Exam 8: Corporate Strategy: Vertical Integration and Diversification

The smartphone division of the large consumer electronics company, True Electra Inc., has a significant market share in the fast-growing cell phone market.If the company invests further into this division, it will be able to reap increased cash flows.In the Boston Consulting Group (BCG)growth-share matrix, the smartphone division of True Electra will be categorized under:

How do firms benefit from vertical integration?

A firm that engages in strategic outsourcing typically:

Coca-Cola was primarily known for its core competencies in marketing, bottling, and distributing aerated drinks.However, with the success of Gatorade, Coca-Cola developed competencies in the development and marketing of its own sports drink, Powerade.Which of the following is true of Coca-Cola?

Describe the two types of vertical integration along the industry value chain.

Which of the following stakeholders of a company would most likely be responsible for formulating a corporate strategy?

How are information asymmetries created? What are the implications?

Discuss any two types of strategic alliances.

Red Empire Inc., a large multinational company owned by two partners, is active in the petroleum, capital market, chemicals, steel, beverages, hospitality, airlines, education, automobiles, and consumer electronics industries.The company has multiple brands and a large product portfolio under its banner.Which of the following terms would best describe this company?

_____ are best described as voluntary arrangements between firms that involve the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services to lead to competitive advantage.

Hitoro Inc.developed a superior touchscreen technology for tablet computers that enabled multiple users to operate the screen at the same time.The technology was leased to Revox Inc., a consumer electronics company, for five years.Which of the following alternatives to integration does this best illustrate?

Decisions relating to "what stages of the industry value chain to participate in" determine a firm's:

When should a firm decide to vertically integrate? Explain using Google as an example.

Which of the following alternatives on the make-or-buy continuum allows for most integration?

In 2007, Salesforce.com recognized an emerging market for "platform as a service (PaaS)" offerings and developed a new competency in delivering software development and deployment tools.This allowed its customers to either extend their existing CRM offering or build completely new types of softwares.This is an example of:

The Boston Consulting Group (BCG)growth-share matrix locates a firm's individual strategic business units (SBUs)in two dimensions:

MotorCult Inc.is an automobile company whose core competency lies in manufacturing petrol- and diesel-based cars.The company realizes that more of its potential customers are switching to electric cars.The R&D department of the company acquires competencies in developing electric cars and launches its first hybrid car.In this scenario, MotorCult is primarily:

_____ is best described as a situation in which one party is more informed than another, because of the possession of private information.

Galaxi Products Inc.is a U.S.-based consumer electronics company.It owns smaller firms in Japan and Taiwan where most of its cell phone technology is developed and manufactured before being released worldwide.Which of the following alternatives to integration does this best illustrate?

What do you mean by taper integration? Provide examples of firms that use this alternative.