Strategic Management

Question 1: The benefit from diversification that a shareholder cannot duplicate on their own is 1. Smoothing the income stream by combining firms with counter-cyclical performance 2. Growth from diversification 3. Lower systematic risk from unrelated diversification 4. Synergy among the different businesses Question 2: A typical question asked by corporate strategy is 1. How should we compete in the telecom market? 2. How should we position our car business? 3. Should we be in over-the-counter cosmetics businesses? 4. Should we add new features to our product line? Question 3: For firms pursuing a synergy strategy, it is easier to ____________ than to ____________ 1. Transfer tacit knowledge; transfer codified knowledge 2. Share financial assets; share physical assets 3. Transfer knowledge; share assets 4. Share assets; transfer knowledge Question 4: Which of the following would be classified as a corporate level strategy? 1. Low cost strategy 2. Product diversification 3. Narrow market strategy 4. Related diversification strategy 5. All of the strategies listed here are corporate level strategies

Question 5: Which of the following statements about corporate strategy models is true? 1. The portfolio approach was developed to solve the problems of the stick-to-your-knitting strategy. 2. Synergy is relatively costless to achieve 3. Related mergers are easier than unrelated mergers 4. Portfolio models focus on managing cash-flows among the different business units

Question 6: According to the lecture, Waste Management and Blockbuster Video were started using a _______________ strategy. 1. Restructuring 2. Portfolio 3. Dominate logic 4. Synergy Question 7: Diversifications primary benefits for managers include all but which of the following? 1. Diversification creates growth that lead to higher pay 2. Diversification lowers the risk firm bankruptcy thus employment risk 3. Diversification can smooth the firms income stream leading to higher pay 4. Diversification can lead to superior information about how each business is doing Question 8: One difference between related and unrelated diversification 1. Related diversification seeks to create an internal capital market 2. Related diversification seeks to restructure businesses with standardized procedures 3. Unrelated diversification seeks to create an internal capital market 4. Unrelated diversification seeks to transfer core competencies among businesses

Question 9: Corporate-level strategy is concerned with the following two key issues 1. What single business the firm should be in, and how it should maintain a competitive advantage with a differentiation strategy in that business 2. What businesses the firm should be in and how the corporate office should manage its group of businesses 3. How to maximize power over buyers and suppliers 4. Which tactical and strategic competitive actions to pursue Question 10: According to the examples provided in the lecture, the firm that best exemplifies a company seeking to create an internal capital market through diversification is 1. General Foods 2. General Motors 3. General Electric 4. General Dynamics