BUSI 4940 Chapter 6 (Textbook) Latest
Questions with Solved Solutions 2025-
2026 Update.
what are corporate-level strategies? - Answer -strategies firms use to diversify their
operations from a single business competing in a single market into several product markets—
most commonly, into several businesses
-specifies actions a firm takes to gain a competitive advantage by selecting and managing a
group of different businesses competing in different product markets
-help companies to select new strategic positions—positions that are expected to increase the
firm's value
why do firms use corporate-level strategies? - Answer -a means to grow revenues and profits
-pursue defensive or offensive strategies that realize growth but have different strategic intents
-pursue market development by entering different geographic markets
-acquire competitors (horizontal integration) or buy a supplier or customer (vertical integration)
what are the two types of strategies that firms form? - Answer -corporate-level (company-
wide)
-business-level (competitive)
Corporate-level strategy is concerned with two key issues: - Answer 1. in what product
markets and businesses the firm should compete
2. how corporate headquarters should manage those businesses
For the diversified company, a business-level strategy - Answer must be selected for each of
the businesses in which the firm has decided to compete.
a corporate-level strategy's value is ultimately determined by - Answer the degree to which
"the businesses in the portfolio are worth more under the management of the company than
they would be under any other ownership
an effective corporate-level strategy creates, across all of a firm's businesses, - Answer -
aggregate returns that exceed what those returns would be without the strategy
-contributes to the firm's strategic competitiveness and its ability to earn above-average returns
Product diversification - Answer -a primary form of corporate-level strategies
, -concerns the scope of the markets and industries in which the firm competes as well as "how
managers buy, create, and sell different businesses to match skills and strengths with
opportunities presented to the firm.
Successful diversification is expected to - Answer -reduce variability in the firm's profitability
as earnings are generated from different businesses
-can also provide firms with the flexibility to shift their investments to markets where the
greatest returns are possible rather than being dependent on only one or a few markets.
Because firms incur development and monitoring costs when diversifying, - Answer the ideal
portfolio of businesses balances diversification's costs and benefits.
related diversification - Answer signifies a moderate to high level of diversification for the
firm
the related constrained strategy - Answer the sharing of resources
the related linked strategy - Answer the transferring of core competencies across the firm's
different businesses
related diversification - Answer -A firm is related through its diversification when its
businesses share several links.
-For example, businesses may share product markets (goods or services), technologies, or
distribution channels. The more links among businesses, the more "constrained" is the level of
diversification
unrelated diversification - Answer refers to the absence of direct links between businesses.
Low levels of Diversification - Types - Answer -Single Business: 95% or more of revenue
comes from a single business
-Dominant Business: Between 70 and 95% of revenue comes from a single business
Moderate to High Levels of Diversification - Types - Answer -Related Constrained: Less than
70% of revenue comes from the dominant business, and all businesses share product,
technological, and distribution linkages
-Related Linked/Mixed Related and Unrelated: Less than 70% of revenue comes from the
dominant business. and there are only limited links between businesses
Questions with Solved Solutions 2025-
2026 Update.
what are corporate-level strategies? - Answer -strategies firms use to diversify their
operations from a single business competing in a single market into several product markets—
most commonly, into several businesses
-specifies actions a firm takes to gain a competitive advantage by selecting and managing a
group of different businesses competing in different product markets
-help companies to select new strategic positions—positions that are expected to increase the
firm's value
why do firms use corporate-level strategies? - Answer -a means to grow revenues and profits
-pursue defensive or offensive strategies that realize growth but have different strategic intents
-pursue market development by entering different geographic markets
-acquire competitors (horizontal integration) or buy a supplier or customer (vertical integration)
what are the two types of strategies that firms form? - Answer -corporate-level (company-
wide)
-business-level (competitive)
Corporate-level strategy is concerned with two key issues: - Answer 1. in what product
markets and businesses the firm should compete
2. how corporate headquarters should manage those businesses
For the diversified company, a business-level strategy - Answer must be selected for each of
the businesses in which the firm has decided to compete.
a corporate-level strategy's value is ultimately determined by - Answer the degree to which
"the businesses in the portfolio are worth more under the management of the company than
they would be under any other ownership
an effective corporate-level strategy creates, across all of a firm's businesses, - Answer -
aggregate returns that exceed what those returns would be without the strategy
-contributes to the firm's strategic competitiveness and its ability to earn above-average returns
Product diversification - Answer -a primary form of corporate-level strategies
, -concerns the scope of the markets and industries in which the firm competes as well as "how
managers buy, create, and sell different businesses to match skills and strengths with
opportunities presented to the firm.
Successful diversification is expected to - Answer -reduce variability in the firm's profitability
as earnings are generated from different businesses
-can also provide firms with the flexibility to shift their investments to markets where the
greatest returns are possible rather than being dependent on only one or a few markets.
Because firms incur development and monitoring costs when diversifying, - Answer the ideal
portfolio of businesses balances diversification's costs and benefits.
related diversification - Answer signifies a moderate to high level of diversification for the
firm
the related constrained strategy - Answer the sharing of resources
the related linked strategy - Answer the transferring of core competencies across the firm's
different businesses
related diversification - Answer -A firm is related through its diversification when its
businesses share several links.
-For example, businesses may share product markets (goods or services), technologies, or
distribution channels. The more links among businesses, the more "constrained" is the level of
diversification
unrelated diversification - Answer refers to the absence of direct links between businesses.
Low levels of Diversification - Types - Answer -Single Business: 95% or more of revenue
comes from a single business
-Dominant Business: Between 70 and 95% of revenue comes from a single business
Moderate to High Levels of Diversification - Types - Answer -Related Constrained: Less than
70% of revenue comes from the dominant business, and all businesses share product,
technological, and distribution linkages
-Related Linked/Mixed Related and Unrelated: Less than 70% of revenue comes from the
dominant business. and there are only limited links between businesses
