Question 1

Which of the following scenarios best illustrates the concept of vertical integration?

Accepted Answer

A)  NZB Corp., a company that sells all its assets to another company 
B)  Hues Inc., a company that owns its supply chain for its raw materials and processes 
C)  Scorpio LLC, a company that buys raw materials from a supplier company 
D)  Blue Corp., a company that makes raw materials and supplies them to a different company 
A)  NZB Corp., a company that sells all its assets to another company 
B)  Hues Inc., a company that owns its supply chain for its raw materials and processes 
C)  Scorpio LLC, a company that buys raw materials from a supplier company 
D)  Blue Corp., a company that makes raw materials and supplies them to a different company

Question 2

Vertical integration can be best defined as:

Accepted Answer

A)  breaking a large process into smaller tasks that require specialized knowledge. 
B)  bringing business processes or activities previously conducted by outside companies in-house. 
C)  a graphic representation of the relationship between cost per unit of a product and its scale of production. 
D)  the sequence of all activities that are performed by a firm to turn raw materials into a finished product. 
A)  breaking a large process into smaller tasks that require specialized knowledge. 
B)  bringing business processes or activities previously conducted by outside companies in-house. 
C)  a graphic representation of the relationship between cost per unit of a product and its scale of production. 
D)  the sequence of all activities that are performed by a firm to turn raw materials into a finished product.

Question 3

In the context of coordination, what is modular interdependence?

Accepted Answer

In the context of coordination, modular

Question 4

Browns Inc., a well-established suitcase brand, started manufacturing its own suitcases.It added new features in its suitcases such as water-resistance and extra storage space.The initiation by Browns Inc.to manufacture its own suitcases best illustrates _____.

Accepted Answer

A)  linked diversification 
B)  backward integration 
C)  forward integration 
D)  assisted development 
A)  linked diversification 
B)  backward integration 
C)  forward integration 
D)  assisted development

Question 5

Cygnus Bank is a banking and financial services company.It offered a large sum of money and a chance to receive employment to the programmers who could create a software that would help enhance employee productivity.Which of the following types of crowdsourcing did Cygnus Bank use?

Accepted Answer

A)  Crowdvoting 
B)  Crowdinnovation 
C)  Crowdtasking 
D)  Crowdcreating 
A)  Crowdvoting 
B)  Crowdinnovation 
C)  Crowdtasking 
D)  Crowdcreating

Question 6

Hydrus Corp.contracted most of its business processes to various other companies.This helped the company generate immediate profits, but Hydrus was losing competitive advantage over its rivals in the long run due to its lack of innovation.Which of the following is a danger of outsourcing that Hydrus Corp.experienced?

Accepted Answer

A)  Lack of control 
B)  Loss of capabilities 
C)  Lack of focus 
D)  Loss of technology 
A)  Lack of control 
B)  Loss of capabilities 
C)  Lack of focus 
D)  Loss of technology

Question 7

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

Accepted Answer

A)  Runners Corp., a shoe manufacturing company, which has a say in how much of its assets are divided among the company's shareholders 
B)  Blueberry Inc., a confectionery company, which has a stronghold over an important resource of the company that helps in differentiating its final product 
C)  Trendsetters LLC, an apparel manufacturing company, which has a stronghold over the number of employees that the company can afford to recruit, train, and retain 
D)  Coders Corp., a software development company, which successfully deflects any possibilities of hostile takeovers 
A)  Runners Corp., a shoe manufacturing company, which has a say in how much of its assets are divided among the company's shareholders 
B)  Blueberry Inc., a confectionery company, which has a stronghold over an important resource of the company that helps in differentiating its final product 
C)  Trendsetters LLC, an apparel manufacturing company, which has a stronghold over the number of employees that the company can afford to recruit, train, and retain 
D)  Coders Corp., a software development company, which successfully deflects any possibilities of hostile takeovers

Question 8

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.

Accepted Answer

A)  loss of frequency 
B)  loss of focus 
C)  loss of flexibility 
D)  loss of facility 
A)  loss of frequency 
B)  loss of focus 
C)  loss of flexibility 
D)  loss of facility

Question 9

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 _____.

Accepted Answer

A)  market penetration 
B)  vertical integration 
C)  horizontal diversification 
D)  outsourcing 
A)  market penetration 
B)  vertical integration 
C)  horizontal diversification 
D)  outsourcing

Question 10

Which of the following statements is a characteristic of subcontractors?

Accepted Answer

A)  They are responsible for bringing in key functions to regulate a company. 
B)  They have to assign and coordinate various projects of a company. 
C)  They have 10 percent share in the profits accrued by a company. 
D)  They create made-to-order contributions for a company. 
A)  They are responsible for bringing in key functions to regulate a company. 
B)  They have to assign and coordinate various projects of a company. 
C)  They have 10 percent share in the profits accrued by a company. 
D)  They create made-to-order contributions for a company.

Question 11

Yellow Express LLC is a company in the computer hardware industry that solely manufactures microchips.Yellow Express LLC is _____.

Accepted Answer

A)  diagonally integrated 
B)  vertically integrated 
C)  horizontally diversified 
D)  vertically specialized 
A)  diagonally integrated 
B)  vertically integrated 
C)  horizontally diversified 
D)  vertically specialized

Question 12

A production house called Script Creations Inc.initiated a strategy for making its next movie.It invited a mass of people to create short documentaries on a social theme.As per the terms and conditions, Script Creations would select top three short stories to create an overall complete movie.This initiation by Script Creations Inc.is an example of _____.

Accepted Answer

A)  crowdsourcing 
B)  insourcing 
C)  offshoring 
D)  benchmarking 
A)  crowdsourcing 
B)  insourcing 
C)  offshoring 
D)  benchmarking

Question 13

Which of the following scenarios supports the view that a company should engage in outsourcing?

Accepted Answer

A)  Zenith Corp., a publishing house, which needed a high capital investment to grow because it contracted most of its peripheral activities to other companies 
B)  FRC Inc., an apparel company, which fears the loss of a strong hold over its prime activities if it does not perform them in house 
C)  AutoLuxe LLC, an automobile company, which has the flexibility to contract processes to another company at a fast rate 
D)  Innovator Inc., a software company, which foresees that its employees will have less work and more time under their disposal for leisure activities if it lets other suppliers help perform its activities 
A)  Zenith Corp., a publishing house, which needed a high capital investment to grow because it contracted most of its peripheral activities to other companies 
B)  FRC Inc., an apparel company, which fears the loss of a strong hold over its prime activities if it does not perform them in house 
C)  AutoLuxe LLC, an automobile company, which has the flexibility to contract processes to another company at a fast rate 
D)  Innovator Inc., a software company, which foresees that its employees will have less work and more time under their disposal for leisure activities if it lets other suppliers help perform its activities

Question 14

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 _____.

Accepted Answer

A)  sequential interdependence 
B)  reciprocal interdependence 
C)  modular interdependence 
D)  extensive interdependence 
A)  sequential interdependence 
B)  reciprocal interdependence 
C)  modular interdependence 
D)  extensive interdependence

Question 15

Adia, the chief executive officer (CEO) of Touch Works Corp., believes that outsourcing would be a disadvantage to her company.She states that she would not be able to control the finances and assets of her company if work gets outsourced.Which of the following statements strengthens Adia's belief?

Accepted Answer

A)  Outsourcing would maximize the capital investment that Touch Works Corp. would require to grow. 
B)  Outsourcing would prevent Touch Works Corp. from contracting out activities to industry specialists. 
C)  Touch Works Corp. would be forced to focus on a wide range of activities. 
D)  Touch Works Corp. would lose the ability to innovate and create competitive advantage. 
A)  Outsourcing would maximize the capital investment that Touch Works Corp. would require to grow. 
B)  Outsourcing would prevent Touch Works Corp. from contracting out activities to industry specialists. 
C)  Touch Works Corp. would be forced to focus on a wide range of activities. 
D)  Touch Works Corp. would lose the ability to innovate and create competitive advantage.

Question 16

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?

Accepted Answer

A)  Crowdvoting 
B)  Crowdinnovation 
C)  Crowdtasking 
D)  Crowdcreating 
A)  Crowdvoting 
B)  Crowdinnovation 
C)  Crowdtasking 
D)  Crowdcreating

Question 17

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

Accepted Answer

A)  middle activities 
B)  forward activities 
C)  upstream activities 
D)  downstream activities 
A)  middle activities 
B)  forward activities 
C)  upstream activities 
D)  downstream activities

Question 18

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 level of 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 _____.

Accepted Answer

A)  sequential interdependence 
B)  reciprocal interdependence 
C)  limited interdependence 
D)  modular interdependence 
A)  sequential interdependence 
B)  reciprocal interdependence 
C)  limited interdependence 
D)  modular interdependence

Question 19

BHG Corp.is a glass manufacturing company that specializes in float glasses.The company manufactures float glass through various stages of melting and refining, coating, and annealing.It is then inspected and cut according to customer requirements.This manufacturing process performed by BHG Corp.is termed as _____.

Accepted Answer

A)  virtuous circle 
B)  value chain 
C)  task specialization 
D)  supply chain 
A)  virtuous circle 
B)  value chain 
C)  task specialization 
D)  supply chain

Question 20

The sequence of all activities that are performed by a firm to turn raw materials into a finished product that is sold to a buyer best describes the term _____.

Accepted Answer

A)  product line 
B)  task specialization 
C)  virtuous circle 
D)  value chain 
A)  product line 
B)  task specialization 
C)  virtuous circle 
D)  value chain

Which of the following scenarios best illustrates the concept of vertical integration?

Vertical integration can be best defined as:

In the context of coordination, what is modular interdependence?

Browns Inc., a well-established suitcase brand, started manufacturing its own suitcases.It added new features in its suitcases such as water-resistance and extra storage space.The initiation by Browns Inc.to manufacture its own suitcases best illustrates _____.

Cygnus Bank is a banking and financial services company.It offered a large sum of money and a chance to receive employment to the programmers who could create a software that would help enhance employee productivity.Which of the following types of crowdsourcing did Cygnus Bank use?

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

Which of the following statements is a characteristic of subcontractors?

Yellow Express LLC is a company in the computer hardware industry that solely manufactures microchips.Yellow Express LLC is _____.

Which of the following scenarios supports the view that a company should engage in outsourcing?

Adia, the chief executive officer (CEO) of Touch Works Corp., believes that outsourcing would be a disadvantage to her company.She states that she would not be able to control the finances and assets of her company if work gets outsourced.Which of the following statements strengthens Adia's belief?

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

The sequence of all activities that are performed by a firm to turn raw materials into a finished product that is sold to a buyer best describes the term _____.

What Is Business Strategy?

Analysis of the External Environment: Opportunities and Threats

Internal Analysis: Strengths, Weaknesses, and Competitive Advantage

Cost Advantage

Differentiation Advantage

Corporate Strategy

Strategic Alliances

International Strategy

Innovative Strategies That Change the Nature of Competition

Competitive Strategy

Implementing Strategy

Corporate Governance and Ethics

Strategy and Society

Filters

Exam 7: Vertical Integration and Outsourcing

Which of the following scenarios best illustrates the concept of vertical integration?

Vertical integration can be best defined as:

In the context of coordination, what is modular interdependence?

Browns Inc., a well-established suitcase brand, started manufacturing its own suitcases.It added new features in its suitcases such as water-resistance and extra storage space.The initiation by Browns Inc.to manufacture its own suitcases best illustrates _____.

Cygnus Bank is a banking and financial services company.It offered a large sum of money and a chance to receive employment to the programmers who could create a software that would help enhance employee productivity.Which of the following types of crowdsourcing did Cygnus Bank use?

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

Which of the following statements is a characteristic of subcontractors?

Yellow Express LLC is a company in the computer hardware industry that solely manufactures microchips.Yellow Express LLC is _____.

Which of the following scenarios supports the view that a company should engage in outsourcing?

Adia, the chief executive officer (CEO) of Touch Works Corp., believes that outsourcing would be a disadvantage to her company.She states that she would not be able to control the finances and assets of her company if work gets outsourced.Which of the following statements strengthens Adia's belief?

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

The sequence of all activities that are performed by a firm to turn raw materials into a finished product that is sold to a buyer best describes the term _____.

What Is Business Strategy?

Analysis of the External Environment: Opportunities and Threats

Internal Analysis: Strengths, Weaknesses, and Competitive Advantage

Cost Advantage

Differentiation Advantage

Corporate Strategy

Strategic Alliances

International Strategy

Innovative Strategies That Change the Nature of Competition

Competitive Strategy

Implementing Strategy

Corporate Governance and Ethics

Strategy and Society

Filters