BUS-4476 Strategic Management - Week 4 -Chapters 6 & 7
Which of the following statements is true?
Related constrained firms share more tangible resources and activities between businesses than do related linked firms.
Specialty Steel, Inc., needs a particular type of brick to line its kilns in order to safely achieve the high temperatures needed for the unusually strong steel it produces. The clay to make this brick is very rare, and only two brick plants in the United States make this type of brick. Specialty Steel owns one of these brick plants and buys all of its production. The other brick manufacturer has recently developed an inexpensive new technology whereby ordinary clay can be used to make this fire brick. This significantly reduces the production cost of this type of brick. Which of the following statements is true?
Specialty Steel has less flexibility now than if it were not vertically integrated.
An office management firm has developed a system for efficiently organizing small medical and dental practices both through proprietary software and through unique training programs for staff. It has recently acquired a firm specializing in providing management services for veterinary practices. The office management firm is hoping to:
achieve economies of scope
The term "leveraged" in leveraged buyouts refers to the:
amount of new debt incurred in buying the firm.
Horizontal, vertical, and related acquisitions to build market power
are likely to undergo regulatory review by various governmental entities.
Internal product development is often viewed as:
carrying a high risk of failure
A friendly acquisition:
facilitates the integration of the acquired and acquiring firms.
Managerial motives to seek diversification include a desire to:
increase their compensation.
Whole-firm LBOs tend to result in all the following negative outcomes EXCEPT:
inefficient operations
When a firm simultaneously practices operational relatedness and corporate relatedness:
it is difficult for investors to identify the value created by the firm.
The __________ phase is probably the single most important determinant of shareholder value creation in mergers and acquisitions.
post-acquisition integration.
The Publicis Groupe has three major groups of business (advertising, media, and digital) that share resources and capabilities. The Publicis Groupe is using a(n) __________ diversification strategy.
related linked
The curvilinear relationship of corporate performance and diversification indicates that:
the highest performing business strategy is related constrained diversification.
All of the following statements are correct EXCEPT:
the majority of acquisitions increase long-term value for the acquiring firm.
The basic types of operational economies through which firms seek value from economies of scope are:
the sharing of value chain activities and support functions
Hutchison Whampoa Limited (HWL) has businesses in ports and related services, telecommunications, property and hotels, retail and manufacturing, and energy and infrastructure. HWL makes no efforts to share activities or transfer core competencies among the businesses. HWL is following a strategy of __________ diversification.
unrelated
The term "conglomerates" refers to firms using the __________ diversification strategy.
unrelated
Manny Inc. recently completed the purchase of its primary supplier. Manny intends to begin expanding the market to which the supplier's products are sold. This purchase is a(n):
vertical acquisition
The acquisition of Sun Microsystems (a computer hardware producer) by Oracle Corporation (a software firm) is an example of a(n):
vertical acquisition
Baby Doe's, a designer and manufacturer of children's clothing, has decided to purchase a retail chain specializing in children's clothing. This purchase is a(n):
vertical acquisition.
