
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-Be shrewd in identifying opportunities to achieve greater economies of scope.
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19) Which of the following is not something that corporate executives must do to succeed in using a strategy of unrelated diversification to produce companywide financial results above and beyond what the businesses could generate operating as stand-alone entities?
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-Selecting a set of industry attractiveness measures, weighting the importance of each measure, rating each industry on each attractiveness measure, multiplying the industry ratings by the assigned weight to obtain a weighted rating, adding the weighted ratings for each industry to obtain an overall industry attractiveness score, and using the overall industry attractiveness scores to evaluate the attractiveness of all the industries, both individually and as a group.
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20) Calculating quantitative attractiveness ratings for the industries a company has diversified into involves
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-The application of general ethical principles and standards to the actions and decisions of businesses and the conduct of their personnel.
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1) Business ethics concerns
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-That forbid the payments of bribes and kickbacks in their codes of ethical conduct that are serious about enforcing this prohibition are acting in accordance with the ethical universalism school of thought.
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2) Multinational companies
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-A company's duty to operate in an honorable manner, provide good working conditions for employees, be a good steward of the environment and actively work to better the quality of life in the local communities where it operates and in society at large.
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3) The concept of social responsibility and good corporate citizenship concerns
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-Overzealous pursuit of wealth and other selfish interested, heavy pressures on company managers to meet or beat performance targets, and company culture that puts profitability and good business performance over ethical behavior.
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4) Which of the following are major drivers of unethical managerial behavior?
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-It is very clear that the payment of bribes and kickbacks is ethically impermissible even in those countries and situations where it is the local custom to engage in such payments.
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5) According to the school of ethical universalism,
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- See themselves as stewards of ethical behavior and believe its important too exercise ethics leadership; they are ethically principled and pursue success in business within the confines of both the letter and spirit of what is ethical and legal.
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6) Moral managers
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-It is very clear that the use of underage labor is ethically impermissible even inn those countries and situations where it is the local custom to utilize child labor.
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7) According to the school of ethical universalism,
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-Moral mangers, amoral managers, and immoral managers
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8) The three categories of managers that standout with regard to ethical and moral principles in business affairs are:
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-A business is obligated to act as a responsible citizen and do its fair share to promote the general welfare' otherwise it is in violation of its implied contract with society and subject to both heavy fines and excess profits tax.
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9) Which one of the following is Not among the good business reasons why companies should be public-spirited and devote time and resources to social responsibility initiatives, environmental sustainability, and being good corporate citizens.
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- Companies that engage in shady behavior usually suffer big drops in profitability and are unlikely to earn attractive profits for as many as 5 to 10 years after their unethical conduct is exposed in the media
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10) Which of the following is not a particularly sound or valid reason why deliberate pursuit of unethical strategies and tolerance of unethical conduct is a risky practice?
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-The collective views of multiple cultures and societies combine to form a "social contract" that all individuals, groups, organizations and businesses in all situations have a duty to observe; however, within the boundaries of this social contract, local cultures or groups have the discretion to go beyond these universal norms and specify other behaviors that are out of bounds and place further limitations on what is considered ethical.
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11) According to integrative social contracts theory,
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-The corruption perception index (CPI) scores in countries as Finland, Denmark, Sweden, the Netherlands, and Switzerland is higher (indicating lower perceived levels of corruption) than in such countries as China, India, Russia, and Brazil.
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12) According to the data in Table 9.1,
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-Because there are meaningful variations in what societies generally agree to be ethically right and wrong in the conduct of business activities, it is appropriate for there to be differing standards of what constitutes ethical business behavior and what constitutes unethical business behavior and, further, for local ethical standards to take precedence over the ethical standards that exist elsewhere.
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13) The school of ethical relativism holds that
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-Actions to keep the prices the company charges for its products/services low enough that the general public, as obscenely high or exorbitant will not view the company's profits
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14) Which of the following is not an aspect of socially responsible behavior and good corporate citizenship?
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-Some concepts of what is right and what is wrong resonate with peoples of most societies regardless of local traditions and cultural norms—hence common ethical standards can be used to judge the conduct of personnel at companies operating in a variety of country markets and cultural circumstances.
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15) The school of universalism holds that
