Subsequent deals for a company are faster, but are generally not as profitable.
The main determinant of CEO pay is the firm’s industry.
An alliance may eventually become an acquisition.
Firms generate more profits out of their R&D investments if they focus strictly on
domestic markets.
At very high levels of internationalization, firms tend to experience performance
declines.
Research suggests that social ties between CEOs and board members lessen the risks
for shareholders.
It is necessary to have both financial and human capital resources to successfully pull
off a firm’s strategy.
In today’s business climate there are two types of companies, “the quick” and “the
dead.”
Segment profitability may vary widely by product group.
Alliances enable participants to share in investments and rewards while reducing risk
and uncertainty.
The effects of governance mechanisms are dependent on the national context.
Over time, the negative influences of newness and foreignness tend to diminish.
Dell’s distribution and marketing operations rest on a direct-sales model that avoids
retailers.
Most business industries are relatively stable, because significant industry changes take
many years to implement.
One of the primary advantages of internal development over acquisitions is speed.
Some research shows that bonus plans can lead to ________.
A) executives looking elsewhere for employment
B) the overfunding of pension plans
C) the underfunding of R&D initiatives
D) questionable accounting practices
Industry convergence occurs when two distinct industries evolve toward a(n) ________.
A)exclusive business relationship with each other
B)single point where old industry boundaries no longer exist
C)competitive position where each benefits from the existence of the other
D)split that forms four industries
All of the following are possible threats to the low-cost strategic position except
________.
A)new technology
B)inferior quality
C)economic risk of outsourcing
D)overfulfilling buyers’ needs
The U.S. Department of Transportation categorizes the airline industry into groups that
include all but which of the following?
A)commercial
B)international
C)national
D)regional
Dell identified the need to be a global player based on all of the reasons except to
________.
A)reach growth objectives
B)decrease competition
C)satisfy customer needs
D)gain new customers
Executives with large proportions of their pay package derived from stock options tend
to pursue aggressive ________ strategies.
A) local expansion and globalization
B) consolidation and restructuring
C) acquisition and divestiture
D) managerial and employee relations
Firms expand vertically to take advantage of ________.
A)growth opportunities
B)lower competition
C)higher price margins
D)offering lower prices
Managers act as ________ when they put into motion the processes that use the firm’s
resources and capabilities.
A)entrepreneurs
B)decision agents
C)communicators
D)psychoanalysts
The key purpose of drawing up a formal business plan is to ________.
A) outline the venture’s pre-launch plans
B) assure key stakeholders of managerial acumen
C) obtain funding
D) conceptualize the venture to potential capitalists
Bargaining leverage, price sensitivity, and threat of backward integration are some of
the elements influencing the five-forces factor of ________.
A)the threat of new entrants
B)supplier power
C)buyer power
D)the threat of substitutes
Acquisitions in a(n) ________ environment are attempts by companies to acquire
resources that will be critical in future projected new industry contexts.
A)industry-convergence
B)hostile takeover
C)internally competitive
D)international conglomerate
_____ strategies involve identifying a business that will let a firm shift customers from
a high-cost-to-serve to a low-cost-to-serve business model.
A) New-market creation
B) New-market disruption
C) Low-end disruption
D) High-end disruption
Intrinsic synergy value is the sum of all of the following except ________.
A)cost savings
B)revenue enhancements
C)financial-engineering activities
D)technological efficiencies
In 1980, Michael Porter introduced an integrated theory of strategy, which considered
the structure of an industry and its effect on the ________.
A)future customer base of the industry
B)environment
C)population it currently serves
D)performance of firms within it
Advantages of choosing acquisition over internal development include all except which
of the following?
A)speed
B)immediate critical mass
C)access to complementary assets and resources
D)leveraging in-house design technology
Acquisitions in which firms purchase their customers are called ________ acquisitions.
A)downstream vertical
B)downstream horizontal
C)upstream vertical
D)upstream horizontal
Current popular social networking websites include all except which of the following?
A) Napster
B) FaceBook
C) Friendster
D) MySpace
External change may take all of the following forms except ________.
A) economic change
B) competitive change
C) social change
D) strategic change
Which of the following is not one of the five elements of the strategy diamond?
A)vision
B)vehicles
C)staging
D)economic logic
What are the pitfalls of increased vertical scope?
What are outcome controls? List both pros and cons.
How might investors make reasonable estimates of a business unit’s potential
independent value?
What tactics result in economies of scope?
What are some possible threats to focus positions?