Q&A Hero

Q: (p. 200) Grand strategies are often called: A. Corporate strategies B. Coordinate strategies C. Master strategies D. Directed action

Q: (p. 200) Grand strategies are designed to accomplish which of the following? A. Short-term objectives B. Long-term goals C. Short-term goals D. Long-term objectives

Q: (p. 201) Firms that focus on a specific product and market combination are utilizing a _______ strategy. A. Concentrated growth B. Turnaround C. Innovation D. Product development

Q: (p. 202) Which of the grand strategies is typically lowest in risk? A. Horizontal integration B. Concentrated growth C. Market development D. Divestiture

Q: ________ are substitutes for exploiting economies of scope in diversification. A) Tax havens B) Tax shelters C) Tax freedom D) Strategic alliances

Q: (p. 198) Which of the following is NOT a value discipline? A. Operational excellence B. Cost leadership C. Customer intimacy D. Product leadership

Q: (p. 196) Intense supervision of labor is a commonly required skill for which one of Michael Porter generic strategies? A. Differentiation B. Market development C. Product development D. Overall cost leadership

Q: ________ is an example of a less costly-to-duplicate economies of scope. A) Tax advantages B) Core competencies C) Internal capital allocation D) Multipoint competition

Q: (p. 195) Striving to create and market unique products for varied customer groups is called: A. Cost leadership B. Differentiation C. Focus D. Concentrated growth

Q: Which of the following is an example of a costly-to-duplicate economies of scope? A) Employee compensation B) Core competencies C) Shared activities D) Risk reduction

Q: Which of the following is a less costly-to-duplicate economies of scope? A) Core competencies B) Internal capital allocation C) Employee compensation D) Exploiting market power

Q: (p. 195) A properly constructed Balanced Scorecard is balanced between: A. Short and long-term measures B. Stakeholder financial measures C. Organizational and stakeholder performance perspectives D. Pricing and packaging of the firm's products

Q: Which of the following statements regarding the rarity of diversification is accurate? A) If only a few competing firms have exploited a particular economy of scope, that economy of scope can be rare. B) A particular economy of scope can only be rare if no other firms are exploiting that economy of scope. C) A particular economy of scope can be rare even if many other firms are exploiting that economy of scope. D) If only a few competing firms have exploited a particular economy of scope, that economy of scope can be rare but only if the firm is pursuing unrelated diversification.

Q: (p. 195) Which of the following is a generic strategy developed by Michael Porter? A. Market development B. Differentiation C. Liquidation D. Innovation

Q: Substitutes for exploiting economies of scope in diversification include A) growing and developing independent businesses within a diversified firm and vertical integration. B) vertical integration and strategic alliances. C) growing and developing independent businesses within a diversified firm and strategic alliances. D) strategic alliances and multipoint competition.

Q: (p. 194) Which one of the following is NOT a perspective found in the Balanced Scorecard? A. Stakeholder performance B. Financial performance C. Customer knowledge D. Learning and growth

Q: (p. 194) "To achieve our vision, how will we sustain our ability to change and improve?" is part of which perspective in the Balanced Scorecard? A. Financial B. Customer C. Learning and growth D. Internal business process

Q: Which of the following economies of scope is less costly to duplicate? A) Employee compensation B) Core competencies C) Multipoint competition D) Exploiting market power

Q: (p. 193) Which of the following qualities of an objective improves its chances of being attained? A. Timeliness B. Flexibility C. Cost efficiency D. Ground breaking

Q: Which of the following economies of scope is costly to duplicate? A) Shared activities B) Internal capital allocation C) Risk reduction D) Task advantages

Q: (p. 193) Which of the following is NOT a fundamental criterion for a long-term objective? A. Acceptable B. Sustainable C. Measurable D. Suitable

Q: The only economy of scope that an unrelated firm can try to realize is A) core competencies. B) tax advantages. C) multipoint competition. D) risk reduction.

Q: (p. 193) Flexibility is usually increased at the expense of: A. Reliability B. Timeliness C. Specificity D. Mobility

Q: Which of the following economies of scope do not have the potential for generating positive returns for a firm's equity holders since the economies of scope can be realized by outside equity holders at a low cost by investing in a diversified portfolio of stock? A) Shared activities B) Diversification to maximize the size of a firm C) Internal capital allocation D) Exploiting market power

Q: (p. 193) Which of the following does NOT describe a good objective? A. Flexible B. Acceptable C. Marketable D. Achievable

Q: Research over the years has demonstrated conclusively that the primary determinant of the compensation of top managers in a firm is A) not the size of the firm, usually measured in sales, but the economic performance of the firm. B) both the economic performance of the firm as well as the size of the firm, usually measured in sales. C) not the economic performance of the firm but the size of the firm, usually measured in sales. D) neither the economic performance of the firm nor the size of the firm.

Q: (p. 192) Safety programs, employee stock option plans and worker representation on management committees are all commonly directed toward achieving which type of long-term objectives? A. Employee relations B. Public responsibility C. Employee development D. Competitive position

Q: When diversified firms use the revenues from profitable businesses to subsidize the operations of another business and then set the prices of the subsidized firm's products at a level that is below the subsidized business's cost to produce these items, this is known as ________ pricing. A) dynamic B) monopoly C) predatory D) beneficial

Q: (p. 192) Establishing objectives for minority training is an example of which type of long-term objective? A. Competitive position B. Employee development C. Public responsibility D. Productivity

Q: For multipoint competition to lead to mutual forbearance, A) the threat of retaliation must be substantial and the firms pursuing this strategy must have strong linkages among their diversified businesses. B) the threat of retaliation must be low and the firms pursuing this strategy must have strong linkages among their diversified businesses. C) the threat of retaliation must be low and the firms pursuing this strategy must have weak linkages among their diversified businesses. D) the threat of retaliation must be substantial and the firms pursuing this strategy must have weak linkages among their diversified businesses.

Q: (p. 192) Larger firms often establish an objective by which to gauge their comparative ability for growth and profitability. This is often stated in terms of: A. Competitive product line B. Competitive position C. Product innovation D. Competitive edge

Q: ________ exists when two or more diversified firms simultaneously compete in multiple markets. A) Multipoint competition B) Dynamic competition C) Multipoint cooperation D) Dynamic cooperation

Q: (p. 192) Competitive position as a measure of corporate success is typically measured as: A. The input-output relationship of the company B. The earnings per share of the company C. The company's relative dominance in the marketplace D. The firm's stock value

Q: Compared to two very risky businesses that have cash flows that are not highly correlated over time and that are operating separately, the risk of a diversified firm operating in those same two businesses simultaneously is A) somewhat higher. B) lower. C) the same. D) substantially higher.

Q: (p. 192) To achieve long-term prosperity, strategic managers commonly establish long-term objectives in seven areas. Which of the following describes one of these areas? A. Technological leadership B. Technological innovation C. Social change D. Marketing

Q: In general, as a source of capital a diversified firm has ________ information about a business that it owns compared to external sources of capital. A) more and better B) the same C) less and inferior D) more but biased

Q: (p. 191-192) To achieve long-term prosperity, strategic planners commonly establish objectives in which of the following? A. Profitability, employee relations and public responsibility B. Acceptability C. Flexibility D. Joint ventures only

Q: (p. 191-192) Which of the following is NOT a commonly pursued long-term objective as described in the text? A. Profitability B. Public responsibility C. Efficiency D. Productivity

Q: A common way of thinking about strategy across different businesses within a firm is known as the firm's A) core competency. B) competitive advantage. C) economy of scope. D) dominant logic.

Q: Diversified firms that are exploiting core competencies as an economy of scope but are not doing so with any shared activities are sometimes called ________ diversified firms. A) seemingly related B) unrelated C) semi-related D) link-related

Q: (p. 191) Grand strategies provide a comprehensive general approach to guide the organization's: A. Major actions designed to accomplish long-term objectives B. Major actions designed to accomplish short-term objectives C. Operational actions designed to accomplish short-term objectives D. Operational actions designed to accomplish intermediate term objectives

Q: (p. 191) Which of the following are intended to provide benchmarks for the evaluation of the company's progress in achieving its aim? A. Mission B. Long-term objectives C. Grand strategies D. Business policies

Q: If all of a firm's businesses share the same core competencies, then that firm has implemented a strategy of ________ diversification. A) single-business B) related-linked C) related-constrained D) dominant-business

Q: (p. 191) The function of objectives is: A. To provide a specific statement of the desires of the firm B. To deal with profitability, growth and survival without specific targets or time frames C. To provide specific benchmarks for evaluating the company's progress in achieving its aims D. To enhance stock market optimism

Q: A firm that diversifies by exploiting its resources and capability advantages in its original business will have ________ costs than (as) firms that begin a new business without these resource and capability advantages, or ________ revenues than (as) firms lacking these advantages. A) higher; lower B) the same; higher C) lower; the same D) lower; higher

Q: (p. 191) Objectives should be suited to the broad aims of the organization which are expressed in the statement of the company: A. Profile B. Mission C. Philosophy D. Goals

Q: ________ are complex sets of resources and capabilities that link different businesses in a diversified firm through managerial and technical know-how, experience and wisdom. A) Managerial competencies B) Core competencies C) Competitive advantages D) Core advantages

Q: Limits of activity sharing include A) substantial organizational issues that are often associated with a diversified firm's learning how to manage cross-business relationships and in which failure can lead to excess bureaucracy, inefficiency, and organizational gridlock. B) a significant reduction in an organization's innovation and flexibility. C) substantial organizational issues related to adequately compensating personnel across businesses and setting transfer prices. D) a significant reduction in an organization's ability to meet the needs of any of its customers.

Q: (p. 149) A good fit maximizes a firms _________ and minimizes its ________. A. strengths and weaknesses; opportunities and threats B. strengths and opportunities; weaknesses and threats C. strengths and threats; weaknesses and opportunities D. strengths and opportunities; opportunities and threats

Q: (p. 149) What have strategists sought in frameworks besides SWOT for conducting internal analysis? A. They have sought to get less detail from other frameworks B. They have sought that the frameworks be more comprehensive C. They have sought a less generic framework D. They have sought to better account for internal factors in light of external factors

Q: Shared activities are quite common between both ________ and ________ diversified firms. A) single-business; dominant-business B) related-constrained; single-business C) related-linked; dominant-business D) related-constrained; related-linked

Q: (p. 149) SWOT analysis's value and continued use is found in its: A. Complexity B. Difficulty C. Simplicity D. Short-sighted nature

Q: If a diversified firm had three businesses and these companies shared a common marketing and service operation, as well as common technology and development, this would be an example of which type of economy of scope? A) Core competencies B) Shared activities C) Risk reduction D) Multipoint competition

Q: Which type of economies of scope includes shared activities and core competencies? A) Operational economies of scope B) Financial economies of scope C) Anticompetitive economies of scope D) Employee and stakeholder incentives for diversification

Q: (p. 148) The tendency to accept the status quo and disregard signals that change is needed is called: A. Management myopia B. Environmental awareness C. Management long-sightedness D. Subjective management

Q: Currently, most scholars believe that exploiting economies of scope through corporate diversification, on average, A) destroyed about 25% of a firm's market value. B) had no impact on a firm's market value. C) destroyed about 55% of a firm's market value. D) increased a firm's market value.

Q: What does an analysis of the sources and uses of funds do? How is this analysis done?

Q: Describe the principal profitability ratios and indicate what each measures.

Q: Which of the following statements regarding economies of scope is accurate? A) Only firms pursuing single-business diversification can exploit economies of scope. B) Only firms pursuing related-constrained diversification can exploit economies of scope. C) Only firms not pursuing diversification can exploit economies of scope. D) Only diversified firms can exploit economies of scope.

Q: When the value of the products or services a firm sells increases as a function of the number of business that the firm operates in, ________ are said to exist. A) economies of scope B) vertical economies C) economies of scale D) diseconomies of scope

Q: What do activity ratios measure? What are the key activity ratios?

Q: In order for corporate diversification to be economically valuable A) there must be some valuable economy of scope among the multiple businesses in which a firm is operating and it must be more costly for managers in a firm to realize these economies of scope than for outside equity holders on their own. B) there must not be any valuable economy of scope among the multiple businesses in which a firm is operating and it must be less costly for managers in a firm to realize these economies of scope than for outside equity holders on their own. C) there must be some valuable economy of scope among the multiple businesses in which a firm is operating and it must be less costly for managers in a firm to realize these economies of scope than for outside equity holders on their own. D) there must not be any valuable economy of scope among the multiple businesses in which a firm is operating and it must be more costly for managers in a firm to realize these economies of scope than for outside equity holders on their own.

Q: What does the term leverage mean? What are the important leverage ratios?

Q: Firms such as General Electric that generate less than 70% of their revenues from a single product market and whose businesses share few, if any, common attributes are said to be pursuing ________ corporate diversification. A) limited B) related-linked C) related-constrained D) unrelated

Q: Describe what liquidity ratios measure? What are the important liquidity ratios?

Q: Firms such as Disney that own and operate businesses that share a limited number of inputs, production technologies or distribution channels are said to be pursuing a ________ corporate diversification strategy. A) related-constrained B) related-linked C) dominant-business D) single-business

Q: What is the product life cycle? What are its different stages?

Q: Firms such as PepsiCo that operate a number of businesses around the world that share a number of inputs, production technologies, or distribution channels but none of whose businesses account for more than 70% of a firm's revenues are said to be implementing a A) related-constrained diversification. B) related-linked diversification. C) dominant-business diversification. D) single-business diversification.

Q: How can a firm compare itself with success factors in the industry?

Q: The analysis of firms pursuing a strategy of ________ is logically equivalent to the analysis of business-level strategies. A) unrelated diversification B) related-linked diversification C) related-constrained diversification D) limited corporate diversification

Q: What is the purpose of benchmarking? How else can a firm evaluate itself against its industry?

Q: Firms pursuing ________ have between 70% and 95% of their sales in a single product market. A) dominant-business diversification B) single-business diversification C) related-constrained diversification D) related-linked diversification

Q: If a firm wants to chart its progress internally, what method of comparison is appropriate? Describe how this works.

Q: In which type of limited corporate diversification do firms have greater than 95% of their total sales in a single product market? A) Dominant-business firms B) Single-business firms C) Related-constrained firms D) Related-linked firms

Q: What is three circles analysis?

Q: A firm has implemented a strategy of ________ when all or most of its activities fall within a single industry and geographic market. A) limited corporate diversification B) related diversification C) unrelated diversification D) related-linked diversification

Q: How can the resource-based view be used in internal analysis?

Q: When a firm implements both a product diversification strategy and a geographic market diversification strategy it is said to be implementing a(n) A) mixed-market diversification strategy. B) unrelated-diversification strategy. C) product-differentiation strategy. D) product-market diversification strategy.

Q: What are isolating mechanisms? What role do they play in the resource-based view?

Q: When using the RBV, what four steps can help a firm gauge which resources truly have strategic value?