MGMT 449 Final Exam || Solved Correctly.
corporate level strategy correct answers a strategy that focuses on gaining long-term revenue,
profits, and market value through managing operations in multiple businesses
diversification correct answers the process of firms expanding their operations by entering new
businesses
related diversification correct answers a firm entering a different business in which it can benefit
from leveraging core competencies, sharing activities, or building market power
what is related diversification divided into correct answers economies of scope and market
power
what is economies of scope divided into correct answers core competencies and sharing activities
economies of scope correct answers cost savings from leveraging core competencies or sharing
related activities among business in a corporation
leveraging core competencies correct answers a firm's strategic resources that reflect the
collective learning in the organization (recycle knowledge and use it in another business or create
other products) (share & lower cost by sharing duplications)
sharing activities correct answers having activities in two or more businesses' value chains done
by one of the businesses (separate operations but a centralized business)
pooled negotiating power correct answers the improvement in bargaining position relative to
suppliers and customers
, market power correct answers firms' abilities to profit through restricting or controlling supply to
a market or coordinating with other firms to reduce investments
vertical integration correct answers an expansion of extension of the firm by integrating
preceding or successive production processes (allows building market power)
high vertical integration correct answers Company that is involved in all parts of production in
the supply chain (tesla)
low vertical integration correct answers Company that specializes in one part of production in the
supply chain (BMW)
transaction cost perspective correct answers vertical integration is better than market transactions
when transaction costs are high (low=buy from mkt)
transaction costs correct answers search, negotiating, contracting, monitoring and enforcement
costs
what are the benefits of vertical integration correct answers secure source of raw material or
distribution channels
control of valuable assets
what are the risk of vertical integration correct answers higher overhead costs and capital
expenditures
loss of flexibility
unrelated diversification correct answers a firm entering a different business that has little
horizontal interactions with other businesses in a firm (products are unrelated)
horizontal interactions correct answers -relationships among business units
corporate level strategy correct answers a strategy that focuses on gaining long-term revenue,
profits, and market value through managing operations in multiple businesses
diversification correct answers the process of firms expanding their operations by entering new
businesses
related diversification correct answers a firm entering a different business in which it can benefit
from leveraging core competencies, sharing activities, or building market power
what is related diversification divided into correct answers economies of scope and market
power
what is economies of scope divided into correct answers core competencies and sharing activities
economies of scope correct answers cost savings from leveraging core competencies or sharing
related activities among business in a corporation
leveraging core competencies correct answers a firm's strategic resources that reflect the
collective learning in the organization (recycle knowledge and use it in another business or create
other products) (share & lower cost by sharing duplications)
sharing activities correct answers having activities in two or more businesses' value chains done
by one of the businesses (separate operations but a centralized business)
pooled negotiating power correct answers the improvement in bargaining position relative to
suppliers and customers
, market power correct answers firms' abilities to profit through restricting or controlling supply to
a market or coordinating with other firms to reduce investments
vertical integration correct answers an expansion of extension of the firm by integrating
preceding or successive production processes (allows building market power)
high vertical integration correct answers Company that is involved in all parts of production in
the supply chain (tesla)
low vertical integration correct answers Company that specializes in one part of production in the
supply chain (BMW)
transaction cost perspective correct answers vertical integration is better than market transactions
when transaction costs are high (low=buy from mkt)
transaction costs correct answers search, negotiating, contracting, monitoring and enforcement
costs
what are the benefits of vertical integration correct answers secure source of raw material or
distribution channels
control of valuable assets
what are the risk of vertical integration correct answers higher overhead costs and capital
expenditures
loss of flexibility
unrelated diversification correct answers a firm entering a different business that has little
horizontal interactions with other businesses in a firm (products are unrelated)
horizontal interactions correct answers -relationships among business units
