BUS5117 Strategic Management Units 5-8 Test Bank — Corporate
Strategy, International Strategy, Implementation, and Control
Course:
BUS5117 Strategic Management — University of the People (UoPeople)
Level:
MBA
Year:
2025/2026
Format:
Comprehensive Test Bank — 60 Q&A with Verified Answers
BUS5117 Units 5-8 Test Bank
60 Questions with Verified Correct Answers | 100% Complete Solutions
Question 1 — Unit 5:
Which of the following best describes a corporate-level strategy of related constrained
diversification?
A) A firm operates multiple businesses that share numerous resources, capabilities, and activities.
B) A firm operates highly independent businesses with no shared resources or activities.
C) A firm acquires a supplier to reduce costs and secure access to raw materials.
D) A firm expands its operations into a new geographic market without changing its product line.
Answer: A
Explanation:
Related constrained diversification occurs when a firm's businesses share a high level of
operational linkages, such as manufacturing processes, marketing channels, or technology. This
strategy aims to create economies of scope by leveraging core competencies across different
business units.
Question 2 — Unit 5:
,TechNova Inc., a smartphone manufacturer, has decided to acquire its main supplier of
microchips. This strategic move is an example of:
A) Horizontal integration
B) Unrelated diversification
C) Backward vertical integration
D) Forward vertical integration
Answer: C
Explanation:
Backward vertical integration involves a firm moving up the supply chain to take control of its
inputs or raw materials. By acquiring its microchip supplier, TechNova is ensuring a steady supply
of critical components and potentially reducing costs.
Question 3 — Unit 5:
What is the primary rationale for a firm to engage in unrelated diversification?
A) To achieve economies of scope by sharing activities.
B) To increase market power relative to competitors.
C) To efficiently allocate capital among independent business units.
D) To leverage a strong brand name across multiple related products.
Answer: C
Explanation:
Unrelated diversification does not rely on sharing operational linkages. Instead, the primary
rationale is often financial economies, such as creating value through an internal capital market
where corporate headquarters efficiently allocates funds to high-potential independent business
units.
Question 4 — Unit 5:
A media conglomerate owns a television network, a publishing house, and a theme park. While
these businesses operate independently, they cross-promote each other's products. This
represents:
A) Related linked diversification
B) Related constrained diversification
C) Vertical integration
D) Single-business strategy
, Answer: A
Explanation:
Related linked diversification features a portfolio of businesses that have only limited links
between them. The businesses may share a corporate-level core competency, such as marketing
or brand management (like cross-promotion), but do not share extensive operational activities.
Question 5 — Unit 5:
In the BCG Matrix, a business unit with a high market share in a low-growth industry is classified
as a:
A) Star
B) Cash Cow
C) Question Mark
D) Dog
Answer: B
Explanation:
A "Cash Cow" holds a dominant market share in a mature, slow-growing industry. These units
generate substantial cash flow that exceeds their internal investment needs, allowing the
corporation to fund other ventures, such as "Question Marks" or "Stars."
Question 6 — Unit 5:
Which of the following is a common reason why mergers and acquisitions (M&A) often fail to
create expected shareholder value?
A) Inadequate due diligence before the acquisition.
B) Overestimating the potential synergies.
C) Challenges in integrating the cultures of the two firms.
D) All of the above.
Answer: D
Explanation:
M&A failure is common due to multiple factors. Poor due diligence can obscure liabilities,
overestimating synergies leads to overpaying, and cultural clashes often disrupt post-merger
integration, destroying value rather than creating it.
Strategy, International Strategy, Implementation, and Control
Course:
BUS5117 Strategic Management — University of the People (UoPeople)
Level:
MBA
Year:
2025/2026
Format:
Comprehensive Test Bank — 60 Q&A with Verified Answers
BUS5117 Units 5-8 Test Bank
60 Questions with Verified Correct Answers | 100% Complete Solutions
Question 1 — Unit 5:
Which of the following best describes a corporate-level strategy of related constrained
diversification?
A) A firm operates multiple businesses that share numerous resources, capabilities, and activities.
B) A firm operates highly independent businesses with no shared resources or activities.
C) A firm acquires a supplier to reduce costs and secure access to raw materials.
D) A firm expands its operations into a new geographic market without changing its product line.
Answer: A
Explanation:
Related constrained diversification occurs when a firm's businesses share a high level of
operational linkages, such as manufacturing processes, marketing channels, or technology. This
strategy aims to create economies of scope by leveraging core competencies across different
business units.
Question 2 — Unit 5:
,TechNova Inc., a smartphone manufacturer, has decided to acquire its main supplier of
microchips. This strategic move is an example of:
A) Horizontal integration
B) Unrelated diversification
C) Backward vertical integration
D) Forward vertical integration
Answer: C
Explanation:
Backward vertical integration involves a firm moving up the supply chain to take control of its
inputs or raw materials. By acquiring its microchip supplier, TechNova is ensuring a steady supply
of critical components and potentially reducing costs.
Question 3 — Unit 5:
What is the primary rationale for a firm to engage in unrelated diversification?
A) To achieve economies of scope by sharing activities.
B) To increase market power relative to competitors.
C) To efficiently allocate capital among independent business units.
D) To leverage a strong brand name across multiple related products.
Answer: C
Explanation:
Unrelated diversification does not rely on sharing operational linkages. Instead, the primary
rationale is often financial economies, such as creating value through an internal capital market
where corporate headquarters efficiently allocates funds to high-potential independent business
units.
Question 4 — Unit 5:
A media conglomerate owns a television network, a publishing house, and a theme park. While
these businesses operate independently, they cross-promote each other's products. This
represents:
A) Related linked diversification
B) Related constrained diversification
C) Vertical integration
D) Single-business strategy
, Answer: A
Explanation:
Related linked diversification features a portfolio of businesses that have only limited links
between them. The businesses may share a corporate-level core competency, such as marketing
or brand management (like cross-promotion), but do not share extensive operational activities.
Question 5 — Unit 5:
In the BCG Matrix, a business unit with a high market share in a low-growth industry is classified
as a:
A) Star
B) Cash Cow
C) Question Mark
D) Dog
Answer: B
Explanation:
A "Cash Cow" holds a dominant market share in a mature, slow-growing industry. These units
generate substantial cash flow that exceeds their internal investment needs, allowing the
corporation to fund other ventures, such as "Question Marks" or "Stars."
Question 6 — Unit 5:
Which of the following is a common reason why mergers and acquisitions (M&A) often fail to
create expected shareholder value?
A) Inadequate due diligence before the acquisition.
B) Overestimating the potential synergies.
C) Challenges in integrating the cultures of the two firms.
D) All of the above.
Answer: D
Explanation:
M&A failure is common due to multiple factors. Poor due diligence can obscure liabilities,
overestimating synergies leads to overpaying, and cultural clashes often disrupt post-merger
integration, destroying value rather than creating it.
