Chapter 11: Strategic Growth

In which of the following scenarios is a joint venture likely to be more attractive than acquisition?
1. Horizontal integration
2. Vertical integration
3. New market entry
4. Larger resource pool.
A company, specializing in producing mass market cars, acquires a company which specializes in financial services. The new company can now offer financial services to its car purchasers. What form of diversification is this?
1. Resource-based
2. Unrelated
3. Routine-based
4. Replication-based
Which of these is not a factor causing weak synergy?
1. Underestimated weaknesses
2. Competitor activity
3. Premium paid
4. Making too many resources available to the integration program
Which of these is not one of Drucker’s (1982) five rules for successful acquisitions?
1. Determine the exact contribution the organization can make to the acquiring company.
2. Value the people of the acquired company.
3. Within a year, promote managers across company boundaries.
4. Value the products, services and customers of the acquired company.
Ramsay (1987) argues there are four stages to effective acquisition strategies. Which of these is not one of those stages?
1. Formulate a clear strategy.
2. The acquisition.
3. A search for alternatives.
4. Develop a pre-acquisition implementation strategy.
Many merger discussions break down, or are abandoned. Which of these is not a reason why?
1. Egos can get in the way
2. Reluctance to accept which will become ‘number two’.
3. The bid is deemed hostile, leading to aggressive defense.
4. Inadequate consultation with shareholders, who then intervene.
Research into diversification, and acquisition, can be divided into 4 schools. Which of the following is not one of the schools?
1. Environmental
2. Financial
3. Accounting
4. Economic
Within a diverse conglomerate, Goold et al (1994) argues that there exists what?
1. The focus
2. The arena
3. The heartland
4. The core
According to Ernst and Young, the nature of the post acquisition challenge depends on the type of acquisition. Which of the following is not one of the four types?
1. Symbiotic acquisition
2. Absorption acquisition
3. Mutual acquisition
4. Geographical acquisition
Which two companies agreed to develop a new business jointly?
1. Club Mediterranee and Carnival
2. Sony and Apple
3. Guinness and LVMH
4. NCR and American Express