4500 - Chapter 9
The only relationship between business units with the portfolio matrix is: A. Creation of competitive advantage B. Internally synergies C. Cash D. Core competencies
Cash
Businesses with high market share in low-growth industries are called: A. Stars B. Cash cows C. Question marks D. Dogs
Cash cows
The most compelling reason companies should diversify can be found in situations when: A. Core competencies are not similar B. Core competencies can be leveraged with other products or into other markets C. Management is similar in various businesses D. Cash resources can be leveraged
Core competencies can be leveraged with other products or into other markets
Crabtree Soup has been facing intense competition and suffering low profit margins for a year now. The market for their specialty soups has matured and the firm is being managed for short-term cash flow to supplement SwissCo's corporate-level resource needs. Which type of firm is Crabtree Soup as per the BCG Growth-Share matrix? A. Star B. Dog C. Cash cow D. Question mark
Dog
For the ABC Company, the Theta business is in a low market share position in a slow growing market. As per the BCG matrix, Theta is a A. Cash cow B. Question mark C. Dog D. Star
Dog
As per the BCG matrix, which of these businesses should be divested or liquidated? A. Cash cows B. Guzzlers C. Dogs D. Stars
Dogs
In the BCG matrix, which of these are managed for short-term cash flow? A. Cash cows B. Question marks C. Dogs D. Stars
Dogs
Low market share businesses in low market growth industries are called: A. Stars B. Cash cows C. Dogs D. Question marks
Dogs
Which of the following is a factor in the cost position that helps determine business strength? A. Delivery times B. Manufacturing flexibility C. Brand awareness D. Economies of scale
Economies of scale
The _________ perspective sees multi-business companies as creating value by influencing the businesses they own. A. Strategic environment B. Growth-share matrix C. Patching D. Parenting
Parenting
The fundamental argument of the _______ approach is that no one can predict how long a competitive advantage will last, particularly in turbulent markets. A. Patching B. Parenting C. Portfolio D. Strategic environment
Patching
Which type of simple rules help managers rank the accepted opportunities? A. How-to rules B. Financial rules C. Priority rules D. Boundary rules
Priority rules
Simple rules need to: A. Provide just enough structure to limit managers' flexibility to a safe amount B. Capture opportunities that may not always be consistent with corporate intent C. Provide enough structure to allow managers to move quickly to capture opportunities that are consistent with corporate intent D. Define the sources of competitive advantage within a firm's industry
Provide enough structure to allow managers to move quickly to capture opportunities that are consistent with corporate intent
Which of the following represents an operating opportunity to build value or sharing? A. Shared inbound or outbound shipping and materials handling B. Shared management know-how C. Shared after-sales service D. Shared brand name
Shared inbound or outbound shipping and materials handling
_______ need to be brief, be axiomatic and convey fundamental guidelines to decisions or actions. A. Key rules B. Fundamental rules C. Competitive advantages D. Simple rules
Simple rules
Skills in achieving differentiation in product design, branding expertise, innovation, first-mover and sometimes scale characterize winners in: A. Stalemate businesses B. Specialization businesses C. Volume businesses D. Fragmented businesses
Specialization businesses
_________ has many sources of advantage and fined those advantages potentially sizable. A. Specialization businesses B. Stalemate businesses C. Fragmented businesses D. Volume businesses
Specialization businesses
For the ABC Company, the Omega business is in a dominant market share position in a fast growing market. As per the BCG matrix, Omega is a A. Cash cow B. Question mark C. Star D. Dog
Star
Cash cows are yesterday's A. Problem children B. Question marks C. Stars D. Dogs
Stars
__________ is concerned with whether or not the potential competitive advantages expected to arise from each value opportunity have materialized. A. Strategic choice B. Strategic analysis C. Strategic evaluation D. Strategic growth
Strategic analysis
In the industry attractiveness-business strength matrix, the position of a business is calculated by _______ its rating along the two dimensions of the matrix. A. Subjectively qualifying B. Objectively qualifying C. Subjectively quantifying D. Objectively quantifying
Subjectively quantifying
Which one of the following is NOT a lever by which corporate parents add value according to the BCG parenting strategy approach? A. corporate engagement B. strategy development C. financing advantages D. business synergies
business synergies
Realizing ____ from shared capabilities and core competencies is a key way value is added in multibusiness companies. A. competencies B. profits C. synergies D. resources
synergies
_________ has many sources of advantage. However, these are all small. A. Stalemate businesses B. Fragmented businesses C. Specialization businesses D. Volume businesses
Fragmented businesses
In the parenting framework, the corporate office of a multibusiness company is the A. "child" B. "brother" C. "parent" D. "sister"
"parent"
How many strategic approaches are suggested by the Industry Attractiveness-Business Strength matrix? A. 2 B. 4 C. 3 D. 5
3
Eisenhardt and Sull suggest that managers should flexibly seize opportunities: A. As long as that flexibility is disciplined B. As long as the opportunities has positive net present value C. As long as the capital raised in capital markets can finance the opportunities D. As long as the managers keep a corporate strategic focus on profitability
As long as that flexibility is disciplined
Which of the following firms pioneered the portfolio approach to strategic analysis and choice? A. Bain Consulting B. Boston Consulting Group C. Booz Allen Hamilton D. McKinsey & Company
Boston Consulting Group
_________ focus on which opportunities can be pursued and which ones are beyond pursuing. A. Timing rules B. Boundary rules C. Financial rules D. Project rules
Boundary rules
For the ABC Company, the Alpha business is in a dominant market share position in a mature market. As per the BCG matrix, Alpha is a A. Sta B. Question mark C. Cash cow D. Dog
Cash cow
In the BCG matrix, which of these businesses often generate cash in excess of their needs? A. Stars B. Question marks C. Cash cows D. Dogs
Cash cows
________ is the current foundation of corporate portfolios—they sustain corporate overhead, dividends and provide debt capacity. A. Cash cows B. Dogs C. Stars D. Question marks
Cash cows
Which of the following is NOT a reason for the emergence of multi-business companies? A. Companies can enter businesses with greater growth potential B. Companies can enter businesses with different cyclical considerations C. Companies can diversify inherent risks D. Companies can slow their internal growth
Companies can slow their internal growth
Firms should use _______ to help managers decide when to pull out of old opportunities that are no longer promising. A. Exit rules B. Boundary rules C. Abandonment rules D. Priority rules
Exit rules
Governments, regulators, unions and suppliers represent ________ who potentially could be managed more effectively by the parent, than by the individual business units. A. Specialized expertise B. Predictable errors C. External stakeholders D. Internal stakeholders
External stakeholders
Which of the following factors is NOT considered in determining industry attractiveness? A. Nature of competitive rivalry B. Bargaining power of suppliers/customers C. Firm's level of differentiation D. Financial norms
Firm's level of differentiation
According to the patching approach, strategic analysis should: A. Focus on strategic processes alone B. Focus on strategic processes more than strategic positioning C. Focus on strategic positioning more than strategic planning D. Focus on strategic positioning more than strategic processes
Focus on strategic processes more than strategic positioning
The _________ matrix was developed by McKinsey & Company at General Electric. A. Industry awareness B. Growth-share C. Industry attractiveness-business strength D. Strategic environments
Industry attractiveness-business strength
Which matrix makes fine distinctions among business portfolio positions with the inclusion of high/medium/low axes? A. Industry strength matrix B. Growth-share matrix C. Strategic environments matrix D. Industry attractiveness-business strength matrix
Industry attractiveness-business strength matrix
Ensuring that certain issues are addressed, objectively assessed and assisting in any resolution may be a parenting opportunity that could add value. These issues--like attracting and keeping people with specialized skills--are: A. Marketing-based B. Management-based C. Age-based D. Part of the business definition
Management-based
The ______ decisions of the industry attractiveness-business strength matrix remain quite similar to those of the BCG growth-share matrix. A. Management approach B. Resource allocation C. Business strategy D. Functional strategy
Resource allocation
The industry attractiveness-business strength matrix improves on the BCG matrix in some fundamental ways. Which of the following is NOT one of these? A. The terminology associated with the industry attractiveness-business strength matrix is preferable because it is less offensive B. The terminology associated with the industry attractiveness-business strength matrix can be much more complicated than the BCG matrix C. The multiple measures associated with each division of the industry attractiveness-business strength matrix tap many factors relevant to business strength and market attractiveness besides market share and market growth D. There is broader assessment during the planning process of the industry attractiveness-business strength matrix
The terminology associated with the industry attractiveness-business strength matrix can be much more complicated than the BCG matrix
For competitive advantage to be sustainable, any combination of competencies must be: A. Expensive B. Easily imitated C. Unique D. Sustainable themselves
Unique
The duration of an advantage in patching is: A. Unpredictable B. Sustained C. Short-term D. Dependent on resources
Unpredictable
Situations that involve _______ occur when no real overlapping capabilities or products exist other than financial resources. A. Financial diversification B. Unrelated diversification C. Related diversification D. Leveraged businesses
Unrelated diversification
_________ are those that have few sources of advantage, but the size is large--typically the result of scale economies. A. Volume businesses B. Stalemate businesses C. Specialization businesses D. Fragmented businesses
Volume businesses
The most compelling reason companies should diversify can be found in situations where _______ can be leveraged with other products or into markets that are not a part of where they were created. A. cash B. disruptive competencies C. core competencies D. finances
core competencies
The two dimensions in the BCG's Strategic Environments matrix are ____ and _____ of competitive advantage. A. length, timing B. yes and no C. sources, size D. many, few
sources, size
_______ are businesses whose high growth rate gives them considerable appeal, but whose low market share makes their profit potential uncertain. A. Dogs B. Stars C. Question marks D. Cash cows
Question marks
In the past ________ years, we have seen a virtual explosion in the extent to which single-business companies seek to acquire other businesses to grow and diversify. A. 5 B. 50 C. 30 D. 100
30
How many cells are in the industry attractiveness-business strength matrix? A. 4 B. 9 C. 12 D. 16
9
The Industry Attractiveness-Business Strength matrix has ____ cells, while the BCG matrix has ___ cells. A. 6,4 B. 4,6 C. 9,4 D. 4,9
9,4
Spelling out key features of how a process is executed is the purpose of which type of simple rules? A. Boundary rules B. Priority rules C. How-to Rules D. Exit rules
How-to Rules
Corporate strategists found the growth-share matrix's singular axes A. Limiting in their ability to reflect the complexity of a business's situation B. A good way to simplify the complexity of a business's situation C. A good reflection of the simplistic nature of most corporate-level decisions D. To difficult to manipulate
Limiting in their ability to reflect the complexity of a business's situation
Whether apparent or not, _______ among business units within or outside the parent company may be complex or difficult to establish without parent company help. A. Capabilities B. Expertise C. Sales D. Linkages
Linkages
What was the key challenge as companies jumped on the diversification bandwagon? A. Making the business profitable B. Finding businesses to buy C. Managing the resource needs of diverse businesses D. Financing acquisitions
Managing the resource needs of diverse businesses
The ______ serves as an indicator of the relative attractiveness of the markets served by each business in the firm's portfolio of businesses. A. Market share B. Market projection C. Market growth rate D. Relative competitive position
Market growth rate
The ________ is the projected rate of sales growth for the market being served by a particular business. A. Market share B. Market projection C. Market growth rate D. Relative competitive position
Market growth rate
The core competency must represent a major source of value to be a basis for competitive advantage. Furthermore, the core competence: A. Must be negotiable B. Must be financial C. Must be diversified D. Must be transferable
Must be transferable
Opportunities to build value via diversification, integration or joint venture strategies are usually NOT found in which of the following? A. Market-related activities B. Operations-related activities C. Management activities D. Non-value chain activities
Non-value chain activities
Which of the following is NOT a strategic approach suggested by the industry attractiveness-business strength matrix? A. Outsource management B. Invest to grow C. Invest selectively and manage for earnings D. Harvest or divest for resources
Outsource management
When markets are turbulent and rapidly changing, _______ is seen as critical to the creation of economic value in a multi-business company. A. Positioning B. Leveraging resources C. Patching D. Parenting
Patching
_______ is the process by which corporate executives routinely remap businesses to match rapidly changing market opportunities. A. Parenting B. Patching C. Portfolio matching D. Environmental strategy
Patching
The _______ approach was one of the early approaches for charting strategy and allocating resources in multi-business companies. It was particularly popular in the 1960s and 1970s. A. Case B. Matrix-management C. Portfolio D. Patching
Portfolio
The ______ portrays the notion that firms need to be self-sufficient in capital. A. Environmental approach B. Parenting approach C. Portfolio approach D. Patching approach
Portfolio approach
________ attempt to help managers "balance" the flow of cash resources among their various businesses while also identifying the overall strategic purpose within the group of businesses. A. Growth techniques B. Market share techniques C. Portfolio techniques D. Environment techniques
Portfolio techniques
Enhanced bargaining power with distributors and retailers to gain shelf space, shelf positioning, stronger push, more dealer attention and better profit margins represents which of the following sources of value building in multi-business companies? A. Market-related opportunities B. Functional-related opportunities C. Potential competitive advantage D. Operating opportunities
Potential competitive advantage
Lengthy product life cycles can lead to over reliance on old products. This is an example of: A. External relations B. Linkage C. Predictable error D. Specialized expertise
Predictable error
The strategic logic of patching is to: A. Pursue more resources B. Leverage resources C. Establish a defensible position D. Pursue opportunities
Pursue opportunities
For the ABC Company, the Delta business has a low market share position in a fast growing market. As per the BCG matrix, Delta is a A. Cash cow B. Star C. Question mark D. Dog
Question mark
As per the BCG matrix, which of these are cash guzzlers because of their uncertain profit potential? A. Cash cows B. Stars C. Question marks D. Dogs
Question marks
As per the BCG matrix, which of these should be selectively divested? A. Cash cows B. Stars C. Question marks D. Dogs
Question marks
_______ is those that rely on the same or similar capabilities to be successful and attain competitive advantage in their respective product markets. A. Leveraged businesses B. Networked businesses C. Related businesses D. Unrelated businesses
Related businesses
__________ provides a basis for comparing the relative strengths of the businesses in the firm's portfolio in terms of their positions in their respective markets. A. Relative competitive position B. Relative market share C. Market growth rate D. Growth-share rate
Relative competitive position
__________ usually is expressed as market share of a business divided by the market share of its largest competitor. A. Relative competitive position B. Relative market share C. Market growth rate D. Growth-share rate
Relative competitive position
Under the ________ approach to strategy, establishing a vision, building resources and leveraging across markets are all strategic steps to be taken by the firm. A. Patching B. Parenting C. Resources D. Position
Resources
Which of the following factors is considered in determining a business's strength for the industry attractiveness-business strength matrix? A. Threat of substitute products B. Economic factors C. Sociopolitical considerations D. Response time
Response time
The position-based approach to strategy works best in: A. Moderately changing, well-structured markets B. Rapidly changing, ambiguous markets C. Turbulent markets D. Slowly changing, well-structured markets
Slowly changing, well-structured markets
Skills in achieving differentiation characterize winners in ________ businesses A. Volume B. Stalemate C. Specialization D. Fragmented
Specialization
_________ has few sources of advantage, with most of them small. This results in very competitive situations. A. Fragmented businesses B. Volume businesses C. Stalemate businesses D. Specialization businesses
Stalemate businesses
Zeon Plus Company requires substantial investment to maintain and expand their dominant position in the growing electronic zeonites market. In fact, this investment is often in excess of the funds that the firm can generate internally. However, Zeon Plus does have a very large market share. What type of company is this, according to the BCG growth-share matrix? A. Cash cow B. Dog C. Question mark D. Star
Star
In the BCG growth-share matrix, the ________ are businesses in rapidly growing markets with large market shares. A. Cash cows B. Question marks C. Stars D. Dogs
Stars
Which matrix allows one way for multi-business companies to rationalize what businesses they are in--businesses that share core competencies and associated competitive advantages. A. Growth-share matrix B. Portfolio attractiveness matrix C. Strategic environments matrix D. Business strength matrix
Strategic environments matrix
Which matrix involves a framework that can help ensure that businesses' strategies are consistent with strategies appropriate to their strategic environment? A. Strategic choice matrix B. Growth-share matrix C. Industry attractiveness-business strength matrix D. Strategic environments matrix
Strategic environments matrix
Which of the following is NOT a limitation of the portfolio approaches? A. Identifying individual businesses or distinct markets was not often as precise as the underlying assumptions required B. The underlying assumption about the relationship between C. The approach did not emphasize that market share and profitability are the same across different industries and market segments D. The portfolio approach limited strategic options, which were seen mostly as basic strategic missions rather than descriptions of the flow of resources in a company
The approach did not emphasize that market share and profitability are the same across different industries and market segments
When using the BCG growth-share matrix, the dividing point for the growth rate of an industry in constant dollars is typically: A. The market's growth rate B. The consumer price index C. The growth rate of the gross domestic product (GDP) D. The growth rate of the gross national product (GNP)
The growth rate of the gross national product (GNP)
Gizmo Co. has rules for product development. Its project teams must know when a product has to be delivered to the customer and total product development time must be less than 1 year. This represents an example of: A. Exit rules B. Timing rules C. Boundary rules D. Priority rules
Timing rules
The least profitable firms are: A. Broadly diversified firms whose strategies are build around very general resources such as money B. Ones that involve combining resources into competitive advantage C. Rigidly specialized in an attractive industry D. Flexible
Broadly diversified firms whose strategies are build around very general resources such as money
Consider Vepco, a company that began as a rocket propulsion development firm and grew through vertical integration. The firm is trying to figure out how to keep pace with the accelerated trends toward outsourcing that has developed in the last 10 years. Which type of parenting opportunity does this represent? A. Business definition/redefinition B. Management C. Specialized expertise D. Predictable errors
Business definition/redefinition
Which type of business involves differentiated products with low brand loyalty, easily replicated technology and minimal scale economies? A. Fragmented businesses B. Specialization businesses C. Volume businesses D. Stalemate businesses
Fragmented businesses