CCM Portfolio Management & Strategy 3

Question 1

In the GE-McKinsey Nine-Box Matrix, a business unit rated 'high' on industry attractiveness and 'medium' on competitive strength should be:

Accepted Answer

Selectively invested in to build strength

Answer

A high-attractiveness, medium-strength unit warrants selective investment to move it toward the top-right (invest/grow) zone.

Question 2

Corporate-level strategy differs from business-level strategy primarily in that it focuses on:

Accepted Answer

Which markets and businesses the firm should participate in

Answer

Corporate-level strategy determines the scope of the firm—which industries, markets, and business units to include in the portfolio.

Question 3

A company sells a non-core division to focus resources on its primary business. This action is best described as:

Accepted Answer

Divestiture

Answer

Divestiture involves selling off a business unit or division, often to sharpen strategic focus and redeploy capital.

Question 4

Which concept describes the additional value created when two merged companies are worth more together than as separate entities?

Accepted Answer

Synergy

Answer

Synergy occurs when combined operations generate more value—through cost savings, revenue growth, or capability sharing—than the sum of separate parts.

Question 5

A portfolio manager uses a 'parenting advantage' framework to evaluate whether corporate headquarters adds or destroys value for each business unit. This approach was developed by:

Accepted Answer

Campbell, Goold, and Alexander

Answer

Campbell, Goold, and Alexander developed the parenting advantage concept, arguing that the parent must add more value than any alternative owner.

(CCM) Certified Commercial Manager Practice Test

(CCM) Certified Commercial Manager Practice Test

CCM Portfolio Management & Strategy 3