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Exam 6: Corporate Strategy

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Question 31

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Which of the following statements is true of a dominant vertical business?

A) It earns less than 70 percent of its revenue from its main line of business.
B) It earns more than 95 percent of revenue from its main line of business.
C) It earns 30 percent of its revenue from business lines across different value chains.
D) It earns 30 percent of its revenue from businesses located along the value chain.

E) All of the above
F) B) and C)

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Question 32

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Neon Colors Corp., a well-established apparel industry, increased its corporate value by purchasing a footwear company as part of its growth strategy.It purchased the footwear company because developing its own operations and processes would be expensive and time consuming.This is an example of a(n) _____.

A) merger
B) brownfield entry
C) acquisition
D) greenfield entry

E) A) and C)
F) B) and D)

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Question 33

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The main focus of Neptune Corp.is to sell apparel, which amounts to 70 percent of its revenue.It also runs warehouses, distribution centers, and logistics as additional businesses that generate the rest of the 30 percent of the earnings.Which level of diversification is followed by Neptune Corp.?

Rest & Sleep Inc.is a mattress manufacturing firm.By manufacturing related products such as bed covers, comforters and quilts, and pillows, it has gained significant competitive advantage as it has managed to create profits in all these markets as well.Rest & Sleep creates a challenge for the other companies in the market by providing unique value through its customer services and warranties.Which of the following terms best describes what Rest & Sleep Inc.is practicing?

How does a related-constrained diversification differ from a related-linked diversification?

Winter Sources Inc., an apparel manufacturer, recently opened a retail store in its unused office space to sell the excess material produced.In this way, the company generated extra profits.The unused space that was available to Winter Sources Inc.is an example of _____.

Pisces Corp.is an apparel manufacturing company.It purchased a few of its raw material suppliers and set up their factories close to the clothing stores so that the company does not have to invest on transportation charges.This is an example of _____.

Even though companies offer varied products and provide unique value to their customers, they have similar barriers to face when entering into a host country due to policies set up by the country's government.The similarities shared by the companies in the way they set up business in the country are an example of a(n) _____.

Summer Technologies Inc.is proud of its managerial personnel who have been able to create unique value for the company.These people have been engaged in coming up with strategic activities that enabled Summer Technologies to grow and establish itself as a reliable brand.This set of abilities of the Summer Technologies personnel can most accurately be termed _____.

Pluto Corp.has been manufacturing hardware materials for its existing customer base for several years.Recently, the company introduced a new line of electronic products to its customers.Pluto Corp.is engaging in _____.