STR 581: Ch 8: Corporate Strategy Questions with well explained answers

The steps involves in creating a diversified company's corporate strategy include ______ - Answer-1. picking new industries to enter and the means for entering them 2. establishing investment priorities 3. leveraging cross-business value chain relationships into competitive advantage Diversifying into new industries ____ - Answer-should be explored when a single business company encounters dwindling opportunities in its principal business Diversification is not really viewed as a success unless it ____. - Answer-yields added long-term economic value for shareholders What are the three tests of corporate advantage? - Answer-1. the industry attractiveness test 2. the cost of entry test 3. the better off test The means of entering a new business by buying an existing business is referred to as ______. - Answeracquisition Which of the following are strategic options for increasing a corporation's overall success? - Answer-1. broadening the scope of diversification by entering additional industries 2. sticking closely with the existing business lineup and pursuing opportunities presented by these businesses 3. retrenching to a narrower scope of diversification by divesting poorly performing businesses Which of the following are drawbacks of acquisition? - Answer-1. there can be high integration costs 2. integration of the company into the existing firm can be time consuming 3. there are often excessive premiums The decision to diversity should begin with _____ - Answer-an economic justificationWhich of the following statements are true about a successful diversification effort? - Answer-1. it must give shareholders value that they cannot get by purchasing different stocks on their own 2. it must add long term economic value for shareholders Which of the following are terms that refer to diversification by starting a new business subsidiary from scratch? - Answer-1. corporate venturing 2. internal development 3. new venture development The potential for an existing company can a new business to function better together following diversification than they would individually is part of the _____. - Answer-better off test Entering a new business via a joint venture can be useful in which of the following situations? - Answer- 1. when an opportunity is too complicated or risky for one company to attempt alone 2. when an opportunity in a new industry requires more know how than one company has alone 3. when diversification entails operations in a foreign country Which of the following are the ways a company can enter a new business? - Answer-1. acquisition 2. joint ventures 3. internal starup Which of the following are benefits of acquisition? - Answer-1. it is a useful way to get over entry barriers, such as building brand awareness 2. it is quicker than trying to launch a new operation 3. it allows access to hard to find resources and capabilities that work well with those of the acquiring company Which of the following are among the four questions that need to be asked when determining how best to enter a new business? - Answer-1. Which is the least costly mode of entry, given the company's objectives 2. Are there entry barriers to overcome?3. Is speed an important factor in the firm's chances for successful entry? Determining whether the materials needed to start a business can be readily obtained by a company is an example of answering the strategy based question of ____. - Answer-critical resources and capabilities Internal development of a new business is a good idea when which of the following conditions are met? - Answer-1. there is plenty of time to start the business 2. it is cheaper to enter internally than through an acquisition 3. the parent company has the in house resources needed to launch the company Which of the following is true about joint ventures? - Answer-there are usually short-lives, ending as soon as partners decide to part ways Choosing how best to enter a new business ____ - Answer-depends partially on determining the least costly mode of entry If the question of critical resources and capabilities demonstrates that a company has or can easily lease all of the materials necessary to start a new business, it will probably do so by _____. - Answer-internal development