Strategic Management MCQ Questions and Solutions with Explanations | Management

Horizontal integration occurs when When a firm acquires or merges with a major competitor. Horizontal integration is the process of a company increasing production of goods or services at the same part of the supply chain. A company may do this via internal expansion, acquisition or merger. The process can lead to monopoly if a company captures the vast majority of the market for that product or service.

Divestment is an asset-reduction strategy. Divestment is the process of selling subsidiary assets, investments or divisions in order to maximize the value of the parent company. Divestment typically takes a form of spin-off, equity carve-out or direct sale of assets, and the most common reason for deploying this strategy is to eliminate non-core businesses.

Sustained survival implies that a turnaround is achieved but there is little further growth. Sustain means to support something or keep it going. Survival skills are techniques that a person may use in order to sustain life in any type of natural environment or built environment.

In Horizontal integration scenarios a joint venture is likely to be more attractive than acquisition. Horizontal integration is the acquisition of a business operating at the same level of the value chain in a similar or different industry.

McDonalds is deciding whether to expand into manufacturing kitchen equipment in China. At Corporate level this decision is likely to be made.

Corporate governance is concerned with Executive remuneration, disclosure of information, auditing and accounting procedures, and organizations' management structures. Corporate Governance refers to the way in which companies are governed and to what purpose. It identifies who has power and accountability, and who makes decisions. It is, in essence, a toolkit that enables management and the board to deal more effectively with the challenges of running a company.

The slowest way to grow a business is likely to be through Internal development. Internal growth strategy refers to the growth within the organisation by using internal resources. Internal growth strategy focus on developing new products, increasing efficiency, hiring the right people, better marketing etc.

The value chain is subdivided into two main headings. These are primary activities and support activities.

A joint venture can be defined as Two firms come together to form a third, legally separate firm. A joint venture (JV) is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.

Goals are short-term milestones or benchmarks that organizations must achieve in order for longer term objectives are to be reached. Strategic goals is a term denoting the set of highest goals of the organization or an individual.