Strategic mgmt International

An antitakeover tactic in which existing shareholders have the option to buy additional shares of stock at a discount to the current market price is called ___________.

a poison pill

Real options analysis is most appropriate when

a small investment upfront can be followed by a series of subsequent investments.

In the BCG (Boston Consulting Group) Matrix, a business that has a low market share in an industry characterized by high market growth is termed a

question mark

All of the following are guidelines for managing strategic alliances except

relying primarily on a contract to make the joint venture work.

The downsides or limitations of mergers and acquisitions include all of the following except:

it is a slow means to enter new markets and acquire skills and competences.

It may be advantageous to vertically integrate when

lower transaction costs and improved coordination are vital and achievable through vertical integration.

According to Michael Porter: "There's a tremendous allure to _______________. It's the big play, the dramatic gesture. With one stroke of the pen you can add billions to size, get a front page story, and create excitement in markets."

mergers and acquisitions

The three primary means by which a firm can diversify are:

mergers and acquisitions; joint ventures and strategic alliances; internal development

The term "golden parachutes" refers to

pay given to executives fired because of a takeover

_______ is when a firm tries to find and acquire either poorly performing firms with unrealized potential or firms in industries on the threshold of significant, positive change

Restructuring

When using a BCG matrix, a business that currently holds a large market share in a rapidly growing market and that has minimal or negative cash flow would be known as a

star

A company offering local telecommunications service combines resources with an international company that manufactures digital switching equipment to research a new type of telecommunications technology. This is an example of

strategic alliance.

A firm should consider vertical integration when

the firm's suppliers of raw materials are often unable to maintain quality standards.

Unbalanced capacities that limit cost savings, difficulties in combining specializations, and reduced flexibility are disadvantages associated with

vertical integration.

Corporate-level strategy addresses two related issues:

what businesses to compete in; how these businesses can achieve synergy.

In managing a firm's portfolio, the BCG matrix would suggest that

"question marks" can represent future "stars" if their market share is increased.

Cooperative relationships such as _______ have the potential advantages such as entering new markets, reducing manufacturing (or other) costs in the value chain, and developing and diffusing new technologies.

A and C

Which of the following statements regarding internal development as a means of diversification is false:

An advantage of internal development is that it is generally faster than other means of diversification and firms can benefit from speed in developing new products and services.

__________ reflect the collective learning in organizations such as how to coordinate production skills, integrate multiple streams of technologies, and market and merchandise diverse products and services.

Core competencies

Portfolio management frameworks (e.g., BCG matrix) share which of the following characteristics?

Grid dimensions are based on external environments and internal capabilities/market positions.

___________ may be time consuming and, therefore, firms may forfeit the benefits of speed that growth through _________ and __________ can provide.

Internal development; mergers; acquisitions

_________ is when a firm's corporate office helps subsidiaries make wise choices in their own acquisitions, divestures, and new ventures.

Parenting

For a core competence to be a viable basis for the corporation strengthening a new business unit, there are three requirements. Which one of the following is not one of these requirements?

The new business must have an established large market share

McKesson, a large distribution company, sells many product lines such as pharmaceuticals and liquor through its superwarehouses. This is an example of

achieving economies of scope through related diversification.

Individual investors are dependent upon the corporation's managers to

add value to their investments in a way that the stockholders could not accomplish on their own.

Transaction costs include all of the following costs except

agency costs.

According to the text, corporate restructuring includes

capital restructuring, asset restructuring, and management restructuring

Philip Morris bought Miller Brewing and used its marketing expertise to improve Miller's market share. This justification for diversification is best described as

capitalizing on core competencies

Portfolio management matrices are applied to what level of strategy?

corporate level

Antitakeover tactics include all of the following except

golden handcuffs.

An antitakeover tactic called (a) ___________ is when a firm offers to buy shares of their stock from a company planning to acquire their firm at a higher price than the unfriendly company paid for it.

greenmail

All of the following are limitations (or downsides) of the BCG (Boston Consulting Group) matrix except

it takes a dynamic view of competition which can lead to overly complex analyses.

The risks of vertical integration include all of the following except

lack of control over valuable assets

A "cash cow," referred to in the Boston Consulting Group Portfolio management technique, refers to a business that has

low market growth and relatively high market share

In the Boston Consulting Group's (BCG) Growth Share Matrix, the suggested strategy for "stars" is to

maintain position and after the market growth slows use the business to provide cash flow.

When management uses common production facilities or purchasing procedures to distribute different but related products, they are

sharing activities.

Options exist when the owner of the option has

the right, but not the obligation to engage in a transaction.

Sharing core competencies is one of the primary potential advantages of diversification. In order for diversification to be most successful, it is important that

the similarity required for sharing core competencies must be in the value chain, not in the product.

Vertical integration is attractive when

transaction costs are higher than internal administrative costs

Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input into its manufacturing process. This is an example of

vertical integration