Question 1

Briefly state the difference between outsourcing and insourcing.

Accepted Answer

Outsourcing is the process where a firm

Question 2

What are the disadvantages to outsourcing?

Accepted Answer

There are two major dangers of outsourci

Question 3

A supplier that is contracted to create and provide a customized input to a local firm is called a(n) _____.

Accepted Answer

A)  acquirer 
B)  coordinator 
C)  subcontractor 
D)  advocate 
A)  acquirer 
B)  coordinator 
C)  subcontractor 
D)  advocate

Question 4

Which of the following examples correctly depicts a company that uses a transaction-specific asset?

Accepted Answer

A)  Indigo Inc., a company that manufactures faucets 
B)  Eclipse Corp., a company that manufactures pens and sells them through distributors 
C)  BLC Corp., a company that uses heavily customized software to manufacture airplane seats 
D)  Vertigo LLC, a company that sources raw material from suppliers to manufacture dinnerware 
A)  Indigo Inc., a company that manufactures faucets 
B)  Eclipse Corp., a company that manufactures pens and sells them through distributors 
C)  BLC Corp., a company that uses heavily customized software to manufacture airplane seats 
D)  Vertigo LLC, a company that sources raw material from suppliers to manufacture dinnerware

Question 5

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

Accepted Answer

A)  Whether a company has the finances to handle and overcome organizational criticism 
B)  Whether a company knows when it should establish and exercise strict rules and regulations 
C)  Whether a company can economize on scarce inputs in order to reduce transaction costs 
D)  Whether a company has the right resources to perform an activity better than other firms 
A)  Whether a company has the finances to handle and overcome organizational criticism 
B)  Whether a company knows when it should establish and exercise strict rules and regulations 
C)  Whether a company can economize on scarce inputs in order to reduce transaction costs 
D)  Whether a company has the right resources to perform an activity better than other firms

Question 6

Which of the following companies is most likely to experience the benefits of outsourcing?

Accepted Answer

A)  Pulsar Corp., a shoe manufacturer, which has invested huge an amount of capital in order to afford its suppliers 
B)  Black Inc., a consumer electronics company, which has been importing its supplies from other companies and focuses only on the critical aspects of its work 
C)  Carbon LLC, an automobile manufacturer, which has the capability to produce more of its raw materials in house 
D)  Beta Corp., a computer manufacturer, which has been trying hard to adapt new technologies in order to gain competitive edge in the industry 
A)  Pulsar Corp., a shoe manufacturer, which has invested huge an amount of capital in order to afford its suppliers 
B)  Black Inc., a consumer electronics company, which has been importing its supplies from other companies and focuses only on the critical aspects of its work 
C)  Carbon LLC, an automobile manufacturer, which has the capability to produce more of its raw materials in house 
D)  Beta Corp., a computer manufacturer, which has been trying hard to adapt new technologies in order to gain competitive edge in the industry

Question 7

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

Accepted Answer

Having more flexibility-that i

Question 8

Having more flexibility, or being less vertically integrated, is more valuable when:

Accepted Answer

A)  a firm can create its own raw materials. 
B)  technology used is outdated. 
C)  the cost to perform an activity remains the same. 
D)  new technologies are innovated. 
A)  a firm can create its own raw materials. 
B)  technology used is outdated. 
C)  the cost to perform an activity remains the same. 
D)  new technologies are innovated.

Question 9

In this context of the three Cs of vertical integration, which of the following scenarios accurately depicts capabilities?

Accepted Answer

A)  BagMore Inc., a handbag company, decides to engage in backward integration and manufacture all of its products and accessories in the company house. 
B)  GoSpeed Corp., an automobile manufacturing company, evaluates itself by asking if it can perform the vertically integrated activity better than its rivals. 
C)  StyleRight LLC, an apparel company, manufactures eco-friendly, organic, and sustainable clothes. 
D)  HDC Inc., an electronics company, decides to effectively regulate its new technologies. 
A)  BagMore Inc., a handbag company, decides to engage in backward integration and manufacture all of its products and accessories in the company house. 
B)  GoSpeed Corp., an automobile manufacturing company, evaluates itself by asking if it can perform the vertically integrated activity better than its rivals. 
C)  StyleRight LLC, an apparel company, manufactures eco-friendly, organic, and sustainable clothes. 
D)  HDC Inc., an electronics company, decides to effectively regulate its new technologies.

Question 10

As a danger of vertical integration, a(n) _____ refers to the fact that the more different types of activities a firm needs to manage, the harder it is to be world class in all of those activities.

Accepted Answer

The answer of As a danger of vertical integration, a(n)...

Briefly state the difference between outsourcing and insourcing.

What are the disadvantages to outsourcing?

A supplier that is contracted to create and provide a customized input to a local firm is called a(n) _____.

Which of the following examples correctly depicts a company that uses a transaction-specific asset?

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

Which of the following companies is most likely to experience the benefits of outsourcing?

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

Having more flexibility, or being less vertically integrated, is more valuable when:

In this context of the three Cs of vertical integration, which of the following scenarios accurately depicts capabilities?

As a danger of vertical integration, a(n) _____ refers to the fact that the more different types of activities a firm needs to manage, the harder it is to be world class in all of those activities.

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

Briefly state the difference between outsourcing and insourcing.

What are the disadvantages to outsourcing?

A supplier that is contracted to create and provide a customized input to a local firm is called a(n) _____.

Which of the following examples correctly depicts a company that uses a transaction-specific asset?

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

Which of the following companies is most likely to experience the benefits of outsourcing?

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

Having more flexibility, or being less vertically integrated, is more valuable when:

In this context of the three Cs of vertical integration, which of the following scenarios accurately depicts capabilities?

As a danger of vertical integration, a(n) _____ refers to the fact that the more different types of activities a firm needs to manage, the harder it is to be world class in all of those activities.

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