Checking a Diversified Firm's Business Portfolio for the Competitive Advantage

question 77

Multiple Choice

Checking a diversified firm's business portfolio for the competitive advantage potential of cross-business strategic fits entails consideration of

• A) whether the parent's company's competitive advantages are being deployed to maximum advantage in each of its business units.
• B) whether the competitive strategies employed in each business act to reinforce the competitive power of the strategies employed in the company's other businesses.
• C) whether the competitive strategies in each business possess good strategic fit with the parent company's corporate strategy.
• D) the extent to which there are competitively valuable relationships between the value chains of sister business units and what opportunities they present to reduce costs, share use of a potent brand name, create competitively valuable new capabilities via cross-business collaboration, or transfer skills or technology or intellectual capital from one business to another.
• E) how compatible the competitive strategies of the various sister businesses are and whether these strategies are properly aimed at achieving the same kind of competitive advantage.

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Definitions:

Economic Signals

Indicators or pieces of information that guide economic decisions and actions by conveying important data about market conditions.

Marketplace

A physical or virtual space where buyers and sellers converge to trade goods, services, or information.

Market Equilibrium

A situation where the quantity of a good or service supplied equals the quantity demanded, leading to a stable market price.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing their net benefit.