Assignment:
1. The nine-cell industry attractiveness-competitive strength matrix
A. is useful for helping decide which businesses should have high, average, and low priorities in allocating corporate resources.
B. Indicates which businesses to keep that lie on the diagonal of the matrix.
C. Pinpoints what strategies are most appropriate for businesses positioned in the three top cells of the matrix but is less clear about the best strategies for businesses positioned in the bottom six cells.
D. Identifies which sister businesses have the greatest strategic fit.
E. Identities which sister businesses have the greatest resource fit.
2. A "cash cow" type of business
A. generates unusually high profits but low returns on equity investment.
B. Is so profitable that it has no long-term debt.
C. generates positive cash flows over and above its internal requirements, thus providing a corporate parent with cash flows that can be used for financing new acquisitions, investing in cash hog businesses, and/or paying dividends.
D. Is a business with such a strong competitive advantage that it runs the risk of government scrutiny on concerns of being a potential monopoly?
E. has good strategic fit with a cash hog business.
3. In which of the following instances is retrenching to a narrower diversification base not likely to be an attractive or advisable strategy for a diversified company?
A. When a diversified company has struggled to make certain businesses attractively profitable
B. When a diversified company has too many cash cows
C. When one or more businesses are cash hogs with questionable long-term potential
D. When businesses in once-attractive industries have badly deteriorated
E. When a diversified company has businesses that have little or no strategic or resource fits with the "core'' businesses that management wishes to concentrate on.