Question 1

Which strategy might be the most likely when management realizes that the current industry is unattractive and that the firm lacks outstanding skills that it could easily transfer to related products or services in other industries?

Accepted Answer

A)   concentration
B)   horizontal growth
C)   concentric diversification
D)   vertical growth
E)   conglomerate diversificationF) C) and D)
G) A) and C)

Question 2

Discuss the differences among full integration, taper integration, and quasi-integration.

Accepted Answer

A firm's level of vertical integration c...

Question 3

Backward integration is often more profitable than forward integration.

Accepted Answer

A) True 
 B)False

Question 4

In the Boston Consulting Group's Growth-Share Matrix, the relative competitive position of a product or division is defined as

Accepted Answer

A)   its market share.
B)   its gross sales divided by its market share.
C)   its market share multiplied by that of its nearest competitor.
D)   its market share divided by that of the smallest other competitor.
E)   its market share divided by that of the largest other competitor.F) B) and D)
G) A) and C)

Question 5

A long-term contract is considered vertical integration.

Accepted Answer

A) True 
 B)False

Question 6

An attempt to explain that vertical integration is more efficient than contracting for goods and services in the marketplace when the transaction costs of buying goods on the open market becomes too great has been proposed by

Accepted Answer

A)   population theory.
B)   institution theory.
C)   freakonomics.
D)   transaction cost economics.
E)   transaction growth theory.F) A) and E)
G) A) and D)

Question 7

Discuss the three general orientations comprising directional strategy.

Accepted Answer

The three general orientations comprisin...

Question 8

According to the BCG Growth-Share Matrix, dogs should be either sold off or managed carefully for the small amounts of cash they can generate.

Accepted Answer

A) True 
 B)False

Question 9

Discuss the two basic growth strategies.

Accepted Answer

The two basic growth strategies are conc...

Question 10

Which one of the following is not a characteristic of a firm that has chosen a captive company strategy?

Accepted Answer

A)   It is most appropriate for a company with a strong competitive position in a growing industry.
B)   The firm reduces its functional activities to reduce costs.
C)   The firm gains a certainty of sales and production in return for becoming heavily dependent upon another firm for at least 75% of its sales.
D)   One of its customers makes up a large percentage of the company's sales and wants the company to keep operating as its supplier.
E)   Management desperately seeks an "angel" to guarantee the company's continued existence.F) A) and D)
G) A) and C)

Question 11

Corporate parenting generates corporate strategy by focusing on

Accepted Answer

A)   the core competencies of the parent corporation and on the value created from the relationship between the parent and its units.
B)   the cash flow among its business units.
C)   whether a business unit should be growing, stabilizing, or retrenching.
D)   acquiring distinctive competencies in the marketplace.
E)   differentiating its activities into separate units and integrating these activities through complex integrating mechanisms.F) A) and E)
G) B) and E)

Question 12

Which kind of corporate strategy deals with the firm's overall orientation toward growth?

Accepted Answer

A)   portfolio strategy
B)   directional strategy
C)   parenting strategy
D)   cooperative strategy
E)   functional strategyF) B) and D)
G) None of the above

Question 13

Research comparing concentric with conglomerate diversification concludes that

Accepted Answer

A)   conglomerate diversification is always less profitable than concentric diversification.
B)   concentric diversification is always less profitable than conglomerate diversification.
C)   the relationship between relatedness and performance follows an inverted U-shaped curve.
D)   neither concentric nor conglomerate diversification are ever profitable.
E)   for optimum effectiveness both conglomerate and concentric diversification should be utilized in tandem.F) C) and D)
G) C) and E)

Question 14

Stability strategies can be very useful in the short run, but they can be dangerous if followed for too long.

Accepted Answer

A) True 
 B)False

Question 15

Discuss the more popular stability strategies.

Accepted Answer

The more popular stability strategies in...

Question 16

Which strategy did Delta choose when it acquired Northwest Airlines to obtain access to Northwest's Asian markets?

Accepted Answer

A)   a retrenchment strategy using horizontal integration through internal means
B)   a horizontal integration strategy
C)   a stability strategy using concentric diversification
D)   a growth strategy using vertical integration through external means
E)   a retrenchment strategy using a concentration methodF) B) and E)
G) A) and E)

Question 17

According to Campbell, Goold, and Alexander, when parent companies create more value than any of their rivals would if they owned the same businesses, they have

Accepted Answer

A)   multi-point competition.
B)   strategic advantage.
C)   parenting advantage.
D)   portfolio analysis.
E)   no real advantage.F) B) and C)
G) D) and E)

Question 18

When a firm internally makes 100% of its key supplies and completely controls its distributors, this is known as

Accepted Answer

A)   full integration.
B)   taper integration.
C)   mass integration.
D)   economical integration.
E)   strategic integration.F) B) and D)
G) A) and B)

Question 19

Which family of corporate strategies is often viewed as a lack of strategy?

Accepted Answer

A)   stability strategies
B)   cooperative strategies
C)   growth strategies
D)   retrenchment strategies
E)   competitive strategiesF) C) and D)
G) None of the above

Question 20

Vertical integration is going backward on an industry's value chain.

Accepted Answer

A) True 
 B)False

Exam 7: Strategy Formulation: Corporate Strategy

Discuss the two basic growth strategies.

Correct AnswerverifiedThe two basic growth strategies are conc...View AnswerShow Answer

Discuss the more popular stability strategies.

Correct AnswerverifiedThe more popular stability strategies in...View AnswerShow Answer

Which kind of corporate strategy deals with the firm's overall orientation toward growth?

Correct AnswerverifiedShow Answer

Discuss the differences among full integration, taper integration, and quasi-integration.

Correct AnswerverifiedA firm's level of vertical integration c...View AnswerShow Answer

An attempt to explain that vertical integration is more efficient than contracting for goods and services in the marketplace when the transaction costs of buying goods on the open market becomes too great has been proposed by

Correct AnswerverifiedShow Answer

Which strategy might be the most likely when management realizes that the current industry is unattractive and that the firm lacks outstanding skills that it could easily transfer to related products or services in other industries?

Correct AnswerverifiedShow Answer

Stability strategies can be very useful in the short run, but they can be dangerous if followed for too long.

Correct AnswerverifiedShow Answer

Which family of corporate strategies is often viewed as a lack of strategy?

Correct AnswerverifiedShow Answer

According to the BCG Growth-Share Matrix, dogs should be either sold off or managed carefully for the small amounts of cash they can generate.

Correct AnswerverifiedShow Answer

Backward integration is often more profitable than forward integration.

Correct AnswerverifiedShow Answer

Research comparing concentric with conglomerate diversification concludes that

Correct AnswerverifiedShow Answer

According to Campbell, Goold, and Alexander, when parent companies create more value than any of their rivals would if they owned the same businesses, they have

Correct AnswerverifiedShow Answer

In the Boston Consulting Group's Growth-Share Matrix, the relative competitive position of a product or division is defined as

Correct AnswerverifiedShow Answer

Corporate parenting generates corporate strategy by focusing on

Correct AnswerverifiedShow Answer

A long-term contract is considered vertical integration.

Correct AnswerverifiedShow Answer

Vertical integration is going backward on an industry's value chain.

Correct AnswerverifiedShow Answer

Which one of the following is not a characteristic of a firm that has chosen a captive company strategy?

Correct AnswerverifiedShow Answer

Which strategy did Delta choose when it acquired Northwest Airlines to obtain access to Northwest's Asian markets?

Correct AnswerverifiedShow Answer

When a firm internally makes 100% of its key supplies and completely controls its distributors, this is known as

Correct AnswerverifiedShow Answer

Discuss the three general orientations comprising directional strategy.

Correct AnswerverifiedThe three general orientations comprisin...View AnswerShow Answer

Correct Answer
verified
The two basic growth strategies are conc...
View Answer

Correct Answer
verified
The more popular stability strategies in...
View Answer

Correct Answer
verified

Correct Answer
verified
A firm's level of vertical integration c...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The three general orientations comprisin...
View Answer