CH 6 that need to be revise Flashcards
Strategic objectives include those associated with growth in revenues, growth in earnings, higher dividends, larger profit margins, and improved cash flow
F
Which strategy should an organization use when new, but related, products could be offered at highly competitive prices?
A) Forward integration
B) Related diversification
C) Related integration
D) Conglomerate diversification
E) Unrelated diversification
B
Divestiture is selling ll of the company’s assets, in parts, for their tangible worth
F
A CEO is located in the divisional level of a large firms
F
Panera installing online ordering and delivery from their restaurants in an example of which type of strategy?
A) Forward integration
B) Backward integration
C) Horizontal integration
D) Related diversification
E) Unrelated diversification
A
In which situation would horizontal integration be an especially effective strategy?
When an organization can gain monopolistic characteristics in a particular area or region without being challenged by the federal government for “tending substantially” to reduce competition
When an organization competes in a slowing industry
When decreased economies of scale provide major competitive advantages
When an organization has neither the capital nor human talent needed to successfully manage an expanded organization
When competitors are succeeding due to managerial expertise or having particular resources an organization possesses
A
A growing trend is for franchiser to buy out their part of the business from their franchisees
F
Horizontal integration is an appropriate strategy when the competitors of an organzation are doing poorly
F
Which strategy generally entails large research and development expenditure?
A) Markt penetration
B) Retrenchment
C) Forward integration
D) Product development
E) Divestiture
D
Which of the following is NOT a guideline for when an organization should use an unrelated diversification strategy?
A) When revenues derived from an organization’s current products or services would increase significantly by adding the new unrelated, products
B) When an organization’s present channels of distribution can be used to market the new products to current customers
C) When the new products have countercyclical sales patterns compared to an organization’s present products
D) When an organization competes in a highly competitive and/or a no-growth industry
E) When existing markets for an organization’s present products are not yet saturated
E
Unrelated diversification is an appropriate strategy when an organization’s present channels of distribution can be used to market the new products to current customers
T
Unrelated diversification may be an especially effective strategy when an organization’s basic industry is experiencing increasing annual sales and profits
F
Retrenchment would be an effective strategy when an organization
A) has shrunk so quickly that major internal reorganization is needed.
B) is one of the stronger competitors in a given industry. X
C) is plagued by inefficiency, low profitability, poor employee morale, and pressure from stockholders to improve performance.
D) has decided to capitalize on opportunities, maximize threats, take advantage of strengths, and overcome weaknesses.
E) does not have a clearly distinctive competence and has failed to meet its objectives and goals consistently over time.
C
A cost leadership strategy can be especially effective when the market is composed of many price sensitive buyers
T
A secondary buyout occurs when a corporations shares are bought by the company’s management and other private investors using borrowed funds
F
