Chapter 10 corporate strategy diversification acquisitions and internal new ventures

Title mgmt ch.

Create your own flash cards! Supporting users have an ad free experience! My Flashcards My Sets Collaborative Sets Study Sessions Favorites Flashcard Pages Images Audio. Flashcard Library Browse Search Browse. About About FlashcardMachine Contribute Share Support Form Privacy Policy Terms of Use. Help FAQ Getting Started Signup Links. Mobile Apple App Store Google Play Amazon Apps. Details Title mgmt ch. Term Companies that concentrate on just one industry may miss out on opportunities to increase their profitability by leveraging their distinctive competencies to make and sell products in new industries.

Term Diversification is the process of a company entering new industries distinct from its core industry, using a multibusiness model. Term Free cash flow refers to additional funds from a government stimulus program.

chapter 10 corporate strategy diversification acquisitions and internal new ventures

Term Intel is an example of a company that moved from a related diversification strategy to a concentration strategy. Term If a company generates free cash flow, that money technically belongs to shareholders.

Term Transferring competencies across industries involves taking a distinctive competency developed in one industry and implanting it in an existing business unit in another industry. Term A year-old industrial giant, 3M serves as an example of how a company can leverage technology to create successful new business. Term A company should pursue related diversification only to enhance the competitive position of its core business.

Term Multipoint competition occurs when companies compete against each other in different industries. Term Firms with superior strategic capabilities can create profitable new business units at a much higher rate than most other companies can. Term One way a diversified company can increase its profitability is by acquiring inefficient or poorly managed companies and then restructuring them to improve their performance.

Term An advantage of related diversification is that it allows a company to quickly gain entry into a new industry where barriers are high. Term Companies with a strong track record of internal new venturing generally excel at research and development.

Term A company can increase the probability of success of an internal venture by constructing efficient scale manufacturing facilities ahead of demand. Term An advantage of unrelated diversification is that competencies can be shared and leveraged throughout the value chain activities. Term An appropriate reason to diversify is to pool the risk from several business ventures in order to create a more stable income stream.

Term Internal new ventures can generally be executed far more quickly than acquisitions. Term Research evidence suggests that small-scale entry into a new business is the best way for an internal venture to succeed.

Term A laundromat and a pool hall together invest in a new store, where customers can wash their clothes and play pool while waiting. This is an example of an internal new venture. Term A joint venture allows a company to share the risks and costs associated with establishing a new business unit with another company.

Term Research suggests that companies that acquire many businesses over time become expert in this process and so can generate significant value from their acquisitions. Term The coordination required to realize value from a diversification strategy based on transferring, sharing, or leveraging competencies is a major source of bureaucratic costs. Term The three main types of diversification strategies are a. Acquisitions, joint ventures, and divestments. Acquisitions, mergers, and buy outs.

Acquisitions, internal new ventures, and joint ventures. Related acquisitions, unrelated acquisitions, and mergers. Joint ventures, strategic alliances, and long-term contracts. Term Free cash flow is defined as a. Term The role of managers with respect to corporate-level strategy is to a.

Term A focus on using or recombining existing competencies or building new competencies to enter new markets helps managers think strategically about how industry boundaries a.

Term Leveraging competencies involves taking a distinctive competency developed by a business unit in one industry to create a.

board of director recruitment - Board of Directors Talent Bank

Term Product bundling refers to a. Term General organizational competencies refer to competencies a. Term What is the process of transferring resources to and creating a new business unit in a new industry called?

External new venturing b. Exportation of resources c. Term When a company has cash in excess of the amount needed to maintain a competitive advantage in its core business, it will most likely pursue a. Term Which diversification strategy is based on the idea that the company creates value by applying the distinctive competencies it developed in one line of business to another business activity? A technology acquisition strategy b. A restructuring strategy d.

A taper diversification strategy. Term Which of the following statements is not generally true of a diversification strategy based on the realization of economies of scope?

The head office evaluates each business unit as a stand-alone operation. The strategy allows a company to realize cost economies from sharing manufacturing facilities, distribution channels, advertising campaigns, and research and development costs among business units. The strategy may allow a company to use shared resources more intensively, thereby realizing economies of scale.

Managers must be aware of the costs of coordination. The strategy requires close coordination among different business units. Term Which of the following may be true for a company pursuing a strategy of unrelated diversification rather than a strategy of related diversification? The company does not have to achieve coordination between business units.

The company has broad organizational competencies that can be transferred. The company has superior strategic management and organizational design. All of these choices. None of these choices. Term A company pursuing a multibusiness model based on diversification may justify this strategy for what reason s?

Term A diversification strategy based on resource sharing a. Term General organizational competencies are found a.

Term Which of the following is not a general organizational competency? Capabilities in organizational design c. Superior strategic capabilities d. Term A company should pursue unrelated diversification instead of related diversification when a. A focus strategy d. Term A strategy based on diversification may fail to add value because companies a. Term Diversification may dissipate value if it is wrongly based on a.

Term In which of the following cases are bureaucratic costs likely to be lowest? A vertically integrated company with five divisions that pursues full integration b. A company with five divisions that pursues related diversification based on economies of scope c. A company with five divisions that pursues related diversification based on transferring competencies d. A company with five divisions that pursues unrelated diversification based on acquisitions and restructuring e.

A company with twenty divisions that pursues taper integration. A company with five divisions that pursues unrelated diversification based on acquisitions and restructuring.

Term New ventures are likely to be preferred compared to acquisitions when a. Term New ventures a. Term Which of the following statements concerning research and development is correct? Exploratory research is more important than development research. Development research is more important than exploratory research.

Exploratory research is directed toward commercialization of a new technology. Development research advances basic science. Companies with a strong record of internal new venturing excel at both types of research.

Term In which of the following industry environments are new ventures most likely to be favored over acquisitions as a means of entering a new business area? An embryonic industry b. An industry in its later stages of growth c. An industry passing through the shakeout stage d. A mature industry e.

Large-scale entry into the target industry designed to build market share, even when such entry involves significant short-term losses b. Cautious small-scale entry into the target industry so that the company can assess the probable outcome of the venture without losing too much money c.

A low level of integration between the marketing and the research and development functions of the venturing company d. Supporting many new venture projects in the hope that one will succeed e.

Killing the new venture if it does not show a profit after the end of the third year. Large-scale entry into the target industry designed to build market share, even when such entry involves significant short-term losses.

Term An internal new venture is the most appropriate strategic choice when a. Term Which of the following entry strategies should be used when speed is an important consideration?

Internal new venture b. Term A company considering entering an industry that is in the mature stage of its life cycle would generally prefer which of the following entry strategies? Term Acquisitions often fail because of a. Term Which of the following is not a reason for the failure of an acquisition to generate the gains originally expected of it? Poor postacquisition integration b. Overestimation of the potential gains to be derived from synergy c. The high cost of making acquisitions d.

Lack of preacquisition screening e. Overestimation of the potential costs of realizing synergies. Term Which of the following is are the probable consequence s of an inability to integrate two divergent corporate cultures after an acquisition? High management turnover b. Damaging political tensions between the management of the acquired and acquiring companies c. An inability to realize potential gains from synergies d.

All of these choices e. Term What accounts for the high failure rate of all new products that reach the marketplace? Market entry on too small a scale b. Poor commercialization of the new-venture product c. Poor corporate management of the new-venture unit d. Term Which of the following is not a guideline for a successful acquisition?

Good bidding strategy b. A clear strategic rationale for making the acquisition c. Completing the acquisition quickly d. Thorough preacquisition screening e.

Postacquisition audit to review the process and discuss ways to improve it. Completing the acquisition quickly. Term Joint ventures a. Term Which of the following statements is false? Acquisitions are preferable to joint ventures when the new business is unrelated to the existing business.

Acquisitions are preferable to new ventures when speed is important. Joint ventures are generally preferable to acquisitions when entry barriers are high. Acquisitions can be both a reason for corporate decline and part of a turnaround strategy.

New ventures are preferable to acquisitions in the embryonic stage of the industry life cycle. Which of the following strategies would you recommend to Stanley?

Diversify through acquisition b. Do not diversify at all c. Diversify with an internal new venture d. Diversify with a joint venture e. Diversify through vertical integration. Diversify with a joint venture.

mgmt ch Flashcards

Joint ventures risk the loss of proprietary information to a partner. Joint venture partners must split the profits of the business. Joint venture partners must share control and decision-making power.

Joint ventures are slower to reach profitability than are acquisitions. Joint ventures require less up-front investment than do internal new ventures. Term Economies of scope typically involve a.

Term What is perhaps the most important reason why acquisitions made by a company fail? The expense of the acquisition b. The timing of the acquisition c. Incompetence on the part of workers in the acquired firm e. Difficulties in coordinating manufacturing activities.

The expense of the acquisition. Term Which of the following reasons can make a diversification strategy an unwise course of action for a company to pursue? Changing industry conditions b.

Changing firm-specific conditions c. Diversification for the wrong reasons d. Increasing bureaucratic costs of diversification e. Term Diversification is sometimes pursued by a company for the wrong reasons. Which of the following is a faulty justification for diversification? Rescuing the core business from difficulty c. All of the above e.

All of the above. Term At its simplest level, a joint venture may be thought of as a n a.

Rating 4,4 stars - 549 reviews
inserted by FC2 system