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Unformatted text preview: Question Pool: Strategic Management, 12e (Thompson) Chapter 10 1. The procedural steps in evaluating and critiquing a diversified company's strategy include a. applying the industry attractiveness test. b. determining the competitive strength of each business in the portfolio to see which ones are the strongest/weakest contenders in their respective industries. c. ranking business unit profitability and determining the priorities for resource allocation. d. evaluating the strategic and resource fits among sister businesses in the company's portfolio. e. All of the above. 2. 3. A comprehensive evaluation of the group of businesses a company has diversified into involves a. evaluating the attractiveness of each industry in which the firm does business and the competitive strength of each business unit. b. evaluating the strategic fits and resource fits among the various sister businesses. c. ranking the business units from highest to lowest on the basis of both historical performance and future prospects and also ranking the different businesses in terms of their priority for resource allocation and new capital investment. d. using the results of the prior analytical steps as a basis for crafting new strategic moves to improve the performance of the total business portfolio via acquisitions, divestiture, or shifts in internal priorities and resource allocation. e. All of the above. 4. 5. Evaluating a diversified company's corporate strategy and critiquing its business portfolio involves a. a SWOT analysis of each industry in which the firm has a business interest. b. applying the cost-of-entry test, the better-off test, the profitability test, and the shareholder value test to each business and industry represented in the company's business portfolio. c. evaluating the strategic fits and resource fits among the various sister businesses and deciding what priority to give each of the company's business units in allocating resources and making new capital investment. d. looking at each industry/business to determine where competitive forces and driving forces are strongest/weakest and how many profitable strategic groups that each industry has. e. determining how many of the business units are industry leaders and "stars", how many are cash cows, and how many are cash hogs, how many are following focus strategies, how many are using differentiation strategies, and how many are pursuing cost leadership strategies. 6. 7. Which one of the following is not a standard part of analyzing the strategy of a diversified company? a. Assessing the competitive strength of each business the company has diversified into. b. Determining which business units have the most potential for employing low-cost producer strategies, differentiation strategies, focus strategies, and best-cost producer strategies and also determining how soon the company's cash hogs can be transformed into cash cows....
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- Spring '11
- Business, business units