Exam 6: Corporate-Level Strategy

Advanced Steel, Inc., needs a particular type of brick to line its kilns in order to safely achieve the high temperatures needed for the unusually strong steel it produces.The clay to make this brick is very rare, and only two brick plants in the United States make this type of brick.Advanced Steel has decided to buy one of these brick plants.This is an example of:

Describe how diversified firms can use activity sharing and transfer of core competencies to create value.

Revenues for United Parcel Service (UPS) come 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.Which of the following best describes the corporate-level strategy of UPS?

The __________diversification strategy creates value in two ways.First, because the core competency has already been developed in one business, the firm does not have to allocate resources to develop it.Second, because the resource is intangible, competitors cannot easily imitate it.

Golden parachutes protect managers from the negative consequences of over diversifying a firm.

Progressive Steel, Inc., needs a particular type of brick to line its kilns in order to safely achieve the high temperatures needed for the unusually strong steel it produces.The clay to make this brick is very rare, and only two brick plants in the United States make this type of brick.Progressive Steel owns one of these brick plants and buys all of its production.The other brick manufacturer has recently developed an inexpensive new technology whereby ordinary clay can be used to make this fire brick.This significantly reduces the production cost of this type of brick.Which of the following statements is true?

Equator, a U.S.manufacturer of pharmaceuticals, has acquired a firm in the same industry in Ireland.It plans to transfer one of its key managers from its plant in St.Louis to Ireland.Which of the following is the major threat to Equator's plan to transfer competencies from itself to the Irish firm?

Research has shown that horizontal acquisitions:

Because of the tax laws of the 1960s and 1970s, when dividends were taxed more heavily than capital gains, shareholders preferred that corporations:

Companies in emerging markets frequently use the unrelated diversification strategy because of the absence of a "soft infrastructure" in those markets.

The use of poison pills increases the chance that a poorly performing firm will be taken over.

The Mars acquisition of the Wrigley assets was part of its related constrained diversification and added market share to the Mars/Wrigley integrated firm.It allowed Mars to gain __________ because it could sell its products above the market level or reduce its costs below the market level.

Acquisitions to increase market power require that the firm have a(n) __________ diversification strategy.

Synergy exists when:

Virgin Group Ltd.successfully transfers its marketing core competence across airlines, cosmetics, music, drinks, mobile phones, health clubs, and a number of other businesses.Virgin follows a(n) __________ diversification corporate strategy.

Usually, a company is classified as a single-business firm when revenues generated from its core business area are greater than __________ percent.

Compared to diversification that is grounded in intangible resources, diversification based on financial resources only is more visible to competitors and thus more imitable and less likely to create value on a long-term basis.

Which of the following acquisitions would be considered the LEAST related?

The more "constrained" the relatedness of diversification the:

Which of the following makes high-technology firms and service-based firms risky as restructuring candidates?