Question 1

Briefly describe the advantages claimed for the diversified corporation over the single business.

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Question 2

Diversification has been linked to the efficient allocation of capital resources in well-run conglomerates.

Accepted Answer

Diversification allows for companies to spread their investments across various industries and markets, reducing the risk of loss and optimizing the allocation of capital resources. Conglomerates that manage their diversification well can benefit from this approach.

Question 3

In what ways can a 'corporate centre' add value to the corporation? Is it essential to have a 'corporate centre'?

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Question 4

According to Hubbard et al. ,there is only one way in which capabilities can be transferred across the business portfolio.

Accepted Answer

According to Hubbard et al., capabilities can be transferred across the business portfolio through a variety of ways, such as knowledge sharing, collaboration, and strategic investments in technology and human resources.

Question 5

According to Aw and Eng,diversification in Asia compared to Europe leads to different performance.

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Question 6

What are the differences in the answers of corporations with closely related industries versus those with dispersed industries to the following fifth business strategy question: What position does the corporation want to achieve?

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Question 7

What are the possible reasons for a single business wanting to diversify?

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Question 8

What are the five factors that Collis and Montgomery argued needed to be considered for the head office role,according to specific or generalised capabilities?

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Question 9

Studies show that organisations which are vertically integrated are less volatile in activity and profitability than non-vertically integrated organisations.

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Question 10

'Defensive managerial goals' imply diversification to focus attention on existing performance.

Accepted Answer

Defensive managerial goals imply a focus on protecting against losses or declining performance, rather than diversifying attention.

Question 11

The first golden rule of corporate strategy suggests that the corporate centre's value creation should be equal to the coordination costs.

Accepted Answer

The first golden rule of corporate strategy actually suggests that the corporate center's value creation should exceed the coordination costs, not just equal them. This ensures that the corporate strategy adds net positive value to the organization.

Question 12

Briefly discuss the four types of unrelated diversification that may create value.

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Question 13

Market penetration strategy allows organisations to increase market share for present products in the same markets.

Accepted Answer

Market penetration strategy is used to increase the market share of existing products in existing markets. This can be achieved through various tactics such as increasing advertising, promotional offers, price reductions, and improving quality and customer service.

Question 14

Collis and Montgomery argued that five factors needed to be considered to explain the role of corporate head offices in maximising corporate synergies and minimising corporate costs.

Accepted Answer

Collis and Montgomery proposed five factors to explain the role of corporate head offices, which include strategic planning, resource allocation, portfolio management, performance monitoring, and knowledge management. These factors help in achieving corporate synergies and minimizing costs.

Question 15

Explain why,if businesses are interlinked,the coordination costs are a concern.

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Question 16

Discuss any two advantages offered by a parent organisation to a new business.

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Question 17

What type of evidence indicates a capability-based strategy for success in diversification and which researchers have been key investigators in this area?

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Question 18

Compare the BCG and GE tools and contrast their relative strengths and weaknesses as analytical devices.

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Question 19

Product development strategy allows organisations to increase market share for new products in new markets.

Accepted Answer

Product development strategy focuses on creating new products or improving existing products to offer to current markets, not necessarily new markets.

Question 20

The GE business strength-industry attractiveness nine-cell matrix is a technique for classifying businesses into a three horizons portfolio of strategy of corporations.

Accepted Answer

The GE business strength-industry attractiveness nine-cell matrix is a tool used for portfolio analysis, focusing on business units' competitive strength and the attractiveness of the industries they are in, rather than classifying businesses into a three horizons portfolio strategy.

Quiz 9: Corporatemulti-Business Strategy