STRATEGIC MANAGEMENT: CHAPTER 8 EXAM QUESTIONS

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STRATEGIC MANAGEMENT: CHAPTER 8 EXAM QUESTIONS

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -100 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation

Question 1: short term contracts

Answer:

Alternative on the make-or-buy continuum where a firm sends out a request for proposals to several companies which initiates competitive bidding for contracts to be awarded with a short duration, generally less than a year

Question 2: human asset specificity

Answer:

investments made in human capital to acquire unique knowledge and skills, such as mastering the routines and procedures of a specific organization, which are not transferable to a different employer

Question 3: Related-constrained diversification

Answer:

types of related diversification strategy.when it derives less than 70 percent of its revenues from a single business activity and obtains revenues from other lines of business related to the primary business activity (ex: exxon mobile, nike)

Question 4: 1 .Diversification (Products and services)

• Vertical integration (along industry value chain)
• Geography (regional, national, or global markets)

Answer:

Corporate strategy addresses where to compete along what three dimensions?Question 5: o The ability to make command-and control decisions by fiat along clear hierarchical lines of authority

• Coordination of highly complex tasks to allow for specialized division of labor
• Transaction specific investments, such as specialized robotics equipment that is highly

valuable within the firm, but of little or no use in the external market

• Creation of community knowledge, meaning employees within firms has ongoing

relationships, exchanging ideas and working closely together to solve problems.

Answer:

The advantages of firms (make over buy) (4) Question 6: 1) Exposes in-house suppliers and distributors to market competition so that performance comparisons are possible 2) Enhances a firms flexibility 3) Can combine internal and external knowledge, possibly paving the path for innovation

Answer:

benefits of taper integration (3)

Question 7: Related- linked diversification strategy

Answer:

types of related diversification strategy. if executives consider business activities that share only a

limited number of linkages (ex: amazon, disney)

Question 8: site specificity, physical asset specificity, human asset specificity

Answer:

types of specialized assets (3)

Question 9: licensing, franchising

Answer:

two types of long term contracts

Question 10: Boston consulting group growth-share matrix

Answer:

a corporate planning tool in which the corporation is viewed as a portfolio of business units, which are represented graphically along relative market share and speed of market growth

Question 11: joint venture

Answer:

a strategic alliance where two or more partners create and jointly own a new organization Question 12: product diversification, geographic diversification, product-market diversification

Answer:

general diversification strategies (3)

Question 13: o Administrative costs because of necessary bureaucracy

• Low powered incentives, such as hourly wages and salaries
• Principal-agent problems-situation in which an agent performing activities on behalf of a

principal pursues his or her own interest

Answer:

The disadvantages of firms (make over buy) (3)

Question 14: economies of scope, economies of scale, financial economies

Answer:

how does related diversification create value? (3)

Question 15: long term contracts, equity alliances, joint ventures

Answer:

three types of strategic alliances

Question 16: site specificity

Answer:

assets required to be co-located, such as the equipment necessary for mining bauxite and aluminum smelting

Question 17: increasing costs, reducing quality, reducing flexibility, increasing the potential for legal repercussions

Answer:

Risk of vertical integration (4)

Question 18: diversification

Answer:

an increase in the variety of products and services a firm offers or markets and the geographic regions in which is competes

Question 19: Vertically disintegrated with a low degree of vertical integration

Answer:

value chain where firms focus on only one or a few stages of the industry value chain

Question 20: related diversification

Answer:

type of business diversification:

When it derives less than 70 percent of its revenues from a single business activity and obtains revenues from other lines of business linked to the primary business activity. Benefit from economies of scale and scope

Question 21: cash cow

Answer:

Boston consulting group growth-share matrix:

relative market share: high

relative market growth: low

Question 22: taper integration, strategic outsourcing

Answer:

Alternatives to vertical integration (2)

Question 23: competes in several different markets simultaneously

Answer:

a diversified company competes in...