BPL Practice Exam Questions with
Correct Answers
A Cash Cow, in the BCG framework, refers to a business that has
A. high market growth and relatively high market share.
B. relatively low market share and low market growth.
C. relatively low market share and high market growth.
D. low market growth and relatively high market share. - Answer-D. low market growth
and relatively high market share.
In managing the corporate portfolio, the BCG matrix would suggest that
A. Dogs should be invested in to increase market share and become Cash Cows.
B. Stars are in low growth markets and can provide excess cash to fund other
opportunities.
C. Cash Cows require substantial cash outlays to maintain market share.
D. Question Marks can represent future Stars if their market share is increased. -
Answer-D. Question Marks can represent future Stars if their market share is increased.
In the BCG Growth Share Matrix, the suggested strategy for Stars is to
A. milk them to finance other businesses.
B. invest large sums to gain a good market share.
C. maintain position and after the market growth slows use the business to provide cash
flow.
D. not invest in them and to shift cash flow to other businesses. - Answer-C. maintain
position and after the market growth slows use the business to provide cash flow.
The primary means by which a firm can diversify are __________, _________, and
________.
A.mergers and acquisitions; differentiation; overall cost leadership
B. mergers and acquisitions; joint ventures and strategic alliances; internal development
C. joint ventures and strategic alliances; integration of value chain activities; acquiring
human capital
D. mergers and acquisitions; internal development; differentiation - Answer-B. mergers
and acquisitions; joint ventures and strategic alliances; internal development
The downsides or limitations of mergers and acquisitions include all of the following
except:
A. It is a slow means to enter new markets and acquire skills and competences.
,B. Difficulties exist in integrating the activities and resources of the acquired firm into on-
going operations.
C. There can be many cultural issues that can doom an otherwise promising acquisition.
D. Premiums that are frequently paid to acquire a business are expensive. - Answer-It is
a slow means to enter new markets and acquire skills and competences.
Divesting of businesses can accomplish many different objectives, except
A. enabling managers to focus their efforts more directly on the core businesses of the
firm.
B. providing the firm with more resources to spend on more attractive alternatives.
C. raising cash to help fund existing businesses.
D. dispersing manager focus. - Answer-dispersing manager focus.
IBM, Memorial Sloan Kettering, and Cedars-Sinai have a _________ whereby IBM
receives expert medical knowledge that it uses to leverage its technological skills to
develop new medical insights.
A. joint diversification
B. divestment
C. strategic alliance
D. global integration - Answer-strategic alliance
Cooperative relationships such as __________ have potential advantages such as
entering new markets, reducing manufacturing (or other) costs in the value chain, and
developing and diffusing new technologies.
A. franchises
B. mergers
C. acquisitions
D. joint ventures and strategic alliances - Answer-joint ventures and strategic alliances
Which of the following is not part of a good guideline list for managing strategic
alliances?
A. establishing a clear understanding between partners
B. not shortchanging your partner
C. relying primarily on a contract to make the joint venture work
D. working hard to ensure a collaborative relationship between partners - Answer-C.
relying primarily on a contract to make the joint venture work
Which of the following statements regarding internal development as a means of
diversification is false?
A. Many companies use internal development to extend their product or service offers.
, B. An advantage of internal development is that it is generally faster than other means
of diversification and firms can benefit from speed in developing new products and
services.
C. The firm is able to capture wealth created without having to share the wealth with
alliance partners.
D. Firms can often develop products or services at a lower cost, if they rely on their own
resources instead of external funding. - Answer-An advantage of internal development
is that it is generally faster than other means of diversification and firms can benefit from
speed in developing new products and services.
Internal development may be time consuming and, therefore, firms may forfeit the
benefits of speed that growth through __________ and __________ can provide.
A. strategic alliances; joint ventures
B. strategic alliances; mergers
C. mergers; acquisitions
D. mergers; joint ventures - Answer-C. mergers; acquisitions
Firms that choose to diversify through internal development must develop _________
that allow them to move __________ from initial opportunity recognition to market
introduction.
A. strategies; slowly
B. capabilities; quickly
C. capabilities; slowly
D. strategies; quickly - Answer-capabilities; quickly
The Cisco acquisition of Pure Digital Technologies, the parent of the Flip video camera,
failed because
A. Cisco had valuable competencies.
B. the Flip division of Cisco was slow and less responsive to market pressures.
C. consumers continued to purchase the camera.
D. Cisco had good vision of the market. - Answer-b. the Flip division of Cisco was slow
and less responsive to market pressures.
Which of the following is not a reason for merger and acquisition failures?
A. The acquiring company pays a premium for the common stock of the target
company.
B. Top executives act in their best interests rather than those of the shareholders.
Correct Answers
A Cash Cow, in the BCG framework, refers to a business that has
A. high market growth and relatively high market share.
B. relatively low market share and low market growth.
C. relatively low market share and high market growth.
D. low market growth and relatively high market share. - Answer-D. low market growth
and relatively high market share.
In managing the corporate portfolio, the BCG matrix would suggest that
A. Dogs should be invested in to increase market share and become Cash Cows.
B. Stars are in low growth markets and can provide excess cash to fund other
opportunities.
C. Cash Cows require substantial cash outlays to maintain market share.
D. Question Marks can represent future Stars if their market share is increased. -
Answer-D. Question Marks can represent future Stars if their market share is increased.
In the BCG Growth Share Matrix, the suggested strategy for Stars is to
A. milk them to finance other businesses.
B. invest large sums to gain a good market share.
C. maintain position and after the market growth slows use the business to provide cash
flow.
D. not invest in them and to shift cash flow to other businesses. - Answer-C. maintain
position and after the market growth slows use the business to provide cash flow.
The primary means by which a firm can diversify are __________, _________, and
________.
A.mergers and acquisitions; differentiation; overall cost leadership
B. mergers and acquisitions; joint ventures and strategic alliances; internal development
C. joint ventures and strategic alliances; integration of value chain activities; acquiring
human capital
D. mergers and acquisitions; internal development; differentiation - Answer-B. mergers
and acquisitions; joint ventures and strategic alliances; internal development
The downsides or limitations of mergers and acquisitions include all of the following
except:
A. It is a slow means to enter new markets and acquire skills and competences.
,B. Difficulties exist in integrating the activities and resources of the acquired firm into on-
going operations.
C. There can be many cultural issues that can doom an otherwise promising acquisition.
D. Premiums that are frequently paid to acquire a business are expensive. - Answer-It is
a slow means to enter new markets and acquire skills and competences.
Divesting of businesses can accomplish many different objectives, except
A. enabling managers to focus their efforts more directly on the core businesses of the
firm.
B. providing the firm with more resources to spend on more attractive alternatives.
C. raising cash to help fund existing businesses.
D. dispersing manager focus. - Answer-dispersing manager focus.
IBM, Memorial Sloan Kettering, and Cedars-Sinai have a _________ whereby IBM
receives expert medical knowledge that it uses to leverage its technological skills to
develop new medical insights.
A. joint diversification
B. divestment
C. strategic alliance
D. global integration - Answer-strategic alliance
Cooperative relationships such as __________ have potential advantages such as
entering new markets, reducing manufacturing (or other) costs in the value chain, and
developing and diffusing new technologies.
A. franchises
B. mergers
C. acquisitions
D. joint ventures and strategic alliances - Answer-joint ventures and strategic alliances
Which of the following is not part of a good guideline list for managing strategic
alliances?
A. establishing a clear understanding between partners
B. not shortchanging your partner
C. relying primarily on a contract to make the joint venture work
D. working hard to ensure a collaborative relationship between partners - Answer-C.
relying primarily on a contract to make the joint venture work
Which of the following statements regarding internal development as a means of
diversification is false?
A. Many companies use internal development to extend their product or service offers.
, B. An advantage of internal development is that it is generally faster than other means
of diversification and firms can benefit from speed in developing new products and
services.
C. The firm is able to capture wealth created without having to share the wealth with
alliance partners.
D. Firms can often develop products or services at a lower cost, if they rely on their own
resources instead of external funding. - Answer-An advantage of internal development
is that it is generally faster than other means of diversification and firms can benefit from
speed in developing new products and services.
Internal development may be time consuming and, therefore, firms may forfeit the
benefits of speed that growth through __________ and __________ can provide.
A. strategic alliances; joint ventures
B. strategic alliances; mergers
C. mergers; acquisitions
D. mergers; joint ventures - Answer-C. mergers; acquisitions
Firms that choose to diversify through internal development must develop _________
that allow them to move __________ from initial opportunity recognition to market
introduction.
A. strategies; slowly
B. capabilities; quickly
C. capabilities; slowly
D. strategies; quickly - Answer-capabilities; quickly
The Cisco acquisition of Pure Digital Technologies, the parent of the Flip video camera,
failed because
A. Cisco had valuable competencies.
B. the Flip division of Cisco was slow and less responsive to market pressures.
C. consumers continued to purchase the camera.
D. Cisco had good vision of the market. - Answer-b. the Flip division of Cisco was slow
and less responsive to market pressures.
Which of the following is not a reason for merger and acquisition failures?
A. The acquiring company pays a premium for the common stock of the target
company.
B. Top executives act in their best interests rather than those of the shareholders.
