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Question 1

A decision made at the business level of a firm would be:

a) The degree of synergy between the businesses in the portfolio

b) Which industries to enter

c) How to compete in a given market

d) How to add value to the businesses in the portfolio

Question 2

At corporate level, the scope of an organization relates to:

a) The breadth of the portfolio of SBUs

b) The number of SBUs

c) The size of the SBUs

d) The number of customers served

Question 3

Substantial changes to the range of offerings or the markets served or both are known as:

a) Differentiation

b) Diversification

c) Relocation

d) Brand extension

Question 4

Which of the following outcomes is not an advantage of a completely vertically integrated business?

a) Potentially greater control is achieved

b) Potentially greater quality is achieved

c) Lowering of risk is achieved

d) Lower price of supplies is achieved

Question 5

'Synergy' can best be explained by which of the sums below?

a) 2+2=5

b) 2+2=4

c) 2-2=1

d) 2-2=0

Question 6

The Boston Group Portfolio Matrix is used to assess:

a) The size of a portfolio of businesses

b) The extent to which the corporate centre can add value to the businesses

c) The balance of the portfolio of businesses

d) The scope of the portfolio

Question 7

The Ashbridge Portfolio matrix is used to assess whether:

a) The businesses are a good fit with the parent company

b) The portfolio is balanced

c) The portfolio has opportunities for synergies

d) The portfolio is too diversified

Question 8

In the Ashbridge Portfolio matrix, a business that the parent understands but doesn't add any value to is known as:

a) A heartland business

b) An alien business

c) A value trap business

d) A ballast business

Question 9

When evaluating a strategic option a firm can test the option against the criteria of suitability, feasibility and acceptability. Suitability in this context means:

a) The strategy satisfies the shareholders

b) The strategy will work in practice because it has the necessary resources and capabilities

c) The strategy is consistent with the strengths, weaknesses, opportunities and threats identified in the strategic analysis

d) The strategy satisfies the relevant stakeholders

Question 10

Ansoff's growth vector matrix is used for:

a) Analysing the different strategic directions an organization can pursue

b) Analysing the balance of the portfolio

c) Assessing whether the corporate parent is adding value

d) Assessing the market share of a business

Question 11

In Ansoff's matrix, 'product development' involves going in the direction of:

a) Present products to present markets

b) Present products to new markets

c) New products to present markets

d) New products to new markets

Question 12

Horizontal integration is where:

a) A firm takes over a supplier

b) A firm takes over a distributor

c) A firm takes over a competitor

d) A firm takes over a manufacturer

Question 13

Conglomerate diversification is another name for:

a) Unrelated diversification

b) Related diversification

c) Portfolio diversification

d) Acquisition diversification

Question 14

Which of the following statements is true when describing the merits of related and unrelated diversification?

a) Unrelated diversification has been shown to be more successful

b) Related diversification has been shown to be more successful

c) The evidence on diversification strategies is contradictory

d) Related diversification is more successful up to a certain size of corporation

Question 15

What did Peters and Waterman (1982) mean when they implored businesses to 'stick to the knitting'?

a) Corporations should strip down to core activities

b) Corporations follow low risk diversification strategies

c) Corporations should follow the same generic strategy across all businesses

d) Corporations should have a balanced portfolio

Oxford University Press, Online Resource Centre, Chapter 08.

Chapter 08

Instructions