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Understand corporate strategy decisions, synergy benefits, challenges of diversification, industry entries/exits, and value chain movements. Learn about synergies, economies of scope, divestitures, and competitive positions.

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  1. A-Team Fast Trackers Lost Souls Dead Enders Wild Card 100 100 100 100 100 200 200 200 200 200 300 300 300 300 300 400 400 400 400 400 500 500 500 500 500

  2. Corporate strategy addresses issues-related decisions about entering or exiting an industry.

  3. True

  4. Synergy is the condition in which the combined benefits of multiple activities are greater than the simple sum of those benefits.

  5. True

  6. Complex firms are more difficult to manage than simple firms.

  7. True

  8. Managers may have self-serving motives for diversification.

  9. True

  10. A conglomerate is a corporation consisting of many companies in different businesses or industries.

  11. True

  12. To secure needed resources, large firms often move "downstream" in the industry value chain.

  13. False

  14. Moving "upstream" in an industry value chain will draw firms closer to the source of needed raw materials.

  15. True

  16. DAILY DOUBLE DAILY DOUBLE

  17. Economies of scope generally arise from bundling and joint-selling opportunities.

  18. False

  19. A firm becomes a prime candidate for takeover when investors suspect the prospect of a significant diversification discount.

  20. True

  21. Geographic expansion is typically motivated by a desire to reduce overhead costs.

  22. False

  23. Divestitures make it possible for a firm to change rapidly an arena in which it competes.

  24. True

  25. In relatively stable environments, synergies are typically conceived as functions of static business-unit arenas and the formal structural links among them.

  26. True

  27. Coevolution means that units owned by the same corporation are potentially both collaborators and competitors.

  28. True

  29. Depths of profit pools are stable within a given value-chain segment.

  30. False

  31. Financial markets will recognize the existence of a parenting advantage when the collective market value is less than the independent market value of a portfolio of business units.

  32. False

  33. Two processes can generate synergy: sharing resources and this.

  34. transferring capabilities

  35. To create economies of scope and revenue-enhancement synergies, a firm's resources should counteract its business activities.

  36. False

  37. Industries with relatively high ________ are among the most globalized.

  38. R&D expenditures

  39. Two factors determine the size and organization of corporate-level management, including the scope of the firm's involvement in disparate arenas and the ________.

  40. firm's resources

  41. A ________ is a business that has a weak competitive position and is in a slow-growth industry.

  42. Dog

  43. Diversification into upstream or downstream industries is called ________.

  44. vertical integration

  45. A ________ is a business that has a strong competitive position in a slow-growth industry.

  46. Cash Cow

  47. Two concepts that are critical in evaluating opportunities for diversification and value creation are revenue-enhancement opportunities and ________.

  48. economies of scope

  49. Reductions in average costs that result from producing two or more products jointly instead of producing them separately are called ________.

  50. economies of scope

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