Exam 10: Vertical Integration and the Scope of the Firm

For most of the 20^th century companies expanded their vertical scope in the belief that vertical integration reduced risk and permitted superior coordination compared to relying on markets.

Corporate strategy is concerned with decisions over product scope, geographical scope, and vertical scope.

Jewelry companies typically do not own gold and silver mines because the markets for gold and silver are highly competitive and impose few transaction costs on jewelry makers.

Economic organization in the capitalist economy is achieved through markets by the price mechanism and through firms by administrative direction.

The growth in the scope of business enterprises for most of the 19th and 20th centuries can be attributed to a drop in administrative costs of firms relative to the transaction costs of market.This resulted from:

The main business of the Coca-Cola Company is manufacturing, marketing and distributing concentrate for soda drinks to bottlers in over 200 countries of the world.The corporate scope of the Coca-Cola Company is best described as:

When a farmer operates a stall in a local farmers' market; this is a form of backward integration.

When a winery opens a tasting room through which it sells its wine to visitors, this represents:

Which of the following factors has not contributed to the trend towards outsourcing in recent decades:

Manufacturers of final products such as motor vehicles, airplanes, and domestic appliances are more likely to backward integrate into the productions of commodity components than components that are specialized to the specific requirements of the manufacturer of the final product.

In order for a manufacturer of consumer goods to maximize responsiveness to changes in consumer demand for its products:

Corporate strategy decisions are mainly concerned with:

The opening quotation from Tom Peters states that as "yesterday's highly integrated giants" de-integrate, their vertical relationships are taking the form of:

Vertical integration by Zara, the main division and brand of the Spanish clothing firm Inditex, illustrates:

Vertical integration by industrial firms during the major part of the 20^th century was motivated primarily by firms' desire for:

The principal feature of the corporate scope of Tesla Inc, compred to other automobile manufacturers, is:

When Amazon,com founded Amazon Studios to create content for its Amazon Prime video streaming service, this represented:

Which of the following factors is not conducive to vertical integration between two adjacent stages of production?

The main cause of downsizing, refocusing, and outsourcing during the latter part of the 20^th century was:

Franchising offers a means of reconciling the coordination and control benefits of vertical integration with the entrepreneurial flexibility and high-powered incentives of market contracts.