Learn: Strategic Management: Diversification, Restructuring, and Competitive Strategy

Diversification efforts into new markets often fail because top executives are _____ interested in executive _____ and _____ rather than _____ returns.

more; power; prestige; shareholder

According to the text, corporate restructuring includes what three types?

Capital restructuring, asset restructuring, and management restructuring.

Management restructuring typically involves changes in the composition of the _____, _____, and reporting relationships.

top management team; organizational structure

Portfolio management matrices are applied at what level of strategy?

Corporate level.

Asset restructuring involves the sale of _____ assets, or even whole lines of peripheral businesses.

Unproductive.

In a BCG matrix, what is a business with large market share in a rapidly growing market and minimal or negative cash flow?

Star.

Capital restructuring involves changing what mix?

Debt-equity mix.

What common characteristic do portfolio management frameworks such as the BCG matrix share?

Grid dimensions reflect external environments and internal capabilities/market positions.

What are the three primary means by which a firm can diversify?

Mergers and acquisitions; joint ventures and strategic alliances; internal development.

When an acquisition fails to create shareholder value, what is likely to follow?

Divestiture.

What occurs when one firm buys another through stock, cash, or issuance of debt?

Acquisition.

Which is NOT a downside of mergers and acquisitions?

They are a slow means of entering new markets and acquiring skills and competencies.

Internal development may be time-consuming and forfeit the speed benefits of growth through _____ and _____.

Mergers; acquisitions.

What antitakeover tactic involves repurchasing shares from a hostile bidder at a premium?

Greenmail.

What antitakeover tactic lets existing shareholders buy additional shares at a discount?

Poison pill.

When executives act only in their own interests during divestiture, what is likely to happen?

Shareholder value suffers.

Diversification initiatives include _____ alliances and _____ ventures.

Strategic; joint.

Related diversification creates value through what two sources?

Economies of scope and market power.

For diversification into _____ businesses, value creation comes primarily from _____ relationships through the corporate office.

Unrelated; hierarchical.

Which is NOT a standard antitakeover tactic: greenmail, poison pills, golden handcuffs, or golden parachutes?

Golden handcuffs.

For sharing core competencies in diversification to succeed, what must be true?

The firms' value chains must be similar enough to leverage core competencies.

Which is NOT a risk of vertical integration?

Lack of control over valuable assets.

When should a firm consider vertical integration?

When suppliers cannot maintain quality standards.

In the BCG matrix, what has low market share and high market growth?

Question mark.

Strategic management has shifted from tangible resources toward what kind of resources?

Intangible resources.

Differentiation can improve competitive position by _____ margins and _____ buyer power.

Increasing; reducing.

A firm following a focus strategy concentrates on what type of market?

A small segment or subset of a larger market.

Which is NOT a typical pitfall of an integrated low-cost and differentiation strategy?

Targeting too large a market that causes unit costs to increase.

Mass customization permits firms to _____ unique products in relatively _____ quantities at _____ costs.

Manufacture; small; lower.

A pitfall of integrated cost leadership and differentiation is _____ the _____ of _____ activities in the extended value chain.

Underestimating; expenses; coordinating.

Underestimating expenses of coordinating value-chain activities may result from _____ integration of _____ and differentiation strategies.

Poor; cost leadership.

Which is NOT a reason a company's competitive advantage erodes?

Company commitment to innovation.

Why do industry life cycles matter for strategy?

Generic strategies, functional areas, value-creating activities, and objectives vary across life-cycle stages.

At the declining stage of the industry life cycle, how many segments exist and what are the emphases?

Few segments; low process-design emphasis; general management and finance.

Effective inbound logistics layout and technology-development expertise characterize which generic strategy?

Overall cost leadership.

Which generic strategy provides protection against rivalry and addresses the five competitive forces?

Differentiation.

A cost-leading manufacturing business relies on what to improve efficiency?

The experience curve.

In the introduction stage, what is unfamiliar to consumers and what is not well defined?

Products offered; market segments.

Which industry life-cycle stage has very high product-design emphasis, low rivalry, and low growth?

Introduction.

Which life-cycle stage has many segments, intense competition, and low-to-moderate process-design emphasis?

Maturity.

Experience effects are achieved by _____ a process until a task becomes _____.

Repeating; easier.

How do firms with both cost leadership and differentiation advantages tend to perform?

Higher than firms with either advantage alone.

A business striving for a low-cost _____ must attain a(n) _____ cost advantage over rivals.

Advantage; absolute.

An overall low-cost position can generate _____ returns despite _____ competition.

Above-average; strong.

A low-cost position allows buyers to push prices _____ only to the level of the next most efficient _____.

Down; producer.

Which is a risk of cost leadership?

Cost cuts in one value-chain area may raise costs in another.

High product differentiation generally means _____ emphasis on _____ based on price.

Decreased; competition.

What two technologies are increasingly used to select top talent?

Algorithms and artificial intelligence.

At what organizational levels should human-capital development take place?

Throughout the firm at all levels.

What should accompany training and development at all organizational levels?

Monitoring and tracking employee development.

Who does NOT normally rate employees in a 360-degree evaluation?

Family.

Commitment to which two organizational features reduces employee departures?

Mission and values.

Which is NOT an advantage of effectively managing diversity?

Problem creation.

How can strong human capital be used to build social capital?

Encourage employees to share ideas.

Knowledge workers often show _____ loyalty to colleagues and profession than to the _____ organization.

Greater; employing.

Firms are increasingly concerned with protecting which type of workers and capital?

More concerned with knowledge workers, social capital, and intellectual capital.

Knowledge-based resources tend to be _____ and therefore _____ difficult to protect than physical capital.

Tacit; more.

In social network analysis, what connects heterogeneous people to diverse information and perspectives?

Bridging relationships.

What is a potential limitation of high social capital?

It may breed groupthink.

Groupthink occurs when people _____ question shared beliefs.

Do not.

What type of teams have greater potential for process losses because of geographic dispersion?

Virtual teams.

Teams suffer process loss due to _____ cohesion, _____ trust, and lack of _____ task understanding.

Low; low; shared.

Which is NOT a method of managing intellectual property?

Converting explicit knowledge to tacit knowledge.

Which is NOT typically a dynamic capability?

Becoming more efficient in existing operational processes.

_____ capital represents the gap between firm market value and book value and can grow by _____ and _____ knowledgeable workers.

Intellectual; attracting; retaining.

Human capital consists of an individual's _____, _____, and _____.

Capabilities; knowledge; skills.

Creativity and problem-solving ability belong to which form of capital?

Human capital.

What capital consists of relationships among individuals across an organization?

Social capital.

Tacit knowledge can generally be accessed only with whose consent?

The individual employee.

Which is NOT one of the three main ways to keep talented employees: hiring/selecting, developing, sorting/absorbing, retaining?

Sorting/absorbing.