ch6 - Chapter 5Competitive Rivalry and Competitive Dynamics...

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Chapter 6—Corporate-Level Strategy TRUE/FALSE 1. In 2005, Gillette was acquired by Proctor & Gamble (P&G). This is an example of business level stra- ANS: F PTS: 1 DIF: Easy REF: 153 OBJ: 06-01 TYPE: application NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Ru- 2. A business-level strategy indicates product markets and businesses in which the firm should compete. ANS: F PTS: 1 DIF: Medium REF: 154 OBJ: 06-01 TYPE: knowledge NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Ru- 3. If the businesses in the corporate portfolio are not worth more under the management of the corpora- tion than they would be under any other ownership, then the corporate-level strategy has failed. ANS: T PTS: 1 DIF: Medium REF: 155 OBJ: 06-01 TYPE: comprehension NOT: AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value | Dierdorff 4. A major advantage of diversification is that overall monitoring costs are reduced, since each separate business comes under the control of corporate headquarters. ANS: F PTS: 1 DIF: Medium REF: 155 OBJ: 06-01 TYPE: comprehension NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Ru- 5. Successful product diversification is expected to increase the variability in the firm’s profitability, since the earnings are generated from several different business units. ANS: F PTS: 1 DIF: Easy REF: 155 OBJ: 06-01 TYPE: comprehension NOT: AACSB: Business Knowledge & Analytical Skills | Management: Creation of Value | Dierdorff 6. All of Krispy Kreme’s revenues come from its one main product, doughnuts. It can be considered a classic example of a firm following a constrained strategy. ANS: F PTS: 1 DIF: Easy REF: 155-156 OBJ: 06-02 TYPE: application NOT: AACSB: Business Knowledge & Analytical Skills | Management: Strategy | Dierdorff & Ru- bin: Managing strategy & innovation
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7. Revenues for United Parcel Service (UPS) are derived from the following business segments: 74 per- cent from U.S. package delivery operations, 17 percent from international package delivery, and 9 per- cent from non-packaging operations. The best description of the corporate level strategy of UPS is un - related diversification . ANS: F PTS: 1 DIF: Medium REF: 156 OBJ: 06-02 TYPE: application NOT: AACSB: Reflective Thinking Skills | Management: Strategy | Dierdorff & Rubin: Managing 8. Related linked firms share more resources and assets between their businesses than do related con- strained firms. ANS: F
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ch6 - Chapter 5Competitive Rivalry and Competitive Dynamics...

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