BSG Final Exam Questions with
Complete Solutions16
Brinker International operates restaurants in several different segments of the casual dining
market. This is
a. a relatively high level of diversification.
b. an example of product diversification.
c. unlikely to reduce variability in the firm's profitability since the restaurants are all in the
casual dining category.
d. an example of related linked diversification. - ANSWERS-b. an example of product
diversification.
On the most basic level, corporate-level strategy is concerned with ____ and how to manage
these businesses.
a. whether the firm should invest in global or domestic businesses
b. what product markets and businesses the firm should be in
c. whether the portfolio of businesses should generate immediate above-average returns or
should be troubled businesses which will create above-average returns only after restructuring
d. whether to integrate backward or forward. - ANSWERS-b. what product markets and
businesses the firm should be in
Which acquisition would be considered the LEAST related?
a. a candy manufacturer purchases a chemical laboratory specializing in food flavorings.
b. a chain of garden centers acquires a landscape architecture firm.
c. a hospital acquires a long-term care nursing home.
d. an upscale "white-tablecloth" restaurant chain acquires a travel agency - ANSWERS-d. an
upscale "white-tablecloth" restaurant chain acquires a travel agency
,The more "constrained" the relatedness of diversification,
a. the less likely the firm's portfolio of businesses will reduce the firm's variability in profitability.
b. the wider the variation in the portfolio of businesses owned by the firm.
c. the more links there are among the businesses owned by an organization.
d. lower the proportion of total organizational revenue derived from the dominant-business. -
ANSWERS-c. the more links there are among the businesses owned by an organization.
Which of the following is NOT a limit to vertical integration?
a. bureaucratic costs
b. the loss of flexibility through investment in specific technologies
c. capacity balance and coordination problems from changes in demand
d. imitation of core technology by potential competitors - ANSWERS-d. imitation of core
technology by potential competitors
Horizontal acquisitions in the video rental industry are typically intended to
a. take advantage of innovations created by the other firm.
b. reduce some of the overcapacity in the industry.
c. control more parts of the value chain.
d. overcome barriers to entry - ANSWERS-b. reduce some of the overcapacity in the industry.
Foreign firms seeking to acquire U.S. firms are interested in all of the following EXCEPT
a. gaining access to the U.S. company brand names.
b. gaining access to critical resources held by U.S. companies.
c. diversifying into unrelated industries in order to broaden their market scope.
d. acquiring relationships with dealers through horizontal acquisitions. - ANSWERS-d. acquiring
relationships with dealers through horizontal acquisitions.
, Researchers have found that shareholders of acquired firms often
a. earn above-average returns.
b. earn below-average returns.
c. earn close to zero as a result of the acquisition.
d. are not affected by the acquisition. - ANSWERS-a. earn above-average returns.
The fastest and easiest way for a firm to diversify its portfolio of businesses is through
acquisition because
a. of barriers to entry in many industries.
b. it is difficult for companies to develop products that differ from their current product line
c. innovation in both the acquired and the acquiring firm is enhanced by the exchange of
competencies resulting from acquisition
d. unrelated acquisitions are usually uncomplicated because the acquired firm is allowed to
continue to function independently as it did before acquisition - ANSWERS-b. it is difficult for
companies to develop products that differ from their current product line
Related acquisitions to build market power
a. are likely to undergo regulatory review.
b. are rarely permitted to occur across international borders.
c. typically involve a firm purchasing one of its suppliers or distributors.
d. concentrate on capturing value at more than one stage in the value chain. - ANSWERS-a. are
likely to undergo regulatory review.
International strategy refers to a(an)
a. action plan pursued by American companies to compete against foreign companies operating
in the United States.
b. strategy through which the firm sells products in markets outside the firm's domestic market.
Complete Solutions16
Brinker International operates restaurants in several different segments of the casual dining
market. This is
a. a relatively high level of diversification.
b. an example of product diversification.
c. unlikely to reduce variability in the firm's profitability since the restaurants are all in the
casual dining category.
d. an example of related linked diversification. - ANSWERS-b. an example of product
diversification.
On the most basic level, corporate-level strategy is concerned with ____ and how to manage
these businesses.
a. whether the firm should invest in global or domestic businesses
b. what product markets and businesses the firm should be in
c. whether the portfolio of businesses should generate immediate above-average returns or
should be troubled businesses which will create above-average returns only after restructuring
d. whether to integrate backward or forward. - ANSWERS-b. what product markets and
businesses the firm should be in
Which acquisition would be considered the LEAST related?
a. a candy manufacturer purchases a chemical laboratory specializing in food flavorings.
b. a chain of garden centers acquires a landscape architecture firm.
c. a hospital acquires a long-term care nursing home.
d. an upscale "white-tablecloth" restaurant chain acquires a travel agency - ANSWERS-d. an
upscale "white-tablecloth" restaurant chain acquires a travel agency
,The more "constrained" the relatedness of diversification,
a. the less likely the firm's portfolio of businesses will reduce the firm's variability in profitability.
b. the wider the variation in the portfolio of businesses owned by the firm.
c. the more links there are among the businesses owned by an organization.
d. lower the proportion of total organizational revenue derived from the dominant-business. -
ANSWERS-c. the more links there are among the businesses owned by an organization.
Which of the following is NOT a limit to vertical integration?
a. bureaucratic costs
b. the loss of flexibility through investment in specific technologies
c. capacity balance and coordination problems from changes in demand
d. imitation of core technology by potential competitors - ANSWERS-d. imitation of core
technology by potential competitors
Horizontal acquisitions in the video rental industry are typically intended to
a. take advantage of innovations created by the other firm.
b. reduce some of the overcapacity in the industry.
c. control more parts of the value chain.
d. overcome barriers to entry - ANSWERS-b. reduce some of the overcapacity in the industry.
Foreign firms seeking to acquire U.S. firms are interested in all of the following EXCEPT
a. gaining access to the U.S. company brand names.
b. gaining access to critical resources held by U.S. companies.
c. diversifying into unrelated industries in order to broaden their market scope.
d. acquiring relationships with dealers through horizontal acquisitions. - ANSWERS-d. acquiring
relationships with dealers through horizontal acquisitions.
, Researchers have found that shareholders of acquired firms often
a. earn above-average returns.
b. earn below-average returns.
c. earn close to zero as a result of the acquisition.
d. are not affected by the acquisition. - ANSWERS-a. earn above-average returns.
The fastest and easiest way for a firm to diversify its portfolio of businesses is through
acquisition because
a. of barriers to entry in many industries.
b. it is difficult for companies to develop products that differ from their current product line
c. innovation in both the acquired and the acquiring firm is enhanced by the exchange of
competencies resulting from acquisition
d. unrelated acquisitions are usually uncomplicated because the acquired firm is allowed to
continue to function independently as it did before acquisition - ANSWERS-b. it is difficult for
companies to develop products that differ from their current product line
Related acquisitions to build market power
a. are likely to undergo regulatory review.
b. are rarely permitted to occur across international borders.
c. typically involve a firm purchasing one of its suppliers or distributors.
d. concentrate on capturing value at more than one stage in the value chain. - ANSWERS-a. are
likely to undergo regulatory review.
International strategy refers to a(an)
a. action plan pursued by American companies to compete against foreign companies operating
in the United States.
b. strategy through which the firm sells products in markets outside the firm's domestic market.
