MAN 4720 EXAM 2 QUESTIONS AND
ANSWERS 100% VERIFIED
Multiproduct Strategy - ANSWER-an action plan the firm uses to compete in different
product markets
Single Business Diversification - ANSWER-More than 95% of revenue comes from a
single business
Dominant Business - ANSWER-Between 70-95% of revenue comes from a single
business
Related Constrained Diversification - ANSWER-All businesses shre product,
technological, and distribution linkages
Related Linked Diversification - ANSWER-Only limited links exist between businesses
Unrelated Diversification - ANSWER-No common links exist between businesses
Economies of Scope - ANSWER-cost savings the firm accrues when it successfully
shares some of its resources and activities between its businesses or transfers
corporate-level core competencies into its businesses
corporate-level core competencies - ANSWER-complex sets of resources and
capabilties that link different businesses, primarily through managerial and technological
knowledge, experience, and expertise
merger - ANSWER-a transaction in which firms agree to combine their operations on a
relatively equal basis
horizontal acquisition - ANSWER-the purchase of a competitor competing in the same
market or markets as the acquiring firm
vertical acquisition - ANSWER-the purchase of a supplier or distributor of one or more
of a firm's goods or services
market power - ANSWER-power that exists when the firm sells its products above
competitive prices or when its costs are lower than those of its primary competitors
premium - ANSWER-occurs when firms pay more than the current market value to
acquire another firm
, operational relatedness - ANSWER-achieved when the firm's businesses successfully
share resources and activities to make and sell their products
corporate relatedness - ANSWER-achieved when corporate level core competencies
are successfully transferred into some of the firm's businesses
strategic business unit - ANSWER-a semi-autonomous unit of a diversified firm with a
collection of related businesses
financial economies - ANSWER-cost savings or higher returns generated when the firm
effectively allocates its financial resources based on investments inside or outside the
firms
multidivisional structure - ANSWER-an organizational structure in which the firm is
organized to generate economies of scope or financial economies
cooperative M-Form - ANSWER-an organizational structure in which horizontal
integration is used so that divisions can share resources and activities
strategic business unit M-form - ANSWER-corporate headquarters personnel try to
transfer corporate-level core competencies into the firm's businesses
competitive M-form - ANSWER-an organizational structure in which there is complete
interdependence between the firm's divisions
acquisition - ANSWER-a transaction in which a firm buys a controlling interest in
another firm with the intention of either making it a subsidiary business or combining it
with its current business or businesses
acquisition strategy - ANSWER-an action plan that the firm develops to successfully
acquire other companies
takeover - ANSWER-a specialized type of acquisition in which the target does not solicit
the acquiring firm's offer
due diligence - ANSWER-the rational process by which acquiring firms evaluate target
firms
divestiture - ANSWER-a transaction in which businesses are sold to other firms or spun
off as independent enterprises
franchising - ANSWER-the licensing of a good or service and business model to
partners for specified fees (usually a signing fee and a percentage of the franchisee's
revenues or profits)
ANSWERS 100% VERIFIED
Multiproduct Strategy - ANSWER-an action plan the firm uses to compete in different
product markets
Single Business Diversification - ANSWER-More than 95% of revenue comes from a
single business
Dominant Business - ANSWER-Between 70-95% of revenue comes from a single
business
Related Constrained Diversification - ANSWER-All businesses shre product,
technological, and distribution linkages
Related Linked Diversification - ANSWER-Only limited links exist between businesses
Unrelated Diversification - ANSWER-No common links exist between businesses
Economies of Scope - ANSWER-cost savings the firm accrues when it successfully
shares some of its resources and activities between its businesses or transfers
corporate-level core competencies into its businesses
corporate-level core competencies - ANSWER-complex sets of resources and
capabilties that link different businesses, primarily through managerial and technological
knowledge, experience, and expertise
merger - ANSWER-a transaction in which firms agree to combine their operations on a
relatively equal basis
horizontal acquisition - ANSWER-the purchase of a competitor competing in the same
market or markets as the acquiring firm
vertical acquisition - ANSWER-the purchase of a supplier or distributor of one or more
of a firm's goods or services
market power - ANSWER-power that exists when the firm sells its products above
competitive prices or when its costs are lower than those of its primary competitors
premium - ANSWER-occurs when firms pay more than the current market value to
acquire another firm
, operational relatedness - ANSWER-achieved when the firm's businesses successfully
share resources and activities to make and sell their products
corporate relatedness - ANSWER-achieved when corporate level core competencies
are successfully transferred into some of the firm's businesses
strategic business unit - ANSWER-a semi-autonomous unit of a diversified firm with a
collection of related businesses
financial economies - ANSWER-cost savings or higher returns generated when the firm
effectively allocates its financial resources based on investments inside or outside the
firms
multidivisional structure - ANSWER-an organizational structure in which the firm is
organized to generate economies of scope or financial economies
cooperative M-Form - ANSWER-an organizational structure in which horizontal
integration is used so that divisions can share resources and activities
strategic business unit M-form - ANSWER-corporate headquarters personnel try to
transfer corporate-level core competencies into the firm's businesses
competitive M-form - ANSWER-an organizational structure in which there is complete
interdependence between the firm's divisions
acquisition - ANSWER-a transaction in which a firm buys a controlling interest in
another firm with the intention of either making it a subsidiary business or combining it
with its current business or businesses
acquisition strategy - ANSWER-an action plan that the firm develops to successfully
acquire other companies
takeover - ANSWER-a specialized type of acquisition in which the target does not solicit
the acquiring firm's offer
due diligence - ANSWER-the rational process by which acquiring firms evaluate target
firms
divestiture - ANSWER-a transaction in which businesses are sold to other firms or spun
off as independent enterprises
franchising - ANSWER-the licensing of a good or service and business model to
partners for specified fees (usually a signing fee and a percentage of the franchisee's
revenues or profits)
