BUSI 4940 EXAM 3 Questions with
Complete Solutions Graded A+
"A dollar today is worth more than a dollar in the future" is a statement that reflects the
time value of money which underlies the concept and utility of net present value
calculations. - ANS: True
Acquisitions, strategic alliances and innovation are different strategies a firm can
choose for either horizontal or vertical diversification. - ANS: False
Advantages of outsourcing can include loss of control, loss of power, and loss of
capabilities. - ANS: False
Alignment - ANS: A condition where organizational elements fit together and reinforce
each other is the definition of which important aspect of successful implementation
All of the answers are correct - ANS: Corporate governance in a public firm is led by the
board of directors. During class lectures we have discussed the role of the board. The
board of directors hires and fires the CEO. The CEO is responsible for strategy and
execution but the board of directors is accountable to shareholders for strategic
direction and performance. If performance is below expectations the following can
happen:
Alliances follow a continuum from an open market transaction or a handshake
agreement to what other forms? Which of the following options are in the proper order. -
ANS: Contractual alliance, equity alliance, joint venture
An example of a strategic alliance is the acquisition of Whole Foods by Amazon and Dr.
Pepper by Keurig - ANS: False
An example of radical innovation is Frito-Lay's innovation of the chip and dip kits to
provide heartier snacking options for new snacking occasions. - ANS: False
Anti-trust legislation was primarily responsible for the creation of conglomerates made
up of unrelated businesses from approximately 1950-1980. Many corporations acquired
unrelated businesses to grow and later divested those same businesses to re-focus on
core business where they could create more advantage. - ANS: True
Conglomerates (large organizations made up of unrelated businesses) were common
after World War II. Companies chose to diversify this way (acquiring a collection of
unrelated businesses) because anti-trust regulation at the time limited their ability to
acquire related companies for diversification. - ANS: True
, Disruptive innovation generally comes from outside of incumbent firms (existing firms)
the industry. FinTech, Telsa, Amazon e-commerce and Skype are examples of
disruptive innovation that came from outside the established industry competitors. -
ANS: True
Diversification along the supply chain - represented as a horizontal illustration of the
sequence of all activities performed by a firm to turn raw materials into finished product
sold to a buyer - represents vertical diversification - ANS: True
False - ANS: A strategy has no value until it is implemented. Nearly all strategies are
effectively implemented.
False - ANS: Blue ocean innovation relates is a type of innovation that is characterized
by sustainability - innovation that is good for the earth.
False - ANS: Developing growth strategy along the value or supply chain is known as
horizontal diversification.
General Electric was a company that endured throughout history by acquring unrelated
businesses (conglomerate). One of the few remaining corporate conglomerates,
General Electric finally failed. In a crisis, divisions of the company are being sold off
(divested) and General Electric will cease to be a company.
This example shows that related diversification usually does not create value for a
company. - ANS: False
Historically, many companies destroyed value by diversifying into related areas rather
than unrelated areas. - ANS: False
In the lessons, 8 steps to successful change were disussed. Which of the answers does
not reflect some of the steps that are necessary for successful change? - ANS: Having
a bottom up versus leader led effort
In the Make, Buy and Ally framework, Make means do it in-house, Buy means acquire
and Ally means to execute in some sort of alliance with another company. - ANS: True
Kohl's cash - when you spend $25 today you get $10 in Kohl's cash but you have to use
it within a specified window is an example of which of the revenue generating methods
discussed: - ANS: Frequency and higher spend
Part of the Internal Analysis is establishing the current operating (financial) and
organization health of the firm (Section A). Included in this part of the Internal Analysis
are which of the following assessments: - ANS: The company's operational, financial,
market performance and their organizational health. We benchmark the company's
performance against the industry or key competitive group and place them in the
organizational performance matrix which identifies the company as being in crisis,
desired state, complacent or troubled.
Complete Solutions Graded A+
"A dollar today is worth more than a dollar in the future" is a statement that reflects the
time value of money which underlies the concept and utility of net present value
calculations. - ANS: True
Acquisitions, strategic alliances and innovation are different strategies a firm can
choose for either horizontal or vertical diversification. - ANS: False
Advantages of outsourcing can include loss of control, loss of power, and loss of
capabilities. - ANS: False
Alignment - ANS: A condition where organizational elements fit together and reinforce
each other is the definition of which important aspect of successful implementation
All of the answers are correct - ANS: Corporate governance in a public firm is led by the
board of directors. During class lectures we have discussed the role of the board. The
board of directors hires and fires the CEO. The CEO is responsible for strategy and
execution but the board of directors is accountable to shareholders for strategic
direction and performance. If performance is below expectations the following can
happen:
Alliances follow a continuum from an open market transaction or a handshake
agreement to what other forms? Which of the following options are in the proper order. -
ANS: Contractual alliance, equity alliance, joint venture
An example of a strategic alliance is the acquisition of Whole Foods by Amazon and Dr.
Pepper by Keurig - ANS: False
An example of radical innovation is Frito-Lay's innovation of the chip and dip kits to
provide heartier snacking options for new snacking occasions. - ANS: False
Anti-trust legislation was primarily responsible for the creation of conglomerates made
up of unrelated businesses from approximately 1950-1980. Many corporations acquired
unrelated businesses to grow and later divested those same businesses to re-focus on
core business where they could create more advantage. - ANS: True
Conglomerates (large organizations made up of unrelated businesses) were common
after World War II. Companies chose to diversify this way (acquiring a collection of
unrelated businesses) because anti-trust regulation at the time limited their ability to
acquire related companies for diversification. - ANS: True
, Disruptive innovation generally comes from outside of incumbent firms (existing firms)
the industry. FinTech, Telsa, Amazon e-commerce and Skype are examples of
disruptive innovation that came from outside the established industry competitors. -
ANS: True
Diversification along the supply chain - represented as a horizontal illustration of the
sequence of all activities performed by a firm to turn raw materials into finished product
sold to a buyer - represents vertical diversification - ANS: True
False - ANS: A strategy has no value until it is implemented. Nearly all strategies are
effectively implemented.
False - ANS: Blue ocean innovation relates is a type of innovation that is characterized
by sustainability - innovation that is good for the earth.
False - ANS: Developing growth strategy along the value or supply chain is known as
horizontal diversification.
General Electric was a company that endured throughout history by acquring unrelated
businesses (conglomerate). One of the few remaining corporate conglomerates,
General Electric finally failed. In a crisis, divisions of the company are being sold off
(divested) and General Electric will cease to be a company.
This example shows that related diversification usually does not create value for a
company. - ANS: False
Historically, many companies destroyed value by diversifying into related areas rather
than unrelated areas. - ANS: False
In the lessons, 8 steps to successful change were disussed. Which of the answers does
not reflect some of the steps that are necessary for successful change? - ANS: Having
a bottom up versus leader led effort
In the Make, Buy and Ally framework, Make means do it in-house, Buy means acquire
and Ally means to execute in some sort of alliance with another company. - ANS: True
Kohl's cash - when you spend $25 today you get $10 in Kohl's cash but you have to use
it within a specified window is an example of which of the revenue generating methods
discussed: - ANS: Frequency and higher spend
Part of the Internal Analysis is establishing the current operating (financial) and
organization health of the firm (Section A). Included in this part of the Internal Analysis
are which of the following assessments: - ANS: The company's operational, financial,
market performance and their organizational health. We benchmark the company's
performance against the industry or key competitive group and place them in the
organizational performance matrix which identifies the company as being in crisis,
desired state, complacent or troubled.
