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Strategic business units that have a relatively low market share but have the potential to grow are best categorized under _____ in the Boston Consulting Group (BCG) growth-share matrix.


A) dogs
B) stars
C) cash cows
D) question marks

E) A) and C)
F) A) and D)

Correct Answer

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Which of the following stakeholders of a company would most likely be responsible for formulating a corporate strategy?


A) the first-line employees
B) the creditors
C) the chief executive officer
D) the middle manager

E) None of the above
F) A) and C)

Correct Answer

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Hitoro Inc.developed a superior touch screen technology for tablet computers that enabled multiple users to operate the screen at the same time.The technology was leased to Revox Inc.,a consumer electronics company,for five years.Which of the following alternatives to integration does this best illustrate?


A) licensing
B) franchising
C) crowdsourcing
D) bootlegging

E) A) and C)
F) A) and D)

Correct Answer

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How is an equity alliance different from a joint venture?


A) An equity alliance involves ownership that facilitates transaction-specific ventures; a joint venture involves taking ownership by buying stock.
B) An equity alliance involves taking ownership in a partner; a joint venture involves two or more people owning a firm.
C) An equity alliance involves taking ownership in a partner; a joint venture involves taking ownership by buying stock.
D) An equity alliance involves partners contributing equity to a joint venture; a joint venture involves two or more people owning a firm.

E) All of the above
F) None of the above

Correct Answer

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Evara Inc.started as a luxury brand for designer apparel.Soon,the company expanded by launching its own line of premium perfumes,watches,bags,and home furnishings.This expansion allowed the businesses under the company to share a few,if not all,of the common competencies in products,services,technology,and distribution.Which of the following corporate strategies is Evara pursuing in this scenario?


A) taper integration strategy
B) niche marketing strategy
C) related-constrained strategy
D) related-linked strategy

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

Correct Answer

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Which of the following statements is true of internal transaction costs?


A) Internal transaction costs arise when companies transact in the open market.
B) When the internal costs involved in pursuing an activity in-house are more than the costs of transacting, then the concerned firm should vertically integrate.
C) Internal transaction costs tend to increase with organizational size and complexity.
D) It is beneficial to "buy" goods or services rather than "make" when internal transaction costs are low.

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

Correct Answer

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Which of the following statements is true of transaction costs?


A) When the costs of pursuing an activity in-house are more than the costs of transacting for that activity in the market, then the concerned firm should vertically integrate.
B) When companies transact in the open market, they incur internal transaction costs.
C) Transaction costs exclusively consist of external costs associated with economic exchanges.
D) Transaction costs are necessary to explain and predict the boundaries of a firm.

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

Correct Answer

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_____ is best described as an increase in the variety of products and services a firm offers or markets and the geographic regions in which it competes.


A) Taper integration
B) Open innovation
C) Diversification
D) Differentiation

E) None of the above
F) A) and B)

Correct Answer

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_____ are strategic business units that compete in a low-growth market but hold considerable market share.


A) Dogs
B) Question marks
C) Cash cows
D) Stars

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

Correct Answer

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PepsiCo operates in many countries and sells a wide variety of aerated drinks,other beverages,different types of chips,and Quaker Oats goods to achieve continuous growth.From this data,we can conclude that PepsiCo has been involved in


A) strategic outsourcing.
B) lean manufacturing.
C) product-market diversification.
D) process diversification.

E) None of the above
F) A) and B)

Correct Answer

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Which of the following alternatives on the make-or-buy continuum allows for most integration?


A) short-term contracting
B) joint ventures
C) licensing
D) parent-subsidiary relationship

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

Correct Answer

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BestDrive Inc.is a large automobile company.The company's petrol cars strategic business unit (SBU) has been recognized as a cash cow,and its hybrid electric cars SBU has been categorized under stars.Which of the following can be inferred from this scenario?


A) The petrol cars SBU operates in a low-growth market, whereas the hybrid electric cars SBU operates in a high-growth market.
B) The petrol cars SBU will have a relatively low market share in its industry, whereas the hybrid electric cars SBU will have the least market share in its industry.
C) The strategic recommendation for the hybrid electric cars SBU will be to harvest it, whereas for the petrol cars SBU, the company should just maintain it.
D) The petrol cars SBU is more important than the hybrid electric cars SBU in terms of future growth for the company.

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

Correct Answer

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Real Goods Inc.is a large conglomerate.The company's beverages strategic business unit (SBU) has been recognized as a cash cow,and its tobacco SBU has been categorized as a dog.Which of the following can be inferred from this scenario?


A) While the tobacco SBU operates in a low-growth market, the beverages SBU operates in a high-growth market.
B) The management of the company should use the cash inflow from the beverages SBU and invest it in the tobacco SBU.
C) While the market share of the company in the beverages industry will be high, the market share in the tobacco industry will be low.
D) The tobacco SBU should follow a backward integration strategy, and the beverages SBU should pursue a forward integration strategy.

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

Correct Answer

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Investments in specialized assets tend to incur high opportunity costs because the


A) assets can be profitably used for multiple purposes.
B) threat of one of the partners pursuing his or her self-interest is high.
C) social costs associated with these assets are high.
D) firms can avoid backward integration by investing in these assets.

E) A) and B)
F) None of the above

Correct Answer

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Virtue Products Inc.,a large conglomerate,procures a few component parts from external suppliers and also manufactures some of the key raw materials in its own subsidiaries.This apart,the company does not solely depend on outside distributors to reach its customers.In fact,it has its own retail stores to distribute its products.In this scenario,which of the following alternatives to vertical integration is Virtue Products applying?


A) concentric integration
B) taper integration
C) horizontal integration
D) conglomerate integration

E) All of the above
F) C) and D)

Correct Answer

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_____ is best described as changes in an industry value chain that involve moving ownership of activities closer to the end (customer) point of the value chain.


A) Forward vertical integration
B) Corporate divestiture
C) Reverse engineering
D) Closed innovation

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

Correct Answer

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There are many reasons why firms need to grow.Which of the following reasons is strongly influenced by economies of scale?


A) increasing profits
B) lowering costs
C) reducing risk
D) motivating managers

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

Correct Answer

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White Leo Motors (WLM) Inc.generates a major portion of its revenues by manufacturing luxury sports cars.However,the company also derives an insignificant percent of its annual revenues by selling its sports merchandise that includes apparel,shoes,and other accessories under the same brand name.Which of the following terms best describes WLM?


A) a conglomerate
B) a subsidiary
C) a dominant-business firm
D) a single-business firm

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

Correct Answer

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Red Empire Inc.,a large multinational company owned by two partners,is active in the petroleum,capital market,chemicals,steel,beverages,hospitality,airlines,education,automobiles,and consumer electronics industries.The company has multiple brands and a large product portfolio under its banner.Which of the following terms would best describe this company?


A) a flagship brand
B) a single-business firm
C) a dominant-business firm
D) a conglomerate

E) B) and C)
F) None of the above

Correct Answer

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PrimoDisk Inc.holds the highest market share in the low-growth compact disk industry.With the introduction of flash drives,the market for compact disks has reduced.However,PrimoDisk has been able to generate sufficient revenues for the parent company by selling its products in less developed countries.In the Boston Consulting Group (BCG) growth-share matrix,PrimoDisk will be categorized under


A) dogs.
B) cash cows.
C) stars.
D) question marks.

E) A) and D)
F) A) and C)

Correct Answer

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Showing 21 - 40 of 110

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