Question 1

________ is when one firm buys another through a stock purchase,cash or the issuance of debt.

Accepted Answer

A)   An acquisition
B)   A merger
C)   An unrelated diversification
D)   A related diversificationE) None of the above
F) A) and C)

Question 2

For a core competence to be a viable basis for the corporation strengthening a new business unit,there are three requirements.Which one of the following is not one of these requirements?

Accepted Answer

A)   The competence must help the business gain strength relative to its competition.
B)   The new business must be similar to existing businesses to benefit from a core competence.
C)   The new business must have an established large market share.
D)   The collection of competencies should be unique, so that they cannot be easily imitated.E) C) and D)
F) B) and D)

Question 3

The Hewlett-Packard and Autonomy merger in 2011 is an example of a successful merger.

Accepted Answer

A) True 
 B)False

Question 4

Proctor and Gamble is a large multinational organization that has many business sharing distribution resources.Diversification strategies take advantage of the ________ that exist in their organization.

Accepted Answer

A)   costs
B)   employees
C)   discontinuities
D)   synergiesE) C) and D)
F) B) and D)

Question 5

Unbalanced capacities that limit cost savings,difficulties in combining specializations,and reduced flexibility are disadvantages associated with

Accepted Answer

A)   strategic alliances.
B)   vertical integration.
C)   horizontal integration.
D)   divestiture.E) None of the above
F) B) and C)

Question 6

The downsides or limitations of mergers and acquisitions include all of the following except

Accepted Answer

A)   It is a slow means to enter new markets and acquire skills and competences.
B)   Difficulties exist in integrating the activities and resources of the acquired firm into ongoing operations.
C)   There can be many cultural issues that can doom an otherwise promising acquisition.
D)   Premiums that are frequently paid to acquire a business are large.E) A) and B)
F) B) and C)

Question 7

________ is when the corporate office helps subsidiaries make wise choices in their own acquisitions,divestures,and new ventures,thereby creating value within business units.

Accepted Answer

A)   Parenting
B)   Restructuring
C)   Leveraging core competencies
D)   Increasing market powerE) A) and B)
F) All of the above

Question 8

Diversified public corporations,such as Berkshire Hathaway and Virgin Group,create value through management expertise by improving plans and budgets.This is an example of a related diversification strategy.

Accepted Answer

A) True 
 B)False

Question 9

Research shows that a key competence of high-performance diversified firms is the ability to

Accepted Answer

A)   hide excess capital.
B)   efficiently dispose of excess capital.
C)   effectively allocate financial capital.
D)   invest internationally.E) A) and B)
F) A) and C)

Question 10

The risks of vertical integration include all the following except

Accepted Answer

A)   costs and expenses associated with increased overhead and capital expenditures.
B)   lack of control over valuable assets.
C)   problems associated with unbalanced capacities along the value chain.
D)   additional administrative costs associated with managing a more complex set of activities.E) A) and B)
F) None of the above

Question 11

Antitakeover tactics include all the following except

Accepted Answer

A)   greenmail.
B)   poison pills.
C)   golden parachutes.
D)   golden handcuffs.E) C) and D)
F) A) and D)

Question 12

Vertical integration is attractive when

Accepted Answer

A)   administrative costs are higher than transaction costs.
B)   transaction costs are higher than administrative costs.
C)   transaction costs and administrative costs are equal.
D)   search costs are higher than monitoring costs.E) None of the above
F) A) and B)

Question 13

Portfolio models such as the BCG Portfolio matrix are limited in value because they only compare the SBU on four dimensions.

Accepted Answer

A) True 
 B)False

Question 14

Internal development may be time consuming and,therefore,firms may forfeit the benefits of speed that growth through ________ and ________ can provide.

Accepted Answer

A)   strategic alliances; joint ventures
B)   strategic alliances; mergers
C)   mergers; acquisitions
D)   mergers; joint venturesE) B) and D)
F) B) and C)

Question 15

Firms that choose to diversify through internal development must develop ________ that allow them to move ________ from initial opportunity recognition to market introduction.

Accepted Answer

A)   strategies; slowly
B)   capabilities; quickly
C)   capabilities; slowly
D)   strategies; quicklyE) None of the above
F) B) and D)

Question 16

Diversified public corporations such as Berkshire Hathaway and Virgin Group are examples of companies that create value using

Accepted Answer

A)   deconstruction expertise.
B)   parenting expertise.
C)   excess personnel.
D)   increased market positioning.E) A) and C)
F) A) and D)

Question 17

The Marriott International purchase of Starwood Hotels for 13.6 billion USD is an example of a(n)

Accepted Answer

A)   acquisition.
B)   divestiture.
C)   unrelated diversification.
D)   related diversification.E) B) and C)
F) None of the above

Question 18

A disadvantage of mergers and acquisitions is that they can enable a firm to rapidly enter new product markets.

Accepted Answer

A) True 
 B)False

Question 19

Discuss and explain the three criteria that a core competence must meet if it is to create value and to provide a viable basis for synergy among the businesses in a corporation.

Accepted Answer

Feedback: For a core competence to creat...

Question 20

When Cabot Corporation used the BCG matrix to evaluate its carbon black manufacturing business,the model led them to move away from ________ and to diversify into unrelated businesses listed as stars by the model.This resulted in a decline on return on assets.They eventually returned to carbon black manufacturing and divested the unrelated businesses; their 2016 revenue was 2.4 billion USD.

Accepted Answer

A)   the dog quadrant
B)   its core market
C)   the question mark quadrant
D)   semiconductor manufacturingE) A) and D)
F) None of the above

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

Diversified public corporations,such as Berkshire Hathaway and Virgin Group,create value through management expertise by improving plans and budgets.This is an example of a related diversification strategy.

Correct Answer
verified

The downsides or limitations of mergers and acquisitions include all of the following except

Correct Answer
verified

The Marriott International purchase of Starwood Hotels for 13.6 billion USD is an example of a(n)

Correct Answer
verified

Vertical integration is attractive when

Correct Answer
verified

Firms that choose to diversify through internal development must develop that allow them to move from initial opportunity recognition to market introduction.

Correct Answer
verified

Discuss and explain the three criteria that a core competence must meet if it is to create value and to provide a viable basis for synergy among the businesses in a corporation.

Correct Answer
verified
Feedback: For a core competence to creat...
View Answer

Portfolio models such as the BCG Portfolio matrix are limited in value because they only compare the SBU on four dimensions.

Correct Answer
verified

Diversified public corporations such as Berkshire Hathaway and Virgin Group are examples of companies that create value using

Correct Answer
verified

Unbalanced capacities that limit cost savings,difficulties in combining specializations,and reduced flexibility are disadvantages associated with

Correct Answer
verified

Correct Answer
verified

The risks of vertical integration include all the following except

Correct Answer
verified

For a core competence to be a viable basis for the corporation strengthening a new business unit,there are three requirements.Which one of the following is not one of these requirements?

Correct Answer
verified

A disadvantage of mergers and acquisitions is that they can enable a firm to rapidly enter new product markets.

Correct Answer
verified

The Hewlett-Packard and Autonomy merger in 2011 is an example of a successful merger.

Correct Answer
verified

________ is when one firm buys another through a stock purchase,cash or the issuance of debt.

Correct Answer
verified

________ is when the corporate office helps subsidiaries make wise choices in their own acquisitions,divestures,and new ventures,thereby creating value within business units.

Correct Answer
verified

Proctor and Gamble is a large multinational organization that has many business sharing distribution resources.Diversification strategies take advantage of the ________ that exist in their organization.

Correct Answer
verified

Research shows that a key competence of high-performance diversified firms is the ability to

Correct Answer
verified

Antitakeover tactics include all the following except

Correct Answer
verified

Internal development may be time consuming and,therefore,firms may forfeit the benefits of speed that growth through and can provide.

Correct Answer
verified

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

Diversified public corporations,such as Berkshire Hathaway and Virgin Group,create value through management expertise by improving plans and budgets.This is an example of a related diversification strategy.

Correct AnswerverifiedShow Answer

The downsides or limitations of mergers and acquisitions include all of the following except

Correct AnswerverifiedShow Answer

The Marriott International purchase of Starwood Hotels for 13.6 billion USD is an example of a(n)

Correct AnswerverifiedShow Answer

Vertical integration is attractive when

Correct AnswerverifiedShow Answer

Firms that choose to diversify through internal development must develop ________ that allow them to move ________ from initial opportunity recognition to market introduction.

Correct AnswerverifiedShow Answer

Discuss and explain the three criteria that a core competence must meet if it is to create value and to provide a viable basis for synergy among the businesses in a corporation.

Correct AnswerverifiedFeedback: For a core competence to creat...View AnswerShow Answer

Portfolio models such as the BCG Portfolio matrix are limited in value because they only compare the SBU on four dimensions.

Correct AnswerverifiedShow Answer

Diversified public corporations such as Berkshire Hathaway and Virgin Group are examples of companies that create value using

Correct AnswerverifiedShow Answer

Unbalanced capacities that limit cost savings,difficulties in combining specializations,and reduced flexibility are disadvantages associated with

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The risks of vertical integration include all the following except

Correct AnswerverifiedShow Answer

For a core competence to be a viable basis for the corporation strengthening a new business unit,there are three requirements.Which one of the following is not one of these requirements?

Correct AnswerverifiedShow Answer

A disadvantage of mergers and acquisitions is that they can enable a firm to rapidly enter new product markets.

Correct AnswerverifiedShow Answer

The Hewlett-Packard and Autonomy merger in 2011 is an example of a successful merger.

Correct AnswerverifiedShow Answer

________ is when one firm buys another through a stock purchase,cash or the issuance of debt.

Correct AnswerverifiedShow Answer

________ is when the corporate office helps subsidiaries make wise choices in their own acquisitions,divestures,and new ventures,thereby creating value within business units.

Correct AnswerverifiedShow Answer

Proctor and Gamble is a large multinational organization that has many business sharing distribution resources.Diversification strategies take advantage of the ________ that exist in their organization.

Correct AnswerverifiedShow Answer

Research shows that a key competence of high-performance diversified firms is the ability to

Correct AnswerverifiedShow Answer

Antitakeover tactics include all the following except

Correct AnswerverifiedShow Answer

Internal development may be time consuming and,therefore,firms may forfeit the benefits of speed that growth through ________ and ________ can provide.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Firms that choose to diversify through internal development must develop that allow them to move from initial opportunity recognition to market introduction.

Correct Answer
verified

Correct Answer
verified
Feedback: For a core competence to creat...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Internal development may be time consuming and,therefore,firms may forfeit the benefits of speed that growth through and can provide.

Correct Answer
verified