A) eliminates the need for a value chain. B) reduces the firm's dependence on its value chain. C) reorders the steps in a firm's value chain. D) moves some value chain activities outside the firm. E) strengthens the firm's capabilities in each value chain function. A) eliminates the need for a value chain. B) reduces the firm's dependence on its value chain. C) reorders the steps in a firm's value chain. D) moves some value chain activities outside the firm. E) strengthens the firm's capabilities in each value chain function.

A) are preferable to short-term contracts when there is a minimal need for cooperation. B) are preferable to vertical integration when it is not feasible to exchange hostages. C) generally result in lower prices than competitive bidding. D) achieve exactly the same outcomes as vertical integration, but they incur higher bureaucratic costs. E) are a low-cost alternative to vertical integration when it is possible to build cooperative relationships with suppliers. A) are preferable to short-term contracts when there is a minimal need for cooperation. B) are preferable to vertical integration when it is not feasible to exchange hostages. C) generally result in lower prices than competitive bidding. D) achieve exactly the same outcomes as vertical integration, but they incur higher bureaucratic costs. E) are a low-cost alternative to vertical integration when it is possible to build cooperative relationships with suppliers.

Exam 9: Corporate-Level Strategy: Horizontal Integration, Vertical Integration, and Strategic Outsourcing

A strategy of vertical integration may be a risky strategy for a company to pursue when demand is:

(Multiple Choice)

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Question 41

SparklingLeaves is one of the major suppliers of automobile tools to StanMotors, a leading automobile company. Many of the tools are customized to meet the specific needs of StanMotors and hence have little other value. In return, StanMotors has agreed to make SparklingLeaves its sole supplier of automobile equipment for a period of 15 years. This scenario illustrates:

(Multiple Choice)

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Question 42

When a company decides to expand into new industries, it must:

(Multiple Choice)

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Question 43

Outsourcing:

(Multiple Choice)

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Question 44

Vertical integration can raise costs if, over time, a company's leaders continue to purchase inputs from company-owned suppliers even when independent suppliers can supply the same inputs at lower cost.

(True/False)

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Question 45

Transfer pricing refers to when a company is taken advantage of by another company it does business with after it has made an investment in expensive specialized assets to better meet the needs of the other company.

(True/False)

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Question 46

All of the following are benefits of horizontal integration except:

(Multiple Choice)

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Question 47

Unfortunately, horizontal integration can not be accomplished by acquisitions or mergers.

(True/False)

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Question 48

Long-term contracts:

(Multiple Choice)

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Question 49

An automobile company enters into a long-term contract with two suppliers for the same automobile tool. This is to ensure the company is protected in the event one of the suppliers adopts an uncooperative attitude. Which of the following concepts is illustrated in this scenario?

(Multiple Choice)

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Question 50

Vertical integration can be risky when demand is unpredictable because it is hard to manage the volume or flow of products along the value-added chain.

(True/False)

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Question 51

To build trust in a cooperative relationship, both firms can:

(Multiple Choice)

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Question 52

When a company stays inside one industry, the problems of sustaining a successful business model and strategies over time can be difficult because of changing conditions in the environment.

(True/False)

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Question 53

Managers use corporate-level strategy to identify which industries a company should compete in to maximize long-run profitability.

(True/False)

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Question 54

Under which of the following circumstances is vertical integration considered hazardous?

(Multiple Choice)

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Question 55

Strategic alliances and outsourcing are two alternatives to vertical integration. What are the advantages and disadvantages of each compared to vertical integration? What can managers do to eliminate or reduce the risks?

(Essay)

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Question 56

The term bureaucratic costs refers to costs associated with the creation and maintenance of the administrative function in a company.

(True/False)

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Question 57

Vertical disintegration occurs when:

(Multiple Choice)

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Question 58

Companies that outsource most or all of their value creation activities are often referred to as virtual corporations.

(True/False)

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Question 59

A company should first choose a corporate-level strategy, and then look at how changes will affect a company's current business model and strategies.

(True/False)

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Question 60

Showing 41 - 60 of 71

A strategy of vertical integration may be a risky strategy for a company to pursue when demand is:

When a company decides to expand into new industries, it must:

Outsourcing:

Vertical integration can raise costs if, over time, a company's leaders continue to purchase inputs from company-owned suppliers even when independent suppliers can supply the same inputs at lower cost.

Transfer pricing refers to when a company is taken advantage of by another company it does business with after it has made an investment in expensive specialized assets to better meet the needs of the other company.

All of the following are benefits of horizontal integration except:

Unfortunately, horizontal integration can not be accomplished by acquisitions or mergers.

Long-term contracts:

An automobile company enters into a long-term contract with two suppliers for the same automobile tool. This is to ensure the company is protected in the event one of the suppliers adopts an uncooperative attitude. Which of the following concepts is illustrated in this scenario?

Vertical integration can be risky when demand is unpredictable because it is hard to manage the volume or flow of products along the value-added chain.

To build trust in a cooperative relationship, both firms can:

When a company stays inside one industry, the problems of sustaining a successful business model and strategies over time can be difficult because of changing conditions in the environment.

Managers use corporate-level strategy to identify which industries a company should compete in to maximize long-run profitability.

Under which of the following circumstances is vertical integration considered hazardous?

Strategic alliances and outsourcing are two alternatives to vertical integration. What are the advantages and disadvantages of each compared to vertical integration? What can managers do to eliminate or reduce the risks?

The term bureaucratic costs refers to costs associated with the creation and maintenance of the administrative function in a company.

Vertical disintegration occurs when:

Companies that outsource most or all of their value creation activities are often referred to as virtual corporations.

A company should first choose a corporate-level strategy, and then look at how changes will affect a company's current business model and strategies.

Strategic Leadership: Managing the Strategy-Making Process for Competitive Advantage

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Resources and Competitive Advantage

Building Competitive Advantage Through Functional-Level Strategies

Business-Level Strategy

Business-Level Strategy and the Industry Environment

Strategy and Technology

Strategy in the Global Environment

Corporate-Level Strategy: Related and Unrelated Diversification

Corporate Performance, Governance, and Business Ethics

Implementing Strategy Through Organization

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