MGMT 490 Exam 2 Questions With
Complete Answers
Which of the following is NOT a disadvantage of vertical integration? - ANSWER
decreased product quality
All of the following factors make an alliance strategic, as opposed to just a
convenient business arrangement except - ANSWER a strategic alliance enables
greater opportunities for employee advancement
Which of the following statements about blue-ocean strategies is NOT true? -
ANSWER blue-ocean strategies are offensive strategies that involve a
preemptive strike to secure an advantageous position in a mature maker
segment
Which of the following companies are the best targets for offensive-minded firms
to challenge? - ANSWER market leaders that are vulnerable
Horizontal scope refers to the - ANSWER range of product and service
segments that a firm services within its focal market.
Merger and acquisition strategies - ANSWER are often driven by such strategic
objectives as to expand a company's geographic coverage or extend its
business into new product categories.
Building positions in selected stages of the industry value chain is referred to as
a - ANSWER partial integration strategy
A late-mover advantage does NOT arise when - ANSWER property rights
protections in the form of patents, copyrights, and trademarks prevent the
ready imitation of initial moves
Conditions that create first-mover advantages include all of the following
EXCEPT - ANSWER the costs of pioneering are high relative to the benefits
accrued.
Which of the following is NOT one of the big risks of outsourcing value chain
activities presently performed in-house? - ANSWER A company may be less
flexible in accommodating shifting buyer preferences
Which of the following is NOT one of the additional strategic choices a company
must make once it has decided to employ a particular generic competitive
,strategy? - ANSWER whether to focus on providing services or products to a
limited amount of customers in a market niche
Strategic offensives should be based on - ANSWER those areas of strength
where the company has its greatest competitive advantage over targeted rivals.
Backward integration involves performing industry value chain activities -
ANSWER previously performed by suppliers or other enterprises engaged in
earlier stages of the industry value chain
The most frequently used approach to defending a company's present position
involves actions - ANSWER restricting a challenger's option for initiating a
competitive attack
When is outsourcing NOT beneficial? - ANSWER when internal control over a
particular activity is deemed essential
The mix of performing an activity internally as well as outsourcing in any given
stage of the vertical chain refers to which vertical integration strategy? -
ANSWER a tapered integration strategy
The purpose of defensive strategies is to - ANSWER lower the risk of being
attacked, to weaken the impact of any attack that occurs, and to influence
challengers to aim their efforts at other rivals.
The extent to which a firm engages in the various value chain activities, from
initial activities all the way to after-sales activities, is called - ANSWER vertical
scope.
A firm can pursue vertical integration by all of the following EXCEPT - ANSWER
expanding its range of product and service segments within its product or
service market
All of the following are signals to would-be challengers that retaliation is likely
EXCEPT - ANSWER creating collaborative relationships with other industry
leaders to block new entrants.
Which of the following is NOT an example of a competitively valuable strategic
fit? - ANSWER restricting cross-business linkages among value chain activities
Diversifying into new businesses can be considered a success only if it -
ANSWER builds shareholder value
Related diversification strategies are strong when built upon sharing - ANSWER
competitively valuable resources.
, Diversification into a new industry cannot be considered a success unless it
results in - ANSWER enhanced shareholder value.
To produce added long-term shareholder value, a move to diversify into a new
business must pass three tests the - ANSWER better-off test, the cost-of-entry
test, and the industry attractiveness test
Which of the following makes acquisition an attractive approach to diversifying
into another industry? - ANSWER It is quicker than trying to launch a brand-new
operation, offers an effective way to hurdle entry barriers, and allows the
acquirer to move directly to the task of building a strong position in the target
industry.
Combination related-unrelated diversification strategies have particular appeal
for companies - ANSWER having a mix of valuable competitive assets, covering
the spectrum from generalized to special resources and capabilities.
The drawbacks of an unrelated diversification strategy include - ANSWER very
demanding managerial requirements and limited competitive advantage
potential.
Which of the following best describes economies of scope? - ANSWER
Economies of scope are cost reductions that flow from strategic fit along the
value chains of related businesses.
Relative market share as a measure of competitive strength is calculated by -
ANSWER dividing the business's percentage share of total industry sales volume
by the percentage share held by its largest rival—it is a better indicator of a
business's competitive strength than is a simple percentage measure of market
share
What is the benefit of calculating quantitative attractiveness ratings for the
industries a diversified company has invested in? - ANSWER Calculating
attractiveness ratings is a systematic and reasonably reliable method for
ranking a diversified company's industries from most to least attractive.
A "cash hog" type of business - ANSWER ?????? #12 chapter 8
A company that is already diversified may choose to broaden its business scope
by building positions in new related or unrelated businesses because of all of the
following EXCEPT - ANSWER its top management wants to increase its
compensation
Which of the following refers to cost reductions stemming from strategic fit
along the value chains of related businesses? - ANSWER economies of scope
Complete Answers
Which of the following is NOT a disadvantage of vertical integration? - ANSWER
decreased product quality
All of the following factors make an alliance strategic, as opposed to just a
convenient business arrangement except - ANSWER a strategic alliance enables
greater opportunities for employee advancement
Which of the following statements about blue-ocean strategies is NOT true? -
ANSWER blue-ocean strategies are offensive strategies that involve a
preemptive strike to secure an advantageous position in a mature maker
segment
Which of the following companies are the best targets for offensive-minded firms
to challenge? - ANSWER market leaders that are vulnerable
Horizontal scope refers to the - ANSWER range of product and service
segments that a firm services within its focal market.
Merger and acquisition strategies - ANSWER are often driven by such strategic
objectives as to expand a company's geographic coverage or extend its
business into new product categories.
Building positions in selected stages of the industry value chain is referred to as
a - ANSWER partial integration strategy
A late-mover advantage does NOT arise when - ANSWER property rights
protections in the form of patents, copyrights, and trademarks prevent the
ready imitation of initial moves
Conditions that create first-mover advantages include all of the following
EXCEPT - ANSWER the costs of pioneering are high relative to the benefits
accrued.
Which of the following is NOT one of the big risks of outsourcing value chain
activities presently performed in-house? - ANSWER A company may be less
flexible in accommodating shifting buyer preferences
Which of the following is NOT one of the additional strategic choices a company
must make once it has decided to employ a particular generic competitive
,strategy? - ANSWER whether to focus on providing services or products to a
limited amount of customers in a market niche
Strategic offensives should be based on - ANSWER those areas of strength
where the company has its greatest competitive advantage over targeted rivals.
Backward integration involves performing industry value chain activities -
ANSWER previously performed by suppliers or other enterprises engaged in
earlier stages of the industry value chain
The most frequently used approach to defending a company's present position
involves actions - ANSWER restricting a challenger's option for initiating a
competitive attack
When is outsourcing NOT beneficial? - ANSWER when internal control over a
particular activity is deemed essential
The mix of performing an activity internally as well as outsourcing in any given
stage of the vertical chain refers to which vertical integration strategy? -
ANSWER a tapered integration strategy
The purpose of defensive strategies is to - ANSWER lower the risk of being
attacked, to weaken the impact of any attack that occurs, and to influence
challengers to aim their efforts at other rivals.
The extent to which a firm engages in the various value chain activities, from
initial activities all the way to after-sales activities, is called - ANSWER vertical
scope.
A firm can pursue vertical integration by all of the following EXCEPT - ANSWER
expanding its range of product and service segments within its product or
service market
All of the following are signals to would-be challengers that retaliation is likely
EXCEPT - ANSWER creating collaborative relationships with other industry
leaders to block new entrants.
Which of the following is NOT an example of a competitively valuable strategic
fit? - ANSWER restricting cross-business linkages among value chain activities
Diversifying into new businesses can be considered a success only if it -
ANSWER builds shareholder value
Related diversification strategies are strong when built upon sharing - ANSWER
competitively valuable resources.
, Diversification into a new industry cannot be considered a success unless it
results in - ANSWER enhanced shareholder value.
To produce added long-term shareholder value, a move to diversify into a new
business must pass three tests the - ANSWER better-off test, the cost-of-entry
test, and the industry attractiveness test
Which of the following makes acquisition an attractive approach to diversifying
into another industry? - ANSWER It is quicker than trying to launch a brand-new
operation, offers an effective way to hurdle entry barriers, and allows the
acquirer to move directly to the task of building a strong position in the target
industry.
Combination related-unrelated diversification strategies have particular appeal
for companies - ANSWER having a mix of valuable competitive assets, covering
the spectrum from generalized to special resources and capabilities.
The drawbacks of an unrelated diversification strategy include - ANSWER very
demanding managerial requirements and limited competitive advantage
potential.
Which of the following best describes economies of scope? - ANSWER
Economies of scope are cost reductions that flow from strategic fit along the
value chains of related businesses.
Relative market share as a measure of competitive strength is calculated by -
ANSWER dividing the business's percentage share of total industry sales volume
by the percentage share held by its largest rival—it is a better indicator of a
business's competitive strength than is a simple percentage measure of market
share
What is the benefit of calculating quantitative attractiveness ratings for the
industries a diversified company has invested in? - ANSWER Calculating
attractiveness ratings is a systematic and reasonably reliable method for
ranking a diversified company's industries from most to least attractive.
A "cash hog" type of business - ANSWER ?????? #12 chapter 8
A company that is already diversified may choose to broaden its business scope
by building positions in new related or unrelated businesses because of all of the
following EXCEPT - ANSWER its top management wants to increase its
compensation
Which of the following refers to cost reductions stemming from strategic fit
along the value chains of related businesses? - ANSWER economies of scope
