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WPC 480 Final Exam Questions and Answers
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WPC 480 Final Exam Questions and Answers
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WPC 480 Final Exam Questions andAnswers
Corporate iiLevel iiStrategy ii- iiAnswers ii-specifies iiactions iia iifirm iitakes iito iigain iia
iicompetitive iiadvantage iiby iiselecting iiand iimanaging iia iigroup iiof iidifferent iibusinesses
iicompeting iiin iidifferent iiproduct iimarkets. ii(Helps iicompanies iito iiselect iinew iistrategic
iipositions iithat iiare iiexpected iito iiincrease iithe iifirm's iivalue.)
Single-business iidiversification iistrategy ii- iiAnswers ii-corporate iilevel iistrategy iiwherein
iithe iifirm iigenerates ii95% iior iimore iiof iiits iisales iirevenue iifrom iiits iicore iibusiness iiarea.
Dominant-business iidiversification iistrategy ii- iiAnswers ii-the iifirm iigenerates iibetween
ii70% iiand ii95% iiof iiits iitotal iirevenue iiwithin iia iisingle iibusiness iiarea.
Related iiconstrained iidiversification iistrategy ii- iiAnswers ii-when iithe iilinks iibetween iithe
iidiversified iifirm's iibusinesses iiare iirather iidirect.
Related iilinked iidiversification iistrategy ii- iiAnswers ii-A iidiversified iicompany iiwith iia
iiportfolio iiof iibusinesses iithat iihave iionly iia iifew iilinks iibetween iithem iiis iicalled iia iimixed
iirelated iiand iiunrelated iifirm. ii(Used iiby iifirms iiseeking iito iicreate iivalue iithrough
iicorporate iirelatedness.)
Unrelated iidiversification iistrategy ii- iiAnswers ii-A iihighly iidiversified iifirm iithat iihas iino
iirelationships iibetween iiits iibusinesses. ii(Firms iiusing iithis iistrategy iiare iicalled
iiconglomerates. ii)
Economies iiof iiScope ii- iiAnswers ii-cost iisavings iithat iithe iifirm iicreates iiby iisuccessfully
iisharing iisome iiof iiits iiresources iiand iicapabilities iior iitransferring iione iior iimore
iicorporate-level iicore iicompetencies iithat iiwere iideveloped iiin iione iiof iiits iibusinesses iito
iianother iiof iiits iibusinesses.
Corporate-level iicore iicompetencies ii- iiAnswers ii-complex iisets iiof iiresources iiand
iicapabilities iithat iilink iidifferent iibusinesses, iiprimarily iithrough iimanagerial iiand
iitechnological iiknowledge, iiexperience, iiand iiexpertise.
Market iiPower ii- iiAnswers ii-exists iiwhen iia iifirm iiis iiable iito iisell iiits iiproducts iiabove iithe
iiexisting iicompetitive iilevel iior iito iireduce iithe iicosts iiof iiits iiprimary iiand iisupport
iiactivities iibelow iithe iicompetitive iilevel, iior iiboth.
Multipoint iicompetition ii- iiAnswers ii-exists iiwhen iitwo iior iimore iidiversified iifirms
iisimultaneously iicompete iiin iithe iisame iiproduct iiareas iior iigeographic iimarkets.
, Vertical iiIntegration ii- iiAnswers ii-exists iiwhen iia iicompany iiproduces iiits iiown iiinputs
ii(backward iiintegration) iior iiowns iiits iiown iisource iiof iioutput iidistribution ii(forward
iiintegration).
Financial iieconomies ii- iiAnswers ii-cost iisavings iirealized iithrough iiimproved iiallocations
iiof iifinancial iiresources iibased iion iiinvestments iiinside iior iioutside iithe iifirm.
Incentives iito iiDiversify ii- iiAnswers ii-Antitrust iiRegulation iiand iiTax iiLaws, iiLow
iiPerformance, iiUncertain iiFuture iiCash iiFlows, iiand iiSynergy iiand iiFirm iiRisk iiReduction
Synergy ii- iiAnswers ii-exists iiwhen iithe iivalue iicreated iiby iibusiness iiunits iiworking
iitogether iiexceeds iithe iivalue iithat iithose iisame iiunits iicreate iiworking iiindependently.
Business iiLevel iiStrategy ii- iiAnswers ii-Selecting iistrategy ii(e.g., iicost iileadership iiand
iidifferentiation) iito iicompete iiin iiindividual iimarket
Corporate iiLevel iiStrategy ii(Companywide) ii- iiAnswers ii-Selecting iiand iimanaging iia
iigroup iiof iidifferent iibusinesses iicompeting iiin iidifferent iiproduct iimarkets
Diversification ii- iiAnswers ii-Do iisomething iidifferent, iiExpand iioutside iiof iimain
iibusiness, iiHow iiis iiit iirelated iito iisize iiand iirisk?
Single iiBusiness ii- iiAnswers ii-low iilevel iiof iidiversification; iimore iithan ii95% iiof iirevenue
iicomes iifrom iia iisingle iibusiness
Dominant iiBusiness ii- iiAnswers ii-between ii70% iiand ii95% iiof iirevenue iicome iifrom
iisingle iibusinesses
Related iiConstrained ii- iiAnswers ii-less iithan ii70% iiof iirevenue iicomes iifrom iia iisingle
iibusiness; iibusinesses iishare iiproduct, iitechnological iiand iidistribution iilinkages
Related iilinked ii(mixed iirelated iiand iiunrelated) ii- iiAnswers ii-less iithan ii70% iiof iirevenue
iicomes iifrom iithe iidominant iibusiness
Unrelated iiDiversification ii- iiAnswers ii-Less iithan ii70% iiof iirevenue iicomes iifrom iithe
iidominant iibusiness, iiand iithere iiare iino iicommon iilinks iibetween iibusinesses
Merger ii- iiAnswers ii-a iistrategy iithrough iiwhich iitwo iifirms iiagree iito iiintegrate iitheir
iioperations iion iia iirelatively iicoequal iibasis.
Acquisition ii- iiAnswers ii-a iistrategy iithrough iiwhich iione iifirm iibuys iia iicontrolling, iior
ii100% iiinterest iiin iianother iifirm iiwith iithe iiintent iiof iimaking iithe iiacquired iifirm iia
iisubsidiary iibusiness iiwithin iiits iiportfolio.
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