Question 1

What are the primary benefits associated with related diversification?

Accepted Answer

The primary potential benefits to be der...

Question 2

Briefly explain the advantages of vertical integration.

Accepted Answer

Vertical integration represents an expan...

Question 3

Through joint ventures,firms can directly acquire the assets and competencies of other firms.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

When Canadian family-controlled firm Schneider's wanted to block Maple Leaf Foods,they looked to Springfield as a

Accepted Answer

A)   greenmail.
B)   golden parachute.
C)   white knight.
D)   poison pill.E) A) and B)
F) A) and C)

Question 6

_______ is when a firm tries to find and acquire either poorly performing firms with unrealized potential or firms in industries on the threshold of significant,positive change.

Accepted Answer

A)   Parenting
B)   Restructuring
C)   Leveraging core competencies
D)   Sharing activitiesE) A) and B)
F) All of the above

Question 7

An advantage of internal development is that firms do not have to combine activities across the value chains of many companies and merge company cultures.

Accepted Answer

A) True 
 B)False  True

Question 8

Summarize the disadvantages of mergers and acquisitions as a means of diversification.

Accepted Answer

There are many potential downsides associated with mergers and acquisitions.Among these are the expensive and excessive premiums that are frequently paid to acquire a business; premiums of 20,30,or even 80 percent are not uncommon,and the acquiring firm must create enough value to recoup the investment.Although synergies and economies of scale,which should result in increased sales and market gains,may,indeed,materialize,the performance hurdle has already been set quite high.Other difficulties relate to integrating the activities and resources of the acquired firm into the corporation's own operations as well as identifying "synergies" that are quickly imitated by the competition.Moreover,managers' egos and credibility can sometimes get in the way of sound business decisions.Size is not always important for the success of a business,but senior managers may be preoccupied with the personal prestige of leading the largest firm in their industry,even if that means paying excessive amounts of money to accumulate enough entities to become the biggest player.At other times,if the acquisition does not perform as planned,managers who pushed for the deal find their reputations at stake.To protect their credibility,and against better business judgment,these managers might funnel more resources and escalate their commitment toward an inevitably doomed venture.Finally,there are many cultural issues that may bring calamity to a well-intended M&A endeavour.

Question 9

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

Accepted Answer

The benefits of vertical integration inc...

Question 10

For strategic alliances to be effective,reliance on written contracts to delimit responsibilities and enforce compliance is vital.

Accepted Answer

A) True 
 B)False

Question 11

Restructuring requires the corporate office to find either poorly performing firms with unrealized potential or firms in industries on the threshold of significant,positive change.

Accepted Answer

A) True 
 B)False

Question 12

Risk reduction in and of itself is rarely a viable way to create shareholder value.

Accepted Answer

A) True 
 B)False

Question 13

The downsides or limitations of mergers and acquisitions include all of the following except

Accepted Answer

A)   expensive premiums that are frequently paid to acquire a business.
B)   difficulties in integrating the activities and resources of the acquired firm into a corporation's on-going operations.
C)   it is a slow means to enter new markets and acquire skills and competences.
D)   there can be many cultural issues that can doom an otherwise promising acquisition.E) All of the above
F) C) and D)

Question 14

According to the text,Canfor Corporation of Vancouver is a good example from the forest industry of having followed a successful strategy,to expand across markets,of

Accepted Answer

A)   capital restructuring and technology restructuring.
B)   asset restructuring.
C)   horizontal integration.
D)   vertical integration.E) All of the above
F) None of the above

Question 15

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

Accepted Answer

A)   joint ventures
B)   mergers and acquisitions
C)   strategic alliances
D)   joint ventures and strategic alliancesE) B) and D)
F) B) and C) D

Question 16

Unbalanced capacities that limit cost savings,difficulties in combining specializations,and reduced flexibility are disadvantages associated with

Accepted Answer

A)   strategic alliances.
B)   divestment.
C)   vertical integration.
D)   horizontal integration.E) A) and B)
F) A) and C)

Question 17

The term "golden parachute" refers to

Accepted Answer

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) B) and C)
F) A) and B)

Question 18

When management uses common production facilities or purchasing procedures to distribute different but related products,they are

Accepted Answer

A)   building on core competencies.
B)   sharing activities.
C)   achieving process gains.
D)   using portfolio analysis.E) A) and B)
F) A) and C)

Question 19

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

Accepted Answer

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) B) and D)

Question 20

Upon the acquisition of Microcell,Rogers was able to immediately obtain savings.

Accepted Answer

A) True 
 B)False

Exam 6: Corporate-Level Strategy: Creating Value Through Diversification

What are the primary benefits associated with related diversification?

Correct Answer
verified
The primary potential benefits to be der...
View Answer

Briefly explain the advantages of vertical integration.

Correct Answer
verified
Vertical integration represents an expan...
View Answer

Through joint ventures,firms can directly acquire the assets and competencies of other firms.

Correct Answer
verified

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

Correct Answer
verified

When Canadian family-controlled firm Schneider's wanted to block Maple Leaf Foods,they looked to Springfield as a

Correct Answer
verified

_______ is when a firm tries to find and acquire either poorly performing firms with unrealized potential or firms in industries on the threshold of significant,positive change.

Correct Answer
verified

An advantage of internal development is that firms do not have to combine activities across the value chains of many companies and merge company cultures.

Correct Answer
verified
True

Summarize the disadvantages of mergers and acquisitions as a means of diversification.

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

Correct Answer
verified
The benefits of vertical integration inc...
View Answer

For strategic alliances to be effective,reliance on written contracts to delimit responsibilities and enforce compliance is vital.

Correct Answer
verified

Restructuring requires the corporate office to find either poorly performing firms with unrealized potential or firms in industries on the threshold of significant,positive change.

Correct Answer
verified

Risk reduction in and of itself is rarely a viable way to create shareholder value.

Correct Answer
verified

The downsides or limitations of mergers and acquisitions include all of the following except

Correct Answer
verified

According to the text,Canfor Corporation of Vancouver is a good example from the forest industry of having followed a successful strategy,to expand across markets,of

Correct Answer
verified

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

Correct Answer
verified
D

Unbalanced capacities that limit cost savings,difficulties in combining specializations,and reduced flexibility are disadvantages associated with

Correct Answer
verified

The term "golden parachute" refers to

Correct Answer
verified

When management uses common production facilities or purchasing procedures to distribute different but related products,they are

Correct Answer
verified

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

Correct Answer
verified

Upon the acquisition of Microcell,Rogers was able to immediately obtain savings.

Correct Answer
verified

Exam 6: Corporate-Level Strategy: Creating Value Through Diversification

What are the primary benefits associated with related diversification?

Correct AnswerverifiedThe primary potential benefits to be der...View AnswerShow Answer

Briefly explain the advantages of vertical integration.

Correct AnswerverifiedVertical integration represents an expan...View AnswerShow Answer

Through joint ventures,firms can directly acquire the assets and competencies of other firms.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When Canadian family-controlled firm Schneider's wanted to block Maple Leaf Foods,they looked to Springfield as a

Correct AnswerverifiedShow Answer

_______ is when a firm tries to find and acquire either poorly performing firms with unrealized potential or firms in industries on the threshold of significant,positive change.

Correct AnswerverifiedShow Answer

An advantage of internal development is that firms do not have to combine activities across the value chains of many companies and merge company cultures.

Correct AnswerverifiedTrue

Summarize the disadvantages of mergers and acquisitions as a means of diversification.

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

Correct AnswerverifiedThe benefits of vertical integration inc...View AnswerShow Answer

For strategic alliances to be effective,reliance on written contracts to delimit responsibilities and enforce compliance is vital.

Correct AnswerverifiedShow Answer

Restructuring requires the corporate office to find either poorly performing firms with unrealized potential or firms in industries on the threshold of significant,positive change.

Correct AnswerverifiedShow Answer

Risk reduction in and of itself is rarely a viable way to create shareholder value.

Correct AnswerverifiedShow Answer

The downsides or limitations of mergers and acquisitions include all of the following except

Correct AnswerverifiedShow Answer

According to the text,Canfor Corporation of Vancouver is a good example from the forest industry of having followed a successful strategy,to expand across markets,of

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedD

Unbalanced capacities that limit cost savings,difficulties in combining specializations,and reduced flexibility are disadvantages associated with

Correct AnswerverifiedShow Answer

The term "golden parachute" refers to

Correct AnswerverifiedShow Answer

When management uses common production facilities or purchasing procedures to distribute different but related products,they are

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Upon the acquisition of Microcell,Rogers was able to immediately obtain savings.

Correct AnswerverifiedShow Answer

Correct Answer
verified
The primary potential benefits to be der...
View Answer

Correct Answer
verified
Vertical integration represents an expan...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified
True

Correct Answer
verified
The benefits of vertical integration inc...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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D

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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