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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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Portfolio management matrices are applied to what level of strategy?

A) departmental level
B) business level
C) corporate level
D) international level

E) None of the above
F) A) and B)

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Question 32

Multiple Choice

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Transaction costs include all of the following costs except

A) search costs.
B) negotiating costs.
C) monitoring costs.
D) agency costs.

E) B) and C)
F) None of the above

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Question 33

Multiple Choice

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In the BCG (Boston Consulting Group) matrix,a business that has a low market share in an industry characterized by high market growth is termed a

Explain the limitations of portfolio management matrices such as the growth-share matrix developed by the Boston Consulting Group (BCG).

A golden parachute is a prearranged contract with managers specifying that in the event of a hostile takeover,the target firm's managers will be paid a significant severance package.

One of the risks of vertical integration is that there may be problems associated with unbalanced capacities or unfilled demands along a firm's value chain.

A company offering local telecommunications service combines resources with an international company that manufactures digital switching equipment to research a new type of telecommunications technology.This is an example of

Real options analysis helps managers make investment decisions involving large irreversible commitments of financial resources.

A firm should consider vertical integration when

The two principal means by which firms achieve synergy through market power are: pooled negotiating power and corporate parenting.

Greenmail is an offer by a company,threatened by takeover,to offer its stock at a reduced price to a third party.

What is Real Options Analysis (ROA)and how can it be used by strategic decision makers?

Strategic alliances are arrangements in which two firms join forces and form a cooperative partnership.Discuss the potential advantages of strategic alliances.

For a core competence to be a viable basis for the corporation strengthening a new business unit,there are three requirements.Which one of the following is not one of these requirements?

Corporate-level strategy addresses two related issues

Similar businesses working together or the affiliation of a business with a strong parent can strengthen a firm's bargaining position relative to suppliers and customers.

Options exist when the owner of the option has

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

__________ reflect the collective learning in organizations,such as,how to coordinate production skills,integrate multiple streams of technologies,and market and merchandise diverse products and services.

An anti-takeover tactic called greenmail is