question

Corporate level strategy addresses two related issues:

answer

what businesses to compete in; how these businesses can achieve synergy

question

Individual investors are dependent upon the corporation's managers to:

answer

add value to their investments in a way that the stockholders could not accomplish on their own

question

McKesson, a large distribution company, sells many product lines such as pharmaceuticals and liquor through its super warehouses. This is an example of:

answer

achieving economies of scope through related diversification

question

Philip Morris bought Miller Brewing and used its marketing expertise to improve Miller's market share. This justification for diversification is best described as:

answer

capitalizing on core competencies

question

The corporate office of Cooper Industries adds value to its acquired businesses by performing such activities as auditing their manufacturing operations, improving their accounting activities, and centralizing union negotiations. This is an example of:

answer

attaining the benefits of parenting through unrelated diversification.

question

reflects 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

answer

core competencies

question

For a core competence to be a viable basis for the corporation strengthening a new business unit there are 3 requirements:

answer

must help the business gain strength relative to its competition, new business must be similar to existing business to benefit, collection of competencies should be unique so that they cannot be easily imitated

question

Sharing core competencies is one of the primary potential advantages of diversification. in order for diversification to be most successful, it is important that:

answer

the similarity required for sharing core competencies must be in the value chain, not in the product.

question

when management uses common production facilities or purchasing procedures to distribute different but related products, they are:

answer

sharing activities

question

Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input into its manufacturing process. This is an example of:

answer

vertical integration

question

The risks of vertical integration include:

answer

costs and expenses associated with increased overhead and capital expenditures, problems associated with unbalanced capacities along the value chain, additional admin costs associated with managing a more complex set of activities

question

Unbalanced capacities that limit cost savings, difficulties in combining specializations, and reduced flexibility are disadvantages associated with:

answer

Vertical Integration

question

a firm should consider vertical integration when:

answer

the firm's suppliers of raw materials are often unable to maintain quality standards

question

it may be advantageous to vertically integrate when:

answer

lower transaction costs and improved coordination are vital and achievable through vertical integration

question

transaction costs include all of the following:

answer

search costs, negotiating costs, monitoring costs

question

vertical integration is attractive when:

answer

transaction costs are higher than internal admin costs

question

when a firm's corporate office helps subsidiaries make wise choices in their own acquisitions, divestures, and new ventures

answer

parenting

question

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

answer

restructuring

question

according to the text, corporate restructuring includes:

answer

capital restructuring, asset restructuring, and management restructuring

question

portfolio management matrices are applied to what level of strategy?

answer

corporate level

question

when using a BCG matrix, a business that currently holds a large market share in a rapidly growing market and that has minimal or negative cash flow would be known as:

answer

star

question

in the BCG matrix, a business that has a low market share in an industry characterized by a high market growth is termed a:

answer

question mark

question

portfolio management frameworks share what characteristics?

answer

grid dimensions are based on external environments and internal capabilities/market positions

question

a cash cow referred to in the BCG, refers to a business that has

answer

low market growth and relatively high market share

question

In managing a firm's portfolio, the BCG matrix would suggest that:

answer

question marks can represent future stars if their market share increased

question

In the BCG matrix, the suggested strategy for stars is to:

answer

maintain position and after the market growth slows use the business to provide cash flow

question

limitations of the BCG

answer

every business cannot be accurately measured and compared on 2 dimensions, views each business as a stand alone entity and ignores the potential for synergies, can lead to some troublesome and overly prescriptions

question

the 3 primary means by which a firm can diversify are:

answer

mergers and acquisitions, joint ventures and strategic alliances, internal development

question

according to michael porter: there's a tremendous allure to ____. its the big play, the dramatic gesture. with one stroke of the pen you can add billions to size, get a front page store, and create excitement in markets.

answer

mergers and acquisitions

question

an antitakeover called _____ is when a firm offers to buy shares of their stock from a company planning to acquire their firm at a higher price than the unfriendly company paid for it

answer

greenmail

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