MBA 705 MINSUN KIM EXAM 3 COMPLETE
STUDY GUIDE AND STRATEGIC MANAGEMENT
REVIEW 2026
◉ CEOS and top managers ask questions such as.
Answer: - which business unit(s) should we have?
-How should we support and enhance the value of each business as a
whole?
◉ Business Unit Managers ask questions such as.
Answer: -How individual business units compete and win in their
own individual market?
◉ Operational managers ask questions such as.
Answer: How to improve the effectiveness and efficiencies of
operations?
◉ What are the Three Corporate Level Strategies?.
Answer: Growth Strategy (increase in size)
Stability Strategy (Retain current size)
Retrenchment strategy (decrease in size)
,◉ Internal Growth.
Answer: accomplished when a firm increases its revenues,
production capacity, and workforce
◉ External Growth.
Answer: when two firms merge or one acquires the other
◉ Acquisition.
Answer: a form of merger whereby one firm purchases another,
often with a combination of cash and stock
◉ Merger.
Answer: occurs when two or more firms, usually of roughly similar
sizes, combine into one through an exchange of stock
◉ Shortcoming of a merger or acquisition.
Answer: 1. The acquiring firm pays a premium
2. Top managers of the acquired firm often depart the organization
3. Building a common culture after layoffs can be complicated
◉ Five forms of External Growth.
Answer: 1. Horizontal integration
, 2. Horizontal related diversification
3. Conglomerate (unrelated) diversification
4. Vertical integration
5. Strategic Alliances
◉ Horizontal (related) integration.
Answer: When a firm acquires other companies in the same line of
business. Doing so allows a firm operating in a single industry to
grow rapidly without moving into other industries
◉ Horizontal (Related) Diversification.
Answer: When a firm acquires a business outside its present scope
of operation, but with similar or related core competencies, the
firm's key capabilities and collective learning skills that are
fundamental to its strategy, performance, and long-term
profitability.
e.g. McDonald's diversified their menu selection, diversified in areas
that are related on some basic variable. The 3 menu items share
common resources and common customer segments
◉ Why does a company pursue the horizontal (related)
diversification?.
Answer: It is because it can create synergy using the same supplies
and resources, the same marketing and distribution channels, and
advertising multiple services simultaneously
STUDY GUIDE AND STRATEGIC MANAGEMENT
REVIEW 2026
◉ CEOS and top managers ask questions such as.
Answer: - which business unit(s) should we have?
-How should we support and enhance the value of each business as a
whole?
◉ Business Unit Managers ask questions such as.
Answer: -How individual business units compete and win in their
own individual market?
◉ Operational managers ask questions such as.
Answer: How to improve the effectiveness and efficiencies of
operations?
◉ What are the Three Corporate Level Strategies?.
Answer: Growth Strategy (increase in size)
Stability Strategy (Retain current size)
Retrenchment strategy (decrease in size)
,◉ Internal Growth.
Answer: accomplished when a firm increases its revenues,
production capacity, and workforce
◉ External Growth.
Answer: when two firms merge or one acquires the other
◉ Acquisition.
Answer: a form of merger whereby one firm purchases another,
often with a combination of cash and stock
◉ Merger.
Answer: occurs when two or more firms, usually of roughly similar
sizes, combine into one through an exchange of stock
◉ Shortcoming of a merger or acquisition.
Answer: 1. The acquiring firm pays a premium
2. Top managers of the acquired firm often depart the organization
3. Building a common culture after layoffs can be complicated
◉ Five forms of External Growth.
Answer: 1. Horizontal integration
, 2. Horizontal related diversification
3. Conglomerate (unrelated) diversification
4. Vertical integration
5. Strategic Alliances
◉ Horizontal (related) integration.
Answer: When a firm acquires other companies in the same line of
business. Doing so allows a firm operating in a single industry to
grow rapidly without moving into other industries
◉ Horizontal (Related) Diversification.
Answer: When a firm acquires a business outside its present scope
of operation, but with similar or related core competencies, the
firm's key capabilities and collective learning skills that are
fundamental to its strategy, performance, and long-term
profitability.
e.g. McDonald's diversified their menu selection, diversified in areas
that are related on some basic variable. The 3 menu items share
common resources and common customer segments
◉ Why does a company pursue the horizontal (related)
diversification?.
Answer: It is because it can create synergy using the same supplies
and resources, the same marketing and distribution channels, and
advertising multiple services simultaneously
