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Exam 6: Corporate-Level Strategy Creating Value through Diversification

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Question 31

Multiple Choice

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An acquisition that results in ________ commonly indicates that expectations were not met.

A) expansion
B) divestiture
C) cost savings
D) increased sales

E) C) and D)
F) All of the above

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Question 32

Multiple Choice

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Which of the following is not part of a good guideline list for managing strategic alliances?

A) establishing a clear understanding between partners
B) not shortchanging your partner
C) relying primarily on a contract to make the joint venture work
D) working hard to ensure a collaborative relationship between partners

E) B) and D)
F) All of the above

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Question 33

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Diversification initiatives must be justified by the creation of value for shareholders.

The antitakeover tactic, ________, is when a firm offers to buy shares of their stock from a company (or individual) planning to acquire their firm at a higher price than the unfriendly company paid for it.

Portfolio management frameworks, such as the BCG matrix, share which of the following characteristics?

Asset restructuring involves the sale of ________ assets, or even whole lines of businesses that are peripheral.

The potential advantages of strategic alliances and joint ventures include entering new markets as well as developing and diffusing new technologies.

ConAgra, a diversified food producer, increases its power over suppliers by centrally purchasing huge quantities of packaging materials for all its food divisions. This is an example of using

A disadvantage of mergers and acquisitions is that they can enable a firm to rapidly enter new product markets.

Corporate-level strategy focuses on

Cooperative relationships such as ________ have potential advantages such as entering new markets, reducing manufacturing (or other) costs in the value chain, and developing and diffusingnew technologies.

When a firm diversifies into ________ businesses, the primary potential benefits to be derived come from ________ relationships-those businesses that share intangible and tangible resources.

Microsoft offered in 2016 to buy LinkedIn for 26.2 billion USD which was 50 percent higher than the value for LinkedIn the day before. This high premium offer was necessary for Microsoft to complete ________ initiative.

Academic research indicates that on average acquisitions do not create shareholder value for acquiring firms. Using examples to support your response, give some explanations for this observation.

If a multinational firm paid too high a premium for the common stock of the company, this can lead to

When firms diversify into unrelated businesses, the primary potential benefits are horizontal relationships, i.e., businesses sharing tangible and intangible resources.

Benefits derived from horizontal and hierarchical relationships are mutually exclusive.

If a multinational firm is unable to understand how the assets of the acquired company would fit with their own lines of business, this can lead to

Discuss and explain the three criteria that a core competence must meet if it is to create value and to provide a viable basis for synergy among the businesses in a corporation.

Divesting of businesses can accomplish many different objectives, except