Deck 5: Strategic Options - Corporate Level

Question 1

Corporate strategy is the strategy that shapes the structure of the organization as an entity.

Answer 1

False

Question 2

Portfolio analysis helps corporate strategists to conceptualize the organization as a whole.

Answer 2

True

Question 3

Growth strategy should be the firm's goal in the short and long terms.

Answer 3

False

Question 4

Acquisitions and mergers are two opposite ways to exercise external growth of an organization.

Question 5

All acquisitions are hostile takeovers that are resisted by the acquired company.

Question 6

A high-synergy enterprise is one in which employees cooperate for comparative advantage because the culture of the organization support such behavior.

Question 7

Diversification is an attempt by an organization to enter a new area altogether, but not to obtain a related product/service.

Question 8

In 1970s, the Federal Communications Commission (FCC) established rules to relax the television networks ability to invest directly in most prime time programming.

Question 9

Another name for concentric diversification strategy is conglomerate diversification strategy.

Question 10

Acculturation intends to segregate two or more presumably divergent cultures.

Question 11

Joint venture was the method applied when Sony and Ericsson came together to establish Sony-Ericsson. This helped Ericsson, previously a manufacturer of telecommunication equipment, to enter the mobile phone market.

Question 12

An example of 'rites of degradation' would be the loss of top managers from the acquired company.

Question 13

Porter and Cooper present an acculturation model that is based on the extent to which organization members are satisfied with and value their existing culture, and the extent to which they perceive the other culture's attractiveness.

Question 14

Joint ventures are permanent combinations of two separate organizations.

Question 15

Stability strategy is synonymous to a growth strategy, where consistency is the key driver.

Question 16

There are two types of retrenchment strategies available, divestment and liquidation.

Question 17

Liquidation happens when the organization actually sells one of its business units.

Question 18

Companies avoid using combinations of many strategies simultaneously in order to be successful.

Question 19

Portfolio analysis is only concerned with multi-product firms.

Question 20

BCG Matrix is a simple analytic technique, which seeks to examine the organization's portfolio along two dimensions: competitor's growth rate, and relative market share/competitive position.

Question 21

In the BCG matrix, a Question Mark is a product that is experiencing relatively low industry growth, but has a high relative market share/competitive position.

Question 22

The excess cash produced by Cash Cows can provide the funding necessary to begin making a Question Mark product or a product line more competitive. The result would be to create a new Cash Cow.

Question 23

General Electric Business Screen analysis creates an eight-cell matrix.

Question 24

By following the niche strategy, sales will generally be less than what might be achieved via a full out competitive fore front, but the profit margins might be greater than the latter.

Question 25

Cultural synergy builds upon similarities and the very diversity of employees can be used to enhance problem solving by combined action.

Question 26

A firm faces two choices in pursuing a growth strategy:

A) Regional, National
B) National, International
C) Internal, External
D) Multinational, Global

Question 27

A ___________ is characterized as a combination of two organizations to form a new company in terms of external growth.

A) Joint venture
B) Acquisition
C) Amalgamation
D) Merger

Question 28

__________ requires the organization to extend their current expertise and/or product lines.

A) External growth
B) Internal growth
C) Conglomerate diversification
D) Diversification strategy

Question 29

Successful acquisitions come under certain categories:
(i) Pick winners early and help them develop their business;
(ii) Get skills or technologies faster or at lower cost than they can be built;
(iii) Consolidate to remove competitors from the industry;
(iv) Improve the acquired company's performance.
Which of these categories are successful acquisitions?

A) i, ii, iii
B) ii, iii, iv
C) i, ii, iv
D) All of the above

Question 30

_____________ firm has difficulties adapting quickly to change.

A) High-synergy
B) Low-synergy
C) Acquired
D) Consolidated

Question 31

In _____________organizations, the best of each culture is melded together without infringing on the other.

A) Culturally synergetic
B) Low-Synergy
C) High synergy
D) Diversified

Question 32

Which of the following is an inherent problem for both mergers and acquisitions?

A) Inadequate information
B) Asymmetrical organization culture
C) Industry differences
D) Diversion from core business

Question 33

____________ is a probable consequence of mergers or acquisition in strategic management.

A) Heavy recruitment of new staff
B) Strategy mismatch
C) Downsizing
D) Price alteration of shares

Question 34

The types of adaptation which occurs as a result of the collision between two cultures are:
(i) Exploitation;
(ii) Assimilation;
(iii)Integration;
(iv) Accommodation.
Which of these adaptations do not Trice and Beyer refer to?

A) i
B) ii, iii
C) iii
D) None of the above

Question 35

According to Cartwright and Cooper, acculturation occurs in any of these instances:

A) Exploitation, Assimilation, Accommodation
B) Assimilation, Exploitation, Deculturation, Integration
C) Assimilation, Deculturation, Integration, Separation
D) Exploitation, Assimilation, Deculturation, Degradation

Question 36

__________ is a process of making an effort to reduce the outflow of cash while increasing the inflow of cash.

A) Divestment
B) Retrenchment
C) Liquidation
D) Turnaround

Question 37

______________ is generally motivated by the assumption that neither a turnaround nor a divestment will be successful.

A) Divestment
B) Retrenchment
C) Liquidation
D) Turnaround

Question 38

In a BCG Matrix, a ________ exists in a low growth industry and poor competitive position that is not a good combination.

A) Cash Cow
B) Star
C) Dog
D) Question Mark

Question 39

_____________is an extension of the portfolio idea with a more stakeholder-oriented approach through two dimensions: Industry Attractiveness and Competitive Position.

A) General Electric Business Screen
B) BCG Matrix
C) McKinsey Matrix
D) Hofer Matrix

Question 40

_________ strategy is likely to be relatively free from direct competition.

A) Niche
B) Direct
C) Retrenchment
D) Diversification

Question 41

____________ happens when the assets of the business are simply sold for whatever value obtainable.

A) Retrenchment via Turnaround
B) Retrenchment via Divestment
C) Retrenchment via Liquidation
D) Retrenchment via Dispersion

Question 42

External Growth can be achieved in a company through:

A) Merger, acquisition, joint venture
B) Diversification, acquisition, joint venture
C) Product line extension, diversification, merger
D) Synergy, merger, acquisition, and diversification

Question 43

When a company plans to merge with another company in order to amplify their weak areas through the acquired company, they are looking for a company with:

A) Similar core competencies
B) Complementary core competencies
C) Diversified core competencies
D) Supplementary core competencies

Question 44

___________ suggests that synergies often tend to be more imagined than real.

A) James O. McKinsey
B) Michael Porter
C) Trice and Beyer
D) Henri Fayol

Question 45

When a firm is experiencing problems of some sort and advancement or consistency is not feasible, it might be advisable to follow a strategy of______________.

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

Question 46

According to Cartwright and Cooper's acculturation model, _______ is the ideal situation but it is also rarely achieved in practice.

A) Assimilation
B) Deculturation
C) Integration
D) Separation

Question 47

______________ is an excellent visual means of representing the big picture through conceptual skills in organizational hierarchy.

A) McKinsey's framework
B) Porters 5 forces
C) Portfolio Analysis
D) All of the above

Question 48

In a BCG Matrix, ___________ is a product that is experiencing relatively low industry growth but has a high relative market share position.

A) Cash Cow
B) Star
C) Dog
D) Question Mark

Question 49

Explain the significance of portfolio analysis in strategic planning process.

Question 50

"There is no question that growth certainly can be both good and necessary for long-term organizational health." In the light of the aforementioned statement, explain the two major growth strategies with examples.

Question 51

Consider a company of your choice, locate it in the most appropriate section in a BCG Matrix, and justify your answer.

Question 52

Discuss the most appropriate situations for the five types of acquisitions.

Question 53

"Synergy can be represented by the equation: 2+2=5." Comment on the significance of synergy in M&As.

Question 54

Differentiate the characteristics of a high-synergy enterprise and a low-synergy enterprise.

Question 55

Concentric diversification is safer than conglomerate diversification. Do you agree? Disagree? Why?

Question 56

Organization culture is an important factor of consideration in any acquisition. What advice would you offer to the acquiring company in order to have a successful acquisition?