Chp 10 Flashcards
(20 cards)
What is the difference between business strategy and corporate strategy?
a) Business strategy is for single businesses, corporate strategy covers multiple lines
Corporate strategy decisions include:
d) All of the above
What is a strategic business unit (SBU)?
a) Set of businesses with similar strategies or challenges
On average, how do acquisitions perform financially?
b) Low positive returns, with wide variance
What improves acquisition success?
d) All of the above
Why are acquisitions difficult?
d) All of the above
What are common reasons companies diversify?
d) All of the above
What is related diversification?
b) Acquiring businesses with some similarity in industry or value chain
What is unrelated diversification?
b) Entering entirely different industries without expected synergies
What is horizontal diversification?
a) Acquiring a business in the same industry and value chain
What is vertical diversification?
a) Acquiring a business upstream or downstream in the value chain
What is cross-sector diversification?
a) Acquiring in a different industry but with a similar value chain
What is the GE Business Development Matrix used for?
a) Evaluate SBU investment priorities
What is the advice for using the BCG Growth Share Matrix?
a) Invest in Stars, milk Cash Cows, divest Dogs
What is downscoping?
b) Reducing diversification to focus on core businesses
What is a conglomerate?
a) A corporation with many unrelated businesses
What is a holding company?
a) Company owning majority shares but letting subsidiaries operate independently
What is operational fit in acquisitions?
a) Combining similar primary value chain activities
What is market fit in acquisitions?
a) Synergy in supplier or customer relationships
What is management fit in acquisitions?
a) Synergies in administrative and support activities
