Question 1

Concentric diversification is growth into unrelated businesses but may be a very appropriate corporate strategy when a firm has a strong competitive position but industry attractiveness is low.

Accepted Answer

A) True 
 B)False

Question 2

Growth through diversification out of an industry into an unrelated industry is called

Accepted Answer

A)   concentration.
B)   horizontal growth.
C)   concentric diversification.
D)   vertical growth.
E)   conglomerate diversification.F) A) and B)
G) B) and E)

Question 3

The most widely pursued corporate directional strategies are those designed to achieve growth.

Accepted Answer

A) True 
 B)False

Question 4

When Coca Cola contracted with Capgemini to provide accounting and financial services,which strategy was Coca Cola using?

Accepted Answer

A)   horizontal growth
B)   backward integration
C)   outsourcing
D)   retrenchment
E)   diversificationF) C) and D)
G) B) and C)

Question 5

A firm's expansion into other geographic locations and/or increasing the range of products and services offered to current markets is called

Accepted Answer

A)   forward vertical growth.
B)   diversification.
C)   backward vertical growth.
D)   captive company strategy.
E)   horizontal growth.F) A) and E)
G) A) and C)

Question 6

The purchase of the supplier Carroll's Foods for its hog-growing facilities by Smithfield Foods,the world's largest pork processor,is an example of

Accepted Answer

A)   forward integration.
B)   horizontal integration.
C)   backward integration.
D)   transferred integration.
E)   mass integration.F) A) and E)
G) C) and D)

Question 7

Which strategy did Delta choose when it acquired Northwest Airlines to obtain access to Northwest's Asian markets?

Accepted Answer

A)   a retrenchment strategy using horizontal integration through internal means
B)   a horizontal integration strategy
C)   a stability strategy using concentric diversification
D)   a growth strategy using vertical integration through external means
E)   a retrenchment strategy using a concentration methodF) A) and C)
G) A) and E)

Question 8

A limitation of the BCG Growth-Share Matrix is the questionable link between market share and profitability.

Accepted Answer

A) True 
 B)False

Question 9

Which external growth strategy was demonstrated when Procter & Gamble completely absorbed Gillette?

Accepted Answer

A)   merger
B)   strategic alliance
C)   diversification
D)   concentration
E)   acquisitionF) D) and E)
G) A) and E)

Question 10

Which external growth strategy involves two or more corporations joining in a stock exchange and from which only one corporation survives?

Accepted Answer

A)   merger
B)   strategic alliance
C)   diversification
D)   acquisition
E)   concentrationF) A) and D)
G) A) and B)

Question 11

Which one of the following is characteristic of a firm that has chosen a captive company strategy?

Accepted Answer

A)   It is most appropriate for a company with a strong competitive position in a growing industry.
B)   The firm increases the scope of its functional activities.
C)   The firm gains a certainty of sales and production in return for becoming heavily dependent upon another firm for at least 75% of its sales.
D)   The captive company acts as an angel to another firm.
E)   It is the first phase for the company to execute a turnaround strategy.F) B) and E)
G) B) and D)

Question 12

Backward integration is going backward on an industry's value chain.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following strategies was being used when Allied Corporation and Signal Companies formed Allied Signal?

Accepted Answer

A)   merger
B)   strategic alliance
C)   diversification
D)   acquisition
E)   concentrationF) C) and D)
G) A) and E)

Question 14

When P&G sold off half of its brands and consolidated others,it was following which retrenchment strategy?

Accepted Answer

A)   divestment
B)   sell-out
C)   contraction
D)   captive company
E)   liquidationF) A) and C)
G) A) and E)

Question 15

Corporate strategy deals primarily with the choice of direction for the firm as a whole and the management of its business or product portfolio.

Accepted Answer

A) True 
 B)False

Question 16

A simple way to portray a corporation's portfolio of investments is by using the

Accepted Answer

A)   SWOT Matrix.
B)   transaction cost economics.
C)   BCG Growth-Share Matrix.
D)   SFAS Matrix.
E)   IFAS Matrix.F) A) and D)
G) B) and C)

Question 17

Stability strategies can be very useful in the short run,but they can be dangerous if followed for too long.

Accepted Answer

A) True 
 B)False

Question 18

When P&G,Kimberly-Clark,and Scott Paper compete with each other in varying combinations of consumer paper products,they are said to be engaging in

Accepted Answer

A)   oligopolistic competition.
B)   strategic competition.
C)   multipoint competition.
D)   laissez-faire competition.
E)   horizontal competition.F) A) and B)
G) B) and E)

Question 19

What are the three key issues that corporate strategy addresses?

Accepted Answer

Corporate strategy deals with three key ...

Question 20

Which of the following is not a reason why the growth strategy is so desirable?

Accepted Answer

A)   There are more opportunities for advancement and promotion.
B)   A corporation that experiences successful growth is thought of positively by the marketplace and potential investors.
C)   A large and growth-oriented corporation has more clout and influence.
D)   A growing firm can cover up mistakes and inefficiencies because of the increase in cash flow revenue.
E)   A large and growing firm attracts more acquisition offers.F) A) and B)
G) A) and C)

Exam 7: Strategy Formulation: Corporate Strategy

Stability strategies can be very useful in the short run,but they can be dangerous if followed for too long.

Correct AnswerverifiedShow Answer

Backward integration is going backward on an industry's value chain.

Correct AnswerverifiedShow Answer

Concentric diversification is growth into unrelated businesses but may be a very appropriate corporate strategy when a firm has a strong competitive position but industry attractiveness is low.

Correct AnswerverifiedShow Answer

Which one of the following is characteristic of a firm that has chosen a captive company strategy?

Correct AnswerverifiedShow Answer

Which strategy did Delta choose when it acquired Northwest Airlines to obtain access to Northwest's Asian markets?

Correct AnswerverifiedShow Answer

Which external growth strategy was demonstrated when Procter & Gamble completely absorbed Gillette?

Correct AnswerverifiedShow Answer

What are the three key issues that corporate strategy addresses?

Correct AnswerverifiedCorporate strategy deals with three key ...View AnswerShow Answer

When P&G sold off half of its brands and consolidated others,it was following which retrenchment strategy?

Correct AnswerverifiedShow Answer

When Coca Cola contracted with Capgemini to provide accounting and financial services,which strategy was Coca Cola using?

Correct AnswerverifiedShow Answer

Growth through diversification out of an industry into an unrelated industry is called

Correct AnswerverifiedShow Answer

Which of the following is not a reason why the growth strategy is so desirable?

Correct AnswerverifiedShow Answer

The most widely pursued corporate directional strategies are those designed to achieve growth.

Correct AnswerverifiedShow Answer

Corporate strategy deals primarily with the choice of direction for the firm as a whole and the management of its business or product portfolio.

Correct AnswerverifiedShow Answer

Which external growth strategy involves two or more corporations joining in a stock exchange and from which only one corporation survives?

Correct AnswerverifiedShow Answer

The purchase of the supplier Carroll's Foods for its hog-growing facilities by Smithfield Foods,the world's largest pork processor,is an example of

Correct AnswerverifiedShow Answer

When P&G,Kimberly-Clark,and Scott Paper compete with each other in varying combinations of consumer paper products,they are said to be engaging in

Correct AnswerverifiedShow Answer

Which of the following strategies was being used when Allied Corporation and Signal Companies formed Allied Signal?

Correct AnswerverifiedShow Answer

A limitation of the BCG Growth-Share Matrix is the questionable link between market share and profitability.

Correct AnswerverifiedShow Answer

A simple way to portray a corporation's portfolio of investments is by using the

Correct AnswerverifiedShow Answer

A firm's expansion into other geographic locations and/or increasing the range of products and services offered to current markets is called

Correct AnswerverifiedShow Answer

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Corporate strategy deals with three key ...
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