BUSI 4940 Test 2
Simplified Exam Questions with 100% Correct Answers
Economy of Scope - Activities where the average cost of producing two
different products is less when delivered together than separately
Management Skill - The individual and collective abilities of a firm's
management team to engage in value-creating activities
Synergy - Action between different elements of a system that creates more
value together than the elements create separately
Six S's - Employing SLACK
Creating SYNERGY
Leveraging SHARED knowledge
Utilizing SIMILAR models for success
SPREADING human and financial capital to its best use
Providing a STEPPING STONE for the company to a completely new business
sector
Core Competencies / Shared Knowledge - Collective knowledge that can be
distributed throughout the organization to create value
Business Model - A method to enable the creation and exchange of value
between companies and their customers
,Dominant Logic - A conceptualization of a business, or a set of rules for
competition, that applies to seemingly unrelated product markets or industries
Internal Capital Market - The movement of funds, talent, or knowledge from
unit to unit directed by the leaders of the firm
Hubris - Excessive pride, arrogance, or overconfidence
Sunk Cost Fallacy - The belief of managers that investment in a failed
acquisition must continue because significant amounts have already been invested.
Managers make this mistake when they act on their gut feelings rather than
data/research
BCG Matrix: - Cash Cows - High market share but low growth and can
generate large cash flows that can be used to fund growth businesses. (Typically
minimize investments in cash cows bc you want to milk it).
Stars - High Share and High Growth (Heavily invest in these units to maintain /
improve position over time).
Question Marks - Low Market Share, High Growth Rate (Require significant
investment and effective strategic management. Can become stars, but can also, if
managed poorly, become a dog).
Dogs - Low share and low growth (Add little profitability to a company's overall
portfolio business.) Divest.
Greenfield Entry - Entry into an adjacent market by a firm that opens its own
operation
, Acquisition - The purchase of another company, or its assets
Front End Resource: Brands - Greenfield Entry - Brands well-known in the
new markets and little advertising needed
Acquisition - Brands not well-known in the new market and heavy advertising will
be required
Front End Resource: Customers - Greenfield Entry - Customers in new
markets are similar to existing customers
Acquisition - Customers in new markets will be very different from existing ones
Front End Resources: Channels - Greenfield Entry - Many channels available
that the firm can easily access
Acquisition - Few channels available or access to channels is difficult and
expensive
Back End Resources: Human Capital - Greenfield Entry - Standardized
knowledge and skills that can be easily gained
Acquisition - Unique Knowledge and skill
Back End Resources: Technology - Greenfield Entry - New technology
integrates easily with existing processes
Acquisition - New technology does not integrate easily with existing process
Back End Resources: Scale - Greenfield Entry - Economies of scale add few, if
any, advantages
Simplified Exam Questions with 100% Correct Answers
Economy of Scope - Activities where the average cost of producing two
different products is less when delivered together than separately
Management Skill - The individual and collective abilities of a firm's
management team to engage in value-creating activities
Synergy - Action between different elements of a system that creates more
value together than the elements create separately
Six S's - Employing SLACK
Creating SYNERGY
Leveraging SHARED knowledge
Utilizing SIMILAR models for success
SPREADING human and financial capital to its best use
Providing a STEPPING STONE for the company to a completely new business
sector
Core Competencies / Shared Knowledge - Collective knowledge that can be
distributed throughout the organization to create value
Business Model - A method to enable the creation and exchange of value
between companies and their customers
,Dominant Logic - A conceptualization of a business, or a set of rules for
competition, that applies to seemingly unrelated product markets or industries
Internal Capital Market - The movement of funds, talent, or knowledge from
unit to unit directed by the leaders of the firm
Hubris - Excessive pride, arrogance, or overconfidence
Sunk Cost Fallacy - The belief of managers that investment in a failed
acquisition must continue because significant amounts have already been invested.
Managers make this mistake when they act on their gut feelings rather than
data/research
BCG Matrix: - Cash Cows - High market share but low growth and can
generate large cash flows that can be used to fund growth businesses. (Typically
minimize investments in cash cows bc you want to milk it).
Stars - High Share and High Growth (Heavily invest in these units to maintain /
improve position over time).
Question Marks - Low Market Share, High Growth Rate (Require significant
investment and effective strategic management. Can become stars, but can also, if
managed poorly, become a dog).
Dogs - Low share and low growth (Add little profitability to a company's overall
portfolio business.) Divest.
Greenfield Entry - Entry into an adjacent market by a firm that opens its own
operation
, Acquisition - The purchase of another company, or its assets
Front End Resource: Brands - Greenfield Entry - Brands well-known in the
new markets and little advertising needed
Acquisition - Brands not well-known in the new market and heavy advertising will
be required
Front End Resource: Customers - Greenfield Entry - Customers in new
markets are similar to existing customers
Acquisition - Customers in new markets will be very different from existing ones
Front End Resources: Channels - Greenfield Entry - Many channels available
that the firm can easily access
Acquisition - Few channels available or access to channels is difficult and
expensive
Back End Resources: Human Capital - Greenfield Entry - Standardized
knowledge and skills that can be easily gained
Acquisition - Unique Knowledge and skill
Back End Resources: Technology - Greenfield Entry - New technology
integrates easily with existing processes
Acquisition - New technology does not integrate easily with existing process
Back End Resources: Scale - Greenfield Entry - Economies of scale add few, if
any, advantages
