A Comprehensive Evaluation of the Group of Businesses a Company

question 17

Multiple Choice

A comprehensive evaluation of the group of businesses a company has diversified into involves

• A)rating the attractiveness of each industry's strategic and resource fits,summing the attractiveness scores,and determining whether the overall scores for the industries as a group are appealing or not.
• B)identifying each industry's average profitability,rating the difficulty of achieving average profitability in each industry,and deciding whether the company's prospects for above-average profitability are attractive or unattractive,industry by industry.
• C)determining each industry's competitive advantage factors,calculating the ability of the company to be successful on each competitive advantage factor,and obtaining overall measures of the firm's ability to achieve sustainable competitive advantage in each of its industries based on the combined competitive advantage factor ratings.
• D)determining each industry's key success factors,calculating the ability of the company to be successful on each industry KSF,and obtaining overall measures of the firm's ability to compete successfully in each of its industries based on the combined KSF rating.
• E)selecting a set of industry attractiveness measures,weighting the importance of each measure,rating each industry on each attractiveness measure,multiplying the industry ratings by the assigned weight to obtain a weighted rating,adding the weighted ratings for each industry to obtain an overall industry attractiveness score,and using the overall industry attractiveness scores to interpret the attractiveness of all the industries,both individually and as a group.

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Definitions:

Least-squares Regression Line

A straight line that best models the relationship between a dependent and independent variable by minimizing the sum of the squares of the vertical distances of the points from the line.

MPG

Miles Per Gallon, a measure of fuel efficiency used in the United States to indicate how many miles a vehicle can travel per gallon of fuel.

Linear Model

A mathematical model that assumes a linear relationship between the input variables (x) and a single output variable (y), where y can be calculated from a linear combination of the input variables.

Scatter Plot

A graphical representation that displays the relationship between two quantitative variables by using dots.