Corporate-level Strategy

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Question 1
Free
Multiple Choice

 The scope of a corporate-level strategy focuses on

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A

the manner in which activities of the firm will be coordinated.

B

the relationship between business units.

C

the markets and businesses in which the firm will compete.

D

the internal environment affecting a firm's business.

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Question 2
Free
Multiple Choice

 The ultimate goal of developing a corporate-level strategy is to build

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A

employee commitment.

B

a corporate advantage.

C

customer relationships.

D

a wholly owned subsidiary.

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Question 3
Free
Multiple Choice

 Which of the following questions is addressed by the organizational design of a firm's corporate-level strategy?

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A

In what markets and businesses will the firm compete?

B

How will the business units of the firm be aligned?

C

What are the businesses to be acquired?

D

How will the resources of the firm be coordinated?

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Question 4
Free
Multiple Choice

 In a single-product diversification strategy

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A

a firm attempts to develop core competencies in a specific market.

B

a firm owns numerous businesses that are linked in some manner.

C

a firm manages several businesses with no reasonable connection.

D

a firm's main focus is on establishing customer recognition and loyalty.

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Question 5
Free
Multiple Choice

 The distinguishing factor between unrelated and related diversification strategies is that a firm using unrelated diversification strategy

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A

has numerous businesses that are linked in some manner.

B

manages several businesses with no reasonable connection.

C

focuses on one specific product, typically in one market.

D

develops core competencies using its resources and capabilities.

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Question 6
Multiple Choice

 XYZ Company has physical assets that are not being used to full capacity, and it has a strong brand name that it could use to leverage its assets. To grow, XYZ Company will likely pursue 

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A
related diversification.
B
single-product diversification.
C
unrelated diversification.
D
vertical integration.
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Question 7
Multiple Choice

 Which of the following is NOT a reason why managers pursue diversification strategies?

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A
The opportunity to increase customer loyalty
B
The potential to manage or minimize risk
C
The potential for personal gain
D
The opportunity to leverage core assets or skills between different businesses
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Question 8
Multiple Choice

 _____ is created when a firm generates sustainable cost savings by combining duplicate activities or deploying underutilized assets across multiple businesses.

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A
Value
B
Strategy
C
Synergy
D
Market power
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Question 9
Multiple Choice

 Which of the following statements is an advantage of related diversification strategy?

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A
Related diversification strategy allows a firm to maintain several businesses that are not connected in any way.
B
The sharing of resources is a key component of developing economies of scope and often increases a firm's competitive advantage.
C
Related diversification strategies often achieve financial economies through the restructuring of business units.
D
Related diversification strategy can allow a sick or dying company to use capital generated in a profitable division to prop it up for a short period of time.
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Question 10
Multiple Choice

 Z-Furn is an organization that manufactures and sells office furniture. It maintains a good name in this business and has strong capital resources. The organization decides to purchase a failing food product business in order to tap into the market of that company. Which of the following types of diversification is the firm pursuing?

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A
Related diversification
B
Unrelated diversification
C
International diversification
D
Single-product diversification
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Question 11
Multiple Choice

 Which of the following is the main goal of related diversification?

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A
Support failing businesses
B
Understand social values
C
Create strategic flexibility
D
Achieve economies of scope
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Question 12
Multiple Choice

 The Coca-Cola Company acquired Honest Tea Company, a producer of bottled iced tea beverages. This is an example of

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A
unrelated diversification.
B
backward vertical integration.
C
forward vertical integration.
D
related diversification.
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Question 13
Multiple Choice

 An appliance manufacturer acquires a fruit preserves cannery. This is an example of

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A
unrelated diversification.
B
backward vertical integration.
C
forward vertical integration.
D
related diversification.
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Question 14
Multiple Choice

 The ultimate goal of an unrelated diversification strategy is usually to

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A
create financial economies.
B
support failing businesses.
C
enhance innovation.
D
expand globally.
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Question 15
Multiple Choice

 A firm can pass the better-off test in determining the viability of diversification when

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A
the price of the acquired firm is low enough to yield a potential return on investment.
B
the total competitive advantage is above and beyond what the two businesses could achieve independently.
C
it acquires extremely high-cost industries.
D
it spends more time on implementation processes.
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Question 16
Multiple Choice

 Which of the following questions is NOT part of the three-pronged test to identify conditions under which diversification can create shareholder value?

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A
What is the cost of entry?
B
How will the business units of the firm be aligned?
C
How attractive is the industry?
D
Will the business be better off?
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Question 17
Multiple Choice

 ABC Company wished to acquire EFG Company. An analysis of the merger passed the better-off test but failed the ownership test. The managers of ABC Company should

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A
maintain a single-product strategy.
B
enter into a spot contract with EFG Company.
C
seek an alternative arrangement with EFG, such as a strategic alliance.
D
?outsource work to another company. 
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Question 18
Multiple Choice

 Foxx Company wished to share resources with Chixx Company. An analysis of their potential relationship passed both the better-off test and the ownership test. The managers of Foxx Company should

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A
enter into a partnership with Chixx Company.
B
enter into a joint venture with Chixx Company.
C
enter into a strategic alliance with Chixx Company.
D
purchase a controlling interest in Chixx Company. 
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Question 19
Multiple Choice

 _____ occurs when one corporation owns business units that make inputs for other business units in the same corporation.

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A
Globalization
B
Franchising
C
Vertical integration
D
International diversification
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Question 20
Multiple Choice

 Fine Electronics is a corporation that controls all aspects of its business such as extracting raw materials, manufacturing the products, distributing them, and finally marketing to customers. It manages these activities through several business units, where one unit provides inputs to the other. This is an example of

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A
unrelated diversification.
B
vertical integration.
C
strategic flexibility.
D
franchising.
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