Bus189 Ch 6 FINAL – Flashcards

Spring Resources LLC creates unique value by establishing a learning organization that coordinates various production tactics and assimilates different types of technologies. This knowledge is distributed to the entire organization so that its branches can adapt and perform according to their own markets. These tactics and technologies distributed throughout the organization that create value for Spring Resources LLC are termed _____. A. inimitability practices B. prestige development C. core competencies D. dominant logic

A dominant vertical business differs from a dominant business in that a dominant business: A. earns 30 percent of its revenue from businesses located along the value chain of its main line of business. B. earns 30 percent of its revenue from business lines across different value chains. C. earns less than 70 percent of its revenue from its main line of business. D. earns more than 95 percent of its revenue from its main line of business.

Which of the following statements is true of a dominant vertical business? A. It earns less than 70 percent of its revenue from its main line of business. B. It earns more than 95 percent of revenue from its main line of business. C. It earns 30 percent of its revenue from business lines across different value chains. D. It earns 30 percent of its revenue from businesses located along the value chain.

Sparkle LLC, a beverage industry, earns almost all of its profits only by selling beverages. Sparkle LLC can be best categorized as a _____. A. single business B. diversified business C. dominant vertical business D. dominant business

The main focus of Neptune Corp. is to sell apparel, which amounts to 70 percent of its revenue. It also runs warehouses, distribution centers, and logistics as additional businesses that generate the rest of the 30 percent of the earnings. Which level of diversification is followed by Neptune Corp.? A. Single business B. Dominant business C. Related-linked business D. Dominant vertical business

Virgo Inc. earns less than 70 percent of its revenue from manufacturing computers. It recently started manufacturing tablets. The company made use of existing technology and materials and decided to distribute the tablets through the same distributors used for its computers. In this scenario, Virgo Inc. chose _____. A. related-constrained diversification B. related-linked diversification C. unrelated-constrained diversification D. unrelated-linked diversification

Saturn Inc. is an e-commerce company that sells home appliances. The firm recently started selling its line of packaged food items online. In this scenario, Saturn Inc. chose _____. A. unrelated-linked diversification B. related-constrained diversification C. unrelated-constrained diversification D. related-linked diversification

Azure LLC is a toy manufacturing company. The company has recently started manufacturing industrial wiring for construction companies. In this scenario, Azure LLC has chosen _____. A. related diversification B. unrelated diversification C. related-linked diversification D. related-constrained diversification

Zia, the CEO of Indigo Corp., states that it is essential to diversify the company into new markets and to create new products. She believes that it is important and profitable to tap new customer bases and challenging markets as this experience will help the company grow financially as well as expand its knowledge base on strategic management. Which of the following statements strengthens Zia's belief? A. Moderate diversification pays off but very high levels of diversification will lead to lower levels of performance. B. The company will not be able to provide the same value and customer satisfaction when segmented. C. Diversification will create a loss of revenue if the parent company decides to segment itself to different markets. D. Diversification will reduce the company's overall cost of producing goods and services.

Elegant Meals Inc., a company that owns a chain of restaurants, sells dinnerware to its customers who fancy them. Since their restaurants are known for their interior designs, they also sell home décor products. By selling these products, Elegant Meals Inc. caters to a(n) _____. A. entertainment market B. capital market C. adjacent market D. global market

Winter Sources Inc., an apparel manufacturer, recently opened a retail store in its unused office space to sell the excess material produced. In this way, the company generated extra profits. The unused space that was available to Winter Sources Inc. is an example of _____. A. kanban B. kaizen C. hubris D. slack

Jupiter LLC is a manufacturer of leather items. The board of directors of Jupiter realized that it is better to produce handbags and shoes together rather than in two separate factories. This way, the company can reduce its production costs. This scenario best illustrates a(n) _____. A. related-linked diversification B. unrelated diversification C. economy of scope D. economy of scale

Summer Technologies Inc. is proud of its managerial personnel who have been able to create unique value for the company. These people have been engaged in coming up with strategic activities that enabled Summer Technologies to grow and establish itself as a reliable brand. This set of abilities of the Summer Technologies personnel can most accurately be termed _____. A. management skill B. employee expertise C. collective wisdom D. explicit knowledge

Aquarius Corp., a consumer goods company, offers a chain of products that includes food and beverages, beauty care products, apparels, and home décor. By offering these goods, Aquarius creates more value for itself than it would have if it had sold these products individually. This practice by Aquarius Corp. can be referred to as _____. A. imitation B. synergy C. a merger D. an acquisition

Spring Resources LLC creates unique value by establishing a learning organization that coordinates various production tactics and assimilates different types of technologies. This knowledge is distributed to the entire organization so that its branches can adapt and perform according to their own markets. These tactics and technologies distributed throughout the organization that create value for Spring Resources LLC are termed _____. A. inimitability practices B. prestige development C. core competencies D. dominant logic

Galaxy Corp. is a manufacturing company that aims to provide value to its customers by identifying sources of revenue, the intended customer base, products and processes, and details of financing. This method that Galaxy Corp. wants to adopt is termed _____. A. a plan of action B. a business model C. dominant logic D. prestige development

Even though companies offer varied products and provide unique value to their customers, they have similar barriers to face when entering into a host country due to policies set up by the country's government. The similarities shared by the companies in the way they set up business in the country are an example of a(n) _____. A. plan of action B. passive judgment C. dominant logic D. imitation

Which of the following is an ancient Greek word for excessive pride, arrogance, or overconfidence that is used to refer to the actions of managers when they diversify or make acquisitions based on their own experience or gut feelings rather than on solid data and research? A. Kanban B. Hubris C. Agora D. Kaizen

Stacy works as a manager at Daffodils Corp., a manufacturing firm that has not been performing well. Despite the availability of research materials and databases, she uses her own experience to make acquisitions because she is usually very confident about the success of her plans. This attitude of Stacy can be termed _____. A. hubris B. selfishness C. solipsism D. megalomania

Amber Corp., a jute manufacturing company, wants to diversify into the food industry. In order to do so, the board of directors decides to move some of its existing resources, expertise, and technology to set the base of the food unit. The market analysts at Amber predict that this unit has a high growth potential. Thus, rather than leaving the new food unit to grow on its own, the board decides to invest in it as it this will help increase the corporate value of the company. In this scenario, Amber Corp. is trying to create value by acting as a(n) _____. A. adjacent market B. internal capital market C. external capital market D. related-constrained market

A company called Techno Plus LLC experienced a failed acquisition, but the managers of the company were hesitant to end the venture as they had already invested too much time, finances, and effort into it. They presumed that everything would work out with a little more money and time. This attitude of the managers of Techno Plus LLC can be termed _____. A. hubris B. arrogance C. positive thinking D. sunk cost fallacy