Exam 7: Vertical Integration and Outsourcing

Nate,the managing director of Juniper Inc.,believes that instead of making auto parts on its own,it should rather outsource these tasks to other companies so that the company can focus only on the critical aspects of the final product.His colleague,Salma,believes that the company would have more competitive advantage if it made its own auto parts.Which of the following statements strengthens Nate's belief?

Pulse Corp.,a vertically integrated company,is finding it difficult to adapt to current technology that is capable of speeding up its manufacturing process.The company is used to performing work in a specific manner using the old technology.However,in order to maintain competitive advantage,it has to upgrade itself to the current technology.This scenario is an example of _____ that is one of the disadvantages of vertical integration.

DHC Inc.is a television manufacturing company.The components of the televisions are manufactured separately by different companies around the globe.Later,these components are tested and then assembled to get the finished products in house by DHC Inc.In the context of the degree of coordination,this scenario best illustrates _____.

What is the main difference between a company that is vertically integrated and a company that is vertically specialized?

In the context of the primary reasons for vertical integration in companies,what do capabilities refer to?

White Flower Corp.and DLG Inc.are competitors in the crockery industry.Claude,the head of operations at White Flower,says that the company is able to undertake its in-house business processes and activities much better than DLG.This,Claude says,helps White Flower produce better quality products that DLG.In the context of vertical integration,Claude's statements refer to the concept of _____.

The chief executive officer (CEO)of Ecos Inc.,a well-established firm in the real estate industry states that the firm has the resources to outperform its competitors.In the context of reasons for vertical integration,the CEO is referring to the firm's _____.

Which of the following is a primary characteristic of a transaction-specific asset?

Apex Electronics LLC requires many teams to work together intensively and in tandem with each other in order to effectively produce its products.A high coordination between the working teams is essential for the company to maintain the high quality of its products.This type of interdependence can be best termed as _____.

Lupus LLC is a company that sells personalized gift items.It reduces the cost of employing professional artists,designers,photographers,salespeople,and retailers by letting its members and other people submit their ideas for designs,quotes,and phrases on its e-commerce website.Which of the following types of crowdsourcing does Lupus LLC use?

Coral Corp.is a company that initially used to manufacture handbags.It has now set up a store in which it sells its own products rather than supplying them to different stores.This initiation by Coral Corp.best illustrates _____.

What are some of the advantages of outsourcing?

The country of Lydania has a complex network of pipelines that transports natural gas for millions of people.These pipelines are specifically designed for the transportation of natural gas and have limited uses outside the natural gas industry because of inherent industry regulations.These pipelines exemplify a(n)_____.

North Road LLC,an apparel company,found that its fashion supplies and accessories section was not generating much profit.Thus,the company contracted this section of its business to another company that designs and manufactures these products in a better way.The management of North Road realized that the employees of North Road could use the time to focus on other aspects that bring profit to the company.This scenario best illustrates _____.

Which of the following statements is a characteristic of subcontractors?

Which of the following best illustrates a vertically integrated company with control?

In the context of vertical integration,when is flexibility most valuable?

Activities closer to the beginning of the industry value chain are referred to as _____.

Saturn LLC.,a computer manufacturer,uses outdated technology to build specialized graphic cards for its computers.The company finds it difficult to upgrade its graphic card building technology to a newer version.However,Sun Products Inc.,one of its competitors,upgrades itself to the new version with lesser difficulty.In this scenario,Saturn LLC is facing a _____.

Teal Motors Inc.,an automobile company,outsources the manufacturing of most of the automobile parts to several other companies that specialize in making parts such as ignition boxes,coil wires,and grills.Teal Motors makes sure to get these parts manufactured at a much lesser rate than it would if it manufactures its own parts.In this scenario,Teal Motors Inc.is effectively avoiding a _____.