Question 1

Sharing core competencies is one of the primary potential advantages of diversification.In order for diversification to be most successful,it is important that

Accepted Answer

A)   the similarity required for sharing core competencies must be in the value chain, not in the product.
B)   the products use similar distribution channels.
C)   the target market is the same, even if the products are very different.
D)   the methods of production are the same.E) A) and B)
F) B) and D)

Question 2

Loblaw,with a strong presence in Ontario and Western Canada,gained a footprint into the Quebec market by

Accepted Answer

A)   establishing a clear understanding between partners.
B)   acquiring Provigo.
C)   not shortchanging your partner.
D)   working hard to ensure a collaborative relationship between partners.E) A) and B)
F) None of the above

Question 3

When Rogers acquired Microcell,the clients of Fido,Microcell's brand name

Accepted Answer

A)   costs and associated expenses increased with expanded overhead and capital expenditures.
B)   instantly gained broader market coverage and better reception for their phones.
C)   problems developed with unbalanced capacities along the value chain.
D)   additional administrative costs associated with managing a more complex set of activities increased.E) A) and C)
F) None of the above

Question 4

Which of the following statements regarding internal development as a means of diversification is false?

Accepted Answer

A)   Many companies use internal development to extend their product lines or add to their service offerings.
B)   An advantage of internal development is that it is generally faster than other means of diversification and firms can benefit from speed in developing new products and services.
C)   The firm is able to capture the wealth created without having to "share the wealth" with alliance partners.
D)   Firms can often develop products or services at a lower cost if they rely on their own resources instead of external funding.E) A) and D)
F) A) and C)

Question 5

Explain how transaction cost analysis can provide insights into vertical integration decisions.

Accepted Answer

According to this perspective,every mark...

Question 6

According to the text,the main source of synergy in unrelated diversification is the value created by the knowledge and expertise of the corporate office.

Accepted Answer

A) True 
 B)False

Question 7

A publishing company that purchases a chain of bookstores to sell its books is an example of unrelated diversification.

Accepted Answer

A) True 
 B)False

Question 8

What are the primary benefits associated with unrelated diversification?

Accepted Answer

The primary potential benefits derive la...

Question 9

It may be advantageous to vertically integrate when

Accepted Answer

A)   lower transaction costs and improved coordination are vital and achievable.
B)   the minimum efficient scales of two corporations are different.
C)   flexibility is reduced, providing a more stationary position in the competitive environment.
D)   various segregated specializations will be combined.E) A) and C)
F) B) and C)

Question 10

Real options analysis is most appropriate when

Accepted Answer

A)   the total investment required is small, but the environment is uncertain.
B)   the investment required can be justified by Discounted Cash Flow (DCF)  techniques.
C)   a small investment up front can be followed by a series of subsequent investments.
D)   there is no prospect of obtaining additional knowledge before making subsequent investments.E) None of the above
F) A) and D)

Question 11

Molson,Inc.of Montreal and Coors Co.of Golden,Colorado merged their operations in order to stand up to the

Accepted Answer

A)   continued diversification in the beverage market.
B)   competition from Japan.
C)   continuing consolidation in the global beer industry.
D)   substantial cash outlays to maintain market share.E) A) and D)
F) B) and D)

Question 12

Portfolio management should be considered as the primary basis for formulating corporate-level strategies.

Accepted Answer

A) True 
 B)False

Question 13

Sharing activities across business units can provide two primary benefits: cost savings and revenue enhancements.

Accepted Answer

A) True 
 B)False

Question 14

Discuss how the potential benefits of diversification may be adversely affected by conflicts between managers' interests and shareholders' interests.

Accepted Answer

Frequently,managers may act in their own...

Question 15

When using the BCG matrix,a business that currently holds a large market share in a rapidly growing market and that has minimal or negative cash flow would be known as a

Accepted Answer

A)   cow.
B)   dog.
C)   problem child.
D)   star.E) B) and D)
F) A) and B)

Question 16

Portfolio management matrices generally consist of two axes that reflect industry or market growth and the market share of a business.

Accepted Answer

A) True 
 B)False

Question 17

An anti-takeover tactic called a ___________ is when a firm offers to buy shares of their stock from a company planning to acquire their firm at a higher price than the unfriendly company paid for it.

Accepted Answer

A)   golden parachute
B)   greenmail
C)   poison pill
D)   scorched earthE) All of the above
F) A) and D)

Question 18

Vertical integration is attractive when market transaction costs are higher than internal administrative costs.

Accepted Answer

A) True 
 B)False

Question 19

Vertical integration is attractive when

Accepted Answer

A)   transaction costs are higher than internal administrative costs.
B)   internal administrative costs are higher than transaction costs.
C)   transaction costs and internal administrative costs are equal.
D)   search costs are higher than monitoring costs.E) All of the above
F) C) and D)

Question 20

A newly acquired business must always have products that are similar to the existing businesses' products to benefit from the corporation's core competence.

Accepted Answer

A) True 
 B)False

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

A newly acquired business must always have products that are similar to the existing businesses' products to benefit from the corporation's core competence.

Correct AnswerverifiedShow Answer

Vertical integration is attractive when

Correct AnswerverifiedShow Answer

Discuss how the potential benefits of diversification may be adversely affected by conflicts between managers' interests and shareholders' interests.

Correct AnswerverifiedFrequently,managers may act in their own...View AnswerShow Answer

Sharing core competencies is one of the primary potential advantages of diversification.In order for diversification to be most successful,it is important that

Correct AnswerverifiedShow Answer

Vertical integration is attractive when market transaction costs are higher than internal administrative costs.

Correct AnswerverifiedShow Answer

Which of the following statements regarding internal development as a means of diversification is false?

Correct AnswerverifiedShow Answer

What are the primary benefits associated with unrelated diversification?

Correct AnswerverifiedThe primary potential benefits derive la...View AnswerShow Answer

Molson,Inc.of Montreal and Coors Co.of Golden,Colorado merged their operations in order to stand up to the

Correct AnswerverifiedShow Answer

Portfolio management should be considered as the primary basis for formulating corporate-level strategies.

Correct AnswerverifiedShow Answer

Portfolio management matrices generally consist of two axes that reflect industry or market growth and the market share of a business.

Correct AnswerverifiedShow Answer

When using the BCG matrix,a business that currently holds a large market share in a rapidly growing market and that has minimal or negative cash flow would be known as a

Correct AnswerverifiedShow Answer

According to the text,the main source of synergy in unrelated diversification is the value created by the knowledge and expertise of the corporate office.

Correct AnswerverifiedShow Answer

It may be advantageous to vertically integrate when

Correct AnswerverifiedShow Answer

Loblaw,with a strong presence in Ontario and Western Canada,gained a footprint into the Quebec market by

Correct AnswerverifiedShow Answer

Explain how transaction cost analysis can provide insights into vertical integration decisions.

Correct AnswerverifiedAccording to this perspective,every mark...View AnswerShow Answer

Sharing activities across business units can provide two primary benefits: cost savings and revenue enhancements.

Correct AnswerverifiedShow Answer

When Rogers acquired Microcell,the clients of Fido,Microcell's brand name

Correct AnswerverifiedShow Answer

A publishing company that purchases a chain of bookstores to sell its books is an example of unrelated diversification.

Correct AnswerverifiedShow Answer

Real options analysis is most appropriate when

Correct AnswerverifiedShow Answer

An anti-takeover tactic called a ___________ is when a firm offers to buy shares of their stock from a company planning to acquire their firm at a higher price than the unfriendly company paid for it.

Correct AnswerverifiedShow Answer

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Frequently,managers may act in their own...
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The primary potential benefits derive la...
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According to this perspective,every mark...
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