QUESTION 1 (15 PTS)
Consider the following information about the Dover Corporation.
The Dover Corporation is:
• …a multi-billion dollar, global producer of innovative equipment, specialty systems and valueadded
services for the industrial products, fluid management, engineered systems and
electronic technology markets.
• …a decentralized corporation that supports autonomous operating companies focused on
meeting the demands of their customers and served markets.
• …a corporation that believes PERFORMANCE COUNTS and encourages its companies to
exceed world-class operating metrics.
Dover management’s explanation for how the company creates more value for the firm’s
businesses than those would be able to create when operating as stand-alone
• “Dover companies benefit from exposure to a wide variety of internal governance ‘best
practices’ whereby the continuous improvements of its companies are measured
against our world-class metrics of the PERFORMANCECOUNTS program including:
• 10% or greater annual earnings growth
• 15% or greater operating margins
• 25% or greater after-tax return on investment
• Dover has a long history as a successful acquirer of companies. We buy “GOOD” companies
and make them “GREAT” by funding their internal growth initiatives and exposing them to our
superior governance (including measuring their success against our PERFORMANCECOUNTS
What corporate-level strategy (concentration, outsourcing, vertical
integration, related diversification, or unrelated diversification) does
Dover seem to be pursui
QUESTION 3 (5 PTS)
Describe the “number of businesses” cost of the diversification strategy.
QUESTION 4 (10 PTS)
What are the key problems in maintaining a competitive advantage in embryonic and growth
industry environments? What are the dangers associated with being the leader in these
QUESTION 5 (15 PTS)
You work for a small company that has a leading position in an embryonic market. Your boss
believes that the company’s future is ensured because it has a 60% share of the market, the
lowest cost structure in the industry, and the most reliable and highest-valued product. Write a
memo to your boss outlining why his confidence in your company’s future might be premature.
QUESTION 6 (5 PTS)
Discuss the impact of a) domestic demand characteristics and b) domestic rivalry on the global
competitiveness of companies located within a given nation.
QUESTION 7 (10 PTS)
Are the following global standardization industries, or industries where localization is more
important: bulk chemicals, pharmaceuticals, branded food products, moviemaking, television
manufacture, personal computers, airline travel, and fashion retailing? Justify your answer for
QUESTION 8 (5 PTS)
Briefly describe how a firm might implement a transnational strategy.
QUESTION 9 (10 PTS)
Discuss how decentralizing authority can help companies reduce the problems associated with
a tall structure.
QUESTION 10 (10 PTS)
When would a company decide to change from a functional to a multidivisional structure? How
does the multidivisional structure solve the problems associated with the functional structure?
QUESTION 11 (10 PTS)
Describe the Management by Objectives (MBO) system. What are its key
characteristics? What are some drawbacks to this system?
QUESTION 12 (10 PTS)
When is the Leadership strategy appropriate? How is it implemented? What are the risks of
QUESTION 1 (15 PTS)