Question 1

An internal new venture is the most appropriate strategic choice when

Accepted Answer

A)  an industry is mature. 
B)  the firm will enter on a small scale. 
C)  the firm has competencies that can be leveraged. 
D)  speed of entry is the most important consideration. 
E)  there is strong pressure for quick profitability. 
A)  an industry is mature. 
B)  the firm will enter on a small scale. 
C)  the firm has competencies that can be leveraged. 
D)  speed of entry is the most important consideration. 
E)  there is strong pressure for quick profitability.

Question 2

One way a diversified company can increase its profitability is by acquiring inefficient or poorly managed companies and then restructuring them to improve their performance.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following statements concerning research and development is correct?

Accepted Answer

A)  Exploratory research is more important than development research. 
B)  Development research is more important than exploratory research. 
C)  Exploratory research is directed toward commercialization of a new technology. 
D)  Development research advances basic science. 
E)  Companies with a strong record of internal new venturing excel at both types of research. 
A)  Exploratory research is more important than development research. 
B)  Development research is more important than exploratory research. 
C)  Exploratory research is directed toward commercialization of a new technology. 
D)  Development research advances basic science. 
E)  Companies with a strong record of internal new venturing excel at both types of research.

Question 4

When a company has cash in excess of the amount needed to maintain a competitive advantage in its core business,it will most likely pursue

Accepted Answer

A)  taper integration. 
B)  full integration. 
C)  diversification. 
D)  long-term contracts. 
E)  strategic alliances. 
A)  taper integration. 
B)  full integration. 
C)  diversification. 
D)  long-term contracts. 
E)  strategic alliances.

Question 5

The coordination required to realize value from a diversification strategy based on transferring,sharing,or leveraging competencies is a major source of bureaucratic costs.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following seems to be a major determinant of a new venture's success?

Accepted Answer

A)  Large-scale entry into the target industry designed to build market share, even when such entry involves significant short-term losses 
B)  Cautious small-scale entry into the target industry so that the company can assess the probable outcome of the venture without losing too much money 
C)  A low level of integration between the marketing and the research and development functions of the venturing company 
D)  Supporting many new venture projects in the hope that one will succeed 
E)  Killing the new venture if it does not show a profit after the end of the third year 
A)  Large-scale entry into the target industry designed to build market share, even when such entry involves significant short-term losses 
B)  Cautious small-scale entry into the target industry so that the company can assess the probable outcome of the venture without losing too much money 
C)  A low level of integration between the marketing and the research and development functions of the venturing company 
D)  Supporting many new venture projects in the hope that one will succeed 
E)  Killing the new venture if it does not show a profit after the end of the third year

Question 7

What are the two general types of diversification and when would one be preferred over the other?

Accepted Answer

Diversification can take one of two form

Question 8

A company should pursue related diversification instead of unrelated diversification when the company's

Accepted Answer

A)  core skills are applicable to a wide variety of industrial and commercial situations. 
B)  core skills are highly specialized and have few applications outside the core business. 
C)  top managers are skilled at acquiring and turning around poorly run enterprises. 
D)  main objective is to maximize growth. 
E)  free cash flow is high enough that it has funds available for investment. 
A)  core skills are applicable to a wide variety of industrial and commercial situations. 
B)  core skills are highly specialized and have few applications outside the core business. 
C)  top managers are skilled at acquiring and turning around poorly run enterprises. 
D)  main objective is to maximize growth. 
E)  free cash flow is high enough that it has funds available for investment.

Question 9

Free cash flow refers to additional funds from a government stimulus program.

Accepted Answer

A) True 
 B)False

Question 10

Acquisitions often fail because of

Accepted Answer

A)  poor commercialization. 
B)  too much preacquisition screening, which increases the time it takes to enter a market. 
C)  large-scale entry. 
D)  differences in corporate culture. 
E)  slowness in establishing significant market presence. 
A)  poor commercialization. 
B)  too much preacquisition screening, which increases the time it takes to enter a market. 
C)  large-scale entry. 
D)  differences in corporate culture. 
E)  slowness in establishing significant market presence.

Question 11

In which of the following industry environments are new ventures most likely to be favored over acquisitions as a means of entering a new business area?

Accepted Answer

A)  An embryonic industry 
B)  An industry in its later stages of growth 
C)  An industry passing through the shakeout stage 
D)  A mature industry 
E)  A declining industry 
A)  An embryonic industry 
B)  An industry in its later stages of growth 
C)  An industry passing through the shakeout stage 
D)  A mature industry 
E)  A declining industry

Question 12

Sara Lee Corp.,a baking firm,purchased Platex Apparel Inc.This purchase helped to make Sara Lee Corp.one of the largest makers of women's apparel in the United States.Sara Lee Corp.utilized a diversification strategy

Accepted Answer

A) True 
 B)False

Question 13

Which of the following reasons can make a diversification strategy an unwise course of action for a company to pursue?

Accepted Answer

A)  Changing industry conditions 
B)  Changing firm-specific conditions 
C)  Diversification for the wrong reasons 
D)  Increasing bureaucratic costs of diversification 
E)  All of these 
A)  Changing industry conditions 
B)  Changing firm-specific conditions 
C)  Diversification for the wrong reasons 
D)  Increasing bureaucratic costs of diversification 
E)  All of these

Question 14

Reasearch finds that the higher the number of business units in a company's portfolio,the easier it is for corporate managers to remain informed about the complexities of each business.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following entry strategies should be used when speed is an important consideration?

Accepted Answer

A)  Internal new venture 
B)  Acquisition 
C)  Joint venture 
D)  Unrelated diversification 
E)  Related diversification 
A)  Internal new venture 
B)  Acquisition 
C)  Joint venture 
D)  Unrelated diversification 
E)  Related diversification

Question 16

Which of the following may be true for a company pursuing a strategy of unrelated diversification rather than a strategy of related diversification?

Accepted Answer

A)  The company does not have to achieve coordination between business units. 
B)  The company has broad organizational competencies that can be transferred. 
C)  The company has superior strategic management and organizational design. 
D)  All of these 
E)  None of these 
A)  The company does not have to achieve coordination between business units. 
B)  The company has broad organizational competencies that can be transferred. 
C)  The company has superior strategic management and organizational design. 
D)  All of these 
E)  None of these

Question 17

Diversification is sometimes pursued by a company for the wrong reasons.Which of the following is a faulty justification for diversification?

Accepted Answer

A)  Risk pooling 
B)  Rescuing the core business from difficulty 
C)  Growth for growth's sake 
D)  All of the above 
E)  None of these 
A)  Risk pooling 
B)  Rescuing the core business from difficulty 
C)  Growth for growth's sake 
D)  All of the above 
E)  None of these

Question 18

Research suggests that companies that acquire many businesses over time become expert in this process and so can generate significant value from their acquisitions.

Accepted Answer

A) True 
 B)False

Question 19

To be commercially successful,new products must be developed with ____ utmost in mind.

Accepted Answer

A)  manufacturing requirements 
B)  engineering technology 
C)  customer requirements 
D)  sales techniques 
E)  technical requirements 
A)  manufacturing requirements 
B)  engineering technology 
C)  customer requirements 
D)  sales techniques 
E)  technical requirements

Question 20

Economies of scope typically involve

Accepted Answer

A)  sharing resources by business units. 
B)  acquiring resources from outside a company. 
C)  limited utilization of resources by specific business units. 
D)  all of these choices. 
E)  none of these choices. 
A)  sharing resources by business units. 
B)  acquiring resources from outside a company. 
C)  limited utilization of resources by specific business units. 
D)  all of these choices. 
E)  none of these choices.

An internal new venture is the most appropriate strategic choice when

One way a diversified company can increase its profitability is by acquiring inefficient or poorly managed companies and then restructuring them to improve their performance.

Which of the following statements concerning research and development is correct?

When a company has cash in excess of the amount needed to maintain a competitive advantage in its core business,it will most likely pursue

The coordination required to realize value from a diversification strategy based on transferring,sharing,or leveraging competencies is a major source of bureaucratic costs.

Which of the following seems to be a major determinant of a new venture's success?

What are the two general types of diversification and when would one be preferred over the other?

A company should pursue related diversification instead of unrelated diversification when the company's

Free cash flow refers to additional funds from a government stimulus program.

Acquisitions often fail because of

In which of the following industry environments are new ventures most likely to be favored over acquisitions as a means of entering a new business area?

Sara Lee Corp.,a baking firm,purchased Platex Apparel Inc.This purchase helped to make Sara Lee Corp.one of the largest makers of women's apparel in the United States.Sara Lee Corp.utilized a diversification strategy

Which of the following reasons can make a diversification strategy an unwise course of action for a company to pursue?

Reasearch finds that the higher the number of business units in a company's portfolio,the easier it is for corporate managers to remain informed about the complexities of each business.

Which of the following entry strategies should be used when speed is an important consideration?

Which of the following may be true for a company pursuing a strategy of unrelated diversification rather than a strategy of related diversification?

Diversification is sometimes pursued by a company for the wrong reasons.Which of the following is a faulty justification for diversification?

Research suggests that companies that acquire many businesses over time become expert in this process and so can generate significant value from their acquisitions.

To be commercially successful,new products must be developed with ____ utmost in mind.

Economies of scope typically involve

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Distinctive Competencies, Competitive Advantage, and Profitability

Building Competitive Advantage Through Functional-Level Strategy

Building Competitive Advantage Through Business-Level Strategy

Business-Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate Performance, Governance, and Business Ethics

Implementing Strategy in Companies That Compete in a Single Industry

Implementing Strategy in Companies That Compete Across Industries and Countries

Filters

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

An internal new venture is the most appropriate strategic choice when

One way a diversified company can increase its profitability is by acquiring inefficient or poorly managed companies and then restructuring them to improve their performance.

Which of the following statements concerning research and development is correct?

When a company has cash in excess of the amount needed to maintain a competitive advantage in its core business,it will most likely pursue

The coordination required to realize value from a diversification strategy based on transferring,sharing,or leveraging competencies is a major source of bureaucratic costs.

Which of the following seems to be a major determinant of a new venture's success?

What are the two general types of diversification and when would one be preferred over the other?

A company should pursue related diversification instead of unrelated diversification when the company's

Free cash flow refers to additional funds from a government stimulus program.

Acquisitions often fail because of

In which of the following industry environments are new ventures most likely to be favored over acquisitions as a means of entering a new business area?

Sara Lee Corp.,a baking firm,purchased Platex Apparel Inc.This purchase helped to make Sara Lee Corp.one of the largest makers of women's apparel in the United States.Sara Lee Corp.utilized a diversification strategy

Which of the following reasons can make a diversification strategy an unwise course of action for a company to pursue?

Reasearch finds that the higher the number of business units in a company's portfolio,the easier it is for corporate managers to remain informed about the complexities of each business.

Which of the following entry strategies should be used when speed is an important consideration?

Which of the following may be true for a company pursuing a strategy of unrelated diversification rather than a strategy of related diversification?

Diversification is sometimes pursued by a company for the wrong reasons.Which of the following is a faulty justification for diversification?

Research suggests that companies that acquire many businesses over time become expert in this process and so can generate significant value from their acquisitions.

To be commercially successful,new products must be developed with ____ utmost in mind.

Economies of scope typically involve

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Distinctive Competencies, Competitive Advantage, and Profitability

Building Competitive Advantage Through Functional-Level Strategy

Building Competitive Advantage Through Business-Level Strategy

Business-Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

Corporate Performance, Governance, and Business Ethics

Implementing Strategy in Companies That Compete in a Single Industry

Implementing Strategy in Companies That Compete Across Industries and Countries

Filters