428final_prc - 1. The risks of vertical integration include...

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1. The risks of vertical integration include all of the following except A) costs and expenses associated with increased overhead and capital expenditures. B) lack of control over valuable assets. C) problems associated with unbalanced capacities along the value chain. D) additional administrative costs associated with managing a more complex set of activities. 2. All of the following are guidelines for managing strategic alliances except A) establishing a clear understanding between partners. B) relying primarily on a contract to make the joint venture work. C) not shortchanging your partner. D) working hard to ensure a collaborative relationship between partners. 3. In managing a firm's portfolio, the BCG matrix would suggest that A) “dogs” should be invested in to increase market share and become cash cows. B) “stars” are in low growth markets and can provide excess cash to fund other opportunities. C) “question marks” can represent future “stars” if their market share is increased. D) “cash cows” require substantial cash outlays to maintain market share. 4. Which of the following statements regarding internal development as a means of diversification is false : A) Many companies use internal development to extend their product lines or add to their service offerings. B) An advantage of internal development is that it is generally faster than other means of diversification and firms can benefit from speed in developing new products and services. C) The firm is able to capture the wealth created without having to “share the wealth” with alliance partners. D) Firms can often develop products or services at a lower cost if they rely on their own resources instead of external funding. 5. Philip Morris bought Miller Brewing and used its marketing expertise to improve Miller's market share. This justification for diversification is best described as A) utilizing common infrastructures. B) capitalizing on core competencies. Page 1
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C) reducing corporate risk. D) using portfolio analysis. 6. An antitakeover tactic in which existing shareholders have the option to buy additional shares of stock at a discount to the current market price is called ___________. A) greenmail B) a poison pill C) a golden parachute D) scorched earth 7. Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input into its manufacturing process. This is an example of A) leveraging core competencies. B) sharing activities. C) vertical integration. D) pooled negotiating power. 8. When management uses common production facilities or purchasing procedures to distribute different but related products, they are A) building on core competencies. B) sharing activities.
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This note was uploaded on 07/03/2011 for the course ECON 101 taught by Professor Ramiz during the Spring '11 term at Abilene Christian University.

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428final_prc - 1. The risks of vertical integration include...

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