MGT401 Final Exam || with Complete Solutions.
4 types of corporate strategies correct answers growth strategies, stability strategy, retrenchment,
combination
3 growth strategies correct answers horizontal integration, related diversification, conglomerate
or unrelated diversification
horizontal integration correct answers in the same industry; P&G detergents
related diversification correct answers related industries: share/transfer core competencies;
vertical integration within supply chain: forward/downstream; backward/upstream
example of forward vertical integration correct answers film exhibition for movie producers
example of backward vertical integration correct answers publishing for Amazon and film
production for Cineplex
example of conglomerate or unrelated diversification correct answers holding company-
berkshire hathaway; GE
ways to grow within growth strategies correct answers internal development, joint venture,
acquisition, merger
stability strategy correct answers low growth, expansion too costly, uncertainty; Avoid anti-trust
action, wait & see on environment
3 retrenchment strategies correct answers turnaround, divestment, liquidation
combination strategy correct answers growth and retrenchment: seldom 50/50, must classify
which is more
6 objectives of corporate strategy correct answers synergy or economies of scope from managing
multiple businesses, market power, multipoint competition, provide direction, allocating
resources better than market, reduce risk/diversify into other industries (controversial)
what is multipoint competition? correct answers challenge competitors wherever they may be (no
uncontested markets); aggressive competition reduces likelihood of attacks or price wars
diversification concerns (8) correct answers most diversification ends in divesture, increased debt
affects all division, may create new enemies, management loses focus, hard to align incentives,
increased agency costs, diseconomies of management, culture clash among business units
corporate strategy summary correct answers 5 forces influence corporate strategy: integration
decisions, competition still takes place at business level, Integrated firm must add value: whole >
4 types of corporate strategies correct answers growth strategies, stability strategy, retrenchment,
combination
3 growth strategies correct answers horizontal integration, related diversification, conglomerate
or unrelated diversification
horizontal integration correct answers in the same industry; P&G detergents
related diversification correct answers related industries: share/transfer core competencies;
vertical integration within supply chain: forward/downstream; backward/upstream
example of forward vertical integration correct answers film exhibition for movie producers
example of backward vertical integration correct answers publishing for Amazon and film
production for Cineplex
example of conglomerate or unrelated diversification correct answers holding company-
berkshire hathaway; GE
ways to grow within growth strategies correct answers internal development, joint venture,
acquisition, merger
stability strategy correct answers low growth, expansion too costly, uncertainty; Avoid anti-trust
action, wait & see on environment
3 retrenchment strategies correct answers turnaround, divestment, liquidation
combination strategy correct answers growth and retrenchment: seldom 50/50, must classify
which is more
6 objectives of corporate strategy correct answers synergy or economies of scope from managing
multiple businesses, market power, multipoint competition, provide direction, allocating
resources better than market, reduce risk/diversify into other industries (controversial)
what is multipoint competition? correct answers challenge competitors wherever they may be (no
uncontested markets); aggressive competition reduces likelihood of attacks or price wars
diversification concerns (8) correct answers most diversification ends in divesture, increased debt
affects all division, may create new enemies, management loses focus, hard to align incentives,
increased agency costs, diseconomies of management, culture clash among business units
corporate strategy summary correct answers 5 forces influence corporate strategy: integration
decisions, competition still takes place at business level, Integrated firm must add value: whole >
