QUIZ 1 PGDM SM II

1. The ultimate test of the value of a corporate-level strategy is whether the:

A. corporation earns a great deal of money.

B. top management team is satisfied with the corporation's performance.
C. businesses in the portfolio increase the firm's financial returns.
D. businesses in the portfolio are worth more under the management of the company in question
than they would be under any other ownership.

2. Revenues for United Parcel Service (UPS) come from the following business segments: 60

percent from U.S. package delivery operations, 22 percent from international package delivery,

and 18 percent from non-packaging operations. Which of the following best describes the

corporate-level strategy of UPS?

A. Single business
B. Dominant business
C. Related constrained
D. Related linked

3. Firms use corporate-level diversification strategies for all the following reasons EXCEPT:

A. value-creating.
B. value-neutral.
C. value-reducing.
D. value-diversifying.

4. Which of the following acquisitions would be considered the LEAST related?

A. An upscale "white-tablecloth" restaurant chain acquires a travel agency.

B. A candy manufacturer purchases a chemical laboratory specializing in food flavorings.
C. A chain of garden centers acquires a landscape architecture firm.
D. A hospital acquires a long-term care nursing home.

5. Which of the following is a value-reducing reason for diversification?

A. Enhancing the strategic competitiveness of the entire company

B. Expanding the business portfolio in order to diversify managerial employment risk
C. Gaining market power relative to competitors
D. Conforming to antitrust regulation
 6. Acquisitions to increase market power require that the firm have a(n) __________ diversification
strategy.

A. unrelated
B. dominant-business
C. related
D. single-business

7. U.S. companies moving into the international market need to be sensitive to the need for local
country or regional responsiveness because of:

A. increasing rejection of American culture across much of the world.

B. the sophistication of the international consumer due to the Internet.
C. consumer needs and desires, industry conditions, political and legal structures, and social norms
vary by country.
D. the increasing loss of economies of scale.

8. A global strategy:

A. is easy to manage because of common operating decisions across borders.

B. achieves efficient operations without sharing resources across country boundaries.
C. increases risk because decision making is centralized at the home office.
D. lacks responsiveness to local markets.

9. In China, Starbucks is standardizing its operations while simultaneously decentralizing some

decision-making responsibility to local levels to meet customers' tastes. Starbucks is following the
__________ international corporate-level strategy.
A. transnational
B. Global.
C. differentiation
D. multidomestic

10. Disney suffered lawsuits in France, at Disneyland Paris, because of the lack of fit between its
transferred personnel policies and the French employees charged to enact them. This is an example of
the:
A. effects of regionalization.
B. risks of a multidomestic strategy.
C. liability of foreignness.
D. effect of demand conditions.