#1
Which of the following best describes corporate-level strategy?
It concerns the overall scope and direction of a corporation.
ExplanationDefines the overarching direction and scope of a corporation.
#2
What is a primary goal of diversification in business?
To minimize risk by spreading investments across different assets.
ExplanationMinimizing risk by investing in diverse assets.
#3
Which of the following is NOT a type of corporate diversification?
Horizontal diversification
ExplanationHorizontal diversification is not a type of corporate diversification.
#4
What is the term for when a corporation acquires or starts a new business in a different industry?
Conglomerate diversification
ExplanationExpanding into different industries by acquisition or start-up.
#5
Which of the following is an advantage of related diversification?
Higher likelihood of strategic fit and sharing of resources.
ExplanationIncreases likelihood of strategic fit and resource sharing.
#6
In the context of diversification, what does the term 'synergy' refer to?
The potential cost savings or revenue enhancements that result from combining businesses.
ExplanationRefers to cost savings or revenue enhancements from business combination.
#7
Which of the following is an example of vertical integration?
A car manufacturer owning a steel production plant.
ExplanationOwning a supplier or distributor in the supply chain.
#8
Which of the following statements about corporate-level strategy is TRUE?
It is concerned with how a corporation should compete across its businesses.
ExplanationFocuses on how a corporation competes across its businesses.
#9
What is the primary drawback of unrelated diversification?
Limited potential for synergies between businesses.
ExplanationLack of synergy potential among diversified businesses.
#10
What strategic rationale suggests that a corporation diversifies to capture new profit opportunities outside its current businesses?
Growth through unrelated diversification
ExplanationDiversifying to capture new profit opportunities outside current businesses.
#11
Which of the following statements about horizontal integration is FALSE?
It focuses on expanding into unrelated industries.
ExplanationFalse: Horizontal integration does not involve unrelated industries.
#12
What is a potential risk associated with excessive diversification?
Lowering the corporation's financial performance.
ExplanationExcessive diversification can lower financial performance.