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Exam 6: Corporate-Level Strategy Creating Value through Diversification

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Question 51

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Casio, a giant electronic products producer, synthesizes it abilities in miniaturization, microprocessor design, material science, and ultrathin precision castings to produce digital watches. It uses the same skills to produce card calculators, digital cameras, and other small electronics. These collective skills are

A) strategic resources.
B) core competencies.
C) shared activities.
D) economies of scope.

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

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Question 52

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Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. Thisis an example of creating value by using

A) related diversification to acquire market power by pooling negotiating power.
B) related diversification to acquire economies of scope by leveraging core competencies.
C) related diversification to acquire market power by integrating vertically.
D) related diversification to acquire economies of scope by integrating vertically to acquire market power.

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

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Question 53

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A golden parachute is a prearranged contract with managers specifying that, in the event of a hostile takeover, the target company managers will be paid a significant severance package.

The Marriott International purchase of Starwood Hotels for 13.6 billion USD is an example of a(n)

Unbalanced capacities that limit cost savings, difficulties in combining specializations, and reduced flexibility are disadvantages associated with

When a firm diversifies into ________ businesses, the primary potential benefits to be derived come from ________ relationships where value creation is derived from the corporate office.

The risks of vertical integration include all the following except

Discuss the three basic means by which a firm can go about achieving synergy and create value for its shareholders.

Many acquisitions ultimately result in divestiture.

Vertical integration is more likely to be attractive when the end consumer market is

Portfolio management matrices are applied to what level of strategy?

Why do some diversification efforts pay off and others produce poor results? Why should companies even bother with diversification initiatives?

________ is an antitakeover tactic in which existing shareholders have the option to buy additional shares of stock at a discount to the current market price.

________ is when a new legal entity is formed by a combination or consolidation of two firms.

Many leading high-tech firms such as Google, Apple, and Intel have dramatically enhanced their revenues, profits, and market values through a wide variety of diversification initiatives. Which of the following is not such an initiative?

Which of the following is not a downside of portfolio models used to assist a firm in balancing its portfolio of businesses?

According to BNP Paribas chief economist, Julia Coronado, when businesses feel confident about the future they are more aggressive in looking for ways to grow and expand their operations.You would expect the volume of mergers and acquisitions to ________ during this period.

In the BCG Matrix, a ________ is a business that has a low market share in an industry characterized by high market growth.

Yahoo purchased Tumblr for 1.1 billion in 2013 but wrote off 80 percent of the investment by the middle of 2016. They considered this to be a poor

________ is when a firm tries to find and acquire either poorly performing firms with unrealized potential or firms in industries on the threshold of significant, positive change, therebycreating value within business units.