Value Creating Diversification and Corporate Core Competencies Quiz

Cost savings a firm creates by successfully sharing resources and capabilities.

Less than 70% of revenue comes from the dominant business, and there are no common links between businesses.

Complex sets of resources and capabilities that link different businesses.

<p>Exist when a firm is able to sell its product above the existing competitive level.</p> Signup and view all the answers

<p>Exists when two or more diversified firms simultaneously compete in the same product areas or geographical markets.</p> Signup and view all the answers

<p>Exists when a company produces its own inputs (backward integration) or owns its own source of output distribution (forward integration).</p> Signup and view all the answers

<p>Market power exists when a firm can sell its goods and services above competitive levels. A firm can increase its market power through horizontal acquisition by exploiting cost-based and revenue-based synergies.</p> Signup and view all the answers

<p>Vertical acquisition involves acquiring a supplier or distributor, while related acquisition focuses on creating value through synergy by integrating resources and capabilities.</p> Signup and view all the answers

<p>Barriers to entry are factors that increase the expense and difficulty new firms face when entering a market. These barriers can be created by existing firms or market conditions.</p> Signup and view all the answers

<p>Cross-border acquisitions are important as they involve companies with headquarters in different countries. They allow firms to expand their market reach and access new opportunities globally.</p> Signup and view all the answers

<p>Acquiring new products provides lower risk as the outcomes can be estimated more easily. It also allows for increased diversification and faster speed to market.</p> Signup and view all the answers

<p>Increased diversification can make it easier for firms to introduce new products in markets they are currently serving. It allows for a broader product portfolio and can help spread risks.</p> Signup and view all the answers

<p>Synergy exists when the value created by units working together exceeds the value that those units could create working independently.</p> Signup and view all the answers

<p>Private synergies are created when combining and integrating assets of acquiring and acquired firms yield capabilities and core competencies that couldn't be developed otherwise.</p> Signup and view all the answers

<p>Managers' considerable time and energy are required for acquisition strategies to be successful.</p> Signup and view all the answers

<p>Restructuring is when a firm changes its set of businesses or its financial structure.</p> Signup and view all the answers

<p>Downsizing is a reduction in the number of a firm's employees and sometimes in the number of its operating units.</p> Signup and view all the answers

<p>Managers get involved in searching for viable acquisition candidates, due diligence, negotiations, and managing the integration process.</p> Signup and view all the answers

<p>International Business Level Strategy and International Corporate Level Strategy</p> Signup and view all the answers

<p>Inputs necessary for a firm to compete in any industry such as labor, land, natural resources, capital, and infrastructure.</p> Signup and view all the answers

<p>By locating facilities in international locations that provide easier access to lower cost labor, energy, and natural resources.</p> Signup and view all the answers

<p>It is characterized by the nature and size of customers' needs in the home market for the products firms produce.</p> Signup and view all the answers

<p>They enhance the ability to reduce costs and increase the value of products for customers.</p> Signup and view all the answers

<p>They are businesses that supply inputs or purchase businesses' outputs, forming a network of support.</p> Signup and view all the answers

<p>A transnational strategy is an international strategy that seeks to achieve both global efficiency and local responsiveness.</p> Signup and view all the answers

<p>Liability of Foreignness refers to the costs associated with issues firms face when entering foreign markets, such as unfamiliar operating environments, cultural differences, and coordination challenges.</p> Signup and view all the answers

<p>Regionalization influences a firm's choice by allowing it to focus on specific regions to compete effectively and understand the local cultures and norms.</p> Signup and view all the answers

<p>Exporting is when a firm sends products produced in its domestic market to international markets as the initial mode of entry.</p> Signup and view all the answers

<p>Two important trends are Liability of Foreignness and Regionalization.</p> Signup and view all the answers

<p>Regional focus helps firms by enabling better understanding of local cultures, legal norms, and other factors crucial for effective competition in those markets.</p> Signup and view all the answers