.
The first describes the regions of the world where the firm is present and the second the stages of the industry value chain, which the firm performs itself
The first describes the number of countries in which the firm operates and the second describes the number of businesses in which the firm is present
The two are highly inter-related
It’s not always clear what the difference is
Economies of scope
Transaction costs
Corporate costs
All three of the above concepts are relevant
Always a mistake
Likely to be less risky than related diversification
Not always as unrelated as it may seem e.g. the businesses may share some common attributes which can be exploited
Always the last resort
Growth, risk reduction and value creation
Risk, reduction and economies of scope
Value creation and cost reduction
Cash balancing and risk reduction
Market growth rate
International potential
The cyclical nature of the industry
Relative market share
The forces of technology, consumer preferences, and economic growth
Both external forces and the incumbents competitive strategies
The effect of the “5 forces” model of competition
Economic and psychological factors
The emergence of a radically better substitute product, representing a new industry
Tired old firms running out of new ideas
Existing firms leaving the industry to move to a more profitable one
Excessive market saturation
A very large gap in the market emerges
Another industry dies
New knowledge manifests itself in the guise of a sufficiently radical product innovation
There are sufficient entrepreneurs
The evolution of the industry growth rate over time
The evolution of the competition in the industry
The evolution of a firm’s market share
None of the above
See that the barriers to entry to that industry are low
Be able to see a way to make superior profits in that industry
Consider how unattractive their existing industry is, by comparison
See that some firms in that industry have left, leaving space for newcomers
None, they are equally important
The “attractiveness” test
The “cost of entry” test
The “better off” test
A company must internally expand its scope
A company must usually enter into a license arrangement
A company must usually acquire a company who is expert in an additional business
The firm is be able to spread common, either by performing the additional activity internally, or by licensing the resource
Always follow the theoretical pattern
May never enter the decline phase in industries supplying basic essential products or services
Must be the same everywhere, due to globalization
Can never really experience a resurgence
The appeal of the industry to a particular firm
Overall industry profitability
The extent to which the industry draws in new entrants
The potential for one firm to dominate the industry
The overall economic situation, and the intensity of rivalry between established firms
The degree of concentration of the industry and the availability of substitutes
The existence of barriers to entry in the industry
The value of the product for customers, the intensity of competition, and the relative bargaining power of producers, their suppliers and their buyers
It is difficult to copy
It is based on word-of-mouth
It is essential for a firm to do business
It is easily destroyed by bad publicity
We should take the historic cost book value
We must update historic cost assets to current cost (modern replacement cost) assets
We need to understand their potential for creating competitive advantage
We need to rely on the services of professional accountants
Enable it to earn higher profits or greater market share than its competitors in the same industry
Are its unique selling point
Are those product features that stop non-customers from buying the product
Are captured in logos, trademarks etc.
Financial control
Research and development
Marketing
All of the above
Is foolish: a firm cannot stop its rivals doing things they want to
Firms must make that resource or capability immobile
Firms have to rely on patent and copyright legislation
Everyone involved in this activity must be paid at a higher rate than that offered by rivals
Durability, transferability and replicability
Scarcity, relevance and property rights
Property rights, relative bargaining power and embeddedness
None of the above
Flat hierarchy
Little formalization
Self directed work teams
All of the above
Its focus on clear directives and controls
Its reliance on central directives to achieve integration
Coordination through bilateral and multilateral adjustment
Both b and c
Corporate culture refers to the attitudes and values that managers wish to encourage and organizational culture refers the attitudes and values that exist in the informal organizational
Corporate culture refers to the culture within a particular company whereas organizational culture refers to the cultural patterns shared by companies in a particular region or country
There is no difference, these terms are used interchangeably
Option 4
Are highly independent
Are highly interdependent
Are distinct and separate processes
Both a and c