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Exam 6: Corporate-Level Strategy: Creating Value Through Diversification

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Question 41

Multiple Choice

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Antitakeover tactics include all of the following except

A) greenmail.
B) poison pills.
C) golden parachutes.
D) golden handcuffs.

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

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Question 42

Multiple Choice

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Diversification initiatives include all of the following except

A) mergers and acquisitions.
B) strategic alliances.
C) shareholder development.
D) joint ventures.

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

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Question 43

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Loews Corporation,a conglomerate with 15 billion USD in revenues,competes across several industries including oil and gas,tobacco,watches,insurance,and hotels.Its related diversification strategy is to buy low and sell high as in the example where they bought six oil tankers for 5 million USD and then sold them eight years later for 50 million USD.

Portfolio management frameworks,such as the BCG matrix,share which of the following characteristics?

For a core competence to be a viable basis for the corporation strengthening a new business unit,there are three requirements.Which one of the following is not one of these requirements?

An advantage of internal development is that firms do not have to combine activities across the value chains of many companies and merge company cultures.

If a multinational firm is unable to understand how the acquired company's assets would fit with their own lines of business,this can lead to

Portfolio management matrices generally consist of two axes that reflect industry or market growth and the market share of a business.

Novartis,formerly Ciba-Geigy,uses portfolio management to improve many key activities,including resource allocation and reward and evaluation systems.This is an example of using

When management uses common production facilities or purchasing procedures to distribute different but related products,they are

Cooper Industries has followed a successful strategy of related diversification.There are few similarities in the products it makes or the industries in which it competes.

The acquisition of two or more counter-cyclical businesses is an example of using diversification to reduce risk.

Related diversification enables a firm to benefit from horizontal relationships across different businesses in the diversified corporation by leveraging core competencies and sharing activities.

Novartis,formerly Ciba-Geigy,uses portfolio management to improve many key activities,including resource allocation and reward and evaluation systems.This is an example of using unrelated diversification corporate restructuring and parenting initiatives to create value.

Lionsgate (a Canadian-American entertainment company) and Alibaba (a Chinese e-commerce company) created _________ to open the Chinese market for the Lionsgate streaming shows and movies.Alibaba profits by getting access to content to increase demand for its own set-top media boxes.

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?

IBM,Memorial Sloan Kettering,and Cedars-Sinai have a _________ whereby IBM receives expert medical knowledge that it uses to leverage its technological skills to develop new medical insights.

Vertical integration is attractive when

In a study of 270 international mergers between 2000 and 2003 it was found that sales growth increased,earnings growth increased,and market valuations increased overall for the merged companies.

Which of the following statements regarding internal development as a means of diversification is false?