Exam 10: Corporate-Level Strategy: Related and Unrelated Diversification

A joint venture allows a company to share the risks and costs associated with establishing a new business unit with another company.

A diversification strategy based on resource sharing

Companies with a strong track record of internal new venturing generally excel at research and development.

Which diversification strategy is based on the idea that the company creates value by applying the distinctive competencies it developed in one line of business to another business activity?

What is perhaps the most important reason why acquisitions made by a company fail?

Which of the following is not a general organizational competency?

Leveraging competencies involves taking a distinctive competency developed by a business unit in one industry to create

When McDonald's introduced the McCafe,it began offering a new product that was not available in traditional McDonald's stores.The introduction of the McCafe is an example of which of the following?

In which of the following cases are bureaucratic costs likely to be lowest?

A company should pursue related diversification only to enhance the competitive position of its core business.

An appropriate reason to diversify is to pool the risk from several business ventures in order to create a more stable income stream.

Differentiate between joint venture and aquisition as a method to enter new industries.Discuss the advatages and disadvanatges associated with each.

General organizational competencies refer to competencies

Product bundling refers to

Firms with superior strategic capabilities can create profitable new business units at a much higher rate than most other companies can.

Companies that base their diversification strategy on transferring competencies tend to acquire new businesses that are ____ to their existing business activities.

Economies of scope arise when one or more of a diversified company's business units are able to realize cost-saving or differentiation advantages because they can more effectively pool,share,and utilize resources or capabilities.

Stanley's services firm wants to enter an embryonic market,but it doesn't have enough cash to purchase the required assets.Which of the following strategies would you recommend to Stanley?

Miller Brewing was related to Philip Morris's tobacco business because it was possible to create important maketing commonalities: both beer and tobacco are mass market consumer goods in which brand positioning,advertising,and product development skills are crucial to create successful new products.This is an example of which of the following?

An advantage of related diversification is that it allows a company to quickly gain entry into a new industry where barriers are high.