Question 1

The Coca-Cola acquisition of its bottlers failed because

Accepted Answer

A)   Coca-Cola had valuable competencies.
B)   the bottling business required too much capital investment and time.
C)   consumers consumed less because the distribution channel changed.
D)   Coca-Cola spent less money on the distribution of concentrates and syrups.E) A) and B)
F) B) and C)

Question 2

In recent years,many high-tech firms such as Priceline.com have suffered from the negative impact of uncontrolled growth.

Accepted Answer

A) True 
 B)False

Question 3

In 2014,Apple purchased Beats Electronics for billion USD.While Apple valued the product portfolio of Beats,its primary aim was to pull the founders of Beats,Jimmy Iovine and Dr.Dre (aka Andrew Young) ,into the Apple family.This is an example of acquiring firms using acquisitions to acquire

Accepted Answer

A)   critical financial resources.
B)   critical human capital.
C)   critical reputation.
D)   critical land resources.E) None of the above
F) A) and B)

Question 4

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

Accepted Answer

A)   volatile.
B)   stable.
C)   contracting.
D)   fragmented.E) All of the above
F) B) and C)

Question 5

If a multinational firm fails to effectively integrate their acquisitions,this can result in

Accepted Answer

A)   cost savings.
B)   further acquisition.
C)   expansion.
D)   divestiture.E) B) and C)
F) None of the above

Question 6

At Cooper Industries,there are few similarities in the products it makes or the industries in which it completes.The corporate office adds value through such activities as improving their accounting activities and centralizing union negotiations.This is an example of creating value by using

Accepted Answer

A)   related diversification to acquire economies of scope by leveraging pooled negotiating power.
B)   related diversification to acquire market power by leveraging core competencies.
C)   unrelated diversification to acquire financial synergies through portfolio management.
D)   unrelated diversification to acquire synergies through corporate restructuring and parenting.E) A) and C)
F) All of the above

Question 7

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.

Accepted Answer

A)   unrelated; hierarchical
B)   related; hierarchical
C)   related; horizontal
D)   unrelated; horizontalE) All of the above
F) C) and D)

Question 8

For a core competency to create value and provide a viable basis for synergy among the businesses in a corporation,it must at least create superior customer value and it must be difficult to imitate.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A)   expansion.
B)   divestiture.
C)   cost savings.
D)   acquisition.E) A) and B)
F) B) and D)

Question 10

An acquisition that results in ________ commonly indicates that expectations were not met.

Accepted Answer

A)   expansion
B)   divestiture
C)   cost savings
D)   increased salesE) B) and D)
F) B) and C)

Question 11

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

Accepted Answer

A)   strategic resources.
B)   core competencies.
C)   shared activities.
D)   economies of scope.E) None of the above
F) A) and D)

Question 12

Diversification initiatives include all the following except

Accepted Answer

A)   mergers and acquisitions.
B)   strategic alliances.
C)   shareholder development.
D)   joint ventures.E) A) and B)
F) All of the above

Question 13

Restructuring requires the corporate office to find either exceptionally performing firms with realized potential or firms in industries on the threshold of significant,negative change.

Accepted Answer

A) True 
 B)False

Question 14

Many acquisitions ultimately result in divestiture.

Accepted Answer

A) True 
 B)False

Question 15

Factors that directly affect the merger and acquisition environment include all the following except

Accepted Answer

A)   general economic conditions.
B)   level of optimism about the future.
C)   currency fluctuations.
D)   managerial style.E) B) and C)
F) All of the above

Question 16

According to the text,corporate restructuring includes

Accepted Answer

A)   capital restructuring, asset restructuring, and technology restructuring.
B)   capital restructuring, asset restructuring, and management restructuring.
C)   management restructuring, financial restructuring, and procurement restructuring.
D)   global diversification, capital restructuring, and asset restructuring.E) B) and C)
F) A) and D)

Question 17

________ 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.

Accepted Answer

A)   Greenmail
B)   A golden parachute
C)   A poison pill
D)   Scorched earthE) B) and D)
F) A) and D)

Question 18

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.This is an example of creating value by using

Accepted Answer

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

Question 19

The corporate office of Novartis,formerly Ciba-Geigy,acts to improve many key activities,including resource allocation and reward and evaluation systems.This is an example of creating value by using

Accepted Answer

A)   related diversification to achieve value by leveraging pooled negotiating power to attain economies of scope.
B)   unrelated diversification to acquire financial synergies through portfolio management.
C)   related diversification to acquire market power by leveraging pooled negotiating power.
D)   related diversification to acquire parenting synergies through corporate restructuring and parenting.E) C) and D)
F) B) and C)

Question 20

The potential advantages of strategic alliances and joint ventures include entering new markets as well as developing and diffusing new technologies.

Accepted Answer

A) True 
 B)False

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

The Coca-Cola acquisition of its bottlers failed because

Correct Answer
verified

In 2014,Apple purchased Beats Electronics for billion USD.While Apple valued the product portfolio of Beats,its primary aim was to pull the founders of Beats,Jimmy Iovine and Dr.Dre (aka Andrew Young) ,into the Apple family.This is an example of acquiring firms using acquisitions to acquire

Correct Answer
verified

________ 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.

Correct Answer
verified

Diversification initiatives include all the following except

Correct Answer
verified

Factors that directly affect the merger and acquisition environment include all the following except

Correct Answer
verified

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.

Correct Answer
verified

The potential advantages of strategic alliances and joint ventures include entering new markets as well as developing and diffusing new technologies.

Correct Answer
verified

For a core competency to create value and provide a viable basis for synergy among the businesses in a corporation,it must at least create superior customer value and it must be difficult to imitate.

Correct Answer
verified

Restructuring requires the corporate office to find either exceptionally performing firms with realized potential or firms in industries on the threshold of significant,negative change.

Correct Answer
verified

In recent years,many high-tech firms such as Priceline.com have suffered from the negative impact of uncontrolled growth.

Correct Answer
verified

At Cooper Industries,there are few similarities in the products it makes or the industries in which it completes.The corporate office adds value through such activities as improving their accounting activities and centralizing union negotiations.This is an example of creating value by using

Correct Answer
verified

An acquisition that results in ________ commonly indicates that expectations were not met.

Correct Answer
verified

The corporate office of Novartis,formerly Ciba-Geigy,acts to improve many key activities,including resource allocation and reward and evaluation systems.This is an example of creating value by using

Correct Answer
verified

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

Correct Answer
verified

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.This is an example of creating value by using

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

If a multinational firm fails to effectively integrate their acquisitions,this can result in

Correct Answer
verified

According to the text,corporate restructuring includes

Correct Answer
verified

Many acquisitions ultimately result in divestiture.

Correct Answer
verified

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

The Coca-Cola acquisition of its bottlers failed because

Correct AnswerverifiedShow Answer

In 2014,Apple purchased Beats Electronics for billion USD.While Apple valued the product portfolio of Beats,its primary aim was to pull the founders of Beats,Jimmy Iovine and Dr.Dre (aka Andrew Young) ,into the Apple family.This is an example of acquiring firms using acquisitions to acquire

Correct AnswerverifiedShow Answer

________ 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.

Correct AnswerverifiedShow Answer

Diversification initiatives include all the following except

Correct AnswerverifiedShow Answer

Factors that directly affect the merger and acquisition environment include all the following except

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

The potential advantages of strategic alliances and joint ventures include entering new markets as well as developing and diffusing new technologies.

Correct AnswerverifiedShow Answer

For a core competency to create value and provide a viable basis for synergy among the businesses in a corporation,it must at least create superior customer value and it must be difficult to imitate.

Correct AnswerverifiedShow Answer

Restructuring requires the corporate office to find either exceptionally performing firms with realized potential or firms in industries on the threshold of significant,negative change.

Correct AnswerverifiedShow Answer

In recent years,many high-tech firms such as Priceline.com have suffered from the negative impact of uncontrolled growth.

Correct AnswerverifiedShow Answer

At Cooper Industries,there are few similarities in the products it makes or the industries in which it completes.The corporate office adds value through such activities as improving their accounting activities and centralizing union negotiations.This is an example of creating value by using

Correct AnswerverifiedShow Answer

An acquisition that results in ________ commonly indicates that expectations were not met.

Correct AnswerverifiedShow Answer

The corporate office of Novartis,formerly Ciba-Geigy,acts to improve many key activities,including resource allocation and reward and evaluation systems.This is an example of creating value by using

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.This is an example of creating value by using

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a multinational firm fails to effectively integrate their acquisitions,this can result in

Correct AnswerverifiedShow Answer

According to the text,corporate restructuring includes

Correct AnswerverifiedShow Answer

Many acquisitions ultimately result in divestiture.

Correct AnswerverifiedShow Answer

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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.

Correct Answer
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