Question 1

Asset restructuring involves the sale of ________ assets,or even whole lines of businesses that are peripheral.

Accepted Answer

A)   productive
B)   efficient
C)   unproductive
D)   inefficientE) None of the above
F) A) and D)

Question 2

Greenmail is an offer by a company,threatened by takeover,to offer its stock at a reduced price to a third party.

Accepted Answer

A) True 
 B)False

Question 3

Cooperative relationships such as ________ have potential advantages such as entering new markets,reducing manufacturing (or other) costs in the value chain,and developing and diffusing new technologies.

Accepted Answer

A)   franchises
B)   mergers
C)   acquisitions
D)   joint ventures and strategic alliancesE) A) and B)
F) B) and C)

Question 4

In the BCG Growth Share Matrix,the suggested strategy for stars is to

Accepted Answer

A)   milk them to finance other businesses.
B)   invest large sums to gain a good market share.
C)   maintain position and after the market growth slows use the business to provide cash flow.
D)   not invest in them and to shift cash flow to other businesses.E) A) and C)
F) None of the above

Question 5

A golden parachute is a prearranged contract with managers specifying that,in the event of a hostile takeover,the target company managers will be paid a significant severance package.

Accepted Answer

A) True 
 B)False

Question 6

Corporate-level strategy focuses on

Accepted Answer

A)   gaining long-term revenue.
B)   gaining short-term profits.
C)   decreasing business locations.
D)   managing investment bankers and their interests.E) None of the above
F) A) and C)

Question 7

When firms diversify into unrelated businesses,the primary potential benefits are horizontal relationships,i.e.,businesses sharing tangible and intangible resources.

Accepted Answer

A) True 
 B)False

Question 8

Cisco Systems,a computer networking firm,has undertaken over 80 acquisitions in the last decade.It uses these acquisitions to acquire ________ that will permit it to expand its product offerings and services through the addition of the acquired technologies.

Accepted Answer

A)   trend information
B)   the global presence
C)   a reputation
D)   valuable resourcesE) None of the above
F) B) and D)

Question 9

Common steps in management restructuring include all the following except

Accepted Answer

A)   tight financial control.
B)   rewards based on meeting short- to medium-term performance goals.
C)   penalties for missing short- to medium-term performance goals.
D)   reduction in the number of middle-level managers.E) A) and B)
F) All of the above

Question 10

Why do some diversification efforts pay off and others produce poor results? Why should companies even bother with diversification initiatives?

Accepted Answer

Feedback: Discuss what businesses a corp...

Question 11

3M leverages its competencies in adhesives technologies to many industries,including automotive,construction,and telecommunications.This is an example of creating value by using

Accepted Answer

A)   related diversification to acquire economies of scope by leveraging pooled negotiating power.
B)   unrelated diversification to financial synergies through portfolio management.
C)   related diversification to acquire economies of scope by leveraging core competencies.
D)   unrelated diversification to parenting, restructuring, and financial synergies through restructuring and parenting.E) A) and C)
F) A) and B)

Question 12

ConAgra,a diversified food producer,increases its power over suppliers by centrally purchasing huge quantities of packaging materials for all its food divisions.This is an example of using

Accepted Answer

A)   related diversification to acquire economies of scope by leveraging pooled negotiating power.
B)   related diversification to acquire market power by leveraging pooled negotiating power.
C)   unrelated diversification to acquire financial synergies through portfolio management.
D)   unrelated diversification to acquire parenting, restructuring, and financial synergies through restructuring and parenting.E) None of the above
F) A) and B)

Question 13

In the BCG Matrix,a ________ is a business that has a low market share in an industry characterized by high market growth.

Accepted Answer

A)   star
B)   cash cow
C)   question mark
D)   dogE) A) and D)
F) All of the above

Question 14

Portfolio management frameworks,such as the BCG matrix,share which of the following characteristics?

Accepted Answer

A)   Businesses are plotted on a 3-dimensional grid.
B)   Grid dimensions are based on external environments and internal capabilities-market positions.
C)   Position in the matrix suggests a need for sharing synergies.
D)   They are most helpful in helping businesses develop types of competitive advantage.E) B) and C)
F) All of the above

Question 15

When management uses common production facilities or purchasing procedures to distribute different but related products,they are

Accepted Answer

A)   building on core competencies.
B)   achieving process gains.
C)   using portfolio analysis.
D)   sharing activities.E) A) and B)
F) A) and C)

Question 16

________ is when a new legal entity is formed by a combination or consolidation of two firms.

Accepted Answer

A)   An acquisition
B)   A merger
C)   An unrelated diversification
D)   A related diversificationE) A) and B)
F) A) and C)

Question 17

________ is when a firm tries to find and acquire either poorly performing firms with unrealized potential or firms in industries on the threshold of significant,positive change,thereby creating value within business units.

Accepted Answer

A)   Parenting
B)   Leveraging core competencies
C)   Restructuring
D)   Sharing activitiesE) A) and B)
F) All of the above

Question 18

Gillette developed the Fusion and Mach 3 shaving systems.These products created superior customer value as a result of the company core competency in research and development.

Accepted Answer

A) True 
 B)False

Question 19

________ diversification is when a firm enters a different business that has little horizontal interaction with other businesses of a firm.

Accepted Answer

A)   Horizontal
B)   Synergistic
C)   Related
D)   UnrelatedE) B) and D)
F) None of the above

Question 20

In 2012,Microsoft admitted to a major ________ mistake when it wrote off essentially the entire 6.2 billion USD it paid for a digital advertising firm,aQuantive,that it purchased in 2007.

Accepted Answer

A)   expansion
B)   divestiture
C)   acquisition
D)   cost savingsE) A) and D)
F) A) and C)

Exam 6: Corporate-level Strategy: Creating Value Through Diversification

Cooperative relationships such as ________ have potential advantages such as entering new markets,reducing manufacturing (or other) costs in the value chain,and developing and diffusing new technologies.

Correct AnswerverifiedShow Answer

________ is when a new legal entity is formed by a combination or consolidation of two firms.

Correct AnswerverifiedShow Answer

In the BCG Growth Share Matrix,the suggested strategy for stars is to

Correct AnswerverifiedShow Answer

Greenmail is an offer by a company,threatened by takeover,to offer its stock at a reduced price to a third party.

Correct AnswerverifiedShow Answer

Why do some diversification efforts pay off and others produce poor results? Why should companies even bother with diversification initiatives?

Correct AnswerverifiedFeedback: Discuss what businesses a corp...View AnswerShow Answer

Gillette developed the Fusion and Mach 3 shaving systems.These products created superior customer value as a result of the company core competency in research and development.

Correct AnswerverifiedShow Answer

3M leverages its competencies in adhesives technologies to many industries,including automotive,construction,and telecommunications.This is an example of creating value by using

Correct AnswerverifiedShow Answer

A golden parachute is a prearranged contract with managers specifying that,in the event of a hostile takeover,the target company managers will be paid a significant severance package.

Correct AnswerverifiedShow Answer

In 2012,Microsoft admitted to a major ________ mistake when it wrote off essentially the entire 6.2 billion USD it paid for a digital advertising firm,aQuantive,that it purchased in 2007.

Correct AnswerverifiedShow Answer

When management uses common production facilities or purchasing procedures to distribute different but related products,they are

Correct AnswerverifiedShow Answer

ConAgra,a diversified food producer,increases its power over suppliers by centrally purchasing huge quantities of packaging materials for all its food divisions.This is an example of using

Correct AnswerverifiedShow Answer

In the BCG Matrix,a ________ is a business that has a low market share in an industry characterized by high market growth.

Correct AnswerverifiedShow Answer

Common steps in management restructuring include all the following except

Correct AnswerverifiedShow Answer

________ is when a firm tries to find and acquire either poorly performing firms with unrealized potential or firms in industries on the threshold of significant,positive change,thereby creating value within business units.

Correct AnswerverifiedShow Answer

________ diversification is when a firm enters a different business that has little horizontal interaction with other businesses of a firm.

Correct AnswerverifiedShow Answer

Portfolio management frameworks,such as the BCG matrix,share which of the following characteristics?

Correct AnswerverifiedShow Answer

When firms diversify into unrelated businesses,the primary potential benefits are horizontal relationships,i.e.,businesses sharing tangible and intangible resources.

Correct AnswerverifiedShow Answer

Asset restructuring involves the sale of ________ assets,or even whole lines of businesses that are peripheral.

Correct AnswerverifiedShow Answer

Cisco Systems,a computer networking firm,has undertaken over 80 acquisitions in the last decade.It uses these acquisitions to acquire ________ that will permit it to expand its product offerings and services through the addition of the acquired technologies.

Correct AnswerverifiedShow Answer

Corporate-level strategy focuses on

Correct AnswerverifiedShow Answer

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Feedback: Discuss what businesses a corp...
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