CBA 469 - Chapter 8 Flashcards

CBA 469 - JSU - Chapter 8 Flashcards

diversification

vertical integration

Amazon's explosive success is largely due to which of the following? (More than one answer may be correct.)

diversification

information asymmetry

vertical integration

single business focus

Corporate

______ strategy involves the decisions that senior management makes and the goal-directed actions it takes to gain and sustain competitive advantage in several industries and markets simultaneously.

Multiple choice question.

Transactional

Transformational

Administrative

Corporate

to reduce risk 

Which of the following is a reason why a firm needs to grow?

Multiple choice question.

to reduce risk

to balance market power

to increase risk and thus become competitive

to increase costs

the savings from producing two or more outputs at less cost than producing each output individually

Which of the following describes economies of scope?

Multiple choice question.

the average cost per unit decreasing as output increases

the unique strengths embedded deep within a firm

the savings from producing two or more outputs at less cost than producing each output individually

costs associated with economic exchange

Transaction

______ costs are all of the costs associated with an economic exchange.

Multiple choice question.

Opportunity

Competency

Horizontal

Transaction

innovation 

Amazon's continued focus on Blank______ is key to its ongoing success.

Multiple choice question.

specific target markets

employee perks

shareholder profits

innovation

vertically integrate 

When a firm is more efficient in organizing economic activity than markets are, the firm should ______.

Multiple choice question.

vertically integrate

pursue a cost-leadership strategy

merge with another firm

horizontally integrate

executives

The persons responsible for forming corporate-level strategy are the Blank______.

Multiple choice question.

middle managers

consultants

shareholders

executives

grow 

In order for a firm to lower costs, it must Blank______.

Multiple choice question.

increase risks

grow

lower its expectations

lower profits

One way to overcome the principal-agent problem is to Blank______.

Multiple choice question.

make managers owners through stock options

establish coordination and flexibility

specify information symmetries

offer managers communities of knowledge

make managers owners through stock options

One way to overcome the principal-agent problem is to Blank______.

Multiple choice question.

offer managers communities of knowledge

make managers owners through stock options

establish coordination and flexibility

specify information symmetries

core competencies

Which of the following terms describes the strengths that allow a firm to distinguish itself from the competition?

Multiple choice question.

Porter's five forces

core competencies

economies of scope

transaction costs

PESTEL strengths

economies of scale

the internal and external

Transaction costs include Blank______ costs associated with an economic exchange.

Multiple choice question.

the internal and external

the legal

only the external

only the internal

crowding out of desirable goods and services by inferior ones

Which of the following would be as a result of information asymmetry?

Multiple choice question.

crowding out of undesirable goods and services by inferior ones

crowding in of undesirable goods and services by superior ones

crowding out of desirable goods and services by inferior ones

crowding out of desirable goods and services by superior ones

transaction; lower

Google's choice to hire programmers in-house suggests that they decided that the Blank______ costs associated with this strategy are Blank______ than the costs associated with contracting in the open market.

Multiple choice question.

transaction; higher

opportunism; lower

transaction; lower

administrative; higher

backward vertical integration 

Apple acquiring P.A. Semi is an example of 

Multiple Choice

• backward value chain integration.

• backward vertical integration.

• forward horizontal integration.

• forward vertical integration.

• forward value chain integration.

add the talent of P.A. Semi’s engineers to Apple’s workforce to help them build custom chips for Apple devices.

Apple’s primary reason to acquire P.A. Semi was to

Multiple Choice

increase revenues by becoming a manufacturer of microprocessors for all mobile devices.

add the talent of P.A. Semi’s engineers to Apple’s workforce to help them build custom chips for Apple devices.

move ownership of activities closer to the end point of the value chain.

develop an open-source chip.

become more dependent on suppliers of core components.

benefit of vertical integration.

The fact that Apple is able to secure critical supplies and facilitate investments in specialized assets (chips for Apple) is considered a(n)

Multiple Choice

benefit of vertical integration.

example of increasing costs.

benefit of vertical disintegration.

example of full vertical integration.

example of vertical disintegration.

fully vertically integrated.

When all activities of the value chain are conducted within the boundaries of the firm, the firm is said to be

Multiple Choice

fully vertically integrated.

completely value chain integrated.

taper integrated.

vertically disintegrated.

wholly value chain integrated.

backward vertical integration.

When HTC, a manufacturer of phone hardware, started to design its own smartphones, HTC engaged in

Multiple Choice

backward vertical integration.

backward horizontal integration.

forward vertical integration.

backward vertical disintegration.

taper forward integration.

Where should the firm compete?

Corporate Strategy helps managers understand which strategy question?

Multiple Choice

How can the firm buy out a competitor?

How should the firm expand?

Where should the firm expand?

Where should the firm compete?

How should the firm compete?

expansion into new markets by leveraging a core capability.

Disney’s expansion from short films to animated films to live action films to television is an example of

Multiple Choice

expansion into new geographies by leveraging assets.

expansion into vertical markets to address critical supplier power.

expansion into new geographies by leveraging a core capability.

expansion into new markets by leveraging a core capability.

expansion into vertical markets by leveraging a core asset.

parenting advantage 

Disney’s ability to leverage its characters across its network of theme parks, media networks and movies, and consumer products is an example of a corporate

Multiple Choice

parenting advantage.

synergy advantage.

vertical advantage.

integration advantage.

expansion into new geographies.

Unrelated Diversification: 1

Restructuring: 4

Related Diversification: 3

BCG Growth-Share Matrix: 2

1- Diversification most often tied to good performance

2- A tool used in corporate portfolio planning

3- Tata is a conglomerate successfully using this

4- Process of reorganizing activities to refocus a firm

takes on the shape of an inverted U so related diversification has the best performance.

The relationship between the type of diversification and overall firm performance

Multiple Choice

takes on the shape of an inverted U so related diversification has the best performance.

takes on the shape of a U where modest diversification has the worst performance.

is positive, meaning that more diversification always leads to higher firm performance.

there is no relationship between the type of diversification and overall firm performance.

is negative, meaning that more diversification always leads to lower firm performance.

restructuring

The selling of Busch Entertainment, a theme park unit that owns SeaWorld, by Belgium-based AB InBev after the acquisition of Anheuser-Busch by InBev to ensure a focus on AB InBev’s core business, is an example of

Multiple Choice

franchising.

taper integration.

restructuring.

a principal–agent problem.

a diversification premium.

cash cows

Strategic business units that compete in a low-growth market but hold considerable market share are called ________Blank. Their earnings and cash flows are high and stable.

Multiple Choice

stars

dogs

question marks

cash cows

piggy banks