Calculating Quantitative Competitive Strength Ratings for Each of a Diversified

question 116

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 businesses 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:

Limestone

A sedimentary rock composed mainly of calcium carbonate, typically formed from the skeletal fragments of marine organisms.

Shales

Fine-grained sedimentary rocks that can split into thin, parallel layers, composed mainly of clay minerals.

Siltstones

Fine-grained sedimentary rocks that consist predominantly of silt particles, smaller than sand grains but larger than clay, often formed in quiet water environments.

Lime Muds

Fine-grained sediments composed largely of calcium carbonate, typically formed in marine environments where organisms such as coral or foraminifera are prevalent.