Chapter 09 – Multibusiness Strategy
Chapter 09
Multibusiness Strategy
Multiple Choice Questions
1. (p. 261) The _______ approach was one of the early approaches for charting strategy and
allocating resources in multi-business companies. It was particularly popular in the 1960s and
1970s.
2. (p. 261) In the past ________ years, we have seen a virtual explosion in the extent to which
single-business companies seek to acquire other businesses to grow and diversify.
3. (p. 261) Which of the following is NOT a reason for the emergence of multi-business
companies?
4. (p. 261) Which of the following firms pioneered the portfolio approach to strategic analysis
and choice?
5. (p. 261) What was the key challenge as companies jumped on the diversification bandwagon?
6. (p. 261) ________ attempt to help managers “balance” the flow of cash resources among their
various businesses while also identifying the overall strategic purpose within the group of
businesses.
7. (p. 261) The ________ is the projected rate of sales growth for the market being served by a
particular business.
8. (p. 261) The ______ serves as an indicator of the relative attractiveness of the markets served
by each business in the firm’s portfolio of businesses.
9. (p. 261) __________ usually is expressed as market share of a business divided by the market
share of its largest competitor.
10. (p. 261) __________ provides a basis for comparing the relative strengths of the businesses
in the firm’s portfolio in terms of their positions in their respective markets.
11. (p. 261) In the BCG growth-share matrix, the ________ are businesses in rapidly growing
markets with large market shares.
12. (p. 261) For the ABC Company, the Omega business is in a dominant market share position
in a fast growing market. As per the BCG matrix, Omega is a
13. (p. 262) Businesses with high market share in low-growth industries are called:
14. (p. 261) For the ABC Company, the Alpha business is in a dominant market share position in
a mature market. As per the BCG matrix, Alpha is a
15. (p. 261) For the ABC Company, the Delta business has a lowmarket share position in a fast
growing market. As per the BCG matrix, Delta is a
16. (p. 261) For the ABC Company, the Theta business is in a low market share position in a
slow growing market. As per the BCG matrix, Theta is a
17. (p. 261) Zeon Plus Company requires substantial investment to maintain and expand their
dominant position in the growing electronic zeonites market. In fact, this investment is often
in excess of the funds that the firm can generate internally. However, Zeon Plus does have a
very large market share. What type of company is this, according to the BCG growth-share
matrix?
18. (p. 262) When using the BCG growth-share matrix, the dividing point for the growth rate of
an industry in constant dollars is typically:
19. (p. 262) ________ is the current foundation of corporate portfolios—they sustain corporate
overhead, dividends and provide debt capacity.
20. (p. 262) In the BCG matrix, which of these businesses often generate cash in excess of their
needs?
21. (p. 261) Cash cows are yesterday’s
22. (p. 262) In the BCG matrix, which of these are managed for short-term cash flow?
23. (p. 262) As per the BCG matrix, which of these are cash guzzlers because of their uncertain
profit potential?
24. (p. 262) As per the BCG matrix, which of these businesses should be divested or liquidated?
25. (p. 262) Low market share businesses in low market growth industries are called:
26. (p. 262) Crabtree Soup has been facing intense competition and suffering low profit margins
for a year now. The market for their specialty soups has matured and the firm is being
managed for short-term cash flow to supplement SwissCo’s corporate-level resource needs.
Which type of firm is Crabtree Soup?
27. (p. 262) _______ are businesses whose high growth rate gives them considerable appeal, but
whose low market share makes their profit potential uncertain.
28. (p. 262) As per the BCG matrix, which of these should be selectively divested?
29. (p. 262) The _________ matrix was developed by McKinsey & Company at General
Electric.
30. (p. 262) The Industry Attractiveness-Business Strength matrix has ____ cells, while the BCG
matrix has ___ cells.
31. (p. 263) How many strategic approaches are suggested by the Industry Attractiveness-
Business Strength matrix?
32. (p. 263) Corporate strategists found the growth-share matrix’s singular axes
33. (p. 263) How many cells are in the industry attractiveness-business strength matrix?
34. (p. 263) Which matrix makes fine distinctions among business portfolio positions with the
inclusion of high/medium/low axes?
35. (p. 262) In the industry attractiveness-business strength matrix, the position of a business is
calculated by _______ its rating along the two dimensions of the matrix.
36. (p. 263) Which of the following is NOT a strategic approach suggested by the industry
attractiveness-business strength matrix?
37. (p. 262) The ______ decisions of the industry attractiveness-business strength matrix remain
quite similar to those of the BCG growth-share matrix.
38. (p. 263) The industry attractiveness-business strength matrix improves on the BCG matrix in
some fundamental ways. Which of the following is NOT one of these?
39. (p. 263) Which of the following factors is NOT considered in determining industry
attractiveness?
40. (p. 263) Which of the following factors is considered in determining a business’s strength for
the industry attractiveness-business strength matrix?
41. (p. 263) Which of the following is a factor in the cost position that helps determine business
strength?
42. (p. 264) Which matrix involves a framework that can help ensure that businesses’ strategies
are consistent with strategies appropriate to their strategic environment?
43. (p. 265) Which matrix allows one way for multi-business companies to rationalize what
businesses they are in—businesses that share core competencies and associated competitive
advantages.
44. (p. 265) _________ are those that have few sources of advantage, but the size is large—
typically the result of scale economies.
45. (p. 265) _________ has few sources of advantage, with most of them small. This results in
very competitive situations.
46. (p. 265) _________ has many sources of advantage. However, these are all small.
47. (p. 265) Which type of business involves differentiated products with low brand loyalty,
easily replicated technology and minimal scale economies?
48. (p. 265) Skills in achieving differentiation in product design, branding expertise, innovation,
first-mover and sometimes scale characterize winners in:
49. (p. 265) _________ has many sources of advantage and fined those advantages potentially
sizable.