BA 405 Test 1 Ch. 6

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

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

Portfolio management frameworks, such as the BCG matrix, share which of the following characteristics?

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

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

Transaction costs include all of the following costs EXCEPT

agency costs

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.

According to the text, corporate restructuring includes

capital restructuring, asset restructuring, and management restructuring

Diversification initiatives include all of the following except________

shareholder development

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

sharing activities

Divesting of businesses can accomplish many different objectives, except_________

dispersing manager focus

Corporate-level strategy focuses on ________

gaining long-term revenue

Antitakeover tactics include all of the following EXCEPT_______

golden handcuffs

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

joint ventures and strategic alliances

The risks of vertical integration include all of the following EXCEPT

lack of control over valuable assets.

A Cash Cow, in the BCG framework, refers to a business that has_________

low market growth and relatively high market share

In the 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

According to Michael Porter, there is a tremendous allure to__________ . It is 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 primary means by which a firm can diversify are ________, _________, and__________ .

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

Internal development may be time consuming and, therefore, firms may forfeit the benefits of speed that growth through__________and_________ can provide.

mergers; acquisitions

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

In the BCG Matrix, a business that has a low market share in an industry characterized by high market growth is termed a________

Question Mark

In managing the corporate portfolio, the BCG matrix would suggest that________

Question Marks can represent future Stars if their market share is increased

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

Star

Which of the following is not a reason for merger and acquisition failures?

The acquisition leads to value creation.

Casio, a giant electronic products producer, synthesizes it abilities in miniaturization, microprocessor design, material science, and ultrathin precision castings to produce digital watches. It uses the same skills to produce card calculators, digital cameras, and other small electronics. These collective skills are known as_________

core competencies

Portfolio management matrices are applied to what level of strategy?

corporate level

Creating value within business units can happen when the corporate office helps subsidiaries make wise choices in their own acquisitions, divestures, and new ventures. This is known as___________

parenting

The term golden parachute refers to_________

pay given to executives fired because of a takeover

Which of the following is not part of a good guideline list for managing strategic alliances?

relying primarily on a contract to make the joint venture work

Creating value within business units can happen 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. This is action is known as _________

restructuring

Verizon Wireless and ILS Technology have a_________ whereby Verizon integrates technology developed by ILS to improve its machine-to machine (M2M) data transmission systems. M2M systems allow firms to securely transmit data to and from various devices.

strategic alliance

The Cisco acquisition of Pure Digital Technologies, the parent of the Flip video camera, failed because______

the Flip division of Cisco was slow and less responsive to market pressures

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

. A firm should consider vertical integration when_______

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

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 to its manufacturing process. This is an example of__________

using related diversification to achieve value by integrating vertically in order to acquire market power

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

using related diversification to achieve value by sharing activities to create economies of scope

At Cooper Industries, there are few similarities in the products it makes or the industries in which it completes. The corporate office adds value through such activities as superb human resource practices and budgeting systems. This is an example of__________

using unrelated diversification to achieve value through restructuring and parenting

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

vertical integration