Question 1

XYZ Company has physical assets that are not being used to full capacity, and it has a strong brand name that it could use to leverage its assets. To grow, XYZ Company will likely pursue

Accepted Answer

A)   related diversification.
B)   single-product diversification.
C)   unrelated diversification.
D)   vertical integration.

Question 2

Discuss the results of diversification.

Accepted Answer

The evidence that diversification strate...

Question 3

Footflyer Publishing has had difficulty finding timely press availability with a four-color printer for its magazines. Footflyer should consider

Accepted Answer

A)   backward vertical integration.
B)   forward vertical integration.
C)   unrelated diversification.
D)   abandoning print publications.

Question 4

Firms pursuing related diversification to increase market power are attempting to decrease the price at which they sell their products to levels below the normal prices found in the market.

Accepted Answer

A) True 
 B)False

Question 5

According to one key study, performance increases as firms change from related diversification to unrelated diversification.

Accepted Answer

A) True 
 B)False

Question 6

Fine Electronics is a corporation that controls all aspects of its business such as extracting raw materials, manufacturing the products, distributing them, and finally marketing to customers. It manages these activities through several business units, where one unit provides inputs to the other. This is an example of

Accepted Answer

A)   unrelated diversification.
B)   vertical integration.
C)   strategic flexibility.
D)   franchising.

Question 7

Firms that have excess capacity or potential in their physical assets or their intangible assets tend to pursue unrelated diversification.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is the main goal of related diversification?

Accepted Answer

A)   Support failing businesses
B)   Understand social values
C)   Create strategic flexibility
D)   Achieve economies of scope

Question 9

Z-Furn is an organization that manufactures and sells office furniture. It maintains a good name in this business and has strong capital resources. The organization decides to purchase a failing food product business in order to tap into the market of that company. Which of the following types of diversification is the firm pursuing?

Accepted Answer

A)   Related diversification
B)   Unrelated diversification
C)   International diversification
D)   Single-product diversification

Question 10

The ultimate goal of an unrelated diversification strategy is usually to

Accepted Answer

A)   create financial economies.
B)   support failing businesses.
C)   enhance innovation.
D)   expand globally. A

Question 11

The ultimate goal of an unrelated diversification strategy is usually to create some form of financial economies.

Accepted Answer

A) True 
 B)False

Question 12

Footflyer Publishing is considering procuring editorial services from outside sources. Which of the following should NOT weigh in Footflyer's decision?

Accepted Answer

A)   The administrative costs of keeping this function in-house
B)   The transaction costs of procuring the outside services
C)   The economies of scope achieved through vertical integration with another publisher
D)   Possible damage to the firm's core competencies C

Question 13

An appliance manufacturer acquires a fruit preserves cannery. This is an example of

Accepted Answer

A)   unrelated diversification.
B)   backward vertical integration.
C)   forward vertical integration.
D)   related diversification.

Question 14

The scope of a corporate-level strategy focuses on

Accepted Answer

A)   the manner in which activities of the firm will be coordinated.
B)   the relationship between business units.
C)   the markets and businesses in which the firm will compete.
D)   the internal environment affecting a firm's business.

Question 15

A firm can pass the better-off test in determining the viability of diversification when

Accepted Answer

A)   the price of the acquired firm is low enough to yield a potential return on investment.
B)   the total competitive advantage is above and beyond what the two businesses could achieve independently.
C)   it acquires extremely high-cost industries.
D)   it spends more time on implementation processes. B

Question 16

The distinguishing factor between unrelated and related diversification strategies is that a firm using unrelated diversification strategy

Accepted Answer

A)   has numerous businesses that are linked in some manner.
B)   manages several businesses with no reasonable connection.
C)   focuses on one specific product, typically in one market.
D)   develops core competencies using its resources and capabilities.

Question 17

Which of the following is NOT a reason why managers pursue diversification strategies?

Accepted Answer

A)   The opportunity to increase customer loyalty
B)   The potential to manage or minimize risk
C)   The potential for personal gain
D)   The opportunity to leverage core assets or skills between different businesses

Question 18

In vertical integration, forward integration occurs when a firm

Accepted Answer

A)   attempts to achieve economies of scope.
B)   controls the customers for its main products.
C)   owns or controls the inputs it uses.
D)   generates sustainable cost savings.

Question 19

The ultimate goal of developing a corporate-level strategy is to build

Accepted Answer

A)   employee commitment.
B)   a corporate advantage.
C)   customer relationships.
D)   a wholly owned subsidiary.

Question 20

Transaction costs refer to the costs a firm incurs to coordinate activities between business units.

Accepted Answer

A) True 
 B)False

Exam 6: Corporate-Level Strategy

XYZ Company has physical assets that are not being used to full capacity, and it has a strong brand name that it could use to leverage its assets. To grow, XYZ Company will likely pursue

Correct Answer
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Discuss the results of diversification.

Correct Answer
verified
The evidence that diversification strate...
View Answer

Footflyer Publishing has had difficulty finding timely press availability with a four-color printer for its magazines. Footflyer should consider

Correct Answer
verified

Firms pursuing related diversification to increase market power are attempting to decrease the price at which they sell their products to levels below the normal prices found in the market.

Correct Answer
verified

According to one key study, performance increases as firms change from related diversification to unrelated diversification.

Correct Answer
verified

Correct Answer
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Firms that have excess capacity or potential in their physical assets or their intangible assets tend to pursue unrelated diversification.

Correct Answer
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Which of the following is the main goal of related diversification?

Correct Answer
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The ultimate goal of an unrelated diversification strategy is usually to

Correct Answer
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A

The ultimate goal of an unrelated diversification strategy is usually to create some form of financial economies.

Correct Answer
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Footflyer Publishing is considering procuring editorial services from outside sources. Which of the following should NOT weigh in Footflyer's decision?

Correct Answer
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C

An appliance manufacturer acquires a fruit preserves cannery. This is an example of

Correct Answer
verified

The scope of a corporate-level strategy focuses on

Correct Answer
verified

A firm can pass the better-off test in determining the viability of diversification when

Correct Answer
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B

The distinguishing factor between unrelated and related diversification strategies is that a firm using unrelated diversification strategy

Correct Answer
verified

Which of the following is NOT a reason why managers pursue diversification strategies?

Correct Answer
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In vertical integration, forward integration occurs when a firm

Correct Answer
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The ultimate goal of developing a corporate-level strategy is to build

Correct Answer
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Transaction costs refer to the costs a firm incurs to coordinate activities between business units.

Correct Answer
verified

Exam 6: Corporate-Level Strategy

XYZ Company has physical assets that are not being used to full capacity, and it has a strong brand name that it could use to leverage its assets. To grow, XYZ Company will likely pursue

Correct AnswerverifiedShow Answer

Discuss the results of diversification.

Correct AnswerverifiedThe evidence that diversification strate...View AnswerShow Answer

Footflyer Publishing has had difficulty finding timely press availability with a four-color printer for its magazines. Footflyer should consider

Correct AnswerverifiedShow Answer

Firms pursuing related diversification to increase market power are attempting to decrease the price at which they sell their products to levels below the normal prices found in the market.

Correct AnswerverifiedShow Answer

According to one key study, performance increases as firms change from related diversification to unrelated diversification.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Firms that have excess capacity or potential in their physical assets or their intangible assets tend to pursue unrelated diversification.

Correct AnswerverifiedShow Answer

Which of the following is the main goal of related diversification?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The ultimate goal of an unrelated diversification strategy is usually to

Correct AnswerverifiedA

The ultimate goal of an unrelated diversification strategy is usually to create some form of financial economies.

Correct AnswerverifiedShow Answer

Footflyer Publishing is considering procuring editorial services from outside sources. Which of the following should NOT weigh in Footflyer's decision?

Correct AnswerverifiedC

An appliance manufacturer acquires a fruit preserves cannery. This is an example of

Correct AnswerverifiedShow Answer

The scope of a corporate-level strategy focuses on

Correct AnswerverifiedShow Answer

A firm can pass the better-off test in determining the viability of diversification when

Correct AnswerverifiedB

The distinguishing factor between unrelated and related diversification strategies is that a firm using unrelated diversification strategy

Correct AnswerverifiedShow Answer

Which of the following is NOT a reason why managers pursue diversification strategies?

Correct AnswerverifiedShow Answer

In vertical integration, forward integration occurs when a firm

Correct AnswerverifiedShow Answer

The ultimate goal of developing a corporate-level strategy is to build

Correct AnswerverifiedShow Answer

Transaction costs refer to the costs a firm incurs to coordinate activities between business units.

Correct AnswerverifiedShow Answer

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The evidence that diversification strate...
View Answer

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A

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C

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B

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