Question 1

Which strategy might be the most likely when management realizes that the current industry is unattractive and that the firm lacks outstanding skills that it could easily transfer to related products or services in other industries?

Accepted Answer

A)   concentration
B)   horizontal growth
C)   concentric diversification
D)   vertical growth
E)   conglomerate diversificationF) A) and B)
G) B) and D)

Question 2

The stability strategies are really a lack of any strategy.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not one of the advantages of portfolio analysis?

Accepted Answer

A)   The graphic depiction facilitates communication.
B)   It provides the basis for impartial objectivity from which to make decisions.
C)   It encourages top management to evaluate each of the corporation's businesses individually.
D)   It raises the issue of cash flow availability for use in expansion and growth.
E)   It stimulates the use of externally oriented data to supplement management's judgment.F) A) and B)
G) C) and E)

Question 4

What are the three key issues that corporate strategy addresses?

Accepted Answer

Corporate strategy deals with three key ...

Question 5

Vertical integration is always more efficient than the marketplace.

Accepted Answer

A) True 
 B)False

Question 6

Research comparing concentric with conglomerate diversification concludes that

Accepted Answer

A)   conglomerate diversification is always less profitable than concentric diversification.
B)   concentric diversification is always less profitable than conglomerate diversification.
C)   the relationship between relatedness and performance follows an inverted U-shaped curve.
D)   neither concentric nor conglomerate diversification are ever profitable.
E)   for optimum effectiveness both conglomerate and concentric diversification should be utilized in tandem.F) D) and E)
G) C) and D)

Question 7

With conglomerate diversification,the focus is on

Accepted Answer

A)   product-market synergy.
B)   sound investment and value-oriented management.
C)   employee satisfaction.
D)   similar product offerings.
E)   market demand.F) B) and D)
G) None of the above

Question 8

Which of the following describes a turnaround strategy?

Accepted Answer

A)   a form of divestment and is appropriate when corporate problems can be traced to the poor performance of an SBU or product line
B)   occurs when the corporation reduces the scope of some of its functional activities and becomes "captive" to another firm
C)   emphasizes improving operational efficiency and is appropriate when a corporation's problems are pervasive, but not yet critical
D)   occurs when a corporation liquidates all its assets
E)   involves adding different products or divisions to the corporationF) A) and D)
G) A) and C)

Question 9

Which kind of corporate strategy deals with the manner in which the firm coordinates activities and builds corporate synergies through resource sharing and development?

Accepted Answer

A)   portfolio strategy
B)   directional strategy
C)   parenting strategy
D)   cooperative strategy
E)   functional strategyF) A) and B)
G) A) and E)

Question 10

Define a retrenchment strategy.Discuss the more popular options.

Accepted Answer

A retrenchment strategy may be used when...

Question 11

Which strategy specifies the firm's overall direction in terms of its general orientation toward growth,the industries or markets in which it competes,and the manner in which it coordinates activities and transfers resources among business units?

Accepted Answer

A)   corporate
B)   functional
C)   divisional
D)   organizational
E)   businessF) A) and E)
G) A) and B)

Question 12

An example of a company that did not blindly follow the prescriptions of a portfolio model was

Accepted Answer

A)   Apple.
B)   Nike.
C)   General Mills.
D)   Dell.
E)   IBM.F) B) and E)
G) A) and E)

Question 13

According to the BCG Growth-Share Matrix,products that typically bring in far more money than is needed for maintenance of their market share are called

Accepted Answer

A)   cash cows.
B)   lost leaders.
C)   dogs.
D)   question marks.
E)   stars.F) C) and E)
G) A) and D)

Question 14

Studies reveal that over one-half to two-thirds of acquisitions are failures primarily because

Accepted Answer

A)   the premiums paid were too high for the firm to earn their cost of capital.
B)   due diligence was not conducted.
C)   the premiums were too high to finance and resulted in bankruptcy.
D)   there were unresolved management conflicts.
E)   there was a clash of management philosophies.F) D) and E)
G) None of the above

Question 15

BP and Royal Dutch Shell are examples of fully integrated firms because they internally make 100% of their key supplies and completely control their distributors.

Accepted Answer

A) True 
 B)False

Question 16

As corporations become global competitors and expand into more markets through strategic alliances,multipoint competition is likely

Accepted Answer

A)   to remain unchanged.
B)   to become even more prevalent.
C)   to become less prevalent going forward.
D)   to become non-existent.
E)   to eliminate the use of horizontal strategies.F) B) and E)
G) A) and C)

Question 17

If a new business is very similar to that of the acquiring firm,it adds little new to the corporation and only marginally improves performance.

Accepted Answer

A) True 
 B)False

Question 18

Which strategy is an attempt to artificially support profits when a company's sales are declining by reducing investment and short-term discretionary expenditures?

Accepted Answer

A)   profit strategy
B)   no-change strategy
C)   turnaround strategy
D)   concentration strategy
E)   captive company strategyF) B) and D)
G) C) and D)

Question 19

The purchase of the supplier Carroll's Foods for its hog-growing facilities by Smithfield Foods,the world's largest pork processor,is an example of

Accepted Answer

A)   forward integration.
B)   horizontal integration.
C)   backward integration.
D)   transferred integration.
E)   mass integration.F) B) and E)
G) All of the above

Question 20

Companies following a related diversification strategy appear to be higher performers and survive longer than companies with narrower scope following a pure concentration strategy.

Accepted Answer

A) True 
 B)False

Exam 7: Strategy Formulation: Corporate Strategy

Which strategy might be the most likely when management realizes that the current industry is unattractive and that the firm lacks outstanding skills that it could easily transfer to related products or services in other industries?

Correct AnswerverifiedShow Answer

An example of a company that did not blindly follow the prescriptions of a portfolio model was

Correct AnswerverifiedShow Answer

The purchase of the supplier Carroll's Foods for its hog-growing facilities by Smithfield Foods,the world's largest pork processor,is an example of

Correct AnswerverifiedShow Answer

Studies reveal that over one-half to two-thirds of acquisitions are failures primarily because

Correct AnswerverifiedShow Answer

Which strategy specifies the firm's overall direction in terms of its general orientation toward growth,the industries or markets in which it competes,and the manner in which it coordinates activities and transfers resources among business units?

Correct AnswerverifiedShow Answer

Which of the following describes a turnaround strategy?

Correct AnswerverifiedShow Answer

Which strategy is an attempt to artificially support profits when a company's sales are declining by reducing investment and short-term discretionary expenditures?

Correct AnswerverifiedShow Answer

If a new business is very similar to that of the acquiring firm,it adds little new to the corporation and only marginally improves performance.

Correct AnswerverifiedShow Answer

Vertical integration is always more efficient than the marketplace.

Correct AnswerverifiedShow Answer

Research comparing concentric with conglomerate diversification concludes that

Correct AnswerverifiedShow Answer

BP and Royal Dutch Shell are examples of fully integrated firms because they internally make 100% of their key supplies and completely control their distributors.

Correct AnswerverifiedShow Answer

According to the BCG Growth-Share Matrix,products that typically bring in far more money than is needed for maintenance of their market share are called

Correct AnswerverifiedShow Answer

What are the three key issues that corporate strategy addresses?

Correct AnswerverifiedCorporate strategy deals with three key ...View AnswerShow Answer

Which kind of corporate strategy deals with the manner in which the firm coordinates activities and builds corporate synergies through resource sharing and development?

Correct AnswerverifiedShow Answer

Define a retrenchment strategy.Discuss the more popular options.

Correct AnswerverifiedA retrenchment strategy may be used when...View AnswerShow Answer

With conglomerate diversification,the focus is on

Correct AnswerverifiedShow Answer

As corporations become global competitors and expand into more markets through strategic alliances,multipoint competition is likely

Correct AnswerverifiedShow Answer

Companies following a related diversification strategy appear to be higher performers and survive longer than companies with narrower scope following a pure concentration strategy.

Correct AnswerverifiedShow Answer

The stability strategies are really a lack of any strategy.

Correct AnswerverifiedShow Answer

Which of the following is not one of the advantages of portfolio analysis?

Correct AnswerverifiedShow Answer

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Corporate strategy deals with three key ...
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A retrenchment strategy may be used when...
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