Exam 7: Strategy Formulation: Corporate Strategy

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The two basic growth strategies are conc...

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A) PIMS.
B) segmentation analysis
C) portfolio analysis.
D) industry analysis.
E) diversification study.

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A) "dogs."
B) "question marks."
C) "stars."
D) "white knights."
E) "fish."

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A) take over a function previously supplied by a former employer.
B) take over a function previously provided by a supplier or by a distributor.
C) acquire a company of similar objective.
D) sell a company encumbered with debt.
E) expand to countries with strong trade alliances.

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A) full integration
B) long-term contracts
C) backwards integration
D) taper integration
E) quasi integration

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A) external growth appears to be superior financially to internal growth.
B) internal growth appears to be superior financially to external growth.
C) there appears to be no financial advantage to either.
D) acquisitions have a lower survival rate than new internally generated business ventures.
E) strategic alliances are superior to both.

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A) reduces the risks of expropriation.
B) enhances the policy of the host country's takeover of the firm.
C) promotes skepticism among other countries not involved in the merger.
D) encourages competitors to work with the company.
E) increases revenues by 20%.

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A) It is too simplistic.
B) The link between market share and profitability is questionable.
C) Growth rate is only one aspect of industry attractiveness.
D) There are too many aspects of overall competitive position included.
E) Small competitors with fast-growing market share are ignored.

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D

A) a way in which an MNC may contract with a foreign government or local firm to trade raw materials for certain resources belonging to the MNC.
B) a way in which an MNC can take total control of operations by acquiring a firm already established in the host country.
C) when a corporation chooses to build a facility from scratch allowing it the freedom to design the plant, choose suppliers, and hire its work force.
D) when an MNC has a large amount of management talent available and chooses to use its personnel to assist a firm in a host country for a specified fee and period of time.
E) contracting for construction of operating facilities in exchange for a fee.

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A) full integration.
B) vertical integration.
C) mass integration.
D) economical integration.
E) strategic integration.

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A) forward vertical growth.
B) diversification.
C) backward vertical growth.
D) captive company strategy.
E) horizontal growth.

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E

A) There are more opportunities for advancement and promotion.
B) A corporation that experiences successful growth is thought of positively by the marketplace and potential investors.
C) A large and growth-oriented corporation has more clout and influence.
D) A growing firm can cover up mistakes and inefficiencies because of the increase in cash flow revenue.
E) A large and growing firm attracts more acquisition offers.

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A) portfolio strategy
B) directional strategy
C) parenting strategy
D) cooperative strategy
E) functional strategy

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A) employees.
B) intangible assets.
C) plant assets.
D) joint ventures.
E) licensing agreements.

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