GBA 490 Exam 2 (Meyer) Exam Questions and Answers |Complete Solutions Graded A+
|100% Correct
What do horizontal mergers and acquisitions provide? an effective means for firms to
rapidly increase the scale and horizontal scope of the core business
Mergers and acquisition strategies try to achieve these objectives 1)creating a more cost-
efficient operation out of the combined companies
2)expanding a company's geographic coverage
3)extending the company's business into new product categories
4)gaining quick access to new technologies or other resources and capabilities
5)leading the convergence of industries whose boundaries are being blurred by changing
technologies and new market opportunities
Horizontal mergers and acquisitions can strengthen a firm's competitiveness in five ways
1)by improving the efficiency of its operations
2)by heightening its product differentiation
3)by reducing market rivalry
4)by increasing the company's bargaining power over suppliers and buyers
5)by enhancing its flexibility and dynamic capabilities
Vertically integrated firm one that participates in multiple stages of an industry's value chain
system
one that performs value chain activities along more than one stage of an industry's value chain
system
Vertical integration strategies can aim at 1)full integration (participating in all stages of the
vertical chain)
2)partial integration (building positions in selected stages of the vertical chain)
3)tapered integration (a mix of in-house and outsourced activity in any given stage of the
vertical chain)
, backwards integration involves entry into activities previously performed by suppliers or
other enterprises positioned along earlier stages of the industry value chain system
For backward integration to a cost-saving and profitable strategy, a company must be able to
1)achieve the same scale economies as outside suppliers
2)match or beat suppliers' production efficiency with no drop-off in quality
Forward integration involves entry into chain system activities closer to the end user
The disdvantages of a vertical integration strategy 1)raises a firm's capital investment in the
industry, thereby increasing business risk
2)slower to adopt technological advances or more efficient production methods when they are
saddled with older technology or facilities
3)can result in less flexibility in accommodating shifting buyer preferences
4)may not enable a company to realize economies of scale
5)poses all kinds of capacity-matching problems
6)backwards or forward integration typically calls for developing new types of resources and
capabilities
Outsourcing contracting out certain value chain activities that are normally performed in
house to outside vendors
Outsourcing can make strategic sense whenever: 1)an activity can be performed better or
more cheaply by outside specialists
2)the activity is not crucial to the firm's ability to achieve sustainable competitive advantage
3)the outsourcing improves organizational flexibility and speeds time to market
4)it reduces the company's risk exposure to changing technology and buyer preferences
|100% Correct
What do horizontal mergers and acquisitions provide? an effective means for firms to
rapidly increase the scale and horizontal scope of the core business
Mergers and acquisition strategies try to achieve these objectives 1)creating a more cost-
efficient operation out of the combined companies
2)expanding a company's geographic coverage
3)extending the company's business into new product categories
4)gaining quick access to new technologies or other resources and capabilities
5)leading the convergence of industries whose boundaries are being blurred by changing
technologies and new market opportunities
Horizontal mergers and acquisitions can strengthen a firm's competitiveness in five ways
1)by improving the efficiency of its operations
2)by heightening its product differentiation
3)by reducing market rivalry
4)by increasing the company's bargaining power over suppliers and buyers
5)by enhancing its flexibility and dynamic capabilities
Vertically integrated firm one that participates in multiple stages of an industry's value chain
system
one that performs value chain activities along more than one stage of an industry's value chain
system
Vertical integration strategies can aim at 1)full integration (participating in all stages of the
vertical chain)
2)partial integration (building positions in selected stages of the vertical chain)
3)tapered integration (a mix of in-house and outsourced activity in any given stage of the
vertical chain)
, backwards integration involves entry into activities previously performed by suppliers or
other enterprises positioned along earlier stages of the industry value chain system
For backward integration to a cost-saving and profitable strategy, a company must be able to
1)achieve the same scale economies as outside suppliers
2)match or beat suppliers' production efficiency with no drop-off in quality
Forward integration involves entry into chain system activities closer to the end user
The disdvantages of a vertical integration strategy 1)raises a firm's capital investment in the
industry, thereby increasing business risk
2)slower to adopt technological advances or more efficient production methods when they are
saddled with older technology or facilities
3)can result in less flexibility in accommodating shifting buyer preferences
4)may not enable a company to realize economies of scale
5)poses all kinds of capacity-matching problems
6)backwards or forward integration typically calls for developing new types of resources and
capabilities
Outsourcing contracting out certain value chain activities that are normally performed in
house to outside vendors
Outsourcing can make strategic sense whenever: 1)an activity can be performed better or
more cheaply by outside specialists
2)the activity is not crucial to the firm's ability to achieve sustainable competitive advantage
3)the outsourcing improves organizational flexibility and speeds time to market
4)it reduces the company's risk exposure to changing technology and buyer preferences
