CH13 Flashcards
The fundamental issue that Implementing corporate strategy addresses is:[See pp.316-317]
a. How the multibusiness company can best create value for its different businesses
b. Where the firm should be competing
c. Managing the business portfolio
d. Exploiting linkages among the different businesses
a
The success of Berkshire Hathaway over the past five decades under the leadership of Warren Buffett may be attributed primarily to: [See pp.317-318]
a. Warren Buffett’s ability to guide strategic decisions at each of Berkshire Hathaway’s subsidiaries
b. Acquiring well-managed companies in attractive industries, then exerting rigorous discipline in allocating capital among them
c. Acquiring poorly-performing companies at bargain prices, turning around their performance, then divesting them at high prices
d. All of the above
b
The main purpose of a portfolio planning matrix is to:[See p.317]
a. Locate potential synergies between businesses
b. Forecast the future performance of the different businesses
c. Evaluate the group’s market positioning of its different products relative to its leading competitors
d. Represent graphically the different businesses in terms of key strategic variables that determine their potential for profit
d
The axes of the BCG and GE/McKinsey portfolio planning matrices act as proxies for two key strategic variables:[See pp.320-321
a. Market share and market growth
b. Competitive advantage and market growth
c. Competitive advantage and market attractiveness
d. Individual business unit performance and potential for synergy.
c
Portfolio planning techniques, (also called portfolio matrixes), contribute to the following corporate management function:[See pp.320-321]
a. Allocating resources among businesses
b. Selecting diversification opportunities
c. Formulating competitive strategies for individual businesses
d. Establishing performance targets for each business
a
Managing linkages among businesses through transferring skills and sharing resources would appear to offer greater potential for creating value than portfolio management because: [See pp.317, 322-323]
a. Economies of scope have a greater impact on profitability than industry attractiveness
b. The size of acquisition premiums means that acquisitions typically destroy value for the acquirer
c. Increasingly efficient capital markets limit the potential either to acquire undervalued companies or to create value through internal capital allocation among businesses
d. Stock markets apply a conglomerate discount to highly diversified companies
c
The corporate headquarters of diversified companies that comprise loosely-related businesses (e.g. Berkshire Hathaway, Danaher, Jardine Matheson, and the Tata Group) differ from the corporate headquarters of closely-related business (e.g. Royal Dutch Shell, IBM, BASF, and Unilever) in the followingway:[See pp. 322-323]
a. They are more inclined to intervene in the management of their business units
b. They are more oriented towards stakeholder rather than shareholder objectives
c. They are more focused upon creating shareholder value
d. They are smaller
d
