SEVI 3013 All Study Guide Exam Questions And Answers
Graded A+ 2025/2026
cost-focus strategy - Creates a cost advantage in its target segment
Exploits differences in cost behavior
differentiation focus - Differentiates itself in its target market
Exploits the special needs of buyers
Industry Life Cycle - the stages of introduction, growth, maturity, and decline that
typically occur over the life of an industry
introduction stage - - Products are unfamiliar to consumers
- Market segments are not well-defined
- Product features are not clearly specified
- Competition tends to be limited
growth stage - - Characterized by strong increases in sales
- Attractive to potential competitors
- When firms can build brand recognition
maturity stage - Aggregate industry demand slows
Market becomes saturated, few new adopters
Direct competition becomes predominant
Marginal competitors begin to exit
decline stage - -Industry sales and profits begin to fall
-Price competition increases
-Industry consolidation occurs
strategies for decline stage - -Maintaining
-Harvesting
-Exiting the market
-Consolidation
diversification strategy must create value for shareholders through - mergers and
acquisitions
strategic alliances
joint ventures
internal development
Related Businesses - -horizontal relationships
-sharing tangible resources
-sharing intangible resources
Unrelated Businesses - -hierarchical relationships
-value creation derives from corporate office
, -leveraging support activities
Economies of scope (related diversification) - cost savings from leveraging core
competencies or sharing related activities among businesses in a corporation
Related businesses gain market power by: - pooled negotiating power and vertical
integration
core competencies - Things a company does extremely well, which sometimes give it
an advantage over its competition
sharing activities - Sharing tangible & value-creating activities can provide payoffs:
- Cost savings through elimination of jobs, facilities & related expenses, or economies of
scale
- Revenue enhancements through increased differentiation & sales growth
Vertical Integration - the firm's ownership of its production of needed inputs or of the
channels by which it distributes its outputs
transaction cost perspective - every market transaction involves some transaction costs
parenting advantage - when it is more able than other firms to boost the combined
performance of its individual businesses through high-level guidance, general oversight,
and other corporate-level contributions.
Portfolio Management - involves a better understanding of the competitive position of an
overall portfolio or family of businesses
diversification can be accomplished via - - Mergers and acquisitions (and divestment)
- Pooling resources of other companies with a firms own resource base through
strategic alliances and joint ventures
- Internal development through corporate entrepreneurship and new venture
development
Mergers - The joining together of two or more companies or organizations to form one
larger one.
acquisitions - the incorporation of one firm into another through purchase
Divestment objectives include: - Cutting the financial losses of a failed acquisition
Redirecting focus on the firm's core businesses
Freeing up resources to spend on more attractive alternatives
Raising cash to help fund existing businesses
Strategic Alliances and Joint Ventures - cooperative relationships between two (or
more) firms with potential advantages
Graded A+ 2025/2026
cost-focus strategy - Creates a cost advantage in its target segment
Exploits differences in cost behavior
differentiation focus - Differentiates itself in its target market
Exploits the special needs of buyers
Industry Life Cycle - the stages of introduction, growth, maturity, and decline that
typically occur over the life of an industry
introduction stage - - Products are unfamiliar to consumers
- Market segments are not well-defined
- Product features are not clearly specified
- Competition tends to be limited
growth stage - - Characterized by strong increases in sales
- Attractive to potential competitors
- When firms can build brand recognition
maturity stage - Aggregate industry demand slows
Market becomes saturated, few new adopters
Direct competition becomes predominant
Marginal competitors begin to exit
decline stage - -Industry sales and profits begin to fall
-Price competition increases
-Industry consolidation occurs
strategies for decline stage - -Maintaining
-Harvesting
-Exiting the market
-Consolidation
diversification strategy must create value for shareholders through - mergers and
acquisitions
strategic alliances
joint ventures
internal development
Related Businesses - -horizontal relationships
-sharing tangible resources
-sharing intangible resources
Unrelated Businesses - -hierarchical relationships
-value creation derives from corporate office
, -leveraging support activities
Economies of scope (related diversification) - cost savings from leveraging core
competencies or sharing related activities among businesses in a corporation
Related businesses gain market power by: - pooled negotiating power and vertical
integration
core competencies - Things a company does extremely well, which sometimes give it
an advantage over its competition
sharing activities - Sharing tangible & value-creating activities can provide payoffs:
- Cost savings through elimination of jobs, facilities & related expenses, or economies of
scale
- Revenue enhancements through increased differentiation & sales growth
Vertical Integration - the firm's ownership of its production of needed inputs or of the
channels by which it distributes its outputs
transaction cost perspective - every market transaction involves some transaction costs
parenting advantage - when it is more able than other firms to boost the combined
performance of its individual businesses through high-level guidance, general oversight,
and other corporate-level contributions.
Portfolio Management - involves a better understanding of the competitive position of an
overall portfolio or family of businesses
diversification can be accomplished via - - Mergers and acquisitions (and divestment)
- Pooling resources of other companies with a firms own resource base through
strategic alliances and joint ventures
- Internal development through corporate entrepreneurship and new venture
development
Mergers - The joining together of two or more companies or organizations to form one
larger one.
acquisitions - the incorporation of one firm into another through purchase
Divestment objectives include: - Cutting the financial losses of a failed acquisition
Redirecting focus on the firm's core businesses
Freeing up resources to spend on more attractive alternatives
Raising cash to help fund existing businesses
Strategic Alliances and Joint Ventures - cooperative relationships between two (or
more) firms with potential advantages
