MGT 8803 Exam 2 with solutions
Examples of Growth Strategy - correct answer ✔Concentration, Diversification,
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| Vertical Integration & Horizontal Integration
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Concentration - correct answer ✔Focus on single market/product | | | | | | |
Vertical Integration - correct answer ✔Acquire forward (distribution) or
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| backwards (supplier) on production vertical
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Horizontal Integration - correct answer ✔Merger or acquisition of companies at
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| same stage of production; results in less competition than vertical
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Diversification - correct answer ✔Increase products, markets or industries
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Corporate Strategy - correct answer ✔Address which businesses the firm will be
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| in and how capital will be allocated among those businesses (scope of firm,
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| allocation of resources, Acquisitions and divestments and overall performance
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| of firm)
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Inorganic Growth - correct answer ✔Occurs through acquisition
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Organic Growth - correct answer ✔Occurs through building new capabilities
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Competitive Advantage - correct answer ✔Characteristics of both the industry
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| and the firm
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1/6
, Single Business Diversification Strategy - correct answer ✔>95% of total firm
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| revenues from a single line of business
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Dominant Business Diversification Strategy - correct answer ✔70-95% of total
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| firm revenues from a single line of business
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Diversification Strategy - correct answer ✔Related or unrelated; <70% of total
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| firm revenues from a single line of business; has multiple competitive strategies
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Grand Strategies - correct answer ✔Growth, stability & renewal
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Combination Stategies - correct answer ✔Often difficult because they are
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| inherently contradictory; goal is to provide unique value in an efficient manner;
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| ignore Porter's advice
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Productivity Frontier - correct answer ✔The theoretical limit of the cost value
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| relationship (differentiation vs cost leadership) and captures the sum of all
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| existing best practices; drawn as a concave curve
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Differentiation Strategy - correct answer ✔Driven by innovation and creativity -
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| focused on value. Can occur in a niche market or broad market
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Cost Leadership - correct answer ✔Becoming the lowest cost producer in an
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| industry. Cost doesn't always mean price. Risks include anything that will erode
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| margins (new production/technology); Typically produce standardized
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| products and focus on operational excellence
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"Stuck in the Middle" - correct answer ✔A firm has tried to implement both a
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2/6
Examples of Growth Strategy - correct answer ✔Concentration, Diversification,
| | | | | | | |
| Vertical Integration & Horizontal Integration
| | | |
Concentration - correct answer ✔Focus on single market/product | | | | | | |
Vertical Integration - correct answer ✔Acquire forward (distribution) or
| | | | | | | |
| backwards (supplier) on production vertical
| | | |
Horizontal Integration - correct answer ✔Merger or acquisition of companies at
| | | | | | | | | |
| same stage of production; results in less competition than vertical
| | | | | | | | |
Diversification - correct answer ✔Increase products, markets or industries
| | | | | | | |
Corporate Strategy - correct answer ✔Address which businesses the firm will be
| | | | | | | | | | |
| in and how capital will be allocated among those businesses (scope of firm,
| | | | | | | | | | | |
| allocation of resources, Acquisitions and divestments and overall performance
| | | | | | | |
| of firm)
|
Inorganic Growth - correct answer ✔Occurs through acquisition
| | | | | | |
Organic Growth - correct answer ✔Occurs through building new capabilities
| | | | | | | | |
Competitive Advantage - correct answer ✔Characteristics of both the industry
| | | | | | | | |
| and the firm
| |
1/6
, Single Business Diversification Strategy - correct answer ✔>95% of total firm
| | | | | | | | | |
| revenues from a single line of business
| | | | | |
Dominant Business Diversification Strategy - correct answer ✔70-95% of total
| | | | | | | | |
| firm revenues from a single line of business
| | | | | | |
Diversification Strategy - correct answer ✔Related or unrelated; <70% of total
| | | | | | | | | |
| firm revenues from a single line of business; has multiple competitive strategies
| | | | | | | | | | |
Grand Strategies - correct answer ✔Growth, stability & renewal
| | | | | | | |
Combination Stategies - correct answer ✔Often difficult because they are
| | | | | | | | |
| inherently contradictory; goal is to provide unique value in an efficient manner;
| | | | | | | | | | |
| ignore Porter's advice
| |
Productivity Frontier - correct answer ✔The theoretical limit of the cost value
| | | | | | | | | | |
| relationship (differentiation vs cost leadership) and captures the sum of all
| | | | | | | | | |
| existing best practices; drawn as a concave curve
| | | | | | |
Differentiation Strategy - correct answer ✔Driven by innovation and creativity -
| | | | | | | | | |
| focused on value. Can occur in a niche market or broad market
| | | | | | | | | | |
Cost Leadership - correct answer ✔Becoming the lowest cost producer in an
| | | | | | | | | | |
| industry. Cost doesn't always mean price. Risks include anything that will erode
| | | | | | | | | | |
| margins (new production/technology); Typically produce standardized
| | | | |
| products and focus on operational excellence
| | | | |
"Stuck in the Middle" - correct answer ✔A firm has tried to implement both a
| | | | | | | | | | | | | |
2/6
