MGMT 481 Test 2 Exam 2023 Update

MGMT 481 Test 2 Exam 2023 Update T/F: In ChapterCase 8, CEO Jeffrey Immelt restructured GE's portfolio partly because its future performance potential was too reliant on the GE Capital division. - ANS-True T/F: Corporate-level strategy involves the decisions made and actions taken while deciding which industries and markets to pursue simultaneously. - ANS-True T/F: A key component to formulating corporate-level strategy is the "make" or "buy" decisions. - ANS-True T/F: Industry value chains are also called vertical value chains. - ANS-True T/F: Investment in specialized assets is a huge risk of vertical integration. - ANS-False T/F: Gradually moving an activity from internal to an outside firm is called taper integration. - ANS-False T/F: Although Google is active in many different businesses, more than 95 percent of its revenues come from online advertising. Therefore, Google can be considered a firm pursuing a related-linked strategy. - ANS-False T/F: General Electric is an example of a firm that is following the dominant business diversification strategy. - ANS-False T/F: The Indian Tata Group and the Asian software company TCS are firms that make less than 70 percent of revenues from a single business unit and have few, if any, linkages among their businesses. These firms are clearly following an unrelated diversification strategy. - ANS-True T/F: The most challenging diversification strategy is one in which the firm must create new core competencies while pursuing new market opportunities. - ANS-True T/F: Research indicates that low levels of diversification are generally associated with higher overall firm performance - ANS-False T/F: Corporate diversification strategy leads to superior performance only if the individual businesses are worth more under the company's management than if managed individually. - ANS-True T/F: The Boston Consulting Group (BCG) growth-share matrix is a tool used by firms to determine the costs and quality of its offerings. - ANS-False T/F: When it comes to accessing capital and value creation, a diversified firm should always choose its internal capital market over external capital markets. - ANS-False T/F: A firm's overall corporate strategy is most concerned with determining levels of vertical integration as well as levels of diversification. - ANS-True ChapterCase 8 highlights the corporate-level strategy of General Electric. As noted, CEO Jeffrey Immelt decided to refocus GE's portfolio of businesses and leverage the firm's core competencies in industrial engineering while pursuing future-growth industries. The two industries CEO Immelt had decided will provide strategic importance to the firm are ___________ and ____________. A. Home appliances; entertainment B. The green economy; health care C. Capital markets; information technology D. Consumer electronics; education - ANS-B. Corporate strategy is concerned with determining the boundaries of the firm among geographic, vertical, and product/service dimensions. This is referred to as: A. Economic scope. B. The scope of the firm. C. Multidimensional mapping. D. Boundary spanning. - ANS-B. Managers wishing to diversify the firm must remember that: A. A single-business diversification strategy generally works best. B. Forward integration is more successful than is backward integration. C. Successful diversification must be aligned with and strengthen a firm's business strategy. D. It is competitively advantageous to shrink the size and scope of most firms. - ANS-C. All of the following are decisions that managers must make when formulating corporate strategy EXCEPT: A. What stages of the industry value chain to participate in. Continues...