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Exam 8: Corporate Strategy: Vertical Integration and Diversification

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Question 51

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Which of the following firms is least integrated?

A) a firm that enters a joint venture with another company to develop a new technology
B) a firm that owns production subsidiaries across the globe
C) a firm that makes equity investments in its supplier's company
D) a firm that buys all the required raw materials from multiple external vendors

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Question 52

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How can a firm pursuing a diversification strategy enhance its overall corporate performance by leveraging financial economies?

A) by using internal capital markets as a source of value creation
B) by adding more unrelated businesses into its corporate portfolio
C) by increasing its coordination and influence costs
D) by investing in businesses under the question mark quadrant of the BCG matrix

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Question 53

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_____ are best described as unique assets with high opportunity costs that have significantly more value in their intended use than in their next-best use.

Symphon Times Inc.,a Swiss-based premium watch brand,has recently started selling its watches through company-owned retail outlets in major cities of the emerging nations.Which of the following types of diversification strategies is the firm pursuing?

Why is following an unrelated diversification strategy especially advantageous in an emerging economy?

RoboToys,Inc.is involved in the production of robotic toys.This firm produces the raw materials,including metals and oils for plastic; creates the integrated circuits,displays,and batteries; and assembles the toys.Which of the following stages of the industry value chain is RoboToys involved in?

Which of the following best illustrates forward vertical integration?

A primary advantage of organizing economic activity within firms is the

If a strategic business unit is recognized as a cash cow,it is advisable to

Which of the following best illustrates physical-asset specificity?

_____ are best described as voluntary arrangements between firms that involve the sharing of knowledge,resources,and capabilities with the intent of developing processes,products,or services to lead to competitive advantage.

The Boston Consulting Group (BCG) growth-share matrix locates a firm's individual strategic business units (SBUs) in which two dimensions?

Each stage of the vertical value chain typically represents a distinct _____ in which a number of different firms are competing.

Which of the following corporate strategies did ExxonMobil pursue by acquiring XTO Energy,a natural gas company?

Firms that use taper integration also use _____ when they rely on outside-market firms for some of their supplies.

Divina Pharma Inc.and MF Electronics Inc.have together invested and created a new organization,FirstHealth Inc.,to focus on developing diagnostic devices.Through this new firm,both companies are attempting to combine their core competencies to innovate and reduce their risks associated with transaction-specific investments.However,the new organization operates independent of Divina Pharma and MF Electronics.Which of the following alternatives to integration does this scenario best illustrate?

_____ is best described as a situation in which one party is more informed than another,because of the possession of private information.

When a firm is said to be pursuing a geographic diversification strategy,it means that the firm will

A firm that engages in strategic outsourcing typically

A _____ is best defined as a company that combines two or more strategic business units under one overarching corporation and follows an unrelated diversification strategy.