18 Questions
What is the primary purpose of a corporate portfolio analysis?
To determine the optimal resource allocation across businesses
What is a Strategic Business Unit (SBU)?
A single, independent business that formulates its own competitive strategies
What is the primary benefit of achieving a sustainable competitive advantage?
It enables the organization to keep its edge despite competitors' actions
What is the name of the first portfolio matrix developed by the Boston Consulting Group?
BCG matrix
What is the primary criterion used to evaluate businesses in a corporate portfolio matrix?
Market share and growth rate
What is the ultimate goal of using a corporate portfolio matrix?
To allocate resources effectively across businesses
What is a strategic implication of having Cash Cows in a company's portfolio?
Limit new investment in Cash Cows and use the generated cash in other areas.
Which type of products have high growth and high market share according to the BCG matrix?
Stars
What strategic investments are recommended for Stars in a company's portfolio?
Heavy investment to capitalize on market growth.
What is the main difference between Cash Cows and Stars in the BCG matrix?
Stars generate large cash but have limited future growth prospects; Cash Cows have high growth potential.
According to the BCG matrix, what should be done with Cash Cows?
Limit new investment in them and use the cash generated elsewhere.
What is the primary purpose of the BCG matrix in corporate portfolio analysis?
To allocate resources effectively across different strategic business units (SBUs).
What is the primary characteristic of a stability strategy?
Maintenance of current market share
What drives an organization to adopt a stability strategy?
Slow or no growth opportunities
Which of the following is a characteristic of unrelated diversification?
Combining with firms in different and unrelated industries
What is the primary focus of an organization pursuing a stability strategy?
Maintaining current market share
Why might an organization with limited resources adopt a stability strategy?
Because its resources are stretched to their limits
What is a key consideration in adopting a stability strategy?
The satisfaction of owners or managers with the organization's performance
Learn about sustainable competitive advantage and its importance in maintaining an edge over competitors despite industry changes. This concept is discussed in Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter.
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