ch6 Flashcards
The Cisco acquisition of Pure Digital Technologies, the parent of the Flip video camera, failed because __________________. A. , Cisco had valuable competenciesB. , the Flip division of Cisco was slow and less responsive to market pressuresC. , consumers continued to purchase the cameraD. , Cisco had good vision of the market
B. , the Flip division of Cisco was slow and less responsive to market pressures
Which of the following is not a reason for merger and acquisition failures? A. , The acquiring company pays too high a premium for the common stock of the target company.B. , Top executives act in their best interests rather than those of the shareholders.C. , The acquired company assets are poorly integrated into the acquiring company business lines.D. , The acquisition leads to value creation.
D. , The acquisition leads to value creation.
Corporate-level strategy focuses on _____________. A. , gaining long-term revenueB. , gaining short-term profitsC. , decreasing business locationsD. , managing investment bankers and their interests
A. , gaining long-term revenue
Diversification initiatives include all of the following except ___________________. A. , mergers and acquisitionsB. , strategic alliancesC. , joint venturesD. , shareholder development
D. , shareholder development
McKesson, a large distribution company, sells many product lines such as pharmaceuticals and liquor through its super warehouses. This is an example of ____________. A. , using related diversification to achieve value by sharing activities to create economies of scopeB. , using related diversification to achieve value by leveraging core competencies to create market powerC. , using unrelated diversification to create value by managing its portfolio to create financial synergiesD. , using unrelated diversification to create value by managing its portfolio to create restructuring advantages
A. , using related diversification to achieve value by sharing activities to create economies of scope
Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. This is an example of _______________. A. , using related diversification to achieve value by pooling negotiating power to achieve market powerB. , using related diversification to achieve value by leveraging core competencies to achieve economies of scopeC. , using related diversification to achieve value by integrating vertically in order to acquire market powerD. , using related diversification to achieve value by integrating vertically in order to attain economies of scope
C. , using related diversification to achieve value by integrating vertically in order to acquire market power
At Cooper Industries, there are few similarities in the products it makes or the industries in which it completes. The corporate office adds value through such activities as superb human resource practices and budgeting systems. This is an example of __________________. A. , using related diversification to achieve value by leveraging core competencies to attain economies of scopeB. , using related diversification to achieve value by leveraging core competencies to acquire market powerC. , using unrelated diversification to achieve value through portfolio management in order to acquire financial synergiesD. , using unrelated diversification to achieve value through restructuring and parenting
D. , using unrelated diversification to achieve value through restructuring and parenting
Casio, a giant electronic products producer, synthesizes it abilities in miniaturization, microprocessor design, material science, and ultrathin precision castings to produce digital watches. It uses the same skills to produce card calculators, digital cameras, and other small electronics. These collective skills are known as _________________. A. , core competenciesB. , strategic resourcesC. , shared activitiesD. , economies of scope
A. , core competencies
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? A. , The competence must help the business gain strength relative to its competition.B. , The new business must be similar to existing businesses to benefit from a core competence.C. , The collection of competencies should be unique, so that they cannot be easily imitated.D. , The new business must have an established large market share.
D. , The new business must have an established large market share.
Sharing core competencies is one of the primary potential advantages of diversification. In order for diversification to be most successful, it is important that _____________. A. , the similarity required for sharing core competencies must be in the value chain, not in the productB. , the products use similar distribution channelsC. , the target market is the same, even if the products are very differentD. , the methods of production are the same
A. , the similarity required for sharing core competencies must be in the value chain, not in the product
When management uses common production facilities or purchasing procedures to distribute different but related products, they are ________________. A. , building on core competenciesB. , achieving process gainsC. , sharing activitiesD. , using portfolio analysis
C. , sharing activities
Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input into its manufacturing process. This is an example of ______________. A. , leveraging core competenciesB. , sharing activitiesC. , pooled negotiating powerD. , vertical integration
D. , vertical integration
The risks of vertical integration include all of the following EXCEPT: A. , costs and expenses associated with increased overhead and capital expenditures.B. , problems associated with unbalanced capacities along the value chain.C. , lack of control over valuable assets.D. , additional administrative costs associated with managing a more complex set of activities.
C. , lack of control over valuable assets.
Unbalanced capacities that limit cost savings, difficulties in combining specializations, and reduced flexibility are disadvantages associated with ___________. A. , strategic alliancesB. , divestmentC. , horizontal integrationD. , vertical integration
D. , vertical integration
A firm should consider vertical integration when ___________. A. , the competitive situation is highly volatileB. , customer needs are evolvingC. , the suppliers of the firm willingly cooperate with the firmD. , the suppliers of raw materials to the firm are often unable to maintain quality standards
D. , the suppliers of raw materials to the firm are often unable to maintain quality standards
Transaction costs include all of the following costs EXCEPT A. , search costsB. , negotiating costsC. , agency costsD. , monitoring costs
C. , agency costs