chapter 9c

chapter 9c - Ch.9 Quiz Instructions Please read the...

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Ch.9 Quiz Instructions Please read the questions carefully. This assessment is worth 100 points. 1. When to diversify (5 points) a. is based more on management preferences than any other factor. b. is a function of how soon a company can identify businesses that can pass the attractiveness test, the competitive advantage test, and the profit test. c. depends partly on the firm's remaining growth opportunities in its present industry and partly on the available opportunities to utilize its resources, expertise, and capabilities in other industries. d. varies from firm to firm according to whether the company is financially strong enough to fund a diversification effort. e. is a function of whether a firm has attractive opportunities to expand its present value chain or whether it needs altogether new value chain opportunities in different industries. 2. 3. Concentrating on a single line-of-business has such advantages as (5 points) a. creating a distinctive competence as concerns one or more industry key success factors. b. promoting a high degree of strategic fit among functional and operating strategies. c. focusing the full force of organizational resources on becoming better at what it does and expanding into geographic markets it doesn't serve. d. reducing shareholder risk that the enterprise will fail. e. not spreading the company's resources and managerial expertise over too many diverse industries and value chain activities. 4. 5. Diversifying into new businesses is a justifiable investment if it (5 points) a. results in increased profit margins and bigger total profits. b. builds shareholder value. c. helps the company escape the rigors of competition in its present business. d. leads to the development of a greater variety of distinctive competencies and competitive capabilities. e. helps the company overcome the barriers to entering additional foreign markets.
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6. 7. Which of the following is the best example of related diversification? (5 points) a. A beer brewer acquiring a maker of aluminum cans b. A manufacturer of canoes diversifying into the production of tennis rackets c. A PC producer acquiring a developer of e-commerce software for e-tailers d. A producer of golf clubs and golf bags acquiring a maker of golfing apparel and golf shoes e. A supermarket chain acquiring a chain of frozen yogurt shops 8. 9. Related diversification (5 points) a. involves diversifying into businesses whose value chains are related in ways that satisfy the industry attractiveness test and the financial fit test. b. offers opportunities to turn cross-business strategic fits into competitive advantage. c. comes closer to satisfying the attractiveness test and the cost of entry test than does unrelated diversification. d.
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chapter 9c - Ch.9 Quiz Instructions Please read the...

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