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Exam 7: Vertical Integration and Outsourcing

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Question 31

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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?

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

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Question 32

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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 _____.

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

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Question 33

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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 _____.

Sport Soles Inc.,a sports footwear manufacturing company,makes athletic shoes with rubber soles.In order to maximize its value and profit,Sport Soles sets up its operations right next to rubber tree fields.This way,the company gets easy access to its main raw material.In the context of vertical integration,this scenario illustrates that Sport Soles Inc.is exercising _____.

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

Explain the three Cs of vertical integration.

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

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

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?

When one firm tries to take advantage of another firm that has made a transaction-specific investment,by causing a brief delay in business because a product has no other use is known as a(n)_____.