Question

13. A property management group is interested in diversifying its company to operate properties for low-income housing, but the group members are nervous about the impact on the brand of high-end apartment developments where they have been operating. What strategy should the property management group use to diversify but keep control of both divisions?

a.Related diversification

b. Internal new venture

c. Unrelated diversification

d. Joint venture

14. Which of these companies is pursuing a strategy of unrelated diversification?

a.Best Buy operates both its retail stores and its Geek Squad IT support group within the same business and store organization.

b. Over the years, Kroger has acquired multiple grocery store chains and currently operates Ralphs, Ruler Foods, Dillons Marketplace, and Harris Teeter.

c. Tesla, a manufacturer of electric cars, is using the same battery technology to develop battery systems for home electricity.

d. GE has a division that manufactures jet engines and another division that operates financial services, including credit cards and credit financing.

15. By transferring distinctive competencies from one business unit to another, a company is more likely to have commonalities that lead to:

a.multibusiness diversification.

b. related diversification.

c. unrelated diversification.

d. single-unit diversification.

16. Diversification can increase profitability when strategic managers:

a.utilize general organization competencies that decrease the performance of all of a company's business units.

b. withhold resources between business units to realize synergies or economies of scope.

c. leverage competencies to create business units in new industries.

d. transfer competencies between business units in the same industry or market segment.

17. Unrelated diversification is a corporate-level strategy in which firms own unrelated businesses and attempt to increase their value through an internal capital market and/or the use of:

a.commonality and shared industry expertise.

b. shared research and development functions.

c. the external capital market.

d. general organizational competencies

18. The process of reorganizing and divesting business units and exiting industries to refocus upon a company's core business and rebuild its distinctive competencies is called:

a.bidding strategy.

b. acquisition.

c. restructuring.

d. joint venture.

19. Diversification is:

a.the process of exiting declining industries that are distinct from a company's core or original industry, to make new kinds of product for customers in new markets.

b. the process of entering existing industries similar to a company's core or original industry to remake products for customers in established markets.

c. the process of entering new industries distinct from a company's core or original industry, to make new kinds of products for customers in new markets.

d. the process of exiting new industries distinct from a company's core or original industry, to make new kinds of products for customers in new markets.

Answer 1

A property management group is interested in diversifying its company to operate properties for low-income housing, but the group members are nervous about the impact on the brand of high-end apartment developments where they have been operating. What strategy should the property management group use to diversify but keep control of both divisions?

a.Related diversification

14. Which of these companies is pursuing a strategy of unrelated diversification?

d. GE has a division that manufactures jet engines and another division that operates financial services, including credit cards and credit financing.

Unrelated diversification is a highly-diversified firm that has no relationships between its businesses.

15. By transferring distinctive competencies from one business unit to another, a company is more likely to have commonalities that lead to:

b. related diversification.

The goal of related diversification is obtaining the benefits from transferring competencies, leveraging competencies, sharing resources, and bundling products.

16. Diversification can increase profitability when strategic managers:

c. leverage competencies to create business units in new industries.

17. Unrelated diversification is a corporate-level strategy in which firms own unrelated businesses and attempt to increase their value through an internal capital market and/or the use of:

d. general organizational competencies

18. The process of reorganizing and divesting business units and exiting industries to refocus upon a company's core business and rebuild its distinctive competencies is called:

c. restructuring.

19. Diversification is:

the process of entering new industries distinct from a company's core or original industry, to make new kinds of products for customers in new markets.