Quiz Week 5 answers - week 5 quiz answer PDF

Preview

Summary

week 5 quiz answer...

Description

Quiz Week 5 answers

A(n) ________ specifies actions a firm takes to gain a competitive advantage by selecting and managing a group of different businesses competing in different product markets. a. corporate-level strategy b. business-level strategy c. investment strategy d. target customer strategy Corporate-level strategy is concerned with two key issues: What businesses the firm should compete in and how corporate headquarters should ________. a. improve its products 2

b. manage those businesses c. grow the business d. internationalise A ________ strategy is a corporate-level strategy wherein the firm generates 95 percent or more of its sales revenue from its core business area. a. single-business diversification

3

b. dominant-business c. related constrained diversification d. related linked diversification With the ________ strategy, the firm generates between 70 and 95 percent of its total revenue within a single business area. a. single-business diversification

4

b. dominant-business diversification c. related constrained diversification d. related linked diversification

5 A firm generating more than 30 percent of its revenue outside a dominant business and whose

businesses are related to each other in some manner uses a ________ strategy. a. single-business diversification b. dominant-business diversification c. related constrained diversification d. related linked diversification The diversified company with a portfolio of businesses that have only a few links between them is called a mixed related and unrelated firm and is using the ________ strategy. a. single-business diversification 6

b. dominant-business diversification c. related constrained diversification. d. related linked diversification A highly diversified firm that has no relationships between its businesses follows a(n) ________ strategy. a. single-business diversification

7

b. dominant-business diversification c. related constrained diversification d. unrelated diversification Operational relatedness and ________ are two ways diversification strategies can create value. a. tactics relatedness

8

b. corporate relatedness c. financial relatedness d. customer relatedness ________ are cost savings that the firm creates by successfully sharing some of its resources and capabilities or transferring one or more corporate-level core competencies that were developed in one of its businesses to another of its businesses.

9 a. Economies of scale b. Economies of scope

c. Economies of margin d. Economies of size Firms seek to create value from economies of scope through two basic kinds of operational economies: ________ and ________. a. operational relatedness; corporate relatedness 10

b. operational relatedness; civic relatedness c. social relatedness; civic relatedness d. social relatedness; corporate relatedness ________, one basic kind of operational economies creating economies of scope, consists of sharing activities. a. Operational relatedness

11

b. Corporate relatedness c. Social relatedness d. Civic relatedness ________, one basic kind of operational economies creating economies of scope, consists of transferring corporate-level core competencies a. Operational relatedness

12

b. Corporate relatedness c. Social relatedness d. Civic relatedness ________ are complex sets of resources and capabilities that link different businesses, primarily through managerial and technological knowledge, experience, and expertise. a. Research-level core competencies

13

b. Customer-oriented competencies c. Corporate-level core competencies d. Investor-level core competencies

________ exists when a firm is able to sell its products above the existing competitive level or to reduce the costs of its primary and support activities below the competitive level, or both. a. Market power 14

b. Consumer power c. Resource power d. Tactical power ________ competition exists when two or more diversified firms simultaneously compete in the same product areas or geographical markets. a. Multipoint

15

b. Dual c. Bi-competitor d. Product ________ exists when a company produces its own inputs (backward integration) or owns its own source of output distribution (forward integration). a. Vertical integration

16

b. Horizontal integration c. Full integration d. Partial integration ________ are cost savings realised through improved allocations of financial resources based on investments inside or outside the firm. a. Tangible economies

17

b. Asset economies c. Resource economies d. Financial economies Two types of financial economies are efficient internal capital allocations and the:

18 a. purchase of overvalued assets.

b. division of acquired assets. c. sale of acquired assets. d. restructuring of acquired assets. External incentives to diversify include ________ and tax laws. a. ownership regulations

19

b. corporate regulations c. antitrust regulations d. competitive regulations Internal incentives to diversify include ________, uncertain future cash flows, and the pursuit of synergy and reduction of risk for the firm. a. high performance

20

b. medium performance c. low performance

d. virtual performance Research suggests that a firm using a related diversification strategy is more ________ when bidding for a new business, whereas a firm pursuing an unrelated diversification strategy may be more likely to ________ its bid. a. reckless, undervalue 21 b. careful, overprice c. hostile, overprice d. reactive, abandon Top level executives' diversification decisions may be held in check by concerns for their ________. a. reputation 22 b. poor agency c. judgement

d. competitors Intangible resources such as tacit knowledge could ________ even more diversification than tangible resources. a. inhibit 23

b. prevent c. reduce d. encourage Small firms and companies in ________ industries sometimes find it necessary to diversify for longterm survival. a. young

24

b. new c. mature d. foreign ________ exists when the value created by business units working together exceeds the value that those same units create working independently. a. Synergy

25

b. Independence c. Conflict d. Competition The desire for increased compensation and ________ are two motives for top-level executives to diversify their firm beyond value-creating and value-neutral levels. a. reduced managerial risk

26

b. increased managerial risk

c. increased employee risk d. reduced employee risk 27

As a firm increases its relatedness between business units, it also ________ its risk of corporate failure, because synergy produces ________ interdependence between businesses that constrains the firm's

flexibility to respond. a. increases; joint b. increases; singular c. decreases; diminished d. decreases; neutralises Diversifying into other product markets or into other businesses can ________ the uncertainty about a firm's future cash flows. a. reduce 28

b. increase c. neutralise d. duplicate A firm may reduce its level of technological change by operating in environments that are more: a. unique.

29

b. uncertain. c. certain. d. unchartered. Even when incentives to diversify exist, a firm must have the ________ needed to successfully use a corporate-level diversification strategy. a. resources and capabilities

30

b. laws and income c. competition and experience d. customers and investors

Product diversification is a primary form of corporate-level strategy. 31

True False

32 Typically, a diversification strategy is used to increase the firm's value by improving its overall

performance.

True False

A reason for using a diversification strategy does not include having neutral effects or reducing a firm's value. 33

True False

Firms can create operational relatedness by sharing either a primary activity (such as inventory delivery systems) or a support activity (such as purchasing practices). 34

True False

Vertical mergers are acquisitions of target firms in the same line of business, such as a merger between two oil companies. 35

True False...