Question 1

When L'Oréal acquired The Body Shop,it carried out ________.
A)horizontal integration
B)forward horizontal integration
C)backward horizontal integration
D)diversified integration

Accepted Answer

When L'Oréal acquired The Body Shop, it was an example of horizontal integration because both companies operate in the same industry (cosmetics and beauty products), and this acquisition expanded L'Oréal's market share within that industry.

Question 2

Cindy's Cosmetics continues to offer the same high quality beauty products that it has for the last 10 years.The company is successful in its market segment and has no plans for change in the near future.The company is pursuing which type of strategy?
A)integration
B)stability
C)retrenchment
D)concentration

Accepted Answer

The company's focus on maintaining the same high quality products and not planning any change in the near future indicates a stability strategy.

Question 3

When Air Canada went into bankruptcy protection to restructure its organization and reduce its operating costs,it was pursuing which of the following strategies?
A)integration
B)stability
C)turnaround
D)concentration

Accepted Answer

When Air Canada went into bankruptcy protection to restructure its organization and reduce its operating costs, it was pursuing a turnaround strategy. This involves making significant changes to a company's operations in order to reverse a trend of declining performance and achieve profitability. In this case, Air Canada was trying to address its financial difficulties by restructuring its organization and cutting costs in order to become financially viable once again.

Question 4

When the Campbell Soup Company began to manufacture its own cans to gain more control over a key production input,it was pursuing which corporate strategy?
A)backward vertical integration
B)forward vertical integration
C)concentration
D)horizontal integration

Accepted Answer

Backward vertical integration involves a company acquiring or owning its suppliers to have more control over key inputs. By manufacturing its own cans, Campbell Soup Company is essentially owning its supplier for cans, giving it more control over the production process and potentially reducing costs.

Question 5

When consumer electronics manufacturer Sony Corporation decided to open its own chain of retail stores,it was pursuing which corporate strategy?
A)backward vertical integration
B)forward vertical integration
C)related diversification
D)horizontal integration

Accepted Answer

Sony Corporation was pursuing the strategy of forward vertical integration by opening its own chain of retail stores. This strategy involves a company expanding its operations by acquiring or creating its own distribution or retail channels to sell its products directly to consumers.

Question 6

Pepsico is divided into several product divisions,including Pepsi,Frito-Lay,Tropicana,Quaker,and Gatorade.Each division has its own strategy that defines the products it wants to offer and the customers it wants to target.The divisions are called ________.
A)subsidiary operating divisions
B)strategic operating centres
C)strategic business units
D)diversified business enterprises

Accepted Answer

These product divisions are referred to as strategic business units (SBUs). SBUs are individual business units or product lines within a larger company that are treated as separate businesses with their own strategies, resources, and objectives. PepsiCo's various SBUs have distinct strategies tailored to their specific product offerings and target markets.

Question 7

When a university reduces its course offerings in a semester due to low student enrolment,it is pursuing a strategy of ________.
A)integration
B)retrenchment
C)stability
D)concentration

Accepted Answer

Retrenchment refers to reducing or cutting back on a company's activities, and in this case, the university is reducing their course offerings due to low student enrolment. This strategy is a form of retrenchment as it involves reducing the university's scope of activities to improve efficiency and profitability. The other options are not relevant to this scenario - integration refers to bringing together separate parts into a unified whole, stability refers to maintaining the status quo, and concentration refers to focusing on a particular product or market.

Question 8

When an organization attempts to grow by merging with or acquiring firms in different and dissimilar industries,the strategy is known as a(n)________ strategy.
A)unrelated diversification
B)horizontal integration
C)vertical integration
D)unrelated differentiation

Accepted Answer

Unrelated diversification refers to the expansion of an organization into unrelated industries that are not connected to their current business operations. This strategy involves acquiring or merging with firms in different industries to spread risk and create new market opportunities. Horizontal integration involves merging or acquiring firms in the same industry to increase market share, while vertical integration involves moving into different stages of the production process within the same industry. Unrelated differentiation is not a recognized strategy.

Question 9

Which of the following provides a framework for understanding diverse businesses and helps managers establish priorities for allocating resources?
A)differentiation strategy
B)vertical integration
C)corporate portfolio matrix
D)strategic business unit

Accepted Answer

The corporate portfolio matrix (also known as the Boston Consulting Group matrix) provides a framework for understanding diverse businesses by categorizing them into four quadrants based on their market growth rate and market share. This tool helps managers establish priorities for allocating resources by identifying which businesses should receive more or less investment, divestment, or maintenance. Differentiation strategy, vertical integration, and strategic business unit are all important concepts in strategic management but do not provide the same framework as the corporate portfolio matrix.

Question 10

Which of the following describes a company growing by combining with other organizations in the same industry?
A)forward vertical integration
B)backward vertical integration
C)horizontal integration
D)concentration

Accepted Answer

Horizontal integration is when a company grows by combining with other organizations in the same industry. This can be accomplished through mergers or acquisitions. Forward vertical integration is when a company expands by acquiring or merging with companies that are closer to the end consumer, while backward vertical integration is when a company expands by acquiring or merging with companies that are closer to raw materials or production processes. Concentration refers to a strategy of focusing on one particular market or product.

Question 11

Ronald's has been in the fast-food business for five years.After struggling for two years,it finally broke even,and the french fries it offers are its most popular product.However,during the past year,its business has suffered because the farm that used to supply it with potatoes has increased its prices drastically.What should Ronald's do to control production costs?
A)Buy out the farm and become its own supplier.
B)Open more distribution outlets.
C)Broaden the product range by introducing potato nuggets on its menu.
D)Hire more efficient outlet managers.

Accepted Answer

Buying out the farm could allow Ronald's to control its supply chain more effectively, potentially reducing the cost of potatoes, which are crucial for its most popular product, french fries. This vertical integration strategy could help in controlling production costs.

Question 12

When an organization attempts to grow by merging with or acquiring firms in different but associated industries,the strategy is known as a ________ strategy.
A)related differentiation
B)horizontal integration
C)vertical integration
D)related diversification

Accepted Answer

Related diversification strategy involves expanding a company's operations into industries that are similar to its current business. This can be done by acquiring or merging with firms in different but associated industries. Horizontal integration strategy involves acquiring or merging with firms in the same industry to achieve economies of scale or eliminate competition. Vertical integration strategy involves expanding a company's operations into different phases or stages of the production process in the same industry. Related differentiation strategy involves creating a unique product or service that is different from competitors.

Question 13

When aluminum manufacturer Alcan purchased a mining company that mines bauxite,a key input in aluminum production,it was pursuing which corporate strategy?
A)concentration
B)forward vertical integration
C)related diversification
D)backward vertical integration

Accepted Answer

Backward vertical integration involves a company acquiring a supplier or inputs for its production process. Alcan's purchase of a bauxite mining company fits this strategy as bauxite is a key input in aluminum production.

Question 14

Over the last century,the Campbell Soup Company has expanded by acquiring other packaged consumer food companies such as Pace,V8,Pepperidge Farms,Swanson,and Godiva Chocolatiers.Campbell was pursuing which corporate strategy?
A)backward vertical integration
B)forward vertical integration
C)related diversification
D)horizontal integration

Accepted Answer

Campbell Soup Company pursued related diversification strategy by acquiring other packaged consumer food companies. Related diversification involves expanding a company's operations into businesses that share similarities with the current operations, which enables companies to leverage core competencies and gain synergies across multiple business units.

Question 15

The Jim Pattison Group has grown by acquiring firms in diverse industries.Today,Jim Pattison owns food retail chains,car dealerships,radio stations,a fishing company,a sign company,a packaging company,and several museum-themed tourist attractions.Jim Pattison has pursued a strategy of ________.
A)horizontal integration
B)related differentiation
C)unrelated differentiation
D)unrelated diversification

Accepted Answer

The acquisition of firms in diverse industries suggests that Jim Pattison has pursued a strategy of unrelated diversification, where the firm expands into unrelated industries in order to reduce risk and achieve growth opportunities.

Question 16

Florance is a chain of flower shops in the Toronto area.The company recently acquired Knick-knacks,which owns three gift shops.Which of the following is most similar to this acquisition?
A)Construction firm Donaldson acquired Fabrica Textiles as it seemed like a good investment.
B)Dallas Shoes buys out RunTime Shoes and expands its distribution channels through RunTime outlets.
C)Toy World acquired Unicorn Children's Books and now retails both toys and books from co-branded outlets.
D)Loblaw's acquired Shopper's Drug Mart as the latter was showing huge profits.

Accepted Answer

Both Florance's acquisition of Knick-knacks and Toy World's acquisition of Unicorn Children's Books involve companies in related but different product categories coming together to offer more selection to their customers. In both cases, the companies can use their existing customer base and distribution channels to cross-sell products from their new acquisition.

Question 17

When Kimberly-Clark Corporation merged with Scott Paper Company to form the world's largest producer of tissue paper,they were pursuing which growth strategy?
A)backward vertical integration
B)forward vertical integration
C)related diversification
D)horizontal integration

Accepted Answer

The merger of Kimberly-Clark Corporation and Scott Paper Company, both in the same industry, can be classified as a horizontal integration strategy. This strategy involves merging with or acquiring competitors to expand market share and competitiveness.

Question 18

YUM! Brands is the world's largest restaurant company,with more than 33,000 restaurants in over 100 countries.Their restaurant brands include KFC,Pizza Hut,and Taco Bell.They recently acquired two other fast-food restaurant chains: A&W and Long John Silver's Seafood.YUM! has pursued which type of corporate strategy?
A)related differentiation
B)forward vertical integration
C)related diversification
D)horizontal integration

Accepted Answer

YUM! Brands has pursued a related diversification strategy by acquiring two other fast-food restaurant chains (A&W and Long John Silver's Seafood) that are related to their existing brands (KFC, Pizza Hut, and Taco Bell). This allows them to diversify their portfolio while leveraging their existing expertise and resources in the fast-food industry.

Question 19

When Air Canada acquired its largest domestic competitor,Canadian Airlines International,it was pursuing a strategy of ________.
A)forward vertical integration
B)horizontal integration
C)related diversification
D)related differentiation

Accepted Answer

When Air Canada acquired Canadian Airlines International, it was pursuing a strategy of horizontal integration, which involves acquiring competitors in the same industry to increase market share and reduce competition. This is different from forward vertical integration, which involves acquiring suppliers or distributors, and related diversification and differentiation, which involve expanding into related or unrelated industries, respectively.

Question 20

When athletic sportswear manufacturer Nike decided to open its own chain of retail stores,it was pursuing which corporate strategy?
A)backward vertical integration
B)forward vertical integration
C)related diversification
D)horizontal integration

Accepted Answer

Nike opening its own chain of retail stores involves integrating forward into the distribution chain. This allows Nike to have more control over its own retail operations and ensure that its products are prominently displayed and marketed in a consistent manner. This strategy could also lead to higher profit margins and increased customer loyalty.

Quiz 10: Managing Strategically

When L'Oréal acquired The Body Shop,it carried out ________.

Cindy's Cosmetics continues to offer the same high quality beauty products that it has for the last 10 years.The company is successful in its market segment and has no plans for change in the near future.The company is pursuing which type of strategy?

When Air Canada went into bankruptcy protection to restructure its organization and reduce its operating costs,it was pursuing which of the following strategies?

When the Campbell Soup Company began to manufacture its own cans to gain more control over a key production input,it was pursuing which corporate strategy?

When consumer electronics manufacturer Sony Corporation decided to open its own chain of retail stores,it was pursuing which corporate strategy?

Pepsico is divided into several product divisions,including Pepsi,Frito-Lay,Tropicana,Quaker,and Gatorade.Each division has its own strategy that defines the products it wants to offer and the customers it wants to target.The divisions are called ________.

When a university reduces its course offerings in a semester due to low student enrolment,it is pursuing a strategy of ________.

When an organization attempts to grow by merging with or acquiring firms in different and dissimilar industries,the strategy is known as a(n) ________ strategy.

Which of the following provides a framework for understanding diverse businesses and helps managers establish priorities for allocating resources?

Which of the following describes a company growing by combining with other organizations in the same industry?

When an organization attempts to grow by merging with or acquiring firms in different but associated industries,the strategy is known as a ________ strategy.

When aluminum manufacturer Alcan purchased a mining company that mines bauxite,a key input in aluminum production,it was pursuing which corporate strategy?

Over the last century,the Campbell Soup Company has expanded by acquiring other packaged consumer food companies such as Pace,V8,Pepperidge Farms,Swanson,and Godiva Chocolatiers.Campbell was pursuing which corporate strategy?

The Jim Pattison Group has grown by acquiring firms in diverse industries.Today,Jim Pattison owns food retail chains,car dealerships,radio stations,a fishing company,a sign company,a packaging company,and several museum-themed tourist attractions.Jim Pattison has pursued a strategy of ________.

Florance is a chain of flower shops in the Toronto area.The company recently acquired Knick-knacks,which owns three gift shops.Which of the following is most similar to this acquisition?

When Kimberly-Clark Corporation merged with Scott Paper Company to form the world's largest producer of tissue paper,they were pursuing which growth strategy?

When Air Canada acquired its largest domestic competitor,Canadian Airlines International,it was pursuing a strategy of ________.

When athletic sportswear manufacturer Nike decided to open its own chain of retail stores,it was pursuing which corporate strategy?