Question 1

The strategy which takes place in three basic phases of contraction,consolidation,and rebirth is

Accepted Answer

A)   merger.
B)   liquidation.
C)   integration.
D)   divestment.
E)   turnaround.

Question 2

An international study by Bain & Company concluded that the likelihood of a successful acquisition is increased with

Accepted Answer

A)   previous experience between an acquirer and a target firm.
B)   narrowing the number of candidates for acquisition.
C)   foregoing the time for due diligence.
D)   limited geographical expansion.
E)   the addition of capacity levels.

Question 3

The ability for Nike to manufacture its own shoes and then build stores for distribution is an example of

Accepted Answer

A)   forward integration.
B)   horizontal integration.
C)   backward integration.
D)   transferred integration.
E)   mass integration.

Question 4

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.

Question 5

Ford Motor Company's use of company resources to build its River Rouge Plant outside of Detroit so that iron ore could enter into one end of the plant and a finished automobile could exit out of the other end is called

Accepted Answer

A)   vertical growth.
B)   tapered integration.
C)   horizontal integration.
D)   external vertical integration.
E)   quasi-integration.

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.

Question 7

Define corporate parenting.

Accepted Answer

Corporate parenting views the corporatio...

Question 8

An example of forward quasi-integration would be a large pharmaceutical firm that acquires part interest in a drugstore chain in order to guarantee that its drugs have access to the distribution channel.

Accepted Answer

A) True 
 B)False

Question 9

Which strategy involves giving up management of the firm to the courts in return for some settlement of the corporation's obligations?

Accepted Answer

A)   liquidation
B)   bankruptcy
C)   diversification
D)   divestment
E)   consolidation

Question 10

According to the BCG Growth-Share Matrix,market leaders that typically are at the peak of their product life cycle and are usually able to generate enough cash to maintain their high share of the market are called

Accepted Answer

A)   cash cows.
B)   lost leaders.
C)   dogs.
D)   question marks.
E)   stars.

Question 11

Backward integration is often more profitable than forward integration.

Accepted Answer

A) True 
 B)False

Question 12

In many cases,________ integration is more profitable than ________ integration.

Accepted Answer

A)   forward; backward
B)   vertical; backward
C)   backward; vertical
D)   backward; forward
E)   mass; forward

Question 13

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 strategies

Question 14

The two basic growth strategies are concentration and strategic alliances.

Accepted Answer

A) True 
 B)False

Question 15

Discuss the more popular stability strategies.

Accepted Answer

The more popular stability strategies in...

Question 16

One of the most popular aids to developing corporate strategy in multi-business corporations that views business units in terms of the cash they generate is called

Accepted Answer

A)   PIMS.
B)   segmentation analysis.
C)   portfolio analysis.
D)   industry analysis.
E)   diversification study.

Question 17

The purpose of vertical growth is to

Accepted Answer

A)   take over a function previously supplied by a former employer.
B)   take over a function previously provided by a supplier or by a distributor.
C)   acquire a company of similar objective.
D)   sell a company encumbered with debt.
E)   expand to countries with strong trade alliances.

Question 18

Which strategy is most appropriate as a temporary strategy to enable a corporation to consolidate its resources after prolonged rapid growth in an industry now facing an uncertain future?

Accepted Answer

A)   horizontal integration strategy
B)   no change strategy
C)   retrenchment strategy
D)   pause/proceed with caution strategy
E)   profit strategy

Question 19

Which of the following is not one of the limitations of portfolio analysis?

Accepted Answer

A)   It contains value-laden terminology that can lead to self-fulfilling prophecies.
B)   It is not difficult: Easy to define product/market segments.
C)   It relies too heavily on objective judgments.
D)   It suggests the use of standard strategies which may be impractical or may miss potential opportunities.
E)   It provides an illusion of scientific rigor.

Question 20

A simple way to portray a corporation's portfolio of investments is by using the

Accepted Answer

A)   SWOT Matrix.
B)   transaction cost economics.
C)   BCG Growth-Share Matrix.
D)   SFAS Matrix.
E)   IFAS Matrix.

Exam 7: Strategy Formulation: Corporate Strategy

An international study by Bain & Company concluded that the likelihood of a successful acquisition is increased with

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

Correct AnswerverifiedShow Answer

Backward integration is often more profitable than forward integration.

Correct AnswerverifiedShow Answer

The two basic growth strategies are concentration and strategic alliances.

Correct AnswerverifiedShow Answer

In many cases,________ integration is more profitable than ________ integration.

Correct AnswerverifiedShow Answer

Which of the following is not one of the limitations of portfolio analysis?

Correct AnswerverifiedShow Answer

Discuss the more popular stability strategies.

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

Which strategy is most appropriate as a temporary strategy to enable a corporation to consolidate its resources after prolonged rapid growth in an industry now facing an uncertain future?

Correct AnswerverifiedShow Answer

The purpose of vertical growth is to

Correct AnswerverifiedShow Answer

A simple way to portray a corporation's portfolio of investments is by using the

Correct AnswerverifiedShow Answer

Which strategy involves giving up management of the firm to the courts in return for some settlement of the corporation's obligations?

Correct AnswerverifiedShow Answer

The strategy which takes place in three basic phases of contraction,consolidation,and rebirth is

Correct AnswerverifiedShow Answer

One of the most popular aids to developing corporate strategy in multi-business corporations that views business units in terms of the cash they generate is called

Correct AnswerverifiedShow Answer

Ford Motor Company's use of company resources to build its River Rouge Plant outside of Detroit so that iron ore could enter into one end of the plant and a finished automobile could exit out of the other end is called

Correct AnswerverifiedShow Answer

The ability for Nike to manufacture its own shoes and then build stores for distribution is an example of

Correct AnswerverifiedShow Answer

An example of forward quasi-integration would be a large pharmaceutical firm that acquires part interest in a drugstore chain in order to guarantee that its drugs have access to the distribution channel.

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

According to the BCG Growth-Share Matrix,market leaders that typically are at the peak of their product life cycle and are usually able to generate enough cash to maintain their high share of the market are called

Correct AnswerverifiedShow Answer

Define corporate parenting.

Correct AnswerverifiedCorporate parenting views the corporatio...View AnswerShow Answer

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In many cases, integration is more profitable than integration.

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The more popular stability strategies in...
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Corporate parenting views the corporatio...
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