FA25 STR Final

Trek Inc., a large conglomerate, took over a small startup company that had made some breakthrough innovations in the field of telecommunications. This purchase would help Trek gain access to the startup company’s superior technology and human capital. This transaction is an example of a(n)

• acquisition

• merger

• joint venture

• cartel

Which of the following is a commonly cited benefit of CEO duality?

• Increased independence in board decisions

• Enhanced focus on shareholder oversight

• Streamlined and faster decision-making processes

• Reduced risk of managerial opportunism

• Improved diversity in board composition

Which of the following examples best represents a strategic alliance?

• Microsoft acquires LinkedIn to expand its presence in professional networking and enterprise services.

• Starbucks teams up with PepsiCo to bottle and distribute Starbucks-branded coffee drinks in global retail outlets.

• Disney acquires Marvel to expand its content portfolio and intellectual property.

• Google develops its own in-house Pixel smartphone to control hardware and software integration.

Swiss-based Nestlé, the largest food company in the world, is well known for customizing its product offerings to suit local preferences, tastes, and requirements. Which of the following strategies does the company pursue?

• a “one product, multiple markets” strategy

• a global-standardization strategy

• a multidomestic strategy

• a cost-reduction strategy

• a unilateral strategy

Kristina runs an organization that implements a cost-leadership strategy. This business-level strategy supports both a ________ and ________ structure.

• matrix; organic

• M-form; vertical

• simple; organic

• functional; mechanistic

Donald owns shares of Meat and Bone Steakhouse, a food and beverages company. The company’s financial situation takes a turn for the worse and ends up in severe debt. Despite owning shares of Meat and Bone Steakhouse, Donald is not responsible for bringing more money into the company to get it out of its debt. Which characteristic of public stock companies does this scenario best exemplify?

• transferability of investor ownership

• legal personality

• separation of legal ownership and management control

• limited liability for investors

________ is a mechanism to direct and control an enterprise and attempts to address the principal–agent problem, which can occur any time an agent performs activities on behalf of a principal.

• Corporate governance

• CEO Pledge of CSR in 2019

• UN Sustainable Development Goals

• ESG strategy

• Competitive advantage analysis

The executives at Dizzy & Sons Corp. are developing strategic plans to address plausible future situations like rise in the prices of cotton and synthetic fabrics by 20%, appreciation in the value of the dollar, increase in the cost of labor by 30%, and increase in demand for the firm’s products. By doing so, the firm will be well prepared with its planned responses if any of these situations occurs in the future. In this case, Dizzy & Sons Corp. is employing ________ as the approach to the development of strategy.

• AFI framework

• scenario planning

• business strategy

• corporate strategy

• diversification

A Swedish manufacturing firm is considering expansion into one of two foreign markets. The firm uses the CAGE Distance Framework, assigning each dimension a weight based on its strategic importance. Higher scores indicate greater distance (i.e., more barriers to entry). The table displays the firm’s distance assessments (click to enlarge). Based on the weighted average CAGE Distance score, which country is more attractive for market entry?

• Country X

• Country Y

• Both countries have equal distance.

• Country X due to lower cultural distance.

• Cannot determine without knowing the industry the firm operates in.

Sonron Auto Corporation generates 85% of its annual revenues by manufacturing luxury cars. The company derives 15% 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 Sonron Auto Corporation?

• A conglomerate

• A subsidiary

• A dominant-business firm

• A single-business firm