A) struggling companies with good turnaround potential,undervalued companies that can be acquired at a bargain price,and companies that have bright growth prospects but are short on investment capital.
B) companies offering the biggest potential to reduce labor costs.
C) cash cow businesses with excellent financial fit.
D) companies that are market leaders in their respective industries.
E) companies that employ the same basic type of competitive strategy as the parent corporation's existing businesses.
G) A) and B)
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A) usually the most attractive long-run strategy for a broadly diversified company confronted with recession,high interest rates,mounting competitive pressures in several of its businesses,and sluggish growth.
B) a strategy that allows a diversified firm's energies to be concentrated on building strong positions in a smaller number of businesses rather the stretching its resources and managerial attention too thinly across many businesses.
C) an attractive strategy option for revamping a diverse business lineup that lacks strong cross-business financial fit.
D) sometimes an attractive option for deepening a diversified company's technological expertise and supporting a faster rate of product innovation.
E) a strategy best reserved for companies in poor financial shape.
G) C) and D)
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A) making acquisitions to establish positions in new businesses or to complement existing businesses.
B) investing in ways to strengthen or grow existing businesses.
C) funding long-range R&D ventures aimed at opening market opportunities in new or existing businesses.
D) paying off existing debt and building cash reserves,.
E) .decreasing dividend payments and/or selling shares of stock.
G) B) and D)
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A) The ability to broaden the company's product line
B) The opportunity to convert cross-business strategic fit into competitive advantage over business rivals whose operations don't offer comparable strategic fit benefits
C) The potential for improving the stability of the company's financial performance
D) The ability to serve a broader spectrum of buyer needs
E) The added capability it provides in overcoming the barriers to entering foreign markets
G) A) and B)
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A) Internal capital market
B) Cash cow benefits
C) Economic value added
D) Shareholder value added
E) Derived valuation
G) A) and C)
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Calculating quantitative industry attrac...View Answer
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A) to prevent the transfer of expertise or technology or capabilities from one business to another.
B) to independently preserve common brand names from cross-business usage.
C) to increase costs by combining the performance of the related value chain activities of different businesses.
D) for cross-business collaboration to build valuable new resource strengths and competitive capabilities.
E) to maintain business value chain activities separate and apart from one business to another to protect company independence.
G) B) and C)
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A) Making acquisitions to establish positions in new businesses or to complement existing businesses
B) Investing financial resources in cash cow businesses until they show enough strength to generate positive cash flows
C) Funding long-range R&D ventures aimed at opening market opportunities in new or existing businesses
D) Paying down existing debt,increasing dividends,or repurchasing shares of the company's stock
E) Investing in ways to strengthen or grow existing businesses
G) B) and D)
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A) broadening the company's business scope by making new acquisitions in new industries.
B) divesting weak-performing businesses and retrenching to a narrower base of business operations.
C) restructuring the company's business lineup with a combination of divestitures and new acquisitions to put a whole new face on the company's business makeup.
D) pursuing growth opportunities within the existing business lineup.
E) pursuing certain acquisitions even if they have done badly or haven't quite lived up to expectations.
G) B) and D)
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A) determining each industry's key success factors,rating the ability of each business to be successful on each industry KSF,and adding the individual ratings to obtain overall measures of each business's ability to compete successfully.
B) identifying the competitive forces facing each business,rating the strength of these competitive forces industry by industry,and then ranking each business's ability to be profitable,given the strength of the competition it faces.
C) selecting a set of competitive strength measures,weighting the importance of each measure,rating each business on each strength measure,multiplying the strength ratings by the assigned weight to obtain a weighted rating,adding the weighted ratings for each business unit to obtain an overall competitive strength score,and using the overall competitive strength scores to evaluate the competitive strength of all the businesses,both individually and as a group.
D) determining which businesses possess good strategic fit with other businesses,identifying the portion of the value chain where this fit occurs,and evaluating the strength of the competitive advantage attached to each of the strategic fits to get an overall measure of competitive advantage potential.Businesses with the highest/lowest competitive advantage potential have the most/least competitive strength.
E) rating the caliber of each businesses strategic and resource fit,weighting the importance of each type of strategic/resource fit,calculating weighted strategic/resource fit scores,and adding the weighted ratings for each business to obtain an overall strength score for each business unit that indicates whether the company has adequate strategic/resource fits to be a strong market contender in each of the industries where it competes.
G) C) and D)
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A) a substantial portion of its revenues and expenses must come from business units with relatively low attractiveness scores.
B) its principal business must be in industries with a good outlook for growth and above-average profitability.
C) its business units in high attractiveness score industries should be candidates for divesture.
D) its business units must operate within the favorable aspects of their industry environment.
E) its business units must have a popular image,even if the performance of their products does not greatly satisfy buyer expectations.
G) C) and D)
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A) It can offer opportunities for transferring expertise,technology,and other capabilities from one business to another.
B) It can offer opportunities for reducing costs on advertising by leveraging use of a competitively powerful brand name.
C) It is particularly well-suited for the use of first-mover strategies and capturing valuable financial fits.
D) It may present opportunities for cross-business collaboration to create valuable new competencies and capabilities.
E) It can facilitate sharing of other resources (besides brands) that support corresponding value chain activities across businesses.
G) A) and C)
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A) Assessing the competitive strength of each business the company has diversified into
B) Determining which business units are cash cows and which ones are cash hogs,and then evaluating how soon the company's cash hogs can be transformed into cash cows
C) Evaluating the strategic fits and resource fits among the various sister businesses
D) Assessing the attractiveness of the industries the company has diversified into,both individually and as a group
E) Ranking the performance prospects of the businesses from best to worst and deciding what priority to give each of the company's business units in allocating resources
G) B) and C)
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A) revamping the value chains of each of a diversified company's businesses.
B) focusing on restoring the profitability of its money-losing businesses and thereby improving the company's overall profitability.
C) revamping the strategies of its different businesses,especially those that are performing poorly.
D) divesting low-performing businesses that do not fit and acquiring new ones where opportunities are more promising to put a new face on the company's business makeup.
E) broadening the scope of diversification to include a larger number of smaller and more diverse businesses.
G) A) and C)
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A) picking the new industries to enter and deciding on the means of entry.
B) initiating actions to boost the combined performance of the corporation's collection of businesses.
C) pursuing opportunities to leverage cross-business value chain relationships and strategic fit into competitive advantage.
D) establishing investment priorities and steering corporate resources into the most attractive business units.
E) divesting well-performing businesses.
G) A) and D)
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A) have value chain match-ups that offer opportunities to combine the performance of related value chain activities and reduce costs.
B) have value chain match-ups that offer opportunities to transfer skills or technology or intellectual capital from one business to another.
C) have opportunities to share use of a well-respected brand name.
D) have value chain match-ups that offer opportunities to create new competitive capabilities or to leverage existing resources.
E) are cash cows and which ones are cash hogs.
G) A) and C)
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A) the fair market value of similar companies in the same geographic locale.
B) the preacquisition market value of the target company.
C) the comparable value of similar companies within the same market.
D) the amount paid as a down payment to be held in escrow until closing.
E) the difference between the amount that was offered and the amount that is escrowed.
G) D) and E)
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A) is a generalized resource that can be leveraged in unrelated diversification.
B) is a brand name that can steer a narrow assortment of business types.
C) represents a public disclosure spotlighting the corporate image.
D) represents an overall corporate marker covering its overriding image of sustainability and responsibility.
E) is a specialized resource designed to influence profit growth.
G) B) and D)
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A) Broadening the company's business scope by making new acquisitions in new industries
B) Increasing dividend payments to shareholders and/or repurchasing shares of the company's stock
C) Restructuring the company's business lineup with a combination of divestitures and acquisitions to put a whole new face on the company's business makeup
D) Pursuing multinational diversification and striving to globalize the operations of several of the company's business units
E) Divesting weak-performing businesses and retrenching to a narrower base of business operations
G) B) and C)
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A) Determining whether the excess cash flows generated by cash cow businesses are sufficient to cover the negative cash flows of its cash hog businesses
B) Determining whether recently acquired businesses are acting to strengthen a company's resource base and competitive capabilities or whether they are causing its competitive and managerial resources to be stretched too thinly across its businesses
C) Determining whether opportunity exists for achieving 1 + 1 = 2 outcomes
D) Determining whether the company has adequate financial strength to fund its different businesses and maintain a healthy credit rating
E) Determining whether the corporate parent has or can develop sufficient resource strengths and competitive capabilities to be successful in each of the businesses it has diversified into
G) None of the above
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