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Exam 6: Corporate-Level Strategy

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Question 31

True/False

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Disney (discussed in the Chapter 6 Opening Case) is an example of a company that was successful because its corporate strategy added value across its set of businesses above what the individual businesses could create individually.

A) True
B) False

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Question 32

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Operational relatedness is created by ___________ of ___________.

A) sharing; core competencies
B) sharing; activities
C) transferring; core competencies
D) transferring; activities

E) None of the above
F) A) and D)

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Question 33

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Google's diversification could lead the firm toward a related linked strategy and give the firm advantages in multipoint competition with competitors such as Facebook and Microsoft.

Since the 1950s, U.S. government policy regarding antitrust concerns has remained constant.

Hutchison Whampoa Limited (HWL) has businesses in ports and related services, telecommunications, property and hotels, retail and manufacturing, and energy and infrastructure. HWL makes no efforts to share activities or transfer core competencies among the businesses. HWL is following a strategy of__________diversification.

Antitrust regulation, tax laws, and low performance are all value-neutral reasons why firms engage in diversification.

Dragonfly, publishers of children's books, has purchased White Rabbit, another publisher of children's books. Both companies' books are sold to the same retail stores and schools. Their content is different because Dragonfly produces children's literature, whereas White Rabbit focuses on child-level nonfiction scientific and nature topics. Which of the following statements is probably TRUE about this acquisition?

Compared with related constrained firms, related linked firms share fewer resources and assets between their businesses, concentrating instead on transferring knowledge and core competencies between the businesses.

The "conglomerate discount" occurs in large, highly diversified businesses and results from analysts not knowing how to value the vast array of large businesses with complex financial reports.

Research suggests that _______________has decreased while ___________has increased possibly due to the restructuring that took place in the 1990s and early twenty-first century.

Which of the following is a value-reducing reason for diversification?

Financial economies are cost savings realized through improved allocations of financial resources based on investments inside or outside the firm.

A firm uses a corporate-level diversification strategy for a variety of reasons, all of which have to do with ways to create value.

An ability to efficiently allocate capital through an internal market may help the firm protect the competitive advantages it develops:

Because of the tax laws of the 1960s and 1970s, when dividends were taxed more heavily than capital gains, shareholders preferred that corporations:

PorkPride Foods produces hams and other meat products. It owns hog raising operations. This is an example of a business that is:

Usually a company is classified as a single business firm when revenues generated by the dominant business are greater than ____ percent.

What are the five categories of businesses based on level of diversification?

The Publicis Groupe uses the digital technology from its digital business to enhance the advertising products in its advertising group. This sharing of activities is characteristic of the _____________ diversification strategy.

Procter & Gamble (P&G) has a paper towel and baby diaper business, both of which use paper products. The firm's paper production plant produces inputs for both businesses. P&G most likely uses the _____________ diversification strategy to create ___________.