BUSI 4940 Exam 2 Test Questions and
All Correct Answers.
Business Unit Strategy - Answer The search for competitive advantage within a single
industry, market, or line of business
Corporate Strategy - Answer The search for value and competitive advantages through
participation in several different industries and markets
Vertical Integration - Answer Movement into adjacent markets by a firm along its own value
chain. Movement in the direction of raw materials is backward integration. Movement in the
direction of sales, service, or warranty operations is forward integration
Horizontal Diversification - Answer The movement into adjacent, or unrelated, market that
isn't along a firm's own value chain
Single Business - Answer A firm earning more than 95 percent of the revenues from a single
line of business
Dominant Vertical Business - Answer 70+ percent of revenue from main line of business,
remainder from businesses located along value chain
Dominant Business - Answer 70+ percent of revenue from main line, remainder from other
lines across value chains
Related-constrained Diversification - Answer less than 70% of revenue from main line, other
lines share product, technological, and distribution linkages with main business
Related-linked Diversification - Answer Firm operates in related markets, but fewer linkages
exist between new and existing markets that the elements create separately
Unrelated Diversified Firm - Answer Competes in product categories and markets with few, if
any, links between them
(Six S's of CA) Employ Slack - Answer Unused Resources
Management Skills
, (Six S's of CA) Creating Synergy - Answer Disney whole exceeds sum of its parts
(Six S's of CA) Shared Knowledge - Answer Leveraging core competencies
(Six S's of CA) Similar Business Models - Answer Dominant Logic: A conceptualization of a
business, or a set of rules for competition, that applies to seemingly unrelated product markets
or industries
(Six S's of CA) Spreading Capital - Answer Internal Capital Market (financial and talent)
Spread Risk (Cyclical Businesses)
(Six S's of CA) Stepping Stone to a New Industry - Answer exit dying business
Greenfield Entry (Build It Yourself) - Answer Existing resources move from existing to new
business
Brand, customer knowledge, technology overlap
Speed not essential
Acquisition Entry (Buy your way in) - Answer Resources don't move from existing to new
business
No brand equity, new customers, new technology
Speed essential
Acquisition Integration Strategies - Answer Bury - Acquirer completely absorbs target
Build - Together build a new integrated organization
Blend - Loose coupling of the two, leverage target's best attributes, take over everything else
Bolt-on - Remain two companies with one owner
All Correct Answers.
Business Unit Strategy - Answer The search for competitive advantage within a single
industry, market, or line of business
Corporate Strategy - Answer The search for value and competitive advantages through
participation in several different industries and markets
Vertical Integration - Answer Movement into adjacent markets by a firm along its own value
chain. Movement in the direction of raw materials is backward integration. Movement in the
direction of sales, service, or warranty operations is forward integration
Horizontal Diversification - Answer The movement into adjacent, or unrelated, market that
isn't along a firm's own value chain
Single Business - Answer A firm earning more than 95 percent of the revenues from a single
line of business
Dominant Vertical Business - Answer 70+ percent of revenue from main line of business,
remainder from businesses located along value chain
Dominant Business - Answer 70+ percent of revenue from main line, remainder from other
lines across value chains
Related-constrained Diversification - Answer less than 70% of revenue from main line, other
lines share product, technological, and distribution linkages with main business
Related-linked Diversification - Answer Firm operates in related markets, but fewer linkages
exist between new and existing markets that the elements create separately
Unrelated Diversified Firm - Answer Competes in product categories and markets with few, if
any, links between them
(Six S's of CA) Employ Slack - Answer Unused Resources
Management Skills
, (Six S's of CA) Creating Synergy - Answer Disney whole exceeds sum of its parts
(Six S's of CA) Shared Knowledge - Answer Leveraging core competencies
(Six S's of CA) Similar Business Models - Answer Dominant Logic: A conceptualization of a
business, or a set of rules for competition, that applies to seemingly unrelated product markets
or industries
(Six S's of CA) Spreading Capital - Answer Internal Capital Market (financial and talent)
Spread Risk (Cyclical Businesses)
(Six S's of CA) Stepping Stone to a New Industry - Answer exit dying business
Greenfield Entry (Build It Yourself) - Answer Existing resources move from existing to new
business
Brand, customer knowledge, technology overlap
Speed not essential
Acquisition Entry (Buy your way in) - Answer Resources don't move from existing to new
business
No brand equity, new customers, new technology
Speed essential
Acquisition Integration Strategies - Answer Bury - Acquirer completely absorbs target
Build - Together build a new integrated organization
Blend - Loose coupling of the two, leverage target's best attributes, take over everything else
Bolt-on - Remain two companies with one owner
