479 Chapter 5 Quiz
The old adage "If it ain't broke, don't fix it" pertains to which of the following? A. Managing by subjectives B. Managing by continuity C. Managing by extrapolation D. Managing by hope E. Managing by crisis
C. Managing by extrapolation
Recent research reveals that small- and medium-size firms expanding into other countries should form alliances with noncompetitors rather than with rival firms. Why? A. Alliances with noncompetitors are positively associated with international performance, whereas alliances with competitors are negatively related. B. Competing firms oftentimes share less knowledge than they could or should. C. Alliances with competitors are more costly, directly and indirectly, and provide redundant knowledge and resources. D. The benefits of allying with competitors are offset by higher monitoring and control costs. E. All of the above
E. All of the above
Which of the following statements is false? A. Partnering has become a core competency, a strategic issue of high importance. B. In a global market tied together by the Internet, joint ventures, and partnerships, alliances are proving to be a more effective way to enhance corporate growth than mergers and acquisitions. C. Partnering is not yet taught at most business schools and is often viewed within companies as a financial issue rather than a strategic issue. D. Although evidence is mounting that firms should use partnering as a means for achieving strategies, most U.S. firms in many industrieslong dash—such as financial services, forest products, metals, and retailinglong dash—still operate in a merge or acquire mode to obtain growth. E. All of the above statements are true.
E. All of the above statements are true
First mover advantages refers to the benefits a firm may achieve by entering a new market or developing a new product or service prior to rival firms. An advantage of being a first mover is: A. Securing access to rare resources. B. Gaining new knowledge of key factors and issues. C. Carving out market share and a position that is easy to defend and costly for rival firms to overtake. D. A and B E. A, B, and C
E. A, B, and C
What strategy seeks to increase market share for present products or services in present markets through greater marketing efforts? A. Market penetration B. Market development C. Forward integration D. Vertical integration E. Market saturation
A. Market penetration
Which statement below is true? A. A leveraged buyout converts a public firm into a private company. B. All of the statements are true. C. There were far more global mergers and acquisitions in 2014 than in any year since 2007, exceeding $3.5 billion. D. More than 10,000 mergers transpire annually in the United States, with same-industry combinations predominating. E. In the United States, mergers and acquisitions totaled $1.52 trillion in 2014, comprising 45 percent of global deals, up from $998 billion, or 43 percent, the prior year.
B. All of the statements are true.
According to Porter, strategies allow organizations to gain competitive advantage from three different bases. What are the three bases? A. Initiator, differentiation, and focus B. Cost leadership, differentiation, and focus C. Being a first-mover, being a late-follower, and differentiation D. Cost leadership, differentiation, and initiator E. Differentiation, focus, and being a first-mover
B. Cost leadership, differentiation, and focus
If an organization's present suppliers are especially expensive, unreliable, or incapable of meeting the firm's needs for parts, components, assemblies, or raw materials, what strategy is likely best? A. Market development B. Horizontal diversification C. Backward integration D. Forward integration E. Vertical integration
C. Backward integration
Secondary buyouts occur when what happens? A. A private equity firm buys a publically held firm. B. A company buys a firm and then itself is purchased by another company. C. A company buys a firm and then sells the firm within a year. D. A private equity firm buys a firm from another private equity firm. E. A private equity firm buys a privately held firm.
D. A private equity firm buys a firm from another private equity firm.
Nonprofit organizations are basically just like for-profit companies except for two major differences. What are the differences? A. Nonprofits do not have competitors. B. Nonprofits do not pay taxes. C. Nonprofits do not have shareholders to provide capital. D. B and C E. A and B
D. B and C
______________ involves companies hiring other companies to take over various parts of their functional operations, such as human resources, information systems, payroll, accounting, customer service, and even marketing. A. Procurement B. Displacement C. Partnering D. Outsourcing E. Backward integration
D. Outsourcing
The two general types of diversification strategies are related diversification and unrelated diversification. When are businesses said to be related? A. When they compete in the same SIC code industry B. When they are about the same size C. When they compete in about the same areas D. When their value chains possess competitively valuable cross-business strategic fits E. When their objectives and strategies are about the same
D. When their value chains possess competitively valuable cross-business strategic fits
Objectives should include which of the following characteristics? A. Measurable, realistic, and understandable B. Measurable, challenging, and hierarchical C. Qualitative, obtainable, congruent among organizational units, and associated with a timeline D. A, B, and C E. A and B
E. A and B
The chapter lists nine reasons why many mergers and acquisitions fail, including the following reason: A. Inability to achieve synergy B. Too large an acquisition C. Improprieties on one or both sides D. A, B, and C E. A and B
E. A and B
What strategy may be best under the following conditions? a. The organization competes in a highly competitive or a no-growth industry, as indicated by low industry profit margins and returns. b. The organization's present channels of distribution can be used to market new products to current customers. c. New products have countercyclical sales patterns compared with an organization's present products. d. The organization's basic industry is experiencing declining annual sales and profits. A. Retrenchment B. Related diversification C. Divestiture D. Vertical integration E. Unrelated diversification
E. Unrelated diversification
The time frame for long-term objectives and strategies should be consistent, usually from _____ to _____ years. A. 2; 5 B. 2; 10 C. 1; 5 D. 1; 10 E. 1; 15
A. 2; 5
When an organization has pursued both a retrenchment strategy and a divestiture strategy, and neither has been successful, then perhaps the best strategy would be ____. A. restructuring B. Chapter 7 bankruptcy C. Chapter 11 bankruptcy D. liquidation E. B and D
E. B and D
What are the five major types of bankruptcy? A. Chapters 3, 5, 7, 9, and 11 B. Chapters 2, 4, 6, 7, and 8 C. Chapters 5, 7, 11, 13, and 15 D. Chapters 1, 3, 5, 7, and 9 E. Chapters 7, 9, 11, 12, and 13
E. Chapters 7, 9, 11, 12, and 13
________________ is a popular strategy that occurs when two or more companies form a temporary partnership or consortium for the purpose of capitalizing on some opportunity. A. Alliancing B. Coordinating C. Joint alliance D. Combining E. Joint venture
E. Joint venture
The largest consumer-products company in the world, Procter & Gamble (P&G), is in the process of selling more than half of its brands (nearly 100) in order to focus on its core brands (about 80). What is this strategy called? A. Divestiture B. Vertical integration C. Restructuring D. Retrenchment E. Reengineering
A. Divestiture
Which of Porter's generic strategies means producing products and services that fulfill the needs of small groups of consumers? A. Focus B. Differentiation C. Cost leadership D. Initiator E. Being a first-mover
A. Focus
Gaining ownership or increased control over distributors or retailers is called what? A. Forward integration B. Vertical integration C. Market penetration D. Market development E. Backward integration
A. Forward integration
What is the name of the strategy that involves selling off land and buildings to raise needed cash, pruning product lines, closing marginal businesses, closing obsolete factories, automating processes, reducing the number of employees, and instituting expense control systems? A. Retrenchment B. Liquidation C. Divestiture D. Bankruptcy E. Reengineering
A. Retrenchment
A benefit of outsourcing is cost restructuring. Is the following statement true? Outsourcing changes the balance of fixed costs to variable costs by moving the firm more to variable costs; outsourcing also makes variable costs more predictable. A. Yes B. Sometimes C. Usually D. Possibly E. No
A. Yes
Why do many U.S. companies plan to reshore in 2016dash-2017? A. A desire to get products to market faster and respond rapidly to customer orders B. Higher transportation and warehousing costs C. Improved quality and protection of intellectual property D. A and C E. A, B, and C
D. A and C