Exam 6: Corporate-Level Strategy

PorkPride Foods produces hams and other meat products.It owns hog raising operations.This is an example of a business that is:

Firms that focus on one or few businesses and markets can earn positive returns because they are able to develop capabilities useful for those markets.

Disney is an example of a company that was successful because its corporate strategy added value across its set of businesses above what the individual businesses could create individually.

The Publicis Groupe has three major groups of business (advertising, media, and digital) that share resources and activities.The Publicis Groupe is using a(n) __________ diversification strategy.

GE is an example of a firm that has used internal capital market allocation as a means of creating value even though it competes using a related linked strategy rather than an unrelated diversification strategy.

Research suggests that __________ has decreased while __________ has increased, possibly due to the restructuring that continued in the 1990s through the early twenty-first century.

When a firm simultaneously practices operational relatedness and corporate relatedness:

If the tax code were to be changed so that individual tax rates for dividends were taxed at a higher rate and long-term capital gains were taxed at a lower rate, shareholders would most likely encourage to limit investments into diversification that would significantly increase share value and, instead, increase dividend rates.

Multipoint competition occurs when:

To create economies of scope, tangible resources often must be shared.Less tangible resources can also be shared.

Economies of scope are cost savings a firm creates by successfully sharing 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.

The drawbacks to transferring competencies by moving key people into new management positions include all of the following EXCEPT:

Decisions to expand a firm's portfolio of businesses to reduce managerial risk can have a positive effect on the firm's value.

Firms using a low-level diversification strategy typically struggle to use their resources efficiently and are disadvantaged by the inability to gain economies of scale.

A firm that earns less than 70 percent of revenue from its dominant business and has direct connections between its businesses is engaging in __________ diversification.

A noted professional art academy has founded an "artists and friends" travel company specializing in tours for artists to scenic locales, using its faculty as traveling teachers.In addition, the art academy has purchased a framing company to make frames for academy art works, and to sell museum-quality framing services to the public.The art academy is engaging in diversification based on __________ relatedness.

Which of the following statements is true?

Revenues for United Parcel Service (UPS) are derived from the following business segments: 60 percent from U.S.package delivery operations, 22 percent from international package delivery, and 18 percent from non-packaging operations.The best description of the corporate-level strategy of UPS is unrelated diversification.

In spite of the challenges associated with it, a number of corporations continue to use the unrelated diversification strategy, especially in emerging markets.

Managerial motives to seek diversification beyond value-creating and value-neutral levels include a desire to: