Strategic Management - Exam 3

A computer manufacturer opens retail stores to sell its computers. The manufacturer was previously selling them to distributors. This decision is a example of

• Forward Vertical Integration

• Backward vertical integration

• Forward horizontal integration

• backward horizontal integration

A smartphone manufactor decides to start manufacturing its own screens. The manufactur was previously buying them from a supplier. This decision is an example of

• forward vertical integration

• backward vertical integration.

• forward horizontal integration

• backward horizontal integration.

Why do companies exist

• create profits

• satisfy a need

• transaction cost of using the market

An airline decides to ally with another airline which has a complementary geographic footprint, this decision is an example of

• backward vertical integration.

• forward horizontal integration

• None of the above

• forward vertical integration

Vertical integration is a type of

• business strategy

• new strategy

• positive strategy

• corporate strategy

The opposition action of vertical integration is

• International diversification

• outsourcing

• alliancing

• acquiring

According to Brian Silverman, a key assumption underlying the theory of vertical integration is

• bounded rationality

• suppliers and buyers have the same size

• suppliers and buyers are located in the same country

• firms are boundryless

According to Brain Silverman, a key dimension of transactions in the theory of vertical integration is

• industry

• country

• frequency

• firms size

Is it a good idea for an employee to invest in gaining knowledge about a firms unique business processes?

• yes

• no

some empirical evidence shows that on average

• corporate diversification leads to random performance

• corporate diversification leads to superior performance

• corporate diversification leads to inferior performance(or at best has a neutral impact)

• corporate diversification leads initially to inferior performance and subsequently to superior performance.