Calculating Quantitative Competitive Strength Ratings for Each of a Diversified

question 105

Multiple Choice

Calculating quantitative competitive strength ratings for each of a diversified company's business units involves

• A)determining each industry's key success factors, rating the ability of each business to be successful on each industry KSF, and adding the individual ratings to obtain overall measures of each business's ability to compete successfully.
• B)identifying the competitive forces facing each business, rating the strength of these competitive forces industry by industry, and then ranking each business's ability to be profitable, given the strength of the competition it faces.
• C)selecting a set of competitive strength measures, weighting the importance of each measure, rating each business on each strength measure, multiplying the strength ratings by the assigned weight to obtain a weighted rating, adding the weighted ratings for each business unit to obtain an overall competitive strength score, and using the overall competitive strength scores to evaluate the competitive strength of all the businesses, both individually and as a group.
• D)determining which businesses possess good strategic fit with other businesses, identifying the portion of the value chain where this fit occurs, and evaluating the strength of the competitive advantage attached to each of the strategic fits to get an overall measure of competitive advantage potential. Businesses with the highest/lowest competitive advantage potential have the most/least competitive strength.
• E)rating the caliber of each business's strategic and resource fit, weighting the importance of each type of strategic/resource fit, calculating weighted strategic/resource fit scores, and adding the weighted ratings for each business to obtain an overall strength score for each business unit that indicates whether the company has adequate strategic/resource fits to be a strong market contender in each of the industries where it competes.

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Definitions:

Law of Size Constancy

The perceptual principle stating that our perceptions of the size of objects remain constant despite changes in the size of the images they cast on our retinas due to distance.

Visual Angle Theory

The concept that the perception of an object's size is determined by its visual angle and the distance from the observer.

Retinal Image Theory

The hypothesis that the retina captures visual images like a camera, which are then processed by the brain.

Perceptual Constancy

A feature of perception in which physical objects are perceived as unvarying and consistent despite changes in their appearance or in the physical environment.