BADM 482 EXAM 2 QUESTIONS AND
ANSWERS
Business-level strategies are concerned specifically with - ANSWER-creating
differences between the firm's position and its competitors.
A firm's core strategy is its ____ strategy - ANSWER-Business
The integrated cost leadership/differentiation strategy is superior to the other
business-level strategies. - ANSWER-False
As the television industry has changed in the last few decades from just three major
networks to a multiplicity of networks, one of the major aspects of business strategy
for the newer networks is ____ than the traditional networks. - ANSWER-narrower
target market
All of the following are ways that a good or service can be differentiated EXCEPT -
ANSWER-economies of scale and efficient operations
Ever-improving levels of efficiency enhance profit margins for a cost-leader. This
effects which of the five forces of industry structure most directly? - ANSWER-
Potential entrants
An entrepreneur is investigating starting a company that provides tax advice to small
companies. In order to position his company differently from the existing competitors,
the entrepreneur must - ANSWER-provide tax advice either in a different manner or
provide a different kind of tax service than competitors.
The difference between the cost leadership and differentiation business-level
strategies, and the focused cost leadership and focused differentiation strategies, is
their basis for customer value. - ANSWER-False
Walmart's change in strategy to attract more upscale customers will likely succeed
because cost leaders are good at differentiating. - ANSWER-False
Firms use the integrated cost leadership/differentiation strategy because - ANSWER-
most consumers want to pay a low price for products with somewhat highly
differentiated features
The focused differentiation strategy differs from the differentiation strategy in that -
ANSWER-focused differentiators target a narrower customer market.
, Viewing the world through the customer's eyes and constantly seeking ways to
create more value for the company enhances - ANSWER-affiliation with the
customer.
The ultimate test of the value of a corporate-level strategy is whether the -
ANSWER-businesses in the portfolio are worth more under the management of the
company in question than they would be under any other ownership.
Which of the following resources are more likely to create value in the diversification
process? - ANSWER-Tacit knowledge
All of Krispy Kreme's revenues come from its one main product, doughnuts. It can be
considered a classic example of a firm following a related constrained strategy. -
ANSWER-False
A firm that earns less than 70 percent of revenue from its dominant business and
has direct connections between its businesses is engaging in ____ diversification. -
ANSWER-related constrained
The main difference between the related constrained level of diversification and the
related linked level of diversification is - ANSWER-the level of resources and
activities shared among the businesses.
A major advantage of diversification is that overall monitoring costs are reduced,
since each separate business comes under the control of corporate headquarters. -
ANSWER-False
Operational relatedness is created by ___________of - ANSWER-sharing; activities.
Usually a company is classified as a single business firm when revenues generated
by the dominant business are greater than ____ percent. - ANSWER-95
Firms use corporate-level diversification strategies for all the following reasons
EXCEPT - ANSWER-value-diversifying.
Corporate-level strategy is concerned with ____ and how to manage these
businesses. - ANSWER-what product markets and businesses the firm should be in
Walt Disney Company has successfully used related diversification to create value
by - ANSWER-sharing activities and transferring core competencies.
Economies of scope are cost savings resulting from a firm successfully leveraging,
either through sharing or transferring, some of its capabilities and competencies
developed in one business to another business. - ANSWER-True
Acquisitions to increase market power require that the firm have a(n) ____
diversification strategy - ANSWER-related
ANSWERS
Business-level strategies are concerned specifically with - ANSWER-creating
differences between the firm's position and its competitors.
A firm's core strategy is its ____ strategy - ANSWER-Business
The integrated cost leadership/differentiation strategy is superior to the other
business-level strategies. - ANSWER-False
As the television industry has changed in the last few decades from just three major
networks to a multiplicity of networks, one of the major aspects of business strategy
for the newer networks is ____ than the traditional networks. - ANSWER-narrower
target market
All of the following are ways that a good or service can be differentiated EXCEPT -
ANSWER-economies of scale and efficient operations
Ever-improving levels of efficiency enhance profit margins for a cost-leader. This
effects which of the five forces of industry structure most directly? - ANSWER-
Potential entrants
An entrepreneur is investigating starting a company that provides tax advice to small
companies. In order to position his company differently from the existing competitors,
the entrepreneur must - ANSWER-provide tax advice either in a different manner or
provide a different kind of tax service than competitors.
The difference between the cost leadership and differentiation business-level
strategies, and the focused cost leadership and focused differentiation strategies, is
their basis for customer value. - ANSWER-False
Walmart's change in strategy to attract more upscale customers will likely succeed
because cost leaders are good at differentiating. - ANSWER-False
Firms use the integrated cost leadership/differentiation strategy because - ANSWER-
most consumers want to pay a low price for products with somewhat highly
differentiated features
The focused differentiation strategy differs from the differentiation strategy in that -
ANSWER-focused differentiators target a narrower customer market.
, Viewing the world through the customer's eyes and constantly seeking ways to
create more value for the company enhances - ANSWER-affiliation with the
customer.
The ultimate test of the value of a corporate-level strategy is whether the -
ANSWER-businesses in the portfolio are worth more under the management of the
company in question than they would be under any other ownership.
Which of the following resources are more likely to create value in the diversification
process? - ANSWER-Tacit knowledge
All of Krispy Kreme's revenues come from its one main product, doughnuts. It can be
considered a classic example of a firm following a related constrained strategy. -
ANSWER-False
A firm that earns less than 70 percent of revenue from its dominant business and
has direct connections between its businesses is engaging in ____ diversification. -
ANSWER-related constrained
The main difference between the related constrained level of diversification and the
related linked level of diversification is - ANSWER-the level of resources and
activities shared among the businesses.
A major advantage of diversification is that overall monitoring costs are reduced,
since each separate business comes under the control of corporate headquarters. -
ANSWER-False
Operational relatedness is created by ___________of - ANSWER-sharing; activities.
Usually a company is classified as a single business firm when revenues generated
by the dominant business are greater than ____ percent. - ANSWER-95
Firms use corporate-level diversification strategies for all the following reasons
EXCEPT - ANSWER-value-diversifying.
Corporate-level strategy is concerned with ____ and how to manage these
businesses. - ANSWER-what product markets and businesses the firm should be in
Walt Disney Company has successfully used related diversification to create value
by - ANSWER-sharing activities and transferring core competencies.
Economies of scope are cost savings resulting from a firm successfully leveraging,
either through sharing or transferring, some of its capabilities and competencies
developed in one business to another business. - ANSWER-True
Acquisitions to increase market power require that the firm have a(n) ____
diversification strategy - ANSWER-related
