business policy chapter 7

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Corporate strategies are concerned with the broad and long-term questions of what business(es) the organization is in or wants to be in and what it wants to do with those businesses
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TRUE
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A multiple business organization operates only in one industry
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FALSE
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a corporate strategy provides the means or mechanisms for making sure the organization achieves its goals
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FALSE
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One example of a possible corporate strategic direction is increasing its level of operations
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TRUE
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a growth strategy involves the attainment of specific growth objectives by increasing the level of an organization’s operations
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TRUE
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A reengineering strategy is one that involves the attainment of specific growth objectives by increasing the level of an organization’s operations
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FALSE
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The product market exploitation operation describes attempts by the organization to increase the number of markets to increase the product sales
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FALSE
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One drawback of the concentration strategy is that the organization is vulnerable to industry and other external environmental shifts
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TRUE
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the vertical integration strategy involves expanding the organization’s operations through combining with other organizations in the same industry doing the same things
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FALSE
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a diversification strategy is a growth strategy in which an organization expands its operations by moving into a different industry
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TRUE
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A merger is a legal transaction in which two or more organizations combine operations through an exchange of stock, but only one organization entity will actually remain
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TRUE
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cost cutting can be approached from the across the board or selective cuts perspectives
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TRUE
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Liquidation is the process of selling off a business to someone else where it will continue as an ongoing business
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FALSE
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A spin-off involves setting up the business unit as a separate business through a distribution of shares of stock
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TRUE
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Downsizing is the failure of a business and involves dissolving the business under the protection of bankruptcy legislation
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FALSE
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Effectiveness is the search for the best practices inside or outside an organization
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FALSE
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The Mckinse-GE Spotlight matrix is also known as the growth share matrix
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FALSE
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The main drawback of the BCG and McKinsey-GE Spotlight matrixes is the subjectivity of the analysis
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TRUE
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Coca Cola is a _________ organization and Pepsico is an example of a ________
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Single-business; multiple business
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A Company like PepsiCo with a number of business units such a snack foods, beverages, and prepared is referred to as a
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Multiple-business organization
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a concentration strategy
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is a growth strategy in which the organization concentrates on its primary line of business and looks for ways to meet its growth objectives through expanding its activities or operations in its core business
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when an organization remains with its core industry, this is an example of a _____
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concentration
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an attempt by the organization to increase sales of its current product(s) in its current market(s) is referred to as
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product market exploitation
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developing different uses for a product is an example of a _______ concentration option
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product market exploitation
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which of the following is a possible organizational growth strategy
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all of the answer choices are correct: concentration vertical integration horizontal integration diversification
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a paper manufacturer purchasing a forest of trees is an example of
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backward vertical integration
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which of the following is a benefit of vertical integration
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none of the above: competitive advantage
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one of the risks associated with a horizontal integration strategy is
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a potential violation of antitrust laws
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diversifying into a completely different industry from the organization’s current operation is referred to as
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conglomerate diversification
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related diversification is _______ unrelated diversification
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more effective than
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the primary reason that an organization would pursue a diversification strategy is to
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achieve synergy
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for corporate growth strategies, the options for implementation are
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mergers/acquisitions, internal development, and strategic partnering
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a legal transaction in which two or more organizations combine operations through an exchange of stock is called a(n)
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merger
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______ are usually “friendly”
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mergers
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starting a business from the ground up is referred to as
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internal development
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which of the following is a type of strategic partnering
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joint venture
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examples of strategic partnering include
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joint ventures, long term contracts, and strategic alliances
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a long term contract is usually an agreement between
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an organization and its suppliers
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the ______ strategy is one in which the organization maintains its current size and current level of business operations
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stability
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the type of renewal strategies include
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retrenchment and turnaround strategies
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a more dramatic response to a failing organization may be
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a turnaround strategy
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the organization’s ability to complete or reach goals is referred to as
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effectiveness
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efficiency is
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the ability of the organization to minimize the use of resources in achieving organizational goals
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examples of portfolio analyses include
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all of the answer choices are correct
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a business unit with low relative market share and low industry grow rate is referred to as
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dog
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factors of industry attractiveness include
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all of the answer choices are correct: industry profitability number of competitors ethical standards technological stability of the market
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one of the major disadvantages of the McKinsey matrix is that of
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subjectivity

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