True or False

Whenever an organization diversifies, it represents investing a stockholder's funds in away in which

the individual investor is unable. *
https://quizlet.com/360604045/strategic-management-chapter-6-tf-flash-cards/

1 point

True

False

Sharing activities across business units can provide two primary benefits: cost savings and revenue
enhancements. * same link as above

1 point

True

False

A firm that incorporates more processes toward the original source of raw materials is an example of
forward integration. * same link

1 point

True

False

Market transactions do not involve transaction costs. * same link

1 point

True

False

Portfolio management should be considered as the primary basis for formulating corporate-level
strategies. * same link

1 point

True

False

The two principal means by which firms achieve synergy through market power are: pooled
negotiating power and corporate parenting. * same link

1 point

True

False
An advantage of mergers and acquisitions is that they can enable a firm to rapidly enter new product
markets. * same link

1 point

True

False

A newly acquired business must always have products that are similar to the existing businesses'
products to benefit from the corporation's core competence. * same link

1 point

True

False

One of the risks of vertical integration is that there may be problems associated with unbalanced
capacities or unfilled demands along a firm's value chain. *

1 point https://quizlet.com/98206939/org-strat-mid-term-6-flash-cards/

True

False

Greenmail is an offer by a company, threatened by takeover, to offer its stock at a reduced price to a
third party. *

1 point https://quizlet.com/207036383/mgmt-final-flash-cards/

True

False

Multiple Choice
Transaction costs include all of the following costs except *

1 point https://www.coursehero.com/file/p2culj/Transaction-costs-include-all-of-the-following-costs-EXCEPT-A-search-costs-B/

A. search costs.

B. negotiating costs.

C. monitoring costs.

D. agency costs.

According to Michael Porter: "There's a tremendous allure to __________. It's the big play, the dramatic
gesture. With one stroke of the pen you can add billions to size, get a frontpage story, and create
excitement in markets." *

1 point https://quizlet.com/289908850/chapter-6-flash-cards/

A. strategic alliances and joint ventures

 B. mergers and acquisitions

C. internal development

D. differentiation strategies

All of the following are guidelines for managing strategic alliances except *

1 point https://www.coursehero.com/file/p1pej46/63-p-228-All-of-the-following-are-guidelines-for-managing-strategic-alliances/

A. establishing a clear understanding between partners.

B. relying primarily on a contract to make the joint venture work.

C. not shortchanging your partner.

D. working hard to ensure a collaborative relationship between partners.

The three primary means by which a firm can diversify are: *

1 point https://quizlet.com/389596349/strategy-management-quizzes-ch-8-12-flash-cards/

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

B. mergers and acquisitions; differentiation; overall cost leadership.

C. joint ventures and strategic alliances; integration of value chain activities; acquiring human capital.

D. mergers and acquisitions; internal development; differentiation.

When using a BCG matrix, a business that currently holds a large market share in a rapidly growing
market and that has minimal or negative cash flow would be known as a *
https://quizlet.com/242181848/4750-exam-2-flash-cards/

1 point

A. cow.

B. dog.

C. problem child.

D. star.

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

1 point https://quizlet.com/458553354/bonus-quiz-answers-flash-cards/

A. achieving economies of scope through related diversification.

B. achieving market power through related diversification.

C. attaining the benefits of restructuring through unrelated diversification.

D. attaining the benefits of parenting through unrelated diversification.

The risks of vertical integration include all of the following except *

1 point https://quizlet.com/143655410/chapter-6-solutions-flash-cards/
 A. costs and expenses associated with increased overhead and capital expenditures.

B. lack of control over valuable assets.

C. problems associated with unbalanced capacities along the value chain.

D. additional administrative costs associated with managing a more complex set of activities.

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? *

1 point https://quizlet.com/143655410/chapter-6-solutions-flash-cards/

A. The competence must help the business gain strength relative to its competition.

B. The new business must be similar to existing businesses to benefit from a core competence.

C. The collection of competencies should be unique, so that they cannot be easily imitated.

D. The new business must have an established large market share.

The corporate office of Cooper Industries adds value to its acquired businesses by performing such
activities as auditing their manufacturing operations, improving their accounting activities, and
centralizing union negotiations. This is an example of *

1 point https://quizlet.com/204699282/bps-ch-6-mc-flash-cards/

A. achieving economies of scope through related diversification.

B. achieving market power through related diversification.

C. attaining the benefits of restructuring through unrelated diversification.

D. attaining the benefits of parenting through unrelated diversification.

__________ is 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. *

1 point https://lawaspect.com/chapter-6-review-questions/ https://quizlet.com/73758139/4322-6-flash-cards/

A. Parenting

B. Restructuring

C. Leveraging core competencies

D. Sharing activities