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GEB exam Prep Questions Solved100%| Already Passed
It is advantageous for a company to concentrate its activities in a limited number of locations in al of
the following circumstances except: -✔✔ When buyer-related activities--such as distribution to
dealers, sales and advertising, and after-sale service--usually must take place close to buyers
Exporters are advantaged when the currency of the country where the goods are being
manufactured grows stronger relative to the currency of the importing country. -✔✔ False
A "think local, act local" approach to international strategy is commonly known as a(n)____ strategy. -
✔✔ multidomestic
Which of the following is not one of the factors in Porter's Diamond of National Competitive Advantage?
-✔✔ All of the above
A(n) _____ strategy is a strategy for competing in two or more countries simultaneously. -✔✔
international
All of the following are advantages of a multidomestic strategy except: -✔✔ enables the transfer
and sharing of resources and capabilities across borders
In a Nine-Cell Matrix used to assess a diversified company, industries with a score much below ____
probably do not pass the attractiveness test -✔✔ 5
The amount by which the price offered exceeds the preacquisition market value of the target company
is known as the -✔✔ acquisition premium
,____ exists whenever one or more activities constituting the value chains of different businesses are
sufficiently similar as to present opportunities for cross-business sharing or transferring of the
resources and capabilities that enable these activies -✔✔ strategic fit
Acquisition of an existing business is a popular means of diversifying into another industry for all the
following reasons except: -✔✔ it is quicker than trying to launch a brand-new operation
From an increasing shareholder value perspective, the only adequate reason for pursuing unrelated
diversification is the value provided by -✔✔ corporate parenting
For there to be reasonable expectations of producing added long-term shareholder value, a move to
diversify into a new business must pass which three tests? -✔✔ the industry attractiveness test, the
cost-of-entry test, and the better-off test
In a diversified firm, a business unit that generates cash flows that over and above its internal
requirements, thus providing a corporate parent with funds for investing in lower performing
businesses, financing new acquisitions, or paying dividends is known as a -✔✔ cash cow
Two of the biggest drawbacks of unrelated diversification are -✔✔ demanding managerial
requirements and limited competitive advantage potential
All of the following are typical transaction costs except -✔✔ the difference between acquisition price
and the preacquisition market price of the target company
Cost reductions that flow from operating in multiple businesses are commonly referred to as -✔✔
economies of scope
A diversified company has a parenting advantage when it is more able than other companies to boost
the performance of its individual businesses through high-level guidance, general oversight, and other
corporate-level contributions -✔✔ True
, Which of the following is not one of the important questions to ask when trying to decide how best to
enter a new business, whether through internal startup, acquisition, or joint venture? -✔✔ Which
has been the predominant mode of entry into the business by other competitors?
Creating added value for shareholders via diversification requires building a multibusiness company
where the whole is greater than the sum of its parts-- an outcome known as -✔✔ synergy
____ businesses have dissimilar value chains and resource requirements, with no competitively
important cross-business relationships at the value chain level. -✔✔ unrelated
Economies of scale are cost reductions that flow from operating in multiple businesses. -✔✔ false
In a diversified firm, a business unit that generates cash flows that are too small to fully fund its
operations and growth and requires cash infusions to provide additional working capital and finance
new capital investment is known as a -✔✔ cash hog
All of the following are commonly used measures in quantifying the competitive strengths of a
diversified company's business subsidiaries except -✔✔ industry profitablity
Each of the following are distinct facets in creating a diversified company's overall corporate strategy
except -✔✔ deciding on the appropriate competitive strategy for each of the company's businesses
A strategy of unrelated diversification can be justified as long as the company achieves any type
of growth -✔✔ false
____ refers to overhauling and streamlining the activities of a business--combining plants with excess
capacity, selling off underutilized assets, reducing unnecessary expenses, and otherwise improving
the productivity and profitability of a company -✔✔ restructuring
____ are the costs of completing a business agreement or deal of some sort, over and above the price of
the deal. -✔✔ transactions costs
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