Question 1

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.

Question 2

In a strategic alliance, one company in the agreement benefits more than the other.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Vertical integration can be disadvantageous when:

Accepted Answer

A)   competitors are vertically integrated.
B)   demand is stable.
C)   industry technology is changing rapidly.
D)   the company is operating in the home country.
E)   costs of company decreases.

Question 5

The final part of the strategy formulation process is:

Accepted Answer

A)   choosing business-level strategies.
B)   choosing functional-level strategies.
C)   choosing corporate-level strategies.
D)   choosing functional-level goals.
E)   choosing business-level goals.

Question 6

Tina's Technologies is expanding its operations backward into an industry that produces inputs for the company's products. Tina's Technologies is utilizing horizontal integration.

Accepted Answer

A) True 
 B)False

Question 7

Horizontal integration can lead to low cost advantages but rarely to differentiation advantages.

Accepted Answer

A) True 
 B)False

Question 8

When a bank offers home mortgages and credit cards to its checking account customers, it is using horizontal integration strategy.

Accepted Answer

A) True 
 B)False

Question 9

When a company outsources its noncore activities to specialists, it loses its capabilities to differentiate its final products.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Horizontal integration almost always increases rivalry in an industry.

Accepted Answer

A) True 
 B)False

Question 12

Consider the case of a manufacturing firm that purchases subassemblies from a supplier, creates a finished product, and then sells that product to a wholesale distributor. What advantages might this firm gain from forward integration? From backward integration? What potential pitfalls of vertical integration might the firm face?

Accepted Answer

Forward integration would allow the manu...

Question 13

When technology in an industry is changing rapidly, a company pursuing a strategy of vertical integration may find itself:

Accepted Answer

A)   locked into an old, inefficient technology.
B)   able to sell its products at continually lower prices.
C)   increasing returns on its assets.
D)   establishing a monopoly in the industry.
E)   lowering its cost structure.

Question 14

A merger occurs when one company uses its capital resources, such as stock, debt, or cash, to purchase another company.

Accepted Answer

A) True 
 B)False

Question 15

Vertical integration can strengthen a company's differentiation business-level strategy and competitive advantage.

Accepted Answer

A) True 
 B)False

Question 16

Vertical integration is undertaken to support the competitive position of a company's core business.

Accepted Answer

A) True 
 B)False

Question 17

In which of the following is a firm most likely to lose direct control over value creation activities?

Accepted Answer

A)   Merger
B)   Acquisition
C)   Vertical integration
D)   Strategic alliance
E)   Outsourcing

Question 18

Credible commitments refer to:

Accepted Answer

A)   believable promises that support the development of a long-term relationship between companies.
B)   the merging of two companies that have an equal market share.
C)   to obtaining of goods, services or works from an external source.
D)   the acquisition of one company by another company.
E)   the outsourcing of after-sale services to a different company.

Question 19

Competitive bidding makes suppliers reluctant to make investments that tie them closely to their trading partners.

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

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

When a bank offers home mortgages and credit cards to its checking account customers, it is using horizontal integration strategy.

Correct Answer
verified

Competitive bidding makes suppliers reluctant to make investments that tie them closely to their trading partners.

Correct Answer
verified

Vertical integration is undertaken to support the competitive position of a company's core business.

Correct Answer
verified

Credible commitments refer to:

Correct Answer
verified

When a company outsources its noncore activities to specialists, it loses its capabilities to differentiate its final products.

Correct Answer
verified

Vertical integration can strengthen a company's differentiation business-level strategy and competitive advantage.

Correct Answer
verified

Horizontal integration can lead to low cost advantages but rarely to differentiation advantages.

Correct Answer
verified

In which of the following is a firm most likely to lose direct control over value creation activities?

Correct Answer
verified

Horizontal integration almost always increases rivalry in an industry.

Correct Answer
verified

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

Correct Answer
verified

A merger occurs when one company uses its capital resources, such as stock, debt, or cash, to purchase another company.

Correct Answer
verified

When technology in an industry is changing rapidly, a company pursuing a strategy of vertical integration may find itself:

Correct Answer
verified

Correct Answer
verified
Forward integration would allow the manu...
View Answer

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

Correct Answer
verified

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

Correct Answer
verified
Horizontal integration has many of the s...
View Answer

The final part of the strategy formulation process is:

Correct Answer
verified

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

Correct Answer
verified

Vertical integration can be disadvantageous when:

Correct Answer
verified

In a strategic alliance, one company in the agreement benefits more than the other.

Correct Answer
verified

Tina's Technologies is expanding its operations backward into an industry that produces inputs for the company's products. Tina's Technologies is utilizing horizontal integration.

Correct Answer
verified

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

When a bank offers home mortgages and credit cards to its checking account customers, it is using horizontal integration strategy.

Correct AnswerverifiedShow Answer

Competitive bidding makes suppliers reluctant to make investments that tie them closely to their trading partners.

Correct AnswerverifiedShow Answer

Vertical integration is undertaken to support the competitive position of a company's core business.

Correct AnswerverifiedShow Answer

Credible commitments refer to:

Correct AnswerverifiedShow Answer

When a company outsources its noncore activities to specialists, it loses its capabilities to differentiate its final products.

Correct AnswerverifiedShow Answer

Vertical integration can strengthen a company's differentiation business-level strategy and competitive advantage.

Correct AnswerverifiedShow Answer

Horizontal integration can lead to low cost advantages but rarely to differentiation advantages.

Correct AnswerverifiedShow Answer

In which of the following is a firm most likely to lose direct control over value creation activities?

Correct AnswerverifiedShow Answer

Horizontal integration almost always increases rivalry in an industry.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A merger occurs when one company uses its capital resources, such as stock, debt, or cash, to purchase another company.

Correct AnswerverifiedShow Answer

When technology in an industry is changing rapidly, a company pursuing a strategy of vertical integration may find itself:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedForward integration would allow the manu...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedHorizontal integration has many of the s...View AnswerShow Answer

The final part of the strategy formulation process is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Vertical integration can be disadvantageous when:

Correct AnswerverifiedShow Answer

In a strategic alliance, one company in the agreement benefits more than the other.

Correct AnswerverifiedShow Answer

Tina's Technologies is expanding its operations backward into an industry that produces inputs for the company's products. Tina's Technologies is utilizing horizontal integration.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Forward integration would allow the manu...
View Answer

Correct Answer
verified

Correct Answer
verified
Horizontal integration has many of the s...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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