Exam 3 - Chapter 9 Quiz

Managers use corporate-level strategy to identify which countries a company should compete in to maximize long-run profitability? True or False

False

A company pursuing a strategy of vertical integration may expand its operations: a. backward into an industry that produces inputs for the company's products. b. by making specialized investments jointly with its competitor. c. laterally into an industry that competes with the company's products. d. be merging with industry competitors

a. backward into an industry that produces inputs for the company's products

Which of the following companies uses forward vertical integration to enhance their product differentiation advantages? a. McDonalds b. Apple c. Whole Foods Market d. WalMart

b. Apple

A corporate-level strategy is about how to? a. Compete with industry competitors b. Compete across multiple industries c. compete in global markets d. partner with industry competitors

b. compete across multiple industries

All of the following are benefits of horizontal integration except: a. increased product differentiation b. reduced risks of coming into conflict with the FTC c. reduced industry rivalry d. reduce cost structure

b. reduced risk of coming into conflict with the FTC

Staying in a single industry allows a company to? a. replicate its success in other industries b. deter potential competitors from entering the industry c. focus its resources on one area. d. change its product line from time to time.

c. focus its resources on one area

Mergers and acquisitions are? a. conceptually different but can be used interchangeably. b. means to realize horizontal integration. c. popular corporate startegies to grow the company's size and market power. d. all of the above

d. all of the above

Which of the following corporate-level strategies is not covered in this chapter? a. Horizontal integration b. vertical integration c. strategic outsourcing d. diversification

d. diversification

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? a. outsourcing b. vertical integration c. horizontal integration d. parallel sourcing

d. parallel sourcing

A number of studies have suggested that many mergers and acquisitions do not create value and some even destroy value. True or False

True

Company-owned suppliers lack incentives to reduce costs therefore develop a higher cost structure than those of the independent suppliers? True or False

True

Horizontal integration may be accomplished by acquisitions or mergers. True or False

True

What are the benefits of strategic outsourcing? what are the challenges?

Strategic outsourcing allows one or more of a company's value-chain activities or functions to be performed by independent specialized companies to focus on all their skills and knowledge on one activity. When it comes to strategic outsourcing the benefits are lower cost structure, enhanced differentiation, focus on the core business functions. And the challenges are slower turnaround time, lack of business or domain knowledge, language and cultural barriers, time zone differences, and lack of control.

Strategic outsourcing is the decision to allow one or more of a company's value chain activities or functions to be performed by independent companies True or False

True