Corporate Strategy

The purpose of vertical growth is to

• take over a function previously supplied by a former employer.

• take over a function previously provided by a supplier or by a distributor.

• acquire a company of similar objective.

• sell a company encumbered with debt.

Backward integration is going backward on an industry's value chain.

• A. TRUE

• B. FALSE

Strategic managers who adopt a conglomerate diversification strategy are primarily concerned with ________ considerations of cash flow or risk reduction.

• A. marketing

• B. human capital

• C. financial

• D. environmental

Which kind of corporate strategy deals with the firm's overall orientation toward growth?

• A. portfolio strategy

• B. directional strategy

• C. parenting strategy

• D. cooperative strategy

When Coca Cola contracted with Capgemini to provide accounting and financial services, which strategy was Coca Cola using?

• A. horizontal growth

• B. backward integration

• C. outsourcing

• D. retrenchment

According to the BCG Growth-Share Matrix (BCG), products that typically bring in far more money than is needed for maintenance of their market share are called

• A. cash cows.

• B. lost leaders.

• C. dogs.

• D. question marks.

Adding a related or complementary product to a corporation's business units is called

• A. concentration.

• B. horizontal growth.

• C. concentric diversification.

• D. vertical growth.

Which external growth strategy involves two or more corporations joining in a stock exchange and from which only one corporation survives?

• A. merger

• B. strategic alliance

• C. diversification

• D. concentration

BP and Royal Dutch Shell are examples of _________ firms because they internally make 100% of their key supplies and completely control their distributors.

• A. fully integrated

• B. divisional

• C. partially integrated

• D. managerial

Growth through diversification out of an industry into an unrelated industry is called

• A. concentration.

• B. horizontal growth.

• C. concentric diversification.

• D. conglomerate diversification.