Question 1

₇₆_._Companie_s_tha_t_ar_e_followin_g_a _strateg_y_woul_d_b_e_mos_t_likel_y_t_o_tr_y_t_o_improv_e_th_e_wa_y_i_n_whic_h_the_y_sel_l_the Same goods or services to the same customers.

Accepted Answer

The situation described is that of maintaining the stability of the company by offering the same goods or services to the same customers. This indicates a lack of desire for growth or expansion, and there is no mention of any retrenchment or recovery efforts. Additionally, there is no indication of exploring new markets or diversifying the company's portfolio, ruling out options D and B. Therefore, the best choice is E, stability.

Question 2

The research on diversification in portfolio management indicates that the best approach is probably .

Accepted Answer

Research indicates that related diversification is the best approach in portfolio management as it reduces overall risk by investing in companies that are related to each other. This approach allows for economies of scale and scope, as well as knowledge and resource sharing between companies, leading to potential synergies and improved performance.

Question 3

When Clorox Corporation, a manufacturer of bleach and bleach-based cleaning products, acquired Kingsford Charcoal and Prime Choice brand steak sauce; it was an example of .

Accepted Answer

Clorox is diversifying away from its bleach-product core into cooking supply and food businesses.

Question 4

The two major approaches to corporate-level strategy are .

Accepted Answer

Grand strategies are the overall corporate-level strategies that guide the direction and scope of an organization. Portfolio strategy is a method of managing a group of businesses by analyzing their potential and assigning resources according to their potential contribution to the overall portfolio. These two approaches are distinct and complementary, and together they form the foundation of corporate-level strategy. Therefore, option C is the correct answer.

Question 5

₆₅_._The _i_s_a_portfoli_o_strateg_y_tha_t_manager_s_us_e_t_o_categoriz_e_thei_r_corporation'_s_businesse_s_b_y_growt_h_rat_e_and Relative market share. This strategy helps them to decide how to invest corporate funds.

Accepted Answer

The BCG matrix is used to determine the relative market share of a corporation's businesses and helps to prioritize investments.

Question 6

The purpose of a the business.

Accepted Answer

Retrenchment strategy focuses on cutting down the size or scope of a business to improve its performance. Therefore, it is the best choice for a company with poor performance that needs to be turned around. The other options - growth, stability, maturity, and repositioning - may not be suitable for a struggling company.

Question 7

₇₇_._Companie_s_ofte_n_choos_e_a _strateg_y_whe_n_thei_r_externa_l_environmen_t_doesn'_t_chang_e_muc_h_o_r_afte_r_the_y_have Struggled with periods of explosive growth.

Accepted Answer

Companies often choose a stability strategy when their external environment doesn't change much or after they have struggled with periods of explosive growth, as it allows them to consolidate and maintain their current position.

Question 8

When Clorox Corporation, the manufacturer of bleach and bleach-based cleaning products, acquired Kingsford Charcoal and Prime Choice brand steak sauce; it was an example of .

Accepted Answer

This acquisition is an example of external growth because Clorox is expanding its business by acquiring other companies rather than focusing on internal growth.

Question 9

When Coca-Cola acquired a water-treatment and bottling plant so it could produce and market Dasani brand bottled water, it was an example of .

Accepted Answer

Coca-Cola acquiring a water-treatment and bottling plant for producing and marketing Dasani brand bottled water is an example of external growth, as it involves expanding the company's operations through acquisition rather than through internal means.

Question 10

Companies can achieve growth mainly by .

Accepted Answer

Companies can achieve growth mainly by growing internally through direct expansion or creating new businesses. Shrinking the scope of their business or deleting all cash cows from their portfolios may lead to a decrease in revenue and profits. Only maintaining stars in their portfolios may not be enough to sustain long-term growth. Therefore, option B is the best choice.

Question 11

Specialized Bicycle Components, Inc. introduced the first major production mountain bike in 1980. Two-thirds of its profits come from the sale of mountain bikes. Specialized bikes have a large share of a fast-growing market. According to the BCG matrix, specialized mountain bikes would be classified as .

Accepted Answer

Stars are companies with a large share of a fast-growing market.

Question 12

Which of the following statements is true about how the portfolio strategy can be used to help managers acquire companies that fit well with the rest of their corporate portfolio?

Accepted Answer

Risk can be reduced through related diversification (creating or acquiring companies in related businesses). By acquiring companies in related businesses, managers can use their existing resources and capabilities to create synergies and reduce the overall risk of their portfolio. The other statements are either unrelated to acquiring new companies or do not accurately describe the benefits of the portfolio strategy for this purpose.

Question 13

Which of the following statements about portfolio strategy is true?

Accepted Answer

Categorizing companies can create dysfunctional consequences because it can limit strategic thinking and decision-making. The other options are not supported by evidence or are not accurate.

Question 14

₇₀_._A _strateg_y_i_s_a_broa_d_{corporate-leve}_l_strategi_c_pla_n_use_d_t_o_achiev_e_strategi_c_goal_s_an_d_guid_e_th_e_strategic Alternatives that managers of individual businesses or subunits may use.

Accepted Answer

A grand strategy is a broad corporate-level strategic plan used to achieve strategic goals and guide the strategic alternatives that managers of individual businesses or subunits may use.

Question 15

In an attempt to stop declining profitability, ICI, a British chemical company, deleted petrochemical products from its production and concentrated on specialty chemicals, a less capital-intensive, less cyclical business. What type of a grand strategy was ICI using?

Accepted Answer

ICI's strategy of deleting petrochemical products and focusing on specialty chemicals is an example of retrenchment, which involves cutting back on operations to improve profitability or address declining performance.

Question 16

Which of the following is an example of a common approach to corporate-level strategy?

Accepted Answer

Grand strategies are a common approach to corporate-level strategy. These are overarching, long-term plans that provide direction for the entire organization. Examples of grand strategies include growth, stability, retrenchment, and combination. Positioning strategies refer to how a company positions its products or services in the market, while adaptive strategies help companies respond to changes in their environment. ROI strategies focus on maximizing return on investment.

Question 17

Deutsche Bank became the world's largest bank through mergers with Bankers Trust, a transatlantic banking operation. Since both banking companies had similar core capabilities, this would be classified as an example of
____.

Accepted Answer

The merger between Deutsche Bank and Bankers Trust is an example of related diversification, as both companies had similar core capabilities in the banking industry.

Question 18

Starbucks, the operator of Starbucks coffeehouses, also markets a line of compilation CDs and other non-coffee items. The making and marketing of the CDs and other non-coffee products would be an example of .

Accepted Answer

Unrelated diversification refers to a company expanding into businesses that are not related to their current product or services, such as Starbucks entering the music industry with their compilation CDs.

Question 19

₇₂_._McDonald'_s_use_s_a _strateg_y₍_a_kin_d_o_f_gran_d_strategy₎_a_s_i_t_increase_s_it_s_profit_s_i_n_Franc_e_b_y_offerin_g_uniquely French products such as Croque McDo, the McDonald's version of a popular French grilled sandwich.

Accepted Answer

McDonald's is using a growth strategy by offering uniquely French products to increase its profits in France.

Question 20

₅₉_._Th_e_term _refer_s_t_o_th_e_overal_l_{organizationa}_l_strateg_y_tha_t_addresse_s_th_e_questio_n_"Wha_t_busines_s_or Businesses are we in or should we be in?"

Accepted Answer

The question is asking about which businesses a company should be in, which is a question of corporate-level strategy. Corporate-level strategy is concerned with the overall direction of the company and which businesses it should be in. Firm-level strategy is concerned with how a specific business unit competes in a particular market. Industry-level strategy is concerned with how a company competes within a particular industry. Portfolio strategy is concerned with the management of a company's portfolio of businesses. Vision is a statement of an organization's aspirations and purpose.

Quiz 6: Organizational Strategy

76. Companies that are following a strategy would be most likely to try to improve the way in which they sell the Same goods or services to the same customers.