A) company's profits are being squeezed,and it needs to increase its net profit margins and return on investment.
B) company lacks sustainable competitive advantage in its present business.
C) company begins to encounter diminishing growth prospects in its mainstay business.
D) company has run out of ways to achieve a distinctive competence in its present business.
E) company is under the gun to create a more attractive and cost-efficient value chain.
G) A) and D)
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A) market size and projected growth rate,industry profitability,and the intensity of competition
B) industry uncertainty and business risk
C) 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 diversified into 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) presence of cross-industry strategic fits
G) D) and E)
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A) financially distressed 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.
B) companies offering the biggest potential to reduce labor costs.
C) cash cow businesses with excellent financial fit.
D) companies that are market leaders in their respective industries.
E) companies that are employing the same basic type of competitive strategy as the parent corporation's existing businesses.
G) All of the above
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A) they have several key suppliers and several key customers in common.
B) their value chains have the same number of primary activities.
C) their products are both sold through retailers.
D) their value chains possess competitively valuable cross-business relationships that present opportunities to transfer skills and capabilities from one business to another,share resources or facilities to reduce costs,share use of a well-known brand name,and/or create mutually useful resource strengths and capabilities.
E) many consumers buy the products/services of both businesses.
G) A) and B)
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A) picking the new industries to enter and deciding on the means of entry.
B) initiating actions to boost the combined performance of the businesses the firm has entered.
C) pursuing opportunities to leverage cross-business value chain relationships and strategic fits into competitive advantage.
D) steering corporate resources into the most attractive business units.
E) All of these choices are correct.
G) B) and D)
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A) transferring competitively valuable resources,expertise,technological know-how,or other capabilities from one business to another.
B) cost sharing between separate businesses whose activities can be combined.
C) brand sharing between business units that have common customers or that draw upon common core competencies.
D) sharing common administrative and customer service infrastructure.
E) All of these choices are correct.
G) B) and D)
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A) cash cow businesses is sufficient to fund the needs of its cash hog businesses.
B) cash cow businesses is sufficient to fund its needs to turn into potential young stars.
C) self-supporting stars use their cash flow to fund cash cows.
D) cash hog businesses is sufficient to fund the needs of its cash cow businesses.
E) potential young stars is sufficient to help stars.
G) A) and B)
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A) is usually the most attractive long-run strategy for a broadly diversified company confronted with recession,high interest rates,mounting competitive pressures in several of its businesses,and sluggish growth.
B) is directed at improving long-term performance by building stronger positions in a smaller number of core businesses.
C) is an attractive strategy option for revamping a diverse business lineup that lacks strong cross-business financial fit.
D) is sometimes an attractive option for deepening a diversified company's technological expertise and supporting a faster rate of product innovation.
E) is a strategy best reserved for companies in poor financial shape.
G) B) and E)
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A) Capital infusions needed from the corporate parent are modest relative to the funds available.
B) There is a decent chance of growing the business into a solid bottom-line contributor.
C) The business is in an industry with low attractiveness and has a weak competitive position in that industry.
D) There is a better than even chance that investing in the cash hog will result in it becoming a star business with a strong or market-leading competitive position in a high growth market and high levels of profitability.
E) The cash hog has a valuable strategic fit with other business units.
G) C) and E)
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A) diversify into new industries that present opportunities to combine value chain activities of two or more businesses to lower costs.
B) diversify into those industries where the same kinds of driving forces and competitive forces prevail,thus allowing use of much the same competitive strategy in all of the businesses a company is in.
C) acquire rival firms that have broader product lines so as to give the company access to a wider range of buyer groups.
D) acquire companies in forward distribution channels (wholesalers and/or retailers) .
E) expand into foreign markets where the firm currently does no business.
G) A) and E)
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A) each business's profit and growth prospects.
B) industry attractiveness and competitive strength of the various businesses.
C) the degree of strategic fit and resource fit with other business units.
D) each business's cash flow characteristics and return on capital invested.
E) All of these choices are correct.
G) A) and C)
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A) conditions in the target industry allow for profits and return on investment that is equal to or better than that of the company's present business(es) .
B) the potential diversification move will boost the company's competitive advantage in its existing business.
C) shareholders will view the contemplated diversification move as attractive.
D) key success factors in the target industry are attractive.
E) there are attractive strategic fits between the value chains of the company's present businesses and the value chain of the new business it is considering entering.
G) A) and B)
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A) broadening the company's business scope by making new acquisitions in new industries.
B) divesting weak-performing businesses and retrenching to a narrower base of business operations.
C) restructuring the company's business lineup and putting a whole new face on the company's business makeup.
D) sticking closely to the existing business lineup and pursuing the growth opportunities presented by these businesses.
E) All of these choices are correct.
G) D) and E)
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