Chapter 9

Question 1

business-level strategy

Answer 1

The strategy that builds competitive advantage in an identifiable market

Question 2

corporate-level strategy (corporate strategy)

Answer 2

Strategy about how a firm creates value through the configuration and coordination of its multimarket activities

Question 3

diversification

Answer 3

adding new businesses to the firm that are distinct from its existing operations

Question 4

product diversification

Answer 4

entries into new product markets

Question 5

geographic diversification

Answer 5

entries into new geographic markets

Question 6

single business strategy

Answer 6

A strategy that focuses on a single product or service with little diversification

Question 7

product-related diversification

Answer 7

Entries into new product markets and/or business activities that are related to a firm’s existing markets and/or activities

Question 8

operational synergy

Answer 8

Synergy is derived by having shared activities, personnel, and technologies

Question 9

product-unrelated diversification

Answer 9

Entries into industries that have no obvious product-related connections to the firm’s current lines of business

Question 10

conglomerate

Answer 10

Product-unrelated diversifier

Question 11

conglomeration

Answer 11

a strategy of product-unrelated diversification

Question 12

financial synergy

Answer 12

the increase in competitiveness for each individual unit that is financially controlled by the corporate headquarters beyond what can be achieved by each unit competing independently as standalone firms

Question 13

economies of scope (scope economies)

Answer 13

reduction in per unit costs and increases in competitiveness by enlarging the scope of the firm

Question 14

internal capital market

Answer 14

the internal management mechanisms of a conglomerate firm that operates as a capital market inside the firm

Question 15

diversification premium

Answer 15

increased levels of performance because of association with a product-diversified firm (also known as a conglomerate advantage)

Question 16

diversification discount

Answer 16

reduced levels of performance because of association with a product-diversified firm (also known as a conglomerate discount)

Question 17

International diversification

Answer 17

the number and diversity of countries in which a firm competes

Question 18

anchored replicator

Answer 18

a firm that seeks to replicate a set of activities in related industries in a small number of countries anchored by the home country

Question 19

multinational replicator

Answer 19

a firm that engages in product-related diversification and far-flung multinational expansion

Question 20

far-flung conglomerate

Answer 20

a conglomerate firm that pursues both extensive product-unrelated diversification and extensive geographic diversification

Question 21

classic conglomerate

Answer 21

a firm that engages in product-unrelated diversification within a small set of countries centered on the home country

Question 22

divestiture

Answer 22

Selling off assets

Question 23

Chapter 9 title

Answer 23

Diversifying and Managing Acquisitions Globally