BUS 475 EXAM 1 ,2 AND FINAL EXAM BUNDLE LATEST ACTUAL
QUESTIONS AND CORRECT DETAILED 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
backward integration - ANSWER: movement of a firm along its own value chain in
the direction of raw materials
forward integration - ANSWER: movement of a firm along its own value chain in the
direction of sales, service, or warranty operations
horizontal diversification - ANSWER: the movement into an adjacent or unrelated
market that is not along a firm's own value chain
single business - ANSWER: a firm earning more than 95% of the revenues from a
single line of business
dominant vertical business - ANSWER: a firm that earns more than 70% of its
revenue from its main line of business and the rest from businesses located along
the value chain
dominant business - ANSWER: a firm that earns more than 70% of revenue from its
main line of business and the remainder from other lines across different value
chains
related-constrained diversification - ANSWER: a firm that earns less than 70% of its
revenue from its main line of business and its other lines of business share product,
technological, and distribution linkages with the main business
unrelated diversified firm - ANSWER: competes in product categories and markets
with few, if any, links between them
adjacent market - ANSWER: a market or industry that is closely related to markets or
industries a firm currently competes in
slack - ANSWER: unused resource capability
, economy of scope - ANSWER: activities where the average cost of producing two
different products is less when delivered together than separately
management skill - ANSWER: the individual and collective abilities of a firm's
management team to engage in value-creating activities
synergy - ANSWER: action between different elements of a system that creates more
value together than the elements create separately
core competencies (shared knowledge) - ANSWER: collective knowledge that can be
distributed throughout the organization to create value
business model - ANSWER: a method to enable the creation and exchange of value
between companies and their customers
dominant logic - ANSWER: a conceptualization of a business, or a set of rules for
competition, that applies to seemingly unrelated product markets or industries
internal capital market - ANSWER: the movement of funds, talent, or knowledge
from unit to unit directed by the leaders of the firm
hubris - ANSWER: excessive pride, arrogance, or overconfidence
sunk cost fallacy - ANSWER: the belief of managers that investment in a failed
acquisition must continue because significant amounts have already been invested
greenfield entry - ANSWER: entry into an adjacent market by a firm that opens its
own operations
acquisition - ANSWER: the purchase of another company or its assets
due dilligence - ANSWER: the process whereby managers closely examine the target
firm to understand its core processes, strengths, and weaknesses
takeover - ANSWER: an acquisition where the acquiring firm absorbs the target firm,
which ceases to exist
merger - ANSWER: an acquisition with the goal of creating a new firm from the
components of the two pre-acquisition firms
integration team - ANSWER: a group of individuals from different functional areas of
an acquiring firm that coordinate and manage the integration of the target company
after the acquisition has closed
bury, build, blend, bolt on - ANSWER: The four B's of integration strategy
QUESTIONS AND CORRECT DETAILED 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
backward integration - ANSWER: movement of a firm along its own value chain in
the direction of raw materials
forward integration - ANSWER: movement of a firm along its own value chain in the
direction of sales, service, or warranty operations
horizontal diversification - ANSWER: the movement into an adjacent or unrelated
market that is not along a firm's own value chain
single business - ANSWER: a firm earning more than 95% of the revenues from a
single line of business
dominant vertical business - ANSWER: a firm that earns more than 70% of its
revenue from its main line of business and the rest from businesses located along
the value chain
dominant business - ANSWER: a firm that earns more than 70% of revenue from its
main line of business and the remainder from other lines across different value
chains
related-constrained diversification - ANSWER: a firm that earns less than 70% of its
revenue from its main line of business and its other lines of business share product,
technological, and distribution linkages with the main business
unrelated diversified firm - ANSWER: competes in product categories and markets
with few, if any, links between them
adjacent market - ANSWER: a market or industry that is closely related to markets or
industries a firm currently competes in
slack - ANSWER: unused resource capability
, economy of scope - ANSWER: activities where the average cost of producing two
different products is less when delivered together than separately
management skill - ANSWER: the individual and collective abilities of a firm's
management team to engage in value-creating activities
synergy - ANSWER: action between different elements of a system that creates more
value together than the elements create separately
core competencies (shared knowledge) - ANSWER: collective knowledge that can be
distributed throughout the organization to create value
business model - ANSWER: a method to enable the creation and exchange of value
between companies and their customers
dominant logic - ANSWER: a conceptualization of a business, or a set of rules for
competition, that applies to seemingly unrelated product markets or industries
internal capital market - ANSWER: the movement of funds, talent, or knowledge
from unit to unit directed by the leaders of the firm
hubris - ANSWER: excessive pride, arrogance, or overconfidence
sunk cost fallacy - ANSWER: the belief of managers that investment in a failed
acquisition must continue because significant amounts have already been invested
greenfield entry - ANSWER: entry into an adjacent market by a firm that opens its
own operations
acquisition - ANSWER: the purchase of another company or its assets
due dilligence - ANSWER: the process whereby managers closely examine the target
firm to understand its core processes, strengths, and weaknesses
takeover - ANSWER: an acquisition where the acquiring firm absorbs the target firm,
which ceases to exist
merger - ANSWER: an acquisition with the goal of creating a new firm from the
components of the two pre-acquisition firms
integration team - ANSWER: a group of individuals from different functional areas of
an acquiring firm that coordinate and manage the integration of the target company
after the acquisition has closed
bury, build, blend, bolt on - ANSWER: The four B's of integration strategy
