Corporate-Level Strategy and Diversification in Business Quiz
Test your knowledge on corporate-level strategy and diversification. Explore concepts like synergy, vertical integration, and strategic fit.
#1
Which of the following best describes corporate-level strategy?
It focuses on managing individual business units.
It concerns the overall scope and direction of a corporation.
It involves day-to-day operational decisions.
It deals with marketing strategies.
#2
What is a primary goal of diversification in business?
To minimize risk by spreading investments across different assets.
To focus solely on a single product or service.
To increase competition within the industry.
To reduce market share.
#3
Which of the following is NOT a type of corporate diversification?
Related diversification
Unrelated diversification
Horizontal diversification
Vertical diversification
#4
What is the term for when a corporation acquires or starts a new business in a different industry?
Vertical integration
Horizontal integration
Conglomerate diversification
Concentration strategy
#5
Which of the following is an advantage of related diversification?
Reduced risk due to unrelated business operations.
Limited potential for synergies between businesses.
Increased flexibility in responding to market changes.
Higher likelihood of strategic fit and sharing of resources.
#6
In the context of diversification, what does the term 'synergy' refer to?
The ability to expand into unrelated industries.
The potential cost savings or revenue enhancements that result from combining businesses.
The process of minimizing risk by spreading investments.
The act of focusing exclusively on a single business unit.
#7
Which of the following is an example of vertical integration?
A shoe manufacturer acquiring a clothing brand.
A supermarket chain launching its own line of organic products.
A technology company expanding into the automotive industry.
A car manufacturer owning a steel production plant.
#8
Which of the following statements about corporate-level strategy is TRUE?
It focuses only on maximizing profits.
It involves decisions related to individual business functions.
It is concerned with how a corporation should compete across its businesses.
It ignores external environmental factors.
#9
What is the primary drawback of unrelated diversification?
Limited potential for synergies between businesses.
Higher risk due to unrelated business operations.
Lower flexibility in responding to market changes.
Reduced complexity in managing diverse businesses.
#10
What strategic rationale suggests that a corporation diversifies to capture new profit opportunities outside its current businesses?
Economies of scope
Market power
Growth through unrelated diversification
Synergy
#11
Which of the following statements about horizontal integration is FALSE?
It involves acquiring or merging with competitors.
It allows a company to achieve economies of scale.
It reduces competition within the industry.
It focuses on expanding into unrelated industries.
#12
What is a potential risk associated with excessive diversification?
Increased market power.
Lowering the corporation's financial performance.
Maximizing synergies between business units.
Strengthening the competitive advantage.
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