It is important for corporate managers to be able to identify high-performing and
underperforming divisions and to take corrective action as necessary.
Access to cheaper capital is an example of an economy of scale.
A company searching for a successful business model has to group customers according
to the similarities or differences in their needs to discover what kinds of products to
develop that will best meet the needs of different kinds of customers.
Diversification is the process of a company entering new industries distinct from its
core industry, using a multibusiness model.
In a firm with a Multidivisional structure, corporate managers oversee the actions of
divisional managers.
One characteristic of embryonic industries is poorly developed distribution channels.
Which of the following industry structures is dominated by a small number of large
companies?
A.Fragmented industry
B.Consolidated industry
C.Oligopoly
D.Monopoly
E.Sector
Often, the industry standard is selected competitively by
A.market supply.
B.market demand.
C.government contracts.
D.all of these choices.
E.none of these choices.
When a company uses a network structure to implement outsourcing,
A.many firms along the value chain can easily cooperate.
B.bureaucratic costs are increased.
C.the cost of the outsourced functions increases.
D.organizational culture is an important control mechanism.
E.many firms along the value chain can easily cooperate and bureaucratic costs are
increased.
Which of the following shakeout strategies requires a company to limit or decrease its
investment in a business and to extract, or milk, the investment as much as it can?
A.Market concentration strategy
B.Share-increasing strategy
C.Cost-leadership strategy
D.Hold-and-maintain strategy
E.Harvest strategy
Which of the following is not one of the benefits that first movers enjoy?
A.Earlier benefits from economies of scale
B.Ability to create customer switching costs
C.First to obtain brand loyalty
D.Ability to accumulate knowledge about the market
E.Lower pioneering costs
Brand loyalty may be created by
A.continuous advertising.
B.patent protection of products.
C.product innovation achieved through company research and development.
D.emphasis on high product quality.
E.all of these.
Nicole is a salesperson at a local Ford dealership. Her bonus pay is dependent upon
surpassing sales targets, thus increasing the profitability of the company. This is a form
of which of the following governance mechanisms?
A.Stock options
B.Self-dealing
C.The takeover constraint
D.Employee incentives
E.Greenmail
A company’s stakeholders include which of the following?
A.Stockholders
B.Creditors
C.Employees
D.Customers
E.All of these
When one or more components of a company’s value chain are applicable to a wide
variety of industrial and commercial situations, which of the following strategies should
a company pursue?
A.Unrelated diversification
B.Related diversification
C.A focus strategy
D.Taper integration
E.Backward integration
A localization strategy is based on which of the following ideas?
A.There is a convergence in the tastes of consumers in different nations of the world.
B.There are substantial economies of scale to be realized from centralizing global
production.
C.Consumer tastes and preferences differ among national markets.
D.There are cost advantages associated with manufacturing a standard product for
global consumption.
E.Competitive strategy should be centralized at the world head office.