Prelim-Quiz3

The fastest and easiest way for a firm to diversity its portfolio of
businesses is through acquisition because:
a. innovation in both the acquired and the acquiring firm is enhanced
by the exchange of competencies resulting from acquisition.
b. of barriers to entry in many industries.
c. it is difficult and time intensive for companies to develop
products that differ from their current product line.
d. unrelated acquisitions are usually uncomplicated since the
acquired firm is allowed to continue to function independently as it
did before acquisition.

Sales of watches among teenagers and twenty-somethings are declining

rapidly as this age group uses cellphones, iPods, and other devices
to tell time. A company that specializes in selling inexpensive
watches to this age group may wish to consider __________ in order to
develop new products other than watches.
a. unrelated diversification
b. backward integration
c. forward integration
d. horizontal acquisition

Which of the following is a reason to pursue an acquisition?

a. To strengthen existing capabilities
b. To increase speed to market
c. To limit diversification
d. To reduce debt

Problems associated with acquisitions include all of the following

EXCEPT:
excessive time spent on the due diligence process.

The factors that lead to poor long-term performance by acquisitions

include all of the following EXCEPT firms:
with insufficient diversification.

The __________ phase is probably the single most important

determinant of shareholder value creation in mergers and
acquisitions.
post-acquisition integration.

Due diligence includes all of the following activities EXCEPT

assessing:
the level of private synergy between the two firms.

Pappelbon Enterprises recently acquired a chain of convenience stores

offering both fuel and food. Pappelbon is now surprised and dismayed
to find that the gas pumps have been poorly maintained and will need
to be replaced at considerable expense. All of the following
statements accurately reflect this EXCEPT:
Pappelbon's management was overly focused on acquisitions.

The use of high levels of debt in acquisitions has contributed to:

an increased risk of bankruptcy for acquiring firms.

Firms with core competencies that can be exploited across

international markets are able to:
achieve synergies and produce high-quality goods at lower costs.

Which of the following is NOT a disadvantage associated with

exporting?
Potential loss of proprietary technologies

Associations such as the European Union, Organization of American

States, and the North American Free Trade Agreement encourage:
regional strategies.

The problems associated with exporting include:

high transportation costs and the expense of tariffs.

The choices that a firm has for entering the international market
include all of the following EXCEPT:
. leasing.

All of the following are international corporate-level strategies

EXCEPT the __________ strategy.
universal

The location advantages associated with locating facilities in other

countries can include all of the following EXCEPT:
avoidance of host country governmental regulations.

In France, fine dressmaking and tailoring have been a tradition

predating Queen Marie Antoinette. Cloth manufacturers, design
schools, craft apprenticeship programs, modeling agencies, and so
forth, all exist to supply the clothing industry. This is an example
of the __________ in Porter's model.
related and supporting industries

Porter's model, if a country has both __________ and __________

production factors, it is likely to serve an industry well by
spawning strong home-country competitors that can also be successful
global competitors.
advanced; specialized

The four determinants in Porter's model of international competitive

advantage include all of the following EXCEPT:
political and economic institutions.
The two important environmental trends that influence a firm's choice
and use of international corporate-level strategies are __________
and __________.
liability of foreignness; regionalization