Why do mergers and acquisitions sometimes fail to produce anticipated results?

Differences in management styles and procedures can prove hard to resolve

A blue ocean type of offensive strategy

inventing a new segment that renders existing competitors irrelevant

What makes related diversification an attractive strategy is the

ability to convert competitive potential to 1 + 1 = 3 in shareholder value

What is not likely to guide Four Seasons Hotels’ approach to develop properties in the Middle East and Southeast Asia?

striving to create one uniform customer experience globally

A cash hog type of business

generates cash too small to fully fund operation so need outside infusions

Which school says that many of the same standards of what’s ethical resonate with peoples of most cultures & religions

the school of ethical universalism

A think global, act global approach to strategy making is preferable to a think local, act local approach when

country-by-country differences are small enough to be accommodated

The purposes of defensive strategies include

lowering the risk/impact of being attacked

Competing in the markets of foreign countries entails dealing with such factors except

the prevalence of global brands

The competitive strategy of a firm pursuing a think global, act local approach to strategy making

the same globally but it may give local managers room for minor variations

What does the scope of the firm refer to?

the range of internal activities and the breadth of its product offerings

A good example of backward vertical integration is a

producer of organic vegetables deciding to acquire a compost company

For backward vertical integration into the business of suppliers to be a viable and profitable strategy, a company must

achieve the same scale economies and match or beat suppliers’ efficiency

unrelated diversification strategy is more common in developing countries than in the United States. One reason is that

Capital markets in the USA are more efficient

Backward integration involves

performing value chain activities previously performed by suppliers

To test whether a particular diversification move has good prospects for shareholder value, strategists should use

industry attractiveness test, cost-of-entry test, better-off test

The essential requirement for different businesses to be “related” is that

their valuechains possess competitively valuable crossbusiness relationship

Which of the following is not an accurate statement concerning competing in the markets of foreign countries?

Localizing Apple’s product country-by-country leads to a low-cost advantage

Which statement below best characterizes the organizational structure of firms pursuing a transnational strategy?

Decentralized authority with heavy flows of information among all units

What is a diversified corporation?

A corporation that is active in multiple distinct industries

Which is not generally on a firm’s menu of actions to consider in crafting a strategy of social responsibility?

actions to look out exclusively for the best interests of shareholders

What are the key benefits of using a wholly-owned subsidiary as foreign entry mode

Easier coordination and better protection of its technologies

The major drivers of unethical business behavior include

pressures to meet or beat performance targets, and obsessive use of power

First-mover disadvantages (or late-mover advantages) rarely arise when

The market response is strong and the pioneer gains a monopoly position

1. A hit-and-run or guerrilla warfare type offensive strategy

unexpected attacks to grab market share from complacent/distracted rivals

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Questions 30

Answers

1
Why do mergers and acquisitions sometimes fail to produce anticipated results?
Gains in competitive capabilities materialize rapidly, causing synergies
Cost savings exceed management’s wildest expectations
Efforts to mesh corporate cultures meet with unconditional acceptance
Differences in management styles and procedures can prove hard to resolve
2
A blue ocean type of offensive strategy
a preemptive strike to secure an advantageous position in a growing segment
attacking rivals head-on with deep price discounts
inventing a new segment that renders existing competitors irrelevant
the use of hit-and-run guerrilla tactics to harass money-losing rivals
3
What makes related diversification an attractive strategy is the
potential to stabilize the company’s financial performance
potential to escape the power of buyers and suppliers
ability to convert competitive potential to 1 + 1 = 3 in shareholder value
potential to more easily hurdle the barriers to entering foreign markets
4
What is not likely to guide Four Seasons Hotels’ approach to develop properties in the Middle East and Southeast Asia?
assessing the future growth potential of these emerging markets
combining local experiences with globally consistent luxury service
striving to create one uniform customer experience globally
identifying and contracting with a local capital partner
5
A cash hog type of business
has more current liabilities than current assets
generates cash too small to fully fund operation so need outside infusions
is growing so rapidly that it does not have the funds to cover the needs
losing money and requires infusions from its parent to continue operations.
6
Which school says that many of the same standards of what’s ethical resonate with peoples of most cultures & religions
both the school of ethical relativism & the school of ethical universalism
integrated social contracts theory
the school of ethical universalism
the school of ethical relativism
7
A think global, act global approach to strategy making is preferable to a think local, act local approach when
host governments requiring that products sold locally meet strict standards
majority of the company’s rivals are pursuing multi-domestic strategies
market growth rates vary considerably from country to country
country-by-country differences are small enough to be accommodated
8
The purposes of defensive strategies include
discouraging deep price discounting on the part of ambitious rivals
widening a company’s competitive advantage over rivals
lowering the risk/impact of being attacked
insulating from the impact of competitive pressures/industry driving forces
9
Competing in the markets of foreign countries entails dealing with such factors except
fluctuating exchange rates & variations in host-government restrictions
country-to-country differences in consumer buying habits and buyer tastes
the prevalence of global brands
whether to customize or to offer standardized products
10
The competitive strategy of a firm pursuing a think global, act local approach to strategy making
little or no strategy coordination across countries
selling a mostly standardized product worldwide
having strongly differentiated product versions for different countries
the same globally but it may give local managers room for minor variations
11
Which is considered as an intangible or less visible cost that companies may incur when ethical wrongdoing is discovered
civil penalties
loss of reputation
legal and investigative costs
costs of taking corrective actions
12
What does the scope of the firm refer to?
the range of internal activities and the breadth of its product offerings
the firm’s capability to employ vertical integration strategies
the ability to prevent foreign competition from affecting the market
competitive advantage based on where it locates its value chain activities
13
A good example of backward vertical integration is a
producer of organic vegetables deciding to acquire a compost company
footwear manufacturer developing own-branded retail stores
maker of prescription pharmaceuticals acquiring a chain of drugstores
crude oil refiner purchasing gas stations
14
Government corruption, the likelihood of rapid change in rules and regulations in Russia can be an example of
Categorical risk
Management risk
Economic risk
Political risk
15
which theory states that decisions should maximize benefits for the greatest number of people while minimizing damages
formalism
utilitarianism
egoism
universalism
16
For backward vertical integration into the business of suppliers to be a viable and profitable strategy, a company must
have core competencies in R&D, design, engineering and logistics
achieve the same scale economies and match or beat suppliers’ efficiency
have state-of-the-art production facilities to capture economies of scale
have considerable expertise in supply chain management
17
unrelated diversification strategy is more common in developing countries than in the United States. One reason is that
firm in developing countries find it difficult to attract strong managers
Capital markets in the USA are more efficient
American corporations are largely owned by individuals
Technical infrastructure in the USA is well-developed
18
Backward integration involves
linking with firms within the array of the valuechain to remove competition
developing new skills and business capabilities
performing value chain activities previously performed by suppliers
reducing the opportunity for achieving greater product differentiation
19
To test whether a particular diversification move has good prospects for shareholder value, strategists should use
profit test, competitive strength test, industry attractiveness test
industry attractiveness test, cost-of-entry test, better-off test
better-off test, competitive advantage test, profit expectations test
strategic fit test, industry attractiveness test, dividend effect test
20
The essential requirement for different businesses to be “related” is that
their valuechains possess competitively valuable crossbusiness relationship
the businesses have several key suppliers in common
theهق products are bought by much the same types of buyers
the production methods that they employ both entail economies of scale
21
Which of the following is not an accurate statement concerning competing in the markets of foreign countries?
Market growth rates vary from country to country, impacting John Deere
Starbucks must contend with fluctuating exchange rates & local requirement
Avon’s products suitable for China can be inappropriate in Malaysia
Localizing Apple’s product country-by-country leads to a low-cost advantage
22
Diversification into a new industry can not be considered a success unless it results in
enhanced industry attractiveness
enhanced shareholder value
diminishing market opportunities and stagnating sales
boosting the performance of the existing business
23
Which statement below best characterizes the organizational structure of firms pursuing a transnational strategy?
Decentralized authority with light flows of information
Decentralized authority with heavy flows of information among all units
Centralized authority with light flows of information
Centralized authority with information flowing only from the headquarters
24
What is a diversified corporation?
A corporation that shares a brand name or key technologies
A corporation that is active in multiple distinct industries
A corporation active in multiple industries subsequent in the supply chain
A corporation that has several brands to serve different market segments
25
Which is not generally on a firm’s menu of actions to consider in crafting a strategy of social responsibility?
actions to build a workforce that is diverse with respect to gender, race..
actions to protect or enhance the environment
actions to look out exclusively for the best interests of shareholders
actions to ensure that the company operates in an honorable manner
26
What are the key benefits of using a wholly-owned subsidiary as foreign entry mode
Easier coordination and better protection of its technologies
Large tax advantages and easier to hire foreign staff
Cheaper to set up and easier to gain local knowledge
Quality improvements and efficiency in production
27
The major drivers of unethical business behavior include
widespread managerial belief in the ethical relativism school of thinking
pervasive managerial immorality and a general lack of scruples
intense competitive pressures
pressures to meet or beat performance targets, and obsessive use of power
28
First-mover disadvantages (or late-mover advantages) rarely arise when
the marketplace remains skeptical about the benefits of a new technology
rapid market evolution gives fast followers an opening to leapfrog pioneers
the costs of pioneering are much higher than being a follower
The market response is strong and the pioneer gains a monopoly position
29
1. A hit-and-run or guerrilla warfare type offensive strategy
random offensive attacks to steal customers from unsuspecting smaller rival
works best if the guerrilla is the industry’s low-cost leader
surprise moves to secure an advantageous position in a fastgrowing segment
unexpected attacks to grab market share from complacent/distracted rivals
30
When the risks of entry to a country is high what foreign entry mode would have made the most sense
Foreign direct investment
Wholly owned subsidiary
Transnational entrance
Licensing

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