front 1 Economies of scope | back 1 are cost-saving efficiencies that stem directly from strategic fits along the value chains of related businesses. |
front 2 Checking a diversified company's business portfolio for the competitive advantage potential of cross-business strategic fits does not involve determining whether sister business units have value chain match-ups that offer opportunities to | back 2 Employ the same basic competitive approach and pursue the same type of competitive advantage. |
front 3 The top-level executive task of crafting a diversified company's overall or corporate strategy does not include which one of the following? | back 3 Choosing the appropriate value chain for each business the company has entered |
front 4 The three tests for judging whether a particular diversification move can create added long-term value for shareholders are | back 4 The industry attractiveness test, the cost-of-entry test, and the better-off test. |
front 5 Retrenching to a narrower diversification base | back 5 has the advantage of enabling a company to strive for better long-term performance by concentrating on building strong positions in a small number of core businesses and industries and avoiding the mistake of diversifying so broadly that resources and management attention are stretched thinly across many businesses. |
front 6 The difference between a "cash-cow" business and a "cash hog" business is that | back 6 A cash cow business produces large internal cash flows over and above what is needed to build and maintain the business whereas the internal cash flows of a cash hog business are too small to fully fund its operating needs and capital requirements. |
front 7 Diversifying into related businesses where competitively valuable strategic fit benefits can be captured and turned into a competitive advantage over business rivals whose operations do not offer comparable strategic-fit benefits | back 7 is what fuels 1+1=3 gains in shareholder value--the necessary outcome for satisfying the better-off test and proving the business merit of a company's diversification effort. |
front 8 Using relative market share to assess a business's competitive strength is analytically superior to straight percentage measures of market share because relative market share | back 8 is a better indicator of competitive strength than is a simple percentage measure of market share--for instance, a company with a 20% market share is in a much stronger competitive position if its largest rival has a market share of 10% (which means its relative market share is 2.0) that it is if its largest rival has a 30% market share (in which case the company's relative market share is only 0.67). |
front 9 Which of the following is not part of the procedure for evaluating the pluses and minuses of a diversified company's strategy and deciding what actions to take to improve the company's performance? | back 9 Conducting a SWOT analysis of each business the company has diversified into. |
front 10 Which of the following are negatives or disadvantages of pursuing unrelated diversification strategies? | back 10 No potential for competitive advantage beyond any benefits of corporate parenting and what each individual business can generate on its own. |
front 11 Which one of the following is not one of the appeals of unrelated diversification? | back 11 it is quicker and easier to build a competitive advantage over undiversified or less-diversified companies. |