Question 1

What is the relationship between a company's corporate-level strategy and its business model?

Accepted Answer

Corporate-level strategies drive a company's business model over time and ultimately help determine the kinds of business and functional-level strategies that it uses to maximize long-mn profitability.The link between corporate strategy and profitability should be underscored.
To increase profitability, a corporate strategy should enable a company, or one or more
of its business divisions, or units, to perform one or more value chain activities or functions at either a lower cost or in a way that allows for differentiation.In addition, corporate strategy may have a positive impact on profitability if it helps a company achieve a better competitive position in the marketplace.
Thus, a company's corporate-level strategies should be chosen to promote the success of a company's business model and to help achieve sustainable competitive advantage at the business level.

Question 2

Strategic alliances are:

Accepted Answer

A) short-term agreements between two companies to jointly develop new products. 
B) short-term agreements between two companies to jointly market new products that benefit all companies involved in creating the product. 
C) short-term partnerships between two companies. 
D) long-term commitments between two companies to share research and development activities. 
E) long-term agreements between two or more companies to jointly develop products that benefit all companies involved in the alliance. 
A) short-term agreements between two companies to jointly develop new products. 
B) short-term agreements between two companies to jointly market new products that benefit all companies involved in creating the product. 
C) short-term partnerships between two companies. 
D) long-term commitments between two companies to share research and development activities. 
E) long-term agreements between two or more companies to jointly develop products that benefit all companies involved in the alliance. E

Question 3

Antitrust authorities:

Accepted Answer

A) favor large companies. 
B) reduce industry competition. 
C) are concerned with the abuse of market power. 
D) tend to raise prices of products for consumers. 
E) enable the achievement of market power. 
A) favor large companies. 
B) reduce industry competition. 
C) are concerned with the abuse of market power. 
D) tend to raise prices of products for consumers. 
E) enable the achievement of market power. C

Question 4

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 envirornnent.

Accepted Answer

A) True 
 B)False

Question 5

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 6

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 products a manufacturer needs in the industry. 
E) all parts for a particular product a manufacturer needs in the industry. 
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 products a manufacturer needs in the industry. 
E) all parts for a particular product a manufacturer needs in the industry.

Question 7

When there is a minimal need for close long-term cooperation between a company and its suppliers, which of the following strategies is the most appropriate?

Accepted Answer

A) Full integration 
B) Taper integration 
C) Competitive bidding 
D) Long-term contracting 
E) Diversification based on economies of scope 
A) Full integration 
B) Taper integration 
C) Competitive bidding 
D) Long-term contracting 
E) Diversification based on economies of scope

Question 8

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 9

For a company based in frnal assembly, moving into retail and distribution means:

Accepted Answer

A) backward integration. 
B) forward integration. 
C) taper integration. 
D) related diversification. 
E) unrelated diversification. 
A) backward integration. 
B) forward integration. 
C) taper integration. 
D) related diversification. 
E) unrelated diversification.

Question 10

Which of the following is not a benefit of vertical integration?

Accepted Answer

A) Facilitated investments in specialized assets 
B) Enhanced product quality 
C) Improved scheduling 
D) Lowered cost structure 
E) Strengthened differentiation advantage 
A) Facilitated investments in specialized assets 
B) Enhanced product quality 
C) Improved scheduling 
D) Lowered cost structure 
E) Strengthened differentiation advantage

Question 11

Compare the benefits and risks associated with horizontal and vertical integration.Under what circumstances would a firm prefer one over the other?

Accepted Answer

Horizontal integration has many of the s

Question 12

Google bought Clever Sense, a mobile app company.This is an example of a(n):

Accepted Answer

A) parallel sourcing policy. 
B) strategic outsource. 
C) strategic alliance. 
D) merger. 
E) acquisition. 
A) parallel sourcing policy. 
B) strategic outsource. 
C) strategic alliance. 
D) merger. 
E) acquisition.

Question 13

A leading software company merged with its competitor to form a new company.Which of the following is likely to be the result of this merger?

Accepted Answer

A) Decreased cost per unit output 
B) Decreased bargaining power over suppliers and customers 
C) Increased industry rivalry 
D) Decreased profitability 
E) Decreased product differentiation 
A) Decreased cost per unit output 
B) Decreased bargaining power over suppliers and customers 
C) Increased industry rivalry 
D) Decreased profitability 
E) Decreased product differentiation

Question 14

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 of one of the suppliers adopting an uncooperative attitude.Which of the following concepts is illustrated in this scenario?

Accepted Answer

A) Outsourcing 
B) Vertical integration 
C) Horizontal integration 
D) Parallel sourcing 
E) Full integration 
A) Outsourcing 
B) Vertical integration 
C) Horizontal integration 
D) Parallel sourcing 
E) Full integration

Question 15

In a strategic alliance, one of the companies that's part of the agreement benefits more than the other.

Accepted Answer

A) True 
 B)False

Question 16

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:

Accepted Answer

A) horizontal integration. 
B) credible commitment. 
C) competitive bidding. 
D) vertical integration. 
E) parallel sourcing. 
A) horizontal integration. 
B) credible commitment. 
C) competitive bidding. 
D) vertical integration. 
E) parallel sourcing.

Question 17

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.

Accepted Answer

A) True 
 B)False

Question 18

Oracle Corp., based in Reno, Nevada, has purchased several other companies to become the world's largest maker of database software.This strategy is known as the strategy of acquisition.

Accepted Answer

A) True 
 B)False

Question 19

An advantage of horizontal integration is that it can lower a company's cost structure by creating increasing economies of scale.

Accepted Answer

A) True 
 B)False

Question 20

Companies invest in specialized assets because these assets allow them to:

Accepted Answer

A) lower their cost stmcture. 
B) charge excessive prices for their products. 
C) the materials required are unique. 
D) develop customized products. 
E) charge premium prices for their products. 
A) lower their cost stmcture. 
B) charge excessive prices for their products. 
C) the materials required are unique. 
D) develop customized products. 
E) charge premium prices for their products.

What is the relationship between a company's corporate-level strategy and its business model?

Strategic alliances are:

Antitrust authorities:

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 envirornnent.

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

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

When there is a minimal need for close long-term cooperation between a company and its suppliers, which of the following strategies is the most appropriate?

Long-term contracts:

For a company based in frnal assembly, moving into retail and distribution means:

Which of the following is not a benefit of vertical integration?

Compare the benefits and risks associated with horizontal and vertical integration.Under what circumstances would a firm prefer one over the other?

Google bought Clever Sense, a mobile app company.This is an example of a(n):

A leading software company merged with its competitor to form a new company.Which of the following is likely to be the result of this merger?

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 of one of the suppliers adopting an uncooperative attitude.Which of the following concepts is illustrated in this scenario?

In a strategic alliance, one of the companies that's part of the agreement benefits more than the other.

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.

Oracle Corp., based in Reno, Nevada, has purchased several other companies to become the world's largest maker of database software.This strategy is known as the strategy of acquisition.

An advantage of horizontal integration is that it can lower a company's cost structure by creating increasing economies of scale.

Companies invest in specialized assets because these assets allow them to:

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

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

What is the relationship between a company's corporate-level strategy and its business model?

Strategic alliances are:

Antitrust authorities:

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 envirornnent.

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

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

When there is a minimal need for close long-term cooperation between a company and its suppliers, which of the following strategies is the most appropriate?

Long-term contracts:

For a company based in frnal assembly, moving into retail and distribution means:

Which of the following is not a benefit of vertical integration?

Compare the benefits and risks associated with horizontal and vertical integration.Under what circumstances would a firm prefer one over the other?

Google bought Clever Sense, a mobile app company.This is an example of a(n):

A leading software company merged with its competitor to form a new company.Which of the following is likely to be the result of this merger?

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 of one of the suppliers adopting an uncooperative attitude.Which of the following concepts is illustrated in this scenario?

In a strategic alliance, one of the companies that's part of the agreement benefits more than the other.

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.

Oracle Corp., based in Reno, Nevada, has purchased several other companies to become the world's largest maker of database software.This strategy is known as the strategy of acquisition.

An advantage of horizontal integration is that it can lower a company's cost structure by creating increasing economies of scale.

Companies invest in specialized assets because these assets allow them to:

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

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

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