Question 1

Selling all of a company's assets in parts for their tangible worth is called
A)divestiture.
B)liquidation.
C)concentric diversification.
D)unrelated integration.
E)joint venture.

Accepted Answer

Liquidation means selling off all of a company's assets in parts to generate cash, which is often done when a company is facing financial troubles or going out of business. Divestiture refers to selling off a portion of a company's assets or business units. Concentric diversification and unrelated integration refer to strategies for expanding a company's operations, while a joint venture involves two or more companies coming together to form a new business entity.

Question 2

Nakheel,the property unit of Dubai World,engaged in several rounds of job cuts in 2008 and 2010.This is an example of
A)forward integration.
B)unrelated diversification.
C)retrenchment.
D)backward integration.
E)divestiture.

Accepted Answer

The job cuts by Nakheel indicate retrenchment, which means cutting back on operations or expenses in order to improve financial performance or recover from losses. This is usually done as part of a turnaround strategy, and involves reducing staff or restructuring operations in order to become more efficient and profitable.

Question 3

Which strategy should be implemented when a division is responsible for an organization's overall poor performance?
A)Backward integration
B)Cost leadership
C)Forward integration
D)Divestiture
E)Related diversification

Accepted Answer

Divestiture is the best strategy when a division is responsible for an organization's overall poor performance. Divestiture involves selling off or spinning off the underperforming division, which allows the organization to focus on its core competencies and strengths. This can help improve overall organizational performance and profitability.

Question 4

Adding new,unrelated products or services is called
A)related diversification.
B)conglomerate diversification.
C)forward integration.
D)unrelated diversification.
E)backward integration.

Accepted Answer

Conglomerate diversification refers to the strategy of adding new, unrelated products or services to a company's portfolio.

Question 5

Egypt- based Fresh Electric Co.assembles gas stoves and water heaters in Georgia,for export to Azerbaijan and Armenia.This is an example of which type of strategy?
A)Product development
B)Market development
C)Horizontal integration
D)Backward integration
E)Forward integration

Accepted Answer

This is an example of market development, as Fresh Electric Co. is expanding into new markets (Azerbaijan and Armenia) with its existing products (gas stoves and water heaters) that are manufactured outside of those markets (in Georgia).

Question 6

Backward integration is effective in all of these except
A)when present suppliers have high profit margins.
B)when an organization has both capital and human resources to manage the new business of supplying its own raw materials.
C)when an organization needs to acquire a needed resource quickly.
D)when an organization competes in an industry that is growing rapidly.
E)when the advantage of stable prices are not important.

Accepted Answer

Backward integration is not effective when stable prices are not important because one of the benefits of backward integration is to stabilize supply costs.

Question 7

The sale of Global Investment House of Kuwait 's stakes in Salam Bank to Techtronic Industries is an example of which type of strategy?
A)Retrenchment
B)Divestiture
C)Liquidation
D)Related diversification
E)Unrelated diversification

Accepted Answer

The sale of Global Investment House of Kuwait's stakes in Salam Bank to Techtronic Industries is an example of divestiture, as Global Investment House is selling a part of its business in order to focus on its core operations.

Question 8

Which strategy seeks to increase market share of present products or services in present markets through greater marketing efforts?
A)Forward integration
B)Market development
C)Market penetration
D)Backward integration
E)Product development

Accepted Answer

Market penetration refers to the strategy of increasing market share of present products or services in present markets through greater marketing efforts. This may involve increasing advertising, promotional efforts, or targeting a broader customer base.

Question 9

Mergers and acquisitions are created for all of the following reasons except to
A)gain economies of scale.
B)gain new technology.
C)smooth out seasonal trends in sales.
D)increase its number of employees.
E)reduce tax obligations.

Accepted Answer

Mergers and acquisitions are typically not created solely to increase the number of employees. While an increase in workforce may be a result of the merger or acquisition, it is not the primary purpose of the deal. The other options - gaining economies of scale, new technology, smoothing out seasonal trends in sales, and reducing tax obligations - are all common reasons for mergers and acquisitions.

Question 10

All of the following are cooperative arrangements except
A)R&D partnerships.
B)cross- licensing agreements.
C)joint- bidding consortia.
D)marketing plans.
E)cross- manufacturing agreements.

Accepted Answer

All of the other options listed (A, B, C, and E) are examples of cooperative arrangements where firms work together to achieve a common goal or benefit. Marketing plans, on the other hand, are typically created and implemented by individual firms without the explicit involvement or cooperation of other companies.

Question 11

All of the following are important factors in the Balanced Scorecard except
A)customer service.
B)business ethics.
C)employee morale.
D)product quality.
E)stockholder equity.

Accepted Answer

While stockholder equity is an important factor in measuring an organization's financial performance, it is not one of the four key perspectives of the Balanced Scorecard, which include customer, financial, internal business processes, and learning and growth. Business ethics, employee morale, product quality, and customer service are all important components of these four perspectives.

Question 12

All of the following situations are conducive to market development except
A)when new untapped or unsaturated markets exist.
B)when an organization's basic industry is becoming rapidly global in scope.
C)when an organization is very successful at what it does.
D)when an organization competes in a high- growth industry.
E)when an organization has excess production capacity.

Accepted Answer

The answer of All of the following situations are conducive...

Question 13

What kind of strategy is retrenchment?
A)An intensive strategy
B)An offensive strategy
C)A turnaround or reorganization strategy
D)A conglomerate strategy
E)An expansion strategy

Accepted Answer

Retrenchment is a strategy used to reduce the size or scope of a business in order to improve its financial performance. It is also known as a turnaround or reorganization strategy, as it aims to restructure the organization and focus on core competencies. This strategy may involve cutting costs, selling off unprofitable assets or business units, or downsizing the workforce. Therefore, option C is the correct answer.

Question 14

Which of the following is not a reason joint ventures fail?
A)The venture may not be supported equally by both partners.
B)Managers who must collaborate daily in operating the venture are not involved in forming or shaping the venture.
C)The venture may begin to compete more with one of the partners than the other.
D)Stakeholders from both partners are equally satisfied.
E)The venture may benefit the partnering companies but may not benefit the customers who then complain about poorer service or criticize the companies in other ways.

Accepted Answer

The other choices are all common reasons joint ventures fail, such as unequal support or competition between partners. However, stakeholders from both partners being equally satisfied does not necessarily mean the joint venture will succeed. There could still be underlying issues or challenges that prevent the venture from achieving its goals.

Question 15

Under which strategy would you offer products or services to a wide range of customers at the lowest price available on the market?
A)Differentiation
B)Low- cost focus
C)Low- cost
D)Best- value focus
E)Best- value

Accepted Answer

The answer of Under which strategy would you offer products...

Question 16

In which situation would horizontal integration be an especially effective strategy?
A)When decreased economies of scale provide major competitive advantages.
B)When an organization can gain monopolistic characteristics in a particular area or region without being challenged by the federal government for "tending substantially" to reduce competition.
C)When an organization competes in a slowing industry.
D)When an organization has neither the capital nor human talent needed to successfully manage an expanded organization.
E)When competitors are succeeding due to managerial expertise or having particular resources an organization possesses.

Accepted Answer

Horizontal integration can be especially effective when an organization can gain monopolistic characteristics in a particular area or region without being challenged by the federal government for "tending substantially" to reduce competition. This can result in increased market power, cost savings through economies of scale, and increased market share, which can lead to higher profits.

Question 17

What principle is built on the idea that there is no general plan for which way to go and what to do?
A)Managing by crisis
B)Managing by subjectives
C)Managing by extrapolation
D)Managing by hope
E)Managing by objectives

Accepted Answer

The answer of What principle is built on the idea...

Question 18

Innovation implies
A)the recycling of unused product
B)the modification of an existing product
C)the duplication of a popular product
D)the creation of a completely new product
E)All of the above

Accepted Answer

Innovation is the process of creating a new product, service, or idea that has not previously existed. Therefore, the best answer is option D, the creation of a completely new product. Options A, B, and C are not necessarily innovative, as they refer to activities that do not necessarily result in a novel solution or product.

Question 19

Which strategy should an organization use if it competes in a no- growth or a slow- growth industry?
A)Related diversification
B)Unrelated diversification
C)Backward integration
D)Divestiture
E)Retrenchment

Accepted Answer

Related diversification allows an organization to leverage its existing capabilities and resources to enter new markets or product lines, which can be beneficial in a no-growth or slow-growth industry to find new opportunities for growth.

Question 20

Financial objectives involve all of the following except
A)higher dividends.
B)growth in revenues.
C)a rising stock price.
D)larger market share.
E)greater return on investment.

Accepted Answer

Financial objectives typically focus on measurable financial performance metrics such as dividends, revenue growth, stock price, and return on investment, rather than market share, which is more of a strategic or competitive objective.

Quiz 6: Strategies in Action

Selling all of a company's assets in parts for their tangible worth is called

Nakheel,the property unit of Dubai World,engaged in several rounds of job cuts in 2008 and 2010.This is an example of

Which strategy should be implemented when a division is responsible for an organization's overall poor performance?

Adding new,unrelated products or services is called

Egypt- based Fresh Electric Co.assembles gas stoves and water heaters in Georgia,for export to Azerbaijan and Armenia.This is an example of which type of strategy?

Backward integration is effective in all of these except

The sale of Global Investment House of Kuwait 's stakes in Salam Bank to Techtronic Industries is an example of which type of strategy?

Which strategy seeks to increase market share of present products or services in present markets through greater marketing efforts?

Mergers and acquisitions are created for all of the following reasons except to

All of the following are cooperative arrangements except

All of the following are important factors in the Balanced Scorecard except

All of the following situations are conducive to market development except

What kind of strategy is retrenchment?

Which of the following is not a reason joint ventures fail?

Under which strategy would you offer products or services to a wide range of customers at the lowest price available on the market?

In which situation would horizontal integration be an especially effective strategy?

What principle is built on the idea that there is no general plan for which way to go and what to do?

Innovation implies

Which strategy should an organization use if it competes in a no- growth or a slow- growth industry?

Financial objectives involve all of the following except