Question 1

The final part of the strategy formulation process is

Accepted Answer

A) formulation of business-level strategies. 
B) formulation of functional-level strategies. 
C) formulation of corporate-level strategies. 
D) development of functional-level goals. 
E) development of business-level goals. 
A) formulation of business-level strategies. 
B) formulation of functional-level strategies. 
C) formulation of corporate-level strategies. 
D) development of functional-level goals. 
E) development of business-level goals.

Question 2

Which of the following strategies facilitates the implementation of a just-in-time inventory system?

Accepted Answer

A) Short-term contracts 
B) Vertical integration 
C) Unrelated diversification 
D) Diversification based on transferring competencies 
E) Diversification based on realizing economies of scope 
A) Short-term contracts 
B) Vertical integration 
C) Unrelated diversification 
D) Diversification based on transferring competencies 
E) Diversification based on realizing economies of scope

Question 3

Taper integration

Accepted Answer

A) has higher bureaucratic costs than does full integration. 
B) has lower bureaucratic costs than does long-term contracts. 
C) can increase the incentive for in-house suppliers to reduce costs. 
D) is preferable to full integration when demand conditions are stable. 
E) eliminates the disadvantage of potential technological obsolescence. 
A) has higher bureaucratic costs than does full integration. 
B) has lower bureaucratic costs than does long-term contracts. 
C) can increase the incentive for in-house suppliers to reduce costs. 
D) is preferable to full integration when demand conditions are stable. 
E) eliminates the disadvantage of potential technological obsolescence.

Question 4

Which of the following is a benefit that firms should expect to gain from the use of horizontal integration?

Accepted Answer

A) Expanded control over stages of the supply chain 
B) Better realization of economies of scale 
C) Shared risk with another firm 
D) Reduced risk of holdup 
E) Reduced investments in noncore activities 
A) Expanded control over stages of the supply chain 
B) Better realization of economies of scale 
C) Shared risk with another firm 
D) Reduced risk of holdup 
E) Reduced investments in noncore activities

Question 5

Long-term contracts

Accepted Answer

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 does 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 does 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.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Horizontal integration can help lower costs when it allows a company to reduce the duplication of resources.

Accepted Answer

A) True 
 B)False

Question 8

Under which of the following circumstances is vertical integration hazardous?

Accepted Answer

A) When the technology involved in different stages of production is changing rapidly 
B) When vertical integration involves moving downstream into retailing 
C) When the value added by successive stages of production is declining 
D) When the industries involved are undergoing rapid expansion 
E) When the company's competitors are also following a strategy of vertical integration 
A) When the technology involved in different stages of production is changing rapidly 
B) When vertical integration involves moving downstream into retailing 
C) When the value added by successive stages of production is declining 
D) When the industries involved are undergoing rapid expansion 
E) When the company's competitors are also following a strategy of vertical integration

Question 9

Observing the pattern of consolidation in U.S.industries over time,one will notice that

Accepted Answer

A) horizontal integration has never been a very popular strategy. 
B) firms that horizontally integrate tend to divest later. 
C) horizontal integration has been very popular in the last decade. 
D) while a few industries have consolidated since 1970,most remain fragmented. 
E) mergers were very common and acquisitions were rare from 1900 to 1999. 
A) horizontal integration has never been a very popular strategy. 
B) firms that horizontally integrate tend to divest later. 
C) horizontal integration has been very popular in the last decade. 
D) while a few industries have consolidated since 1970,most remain fragmented. 
E) mergers were very common and acquisitions were rare from 1900 to 1999.

Question 10

Oracle Corp.,based in Reno,Nevada,has become the world's largest maker of database software largely through a strategy of acquisition.

Accepted Answer

A) True 
 B)False

Question 11

A company may be able to differentiate its final products better by outsourcing certain noncore activities to specialists.

Accepted Answer

A) True 
 B)False

Question 12

To build trust in a cooperative relationship,both firms can

Accepted Answer

A) rely on competitive bidding. 
B) make mutual investments in specialized assets. 
C) write short-term contracts that must be renewed frequently. 
D) increase their vertical integration. 
E) use outsourcing of noncore activities. 
A) rely on competitive bidding. 
B) make mutual investments in specialized assets. 
C) write short-term contracts that must be renewed frequently. 
D) increase their vertical integration. 
E) use outsourcing of noncore activities.

Question 13

Forward integration means that a company is moving into

Accepted Answer

A) sales. 
B) retail. 
C) distribution. 
D) all of these choices. 
E) none of these choices. 
A) sales. 
B) retail. 
C) distribution. 
D) all of these choices. 
E) none of these choices.

Question 14

A wealth of data suggests that most mergers and acquisitions

Accepted Answer

A) create extensive value for the companies involved. 
B) do not create,and may actually reduce,value for the entities involved. 
C) create and sustain large and immediate increases in value. 
D) have little financial impact on the firms involved. 
E) none of these choices. 
A) create extensive value for the companies involved. 
B) do not create,and may actually reduce,value for the entities involved. 
C) create and sustain large and immediate increases in value. 
D) have little financial impact on the firms involved. 
E) none of these choices.

Question 15

Vertical integration can be disadvantageous when

Accepted Answer

A) competitors are vertically integrated. 
B) demand is stable. 
C) industry technology is changing rapidly. 
D) technology is changing slowly. 
E) competitors are vertically integrated and industry technology changes rapidly. 
A) competitors are vertically integrated. 
B) demand is stable. 
C) industry technology is changing rapidly. 
D) technology is changing slowly. 
E) competitors are vertically integrated and industry technology changes rapidly.

Question 16

Adam's boss tells him that their company is pursuing a strategy of horizontal integration,which means that the company will

Accepted Answer

A) acquire one of its suppliers. 
B) buy one of its rivals. 
C) begin to distribute its own products. 
D) reorganize into fewer business units. 
E) centralize all of its support functions. 
A) acquire one of its suppliers. 
B) buy one of its rivals. 
C) begin to distribute its own products. 
D) reorganize into fewer business units. 
E) centralize all of its support functions.

Question 17

Horizontal integration may be accomplished by acquisitions or mergers.

Accepted Answer

A) True 
 B)False

Question 18

Under a competitive bidding strategy,independent component suppliers compete with each other to be the company that will be chosen to supply

Accepted Answer

A) a particular part for a particular manufacturer. 
B) all of the parts for a particular manufacturer. 
C) a particular part for all manufacturers in the industry. 
D) all parts for all manufacturers in the industry. 
E) none of these choices. 
A) a particular part for a particular manufacturer. 
B) all of the parts for a particular manufacturer. 
C) a particular part for all manufacturers in the industry. 
D) all parts for all manufacturers in the industry. 
E) none of these choices.

Question 19

Hewlett Packard and Compaq recently completed a merger.The combined firm is larger and therefore can negotiate lower prices from suppliers.This benefit of horizontal integration is called

Accepted Answer

A) economies of scale. 
B) reduction of excess capacity. 
C) cross-selling. 
D) product bundling. 
E) market power. 
A) economies of scale. 
B) reduction of excess capacity. 
C) cross-selling. 
D) product bundling. 
E) market power.

Question 20

A strategic alliance is a substitute for horizontal integration.

Accepted Answer

A) True 
 B)False

The final part of the strategy formulation process is

Which of the following strategies facilitates the implementation of a just-in-time inventory system?

Taper integration

Which of the following is a benefit that firms should expect to gain from the use of horizontal integration?

Long-term contracts

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

Horizontal integration can help lower costs when it allows a company to reduce the duplication of resources.

Under which of the following circumstances is vertical integration hazardous?

Observing the pattern of consolidation in U.S.industries over time,one will notice that

Oracle Corp.,based in Reno,Nevada,has become the world's largest maker of database software largely through a strategy of acquisition.

A company may be able to differentiate its final products better by outsourcing certain noncore activities to specialists.

To build trust in a cooperative relationship,both firms can

Forward integration means that a company is moving into

A wealth of data suggests that most mergers and acquisitions

Vertical integration can be disadvantageous when

Adam's boss tells him that their company is pursuing a strategy of horizontal integration,which means that the company will

Horizontal integration may be accomplished by acquisitions or mergers.

Under a competitive bidding strategy,independent component suppliers compete with each other to be the company that will be chosen to supply

Hewlett Packard and Compaq recently completed a merger.The combined firm is larger and therefore can negotiate lower prices from suppliers.This benefit of horizontal integration is called

A strategic alliance is a substitute for horizontal integration.

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

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Distinctive Competencies, Competitive Advantage, and Profitability

Building Competitive Advantage Through Functional-Level Strategy

Building Competitive Advantage Through 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 in Companies That Compete in a Single Industry

Implementing Strategy in Companies That Compete Across Industries and Countries

Filters

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

The final part of the strategy formulation process is

Which of the following strategies facilitates the implementation of a just-in-time inventory system?

Taper integration

Which of the following is a benefit that firms should expect to gain from the use of horizontal integration?

Long-term contracts

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

Horizontal integration can help lower costs when it allows a company to reduce the duplication of resources.

Under which of the following circumstances is vertical integration hazardous?

Observing the pattern of consolidation in U.S.industries over time,one will notice that

Oracle Corp.,based in Reno,Nevada,has become the world's largest maker of database software largely through a strategy of acquisition.

A company may be able to differentiate its final products better by outsourcing certain noncore activities to specialists.

To build trust in a cooperative relationship,both firms can

Forward integration means that a company is moving into

A wealth of data suggests that most mergers and acquisitions

Vertical integration can be disadvantageous when

Adam's boss tells him that their company is pursuing a strategy of horizontal integration,which means that the company will

Horizontal integration may be accomplished by acquisitions or mergers.

Under a competitive bidding strategy,independent component suppliers compete with each other to be the company that will be chosen to supply

Hewlett Packard and Compaq recently completed a merger.The combined firm is larger and therefore can negotiate lower prices from suppliers.This benefit of horizontal integration is called

A strategic alliance is a substitute for horizontal integration.

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

External Analysis: The Identification of Opportunities and Threats

Internal Analysis: Distinctive Competencies, Competitive Advantage, and Profitability

Building Competitive Advantage Through Functional-Level Strategy

Building Competitive Advantage Through 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 in Companies That Compete in a Single Industry

Implementing Strategy in Companies That Compete Across Industries and Countries

Filters