Deck 6: Corporate-Level Strategies

Question 1

Which of the following options is commonly viewed as risk averse?

A)Operate in unrelated industries.
B)Operate in related industries.
C)Operate in a single industry.
D)None of the above.

Answer 1

A

Question 2

The firm's key capabilities and collective learning skills that are fundamental to its strategy,performance,and long term profitability are known as core competencies.

Answer 2

True

Question 3

A firm is engaging in horizontal related diversification when it acquires a business outside of its present scope of operation,but with similar or related core competencies.

Answer 3

True

Question 4

Every healthy firm should pursue a retrenchment strategy from time to time.

Question 5

Which of the following is not a corporate profile option?

A)Operate in unrelated industries.
B)Operate in related industries.
C)Operate in a single industry.
D)All of the above are corporate profile options.

Question 6

Which of the following relies heavily on the development of synergy?

A)Operate in two unrelated industries.
B)Operate in three or more unrelated industries.
C)Operate in a single industry.
D)None of the above.

Question 7

The first step in formulating an organization's strategy is analysis of the functional strategies.

Question 8

A turnaround includes such actions as eliminating unprofitable outputs and reassessing the firm's product lines and customer groups.

Question 9

A strategic alliance occurs when two or more firms agree to share the costs,risks,and benefits associated with pursuing new business opportunities.

Question 10

A firm may choose stability over growth for reasons associated with product quality.

Question 11

Synergy occurs when the combination of two organizations results in higher effectiveness and efficiency than would otherwise be generated by them separately.

Question 12

According to the BCG matrix,a star is a business unit with a low market share,but high growth potential.

Question 13

The first step in strategy formulation is

A)the corporate strategy.
B)the corporate profile.
C)the functional strategy.
D)the business strategy.

Question 14

Which of the following places "all eggs in one basket?"

A)Operate in unrelated industries.
B)Operate in related industries
C)Operate in a single industry.
D)None of the above.

Question 15

Under an international licensing agreement,a foreign licensee purchases the rights to produce a company's products and or use its technology in the licensee's country for a negotiated fee structure.

Question 16

A merger is a form of a acquisition whereby one firm purchases another,often with a combination of cash and stock

Question 17

Firms often seek to reduce risk by operating in a single industry.

Question 18

As opposed to external growth,internal growth enables the firm to grow more quickly.

Question 19

Divestment is the strategy of last resort,and terminates the business unit by selling its assets.

Question 20

A large competitor may choose the stability strategy to avoid prosecution for monopolistic practices.

Question 21

What is a turnaround strategy? When should it be employed?

Question 22

Decentralized firms

A)tend to employ small corporate staffs and allow business units to make their own decisions.
B)are more successful than centralized firms.
C)are less successful than centralized firms.
D)tend to make major decisions for the business units at corporate headquarters.

Question 23

Terminating the business by selling its assets is known as

A)corporate restructuring.
B)bankruptcy.
C)divestment.
D)liquidation.

Question 24

Which of the following is not an advantage of a strategic alliance?

A)It minimizes increases in the organizational bureaucracy.
B)It allows a firm to share in the benefits of the alliance without bearing all of the costs.
C)It allows a firm to guarantee a return proportionate to the contributions it makes to the alliance.
D)All of the above are advantages of strategic alliances.

Question 25

Under what four conditions might a stability strategy be preferable to a growth strategy?

Question 26

Increasing revenues,production capacity,and the work force is consistent with

A)an external growth strategy.
B)an internal growth strategy.
C)horizontal integration.
D)horizontal related diversification.

Question 27

When is internal growth preferable to external growth? When is external growth more appropriate? Explain.

Question 28

Selling or "spinning off" one or more of the firm's business units is called

A)corporate restructuring.
B)turnaround.
C)divestment.
D)retrenchment.

Question 29

Discuss the considerations relevant to a firm in determining the extent to which it should become involved internationally.

Question 30

Which is not a common reason a firm may select a stability strategy?

A)The firm may risk prosecution for monopolistic practices.
B)Costs associated with growth may exceed the benefits.
C)Growth may compromise customer service.
D)All of the above are common reasons.

Question 31

Identify the three corporate profile options.When should each be employed?

Question 32

When a firm expands downstream,it is engaging in a process called

A)forward integration.
B)conglomerate diversification.
C)backward integration.
D)related diversification.

Question 33

A scenario in which a local franchisee pays a franchisor in another country for the right to use the franchiser's brand names,promotion,materials,and procedures is known as

A)global interaction.
B)international franchising.
C)international strategic alliances.
D)multinational cooperation.

Question 34

Which of the following is not a common shortcoming of a merger or acquisition?

A)The acquiring firm pays a premium.
B)Top managers of the acquired firm often depart the organization.
C)Building a common culture after layoffs can be complicated.
D)All of the above are common shortcomings.

Question 35

Which of the following is not a consideration for determining the extent to which a firm should be involved globally?

A)Present level of global involvement among the firm's customers
B)Similar or dissimilar needs among customers in different countries
C)Present level of global involvement among the firm's partners
D)All of the above are considerations.

Question 36

When a firm expands upstream,it is engaging in a process called

A)forward integration.
B)conglomerate diversification.
C)backward integration.
D)related diversification.

Question 37

According to the BCG matrix,market share can be built with

A)cash cows.
B)question marks.
C)stars.
D)A or C.

Question 38

Which of the following is not a corporate strategy option?

A)Stability
B)Retrenchment
C)Differentiation
D)Growth

Question 39

Transforming the corporation into a leaner,more effective firm,and includes such actions as eliminating unprofitable outputs,pruning assets,reducing the size of the work force,cutting costs of distribution,and reassessing the firm's product lines and customer groups is known as

A)corporate restructuring.
B)turnaround.
C)divestment.
D)retrenchment.

Question 40

A firm that acquires other companies in the same line of business is engaging in a process called

A)horizontal integration.
B)horizontal related diversification.
C)a merger.
D)None of the above.