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

A) True
B) False

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The term "golden parachute" refers to


A) a clause requiring that huge dividend payments be made upon takeover.
B) financial inducements offered by a threatened firm to stop a hostile suitor from acquiring it.
C) managers of a firm involved in a hostile takeover approaching a third party about making the acquisition.
D) pay given to executives fired because of a takeover.

E) C) and D)
F) A) and B)

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Briefly explain the advantages of vertical integration.

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Vertical integration represents an expan...

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

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The phrase "real options" applies to sit...

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What are the primary benefits associated with unrelated diversification?

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The primary potential benefits derive largely from value created by the corporate office. Examples include leveraging some of the support activities in the value chain, such as information systems or human resource practices. The corporate office adds value through such activities as planning, performance evaluation, and budgeting systems.

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

A) True
B) False

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Portfolio management frameworks (e.g., BCG matrix) share which of the following characteristics?


A) Grid dimensions are based on external environments and internal capabilities/market positions.
B) Businesses are plotted on a 3-dimensional grid.
C) Position in the matrix suggests a need for, or ability to share, infrastructures or build on core competences.
D) They are most helpful in helping businesses develop types of competitive advantage.

E) A) and C)
F) A) and D)

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A

Which of the following tests evaluates such factors as entry barriers, supplier bargaining power, and the number of substitute products available?


A) The just-like-me test
B) The attractiveness test
C) The cost-of-entry test
D) The better-off test

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

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Real options analysis is most appropriate when


A) the total investment required is small, but the environment is uncertain.
B) the investment required can be justified by Discounted Cash Flow (DCF) techniques.
C) a small investment up front can be followed by a series of subsequent investments.
D) there is no prospect of obtaining additional knowledge before making subsequent investments.

E) None of the above
F) All of the above

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Explain the meaning of feasibility as it applies to the evaluation of a corporate strategy.

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Feasibility refers to the capacity of th...

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Strategic alliances and joint ventures are quickly becoming less prominent in today's global economy.

A) True
B) False

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Portfolio management matrices generally consist of two axes that reflect industry or market growth and the market share of a business.

A) True
B) False

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When using the BCG matrix, a SBU with weak market shares in low-growth industries is described as a


A) cow.
B) dog.
C) Monkey.
D) star.

E) C) and D)
F) A) and B)

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In terms of strategy evaluation, which of the following terms describes whether the diversification strategy is in alignment with the organization's goals and objectives?


A) Consistency
B) Consonance
C) Advantage
D) Feasibility

E) A) and D)
F) C) and D)

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A

What are some of the key issues to take into account when considering whether or not to vertically integrate?

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The benefits of vertical integration inc...

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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) True
B) False

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


A) star.
B) question mark.
C) cash cow.
D) dog.

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

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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) All of the above

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

A) True
B) False

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The word synergy means:


A) Creating value
B) Working together
C) Increasing competition
D) Deregulating industries

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

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