Exam 10: Vertical Integration and the Scope of the Firm

The principal feature of the corporate scope of Tesla Inc,compred to other automobile manufacturers,is:

Which of the following factors is not conducive to vertical integration between two adjacent stages of production?

In fashion clothing,one reason why mass-market distributors such as H&M,Forever 21,and Gap outsource their production is to reduce new product cycle time (the time between the initial design of a product and its delivery to a retail store).

Vertical integration by Zara,the main division and brand of the Spanish clothing firm Inditex,illustrates:

Franchising offers a means of reconciling the coordination and control benefits of vertical integration with the entrepreneurial flexibility and high-powered incentives of market contracts.

Economies of scope and transaction costs are important concepts when analyzing the vertical,geograpjical,amd product scope of the firm.

Vertical integration allows a firm to extend its monopoly position from one stage of an industry's value chain to adjacent stages,this allows the firm to increase the amount of monopoly profit it can extract.

Firms exist in situations where the administrative costs of coordinating economic activity are less than the transactions costs of organizing such activity across markets.

Jewelry companies typically do not own gold and silver mines because the markets for gold and silver are highly competitive and impose few transaction costs on jewelry makers.

The main cause of downsizing,refocusing,and outsourcing during the latter part of the 20^th century was:

Alfred Chandler described the administrative mechanism of firms as the "invisible hand" of economic coordination.

The growth in the scope of business enterprises for most of the 19th and 20th centuries can be attributed to a drop in administrative costs of firms relative to the transaction costs of market.This resulted from:

The opening quotation from Tom Peters states that as "yesterday's highly integrated giants" de-integrate,their vertical relationships are taking the form of:

Vendor partnerships based on relational contacts-such as the relationships between vehicle manufacturers and their component suppliers-are superior to either pure market contracts or vertical integration because:

The capitalist economy comprises two forms of economic organization,the market mechanism operated by prices and the administrative mechanism of firms.

Vertical integration by industrial firms during the major part of the 20^th century was motivated primarily by firms' desire for:

Managing vertically-related businesses that are strategically very different is not a problem if companies adopt an appropriate organizational structure.

Which of the following factors has not contributed to the trend towards outsourcing in recent decades:

Corporate strategy is concerned with decisions over product scope,geographical scope,and vertical scope.

When a winery opens a tasting room through which it sells its wine to visitors,this represents: