D focus on crafting initiatives to restore a diversified company's money-losing businesses to profitability. Doing this builds trust and by proxy, sales. C certain business units are weakly positioned and show poor prospects for providing a good return on investment. Starbucks: The world renowned coffee mogul We know. B that businesses having the greatest competitive strength and positioned in the most attractive industries should have the highest priority for corporate resource allocation and that competitively weak businesses in relatively unattractive industries should have the lowest priority and perhaps even be considered for divestiture.
The online retail giant has also announced Amazon Prime Air a drone delivery system and Amazon Flex gig-economy based intra metro delivery service. D the firm has no prior experience with diversification and the industry is on the verge of explosive growth. These activities provide the motivation necessary to maintain employee morale, the technological resources needed to generate the value, and the buying activities need to ensure that the company gets good deals on its materials and product purchases. The emergence of these multiple arm's-length markets indicated that the new players were viable in the marketplace. When identifying a diversified company's present corporate strategy, which of the following would not be something to look for? Started with a single truck in Seattle, nowadays Treasure Truck comprises a fleet of 35 trucks across 25 U.
D consider to what extent the industries a company has invested in hold promise for attractive growth and profitability. Diversification merits strong consideration whenever a single-business company A has integrated backward and forward as far as it can. Then you analyze how to use this value to reduce costs. D paying off existing debt, increasing dividends, building cash reserves, or repurchasing shares of the company's stock. B opportunities to transfer skills, technology, or intellectual capital from one business to another, thereby leveraging use of existing resources. Amazon Value Chain Analysis Amazon Primary Activities Amazon Inbound logistics Generally, Amazon does not have long-term contracts or arrangements with its vendors to guarantee the availability of merchandise, particular payment terms, or the extension of credit limits.
A Market size and projected growth rate, industry profitability, and the intensity of competition B Industry uncertainty and business risk C The frequency with which strategic alliances and collaborative partnerships are used in each industry, the extent to which firms in the industry utilize outsourcing, and whether the industries a company has diversifiedinto have common key success factors D Seasonal and cyclical factors, resource requirements, and whether an industry has significant social, political, regulatory, and environmental problems E The presence of cross-industry strategic fits Assessments of the long-term attractiveness of each industry represented in a diversified company's lineup of businesses should be based on A a complete value-chain analysis of each industry. For example, a refinery no longer constrained to run its own company's crude might choose to purchase a different product slate that offered greater margins. A strategy of diversifying into unrelated businesses A is aimed at achieving good financial fit whereas related diversification aims at good strategic fit. A Assessing the competitive strength of each business the company has diversified into B Determining which business units are cash cows and which ones are cash hogs and then evaluating how soon the company's cash hogs can be transformed into cash cows C Evaluating the strategic fits and resource fits among the various sister businesses D Assessing the attractiveness of the industries the company has diversified into, both individually and as a group E Ranking the performance prospects of the businesses from best to worst and deciding what priority to give each of the company's business units in allocating resources To create value for shareholders via diversification, a company must A get into new businesses that are profitable. Where in the value chain will profitability in the future support currently diverging investment patterns? Value chain analysis provides strategic focus. D results in having more cash cow businesses than cash hog businesses. B the strategic fit test, the resource fit test, and the profitability test.
C When adding new production capacity will not adversely impact the supply demand balance in the industry by creating oversupply conditions D When the industry is growing rapidly and the target industry is comprised of several relatively large and well-established firms E When incumbent firms are likely to be slow or ineffective in combating a new entrant's efforts to crack the market Diversifying into a new industry by forming a new internal subsidiary to enter and compete in the target industry is attractive when A all of the potential acquisition candidates are losing money. E companies that are employing the same basic type of competitive strategy as the parent corporation's existing businesses. D it is in a fast-growing industry. For example, Tosco focused primarily on the refining segment. C the resource fit test, the profitability test, and the shareholder value test.
Value chain analysis is an analytical tool used to identify the ways in which businesses create value for customers. D each business unit produces sufficient cash flows over and above what is needed to build and maintain the business, thereby providing the parent company with enough cash to pay shareholders a generous and steadily increasing dividend. D the extent to which there are competitively valuable relationships between the value chains of sister business units and what opportunities they present to reduce costs, share use of a potent brand name, create competitively valuable new capabilities via cross-business collaboration, or transfer skills or technology or intellectual capital from one business to another. With an unrelated diversification strategy, the types of companies that make particularly attractive acquisition targets are A struggling companies with good turnaround potential, undervalued companies that can be acquired at a bargain price, and companies that have bright growth prospects but are short on investment capital. Usually, superior differentiation and customer value will be the result of many interrelated activities and strategies used.
B entails arraying the various businesses from the biggest cash hog down to the biggest cash cow; big cash hogs get the highest priority for resource allocation and big cash cows get the lowest priority. D identifying opportunities to acquire businesses that can benefit from using the parent company's potent brand name. E faces strong competition and is struggling to earn a good profit. . Which of the following is an important appeal of a related diversification strategy? To identify a diversified company's strategy, one should consider such factors as A the extent to which the firm is broadly or narrowly diversified, whether it is pursuing related or unrelated diversification or a mixture of both , and the recent moves it has made to divest businesses, acquire new businesses, and strengthen the positions of existing businesses. The majors viewed their asset classes refineries, terminals, stations as fundamentally linked.
The overall goal is to deliver maximum value for the least possible total cost and create a competitive advantage. It starts far too late and stops far too soon. B individual businesses add to a company's resource strengths and when a company has the resources to adequately support the requirements of its businesses as a group without spreading itself too thin. C Related diversification is particularly well-suited for the use of first-mover strategies and capturing valuable financial fits. The first and most visible spot market was for crude oil. B has the advantage of focusing a diversified firm's energies on building strong positions in a few core businesses rather the stretching its resources and managerial attention too thinly across many businesses. C it involves diversifying into industries having the same kinds of key success factors.