Sustainable Competitive Advantage Concept
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Questions and Answers

What is the primary purpose of a corporate portfolio analysis?

  • To determine the optimal resource allocation across businesses (correct)
  • To develop a single competitive strategy for the organization
  • To evaluate individual business unit performance
  • To identify new business opportunities

    • What is a Strategic Business Unit (SBU)?

  • A corporate-level strategy tool
  • A method for evaluating market share and growth rate
  • A type of corporate portfolio matrix
  • A single, independent business that formulates its own competitive strategies (correct)

    • What is the primary benefit of achieving a sustainable competitive advantage?

  • It reduces the need for resource allocation decisions
  • It enables the organization to keep its edge despite competitors' actions (correct)
  • It allows the organization to change its strategy frequently
  • It increases the organization's dependence on a single business

    • What is the name of the first portfolio matrix developed by the Boston Consulting Group?

    <p>BCG matrix</p> Signup and view all the answers

    What is the primary criterion used to evaluate businesses in a corporate portfolio matrix?

    <p>Market share and growth rate</p> Signup and view all the answers

    What is the ultimate goal of using a corporate portfolio matrix?

    <p>To allocate resources effectively across businesses</p> Signup and view all the answers

    What is a strategic implication of having Cash Cows in a company's portfolio?

    <p>Limit new investment in Cash Cows and use the generated cash in other areas.</p> Signup and view all the answers

    Which type of products have high growth and high market share according to the BCG matrix?

    <p>Stars</p> Signup and view all the answers

    What strategic investments are recommended for Stars in a company's portfolio?

    <p>Heavy investment to capitalize on market growth.</p> Signup and view all the answers

    What is the main difference between Cash Cows and Stars in the BCG matrix?

    <p>Stars generate large cash but have limited future growth prospects; Cash Cows have high growth potential.</p> Signup and view all the answers

    According to the BCG matrix, what should be done with Cash Cows?

    <p>Limit new investment in them and use the cash generated elsewhere.</p> Signup and view all the answers

    What is the primary purpose of the BCG matrix in corporate portfolio analysis?

    <p>To allocate resources effectively across different strategic business units (SBUs).</p> Signup and view all the answers

    What is the primary characteristic of a stability strategy?

    <p>Maintenance of current market share</p> Signup and view all the answers

    What drives an organization to adopt a stability strategy?

    <p>Slow or no growth opportunities</p> Signup and view all the answers

    Which of the following is a characteristic of unrelated diversification?

    <p>Combining with firms in different and unrelated industries</p> Signup and view all the answers

    What is the primary focus of an organization pursuing a stability strategy?

    <p>Maintaining current market share</p> Signup and view all the answers

    Why might an organization with limited resources adopt a stability strategy?

    <p>Because its resources are stretched to their limits</p> Signup and view all the answers

    What is a key consideration in adopting a stability strategy?

    <p>The satisfaction of owners or managers with the organization's performance</p> Signup and view all the answers

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