Professional Documents
Culture Documents
a
Which of the following may be true for a company
pursuing a strategy of unrelated diversification rather than
a strategy of related diversification?
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 choices.
E. None of these choices.
d
A company pursuing a multibusiness model based on
diversification may justify this strategy for what
reason(s)?
A. Transfer competencies
B. Reserve competencies
C. Resource sharing
D. Product bundling
E. All of these choices
e
A diversification strategy based on resource sharing
A. entails a company creating value by applying the
distinctive competencies it developed in one line of
business to another line of business.
B. requires the development of new business-level
strategies.
C. can help a company to realize economies of scope.
D. is a valid way of supporting the generic business-level
strategy of differentiation.
E. increases the accountability of units.
c
General organizational competencies are found
A. in the skills of a company's top managers and
functional experts.
B. at low levels in the organization.
C. among technology professionals.
D. within a company's strategic core.
E. in an organization's tangible resources.
a
D. Taper integration
E. Backward integration
b
A strategy based on diversification may fail to add value
because companies
A. seek to achieve differentiation instead of low cost.
B. diversify into areas in which they have some
knowledge and miss out on profitable opportunities in
other areas.
C. make acquisitions rather than develop new
technologies on their own.
D. incur bureaucratic costs that exceed the value created
by the strategy.
E. seek to achieve cost leadership instead of
differentiation.
d
Diversification may dissipate value if it is wrongly based
on
A. realizing economies of scope.
B. pooling risks.
C. transferring competencies.
D. acquisitions and restructuring.
E. leveraging existing competencies.
b
In which of the following cases are bureaucratic costs
likely to be lowest?
A. A vertically integrated company with five divisions that
pursues full integration
B. A company with five divisions that pursues related
diversification based on economies of scope
C. A company with five divisions that pursues related
diversification based on transferring competencies
D. A company with five divisions that pursues unrelated
diversification based on acquisitions and restructuring
E. A company with twenty divisions that pursues taper
integration
d
New ventures are likely to be preferred compared to
acquisitions when
A. entry barriers are high.
B. exit barriers are high.
B. engineering technology
C. customer requirements
D. sales techniques
E. technical requirements
c
If a company is to increase the probability of a new
product's commercial success, the company must foster
close links between
A. marketing and sales.
B. engineering and advertising.
C. quality assurance and inventory management.
D. research and development (R&D) and marketing.
E. accounting and industrial engineering.
d
Which of the following seems to be a major determinant
of a new venture's success?
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
An internal new venture is the most appropriate strategic
choice when
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.
c
Which of the following entry strategies should be used
when speed is an important consideration?
A. Internal new venture
B. Acquisition
C. Joint venture
D. Unrelated diversification
E. Related diversification
b
A company considering entering an industry that is in the
mature stage of its life cycle would generally prefer which
of the following entry strategies?
A. Joint ventures
B. New ventures
C. Acquisitions
D. Long-term contracting
E. Taper integration
c
Acquisitions often fail because of
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.
d
Which of the following is not a reason for the failure of an
acquisition to generate the gains originally expected of
it?
A. Poor postacquisition integration
B. Overestimation of the potential gains to be derived
from synergy
C. The high cost of making acquisitions
D. Lack of preacquisition screening
E. Overestimation of the potential costs of realizing
synergies
e
Which of the following is (are) the probable
consequence(s) of an inability to integrate two divergent
corporate cultures after an acquisition?
A. High management turnover
B. Damaging political tensions between the management
of the acquired and acquiring companies
C. An inability to realize potential gains from synergies
b
What is perhaps the most important reason why
acquisitions made by a company fail?
A. The expense of the acquisition
B. The timing of the acquisition
C. Management's unwillingness to expend the necessary
effort to make the acquisition work effectively
D. Incompetence on the part of workers in the acquired
firm
E. Difficulties in coordinating manufacturing activities
a
Which of the following reasons can make a diversification
strategy an unwise course of action for a company to
pursue?
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 choices
e
Diversification is sometimes pursued by a company for
the wrong reasons. Which of the following is a faulty
justification for diversification?
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 choices
d
At its simplest level, a joint venture may be thought of as
a(n)
A. merger of two companies.
B. acquisition of a smaller company by a larger company.
C. form of strategic outsourcing.
D. sign of weakness on the part of one of the companies.
E. corporate partnership.
e