Business Strategy Exam 3 Connect
Questions With Correct Solutions!!
Chapter 8 - ANSWER
A large conglomerate is deciding on the range of new products and services it can offer to its
customers to further expand its operations. This decision determines the firm's - ANSWERlevel of
diversification
The executives of Anaplan Inc., a large conglomerate, are making decisions on the stages of the
industry value chain the firm must participate in, the range of products and services it should offer,
and the global markets it should compete in. What are the executives primarily determining? -
ANSWERthe boundaries of the firm
Firms often consolidate industries through horizontal mergers and acquisitions to - ANSWERincrease
their market power
Which of the following examples would most likely limit a firm's growth? - ANSWERA social
entrepreneur makes conservation of the environment the primary goal of his firm.
Which of the following is an example of internal transaction costs? - ANSWERthe costs pertaining to
setting up a shop floor
A disadvantage associated with obtaining goods and services externally includes - ANSWERnontrivial
search costs to be borne by the firm.
Lillian, a real estate agent, is selling a moderately priced house in a subdivision. She knows from her
uncle that the factory being built half a mile from the subdivision will be manufacturing dog food,
using a process that creates a very strong odor that permeates the surrounding neighborhood. A
buyer, who is unaware of the type of factory under construction, makes an offer on one of the
houses Lillian is selling, and within a short time, the deal goes through. What does this scenario best
illustrate? - ANSWERinformation asymmetries
When Pluralsight Products planned to start its operations in Amerigo, an emerging nation, it realized
that it would have to set up its own distribution channels. This would be a risky and expensive
strategic move. The company had an option of hiring a small supply chain management company,
Elastic Logistics, to reach its ultimate customers. However, this would require Elastic Logistics to
, make huge investments, which would be of no use to it if Pluralsight Products decided to exit the
market. Thus, to gain Elastic Logistics' confidence, Gilded Products purchased 40 percent of the stock
of Elastic Logistics. What does this scenario best illustrate? - ANSWERequity alliance
________ is best described as the changes in an industry value chain that involve moving ownership
of activities upstream to the originating (inputs) point of the value chain. - ANSWERBackward vertical
integration
Which of the following best illustrates backward vertical integration? - ANSWERa chocolate
manufacturing company setting up its own cocoa plantations
Zscaler started as an original equipment manufacturing firm (OEM) for brand-name mobile device
companies. Later, it started offering a lineup of innovative and high-performance smartphones by
acquiring BuildIt, a San Francisco-based design firm. This strategic move of Zscaler is known as -
ANSWERforward vertical integration
Which of the following best illustrates human-asset specificity? - ANSWERtraining employees on how
to operate a customized furnace
LMP Automotive Holdings Inc., a large multinational conglomerate, has hired an external consultant
to process and audit its payroll. This allows the company to focus on manufacturing and marketing
activities rather than developing and maintaining its own human resource management systems.
Which of the following alternatives to vertical integration has LMP Automotive Holdings Inc.
adopted? - ANSWERstrategic outsourcing
The rationale behind related diversification is to - ANSWERbenefit from economies of scale and
scope.
Amazon expanded its single-product business by leveraging spare capacity into cloud computing and
by offering its Kindle line of tablet computers and Echo line of digital assistants. This is an example of
- ANSWERrelated-linked diversification
Which of the following is an example of related-constrained diversification? - ANSWERan automobile
company that manufactures petrol cars expanding into the diesel car industry
Which of the following best illustrates a dominant-business firm? - ANSWER89bio Inc. is a luxury
brand that derives 90 percent of its revenues from its apparel line and 10 percent of its revenues
from its premium furniture business unit.
Questions With Correct Solutions!!
Chapter 8 - ANSWER
A large conglomerate is deciding on the range of new products and services it can offer to its
customers to further expand its operations. This decision determines the firm's - ANSWERlevel of
diversification
The executives of Anaplan Inc., a large conglomerate, are making decisions on the stages of the
industry value chain the firm must participate in, the range of products and services it should offer,
and the global markets it should compete in. What are the executives primarily determining? -
ANSWERthe boundaries of the firm
Firms often consolidate industries through horizontal mergers and acquisitions to - ANSWERincrease
their market power
Which of the following examples would most likely limit a firm's growth? - ANSWERA social
entrepreneur makes conservation of the environment the primary goal of his firm.
Which of the following is an example of internal transaction costs? - ANSWERthe costs pertaining to
setting up a shop floor
A disadvantage associated with obtaining goods and services externally includes - ANSWERnontrivial
search costs to be borne by the firm.
Lillian, a real estate agent, is selling a moderately priced house in a subdivision. She knows from her
uncle that the factory being built half a mile from the subdivision will be manufacturing dog food,
using a process that creates a very strong odor that permeates the surrounding neighborhood. A
buyer, who is unaware of the type of factory under construction, makes an offer on one of the
houses Lillian is selling, and within a short time, the deal goes through. What does this scenario best
illustrate? - ANSWERinformation asymmetries
When Pluralsight Products planned to start its operations in Amerigo, an emerging nation, it realized
that it would have to set up its own distribution channels. This would be a risky and expensive
strategic move. The company had an option of hiring a small supply chain management company,
Elastic Logistics, to reach its ultimate customers. However, this would require Elastic Logistics to
, make huge investments, which would be of no use to it if Pluralsight Products decided to exit the
market. Thus, to gain Elastic Logistics' confidence, Gilded Products purchased 40 percent of the stock
of Elastic Logistics. What does this scenario best illustrate? - ANSWERequity alliance
________ is best described as the changes in an industry value chain that involve moving ownership
of activities upstream to the originating (inputs) point of the value chain. - ANSWERBackward vertical
integration
Which of the following best illustrates backward vertical integration? - ANSWERa chocolate
manufacturing company setting up its own cocoa plantations
Zscaler started as an original equipment manufacturing firm (OEM) for brand-name mobile device
companies. Later, it started offering a lineup of innovative and high-performance smartphones by
acquiring BuildIt, a San Francisco-based design firm. This strategic move of Zscaler is known as -
ANSWERforward vertical integration
Which of the following best illustrates human-asset specificity? - ANSWERtraining employees on how
to operate a customized furnace
LMP Automotive Holdings Inc., a large multinational conglomerate, has hired an external consultant
to process and audit its payroll. This allows the company to focus on manufacturing and marketing
activities rather than developing and maintaining its own human resource management systems.
Which of the following alternatives to vertical integration has LMP Automotive Holdings Inc.
adopted? - ANSWERstrategic outsourcing
The rationale behind related diversification is to - ANSWERbenefit from economies of scale and
scope.
Amazon expanded its single-product business by leveraging spare capacity into cloud computing and
by offering its Kindle line of tablet computers and Echo line of digital assistants. This is an example of
- ANSWERrelated-linked diversification
Which of the following is an example of related-constrained diversification? - ANSWERan automobile
company that manufactures petrol cars expanding into the diesel car industry
Which of the following best illustrates a dominant-business firm? - ANSWER89bio Inc. is a luxury
brand that derives 90 percent of its revenues from its apparel line and 10 percent of its revenues
from its premium furniture business unit.
