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WPC 480 Midterm 2 Exam Questions and Answers
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WPC 480 Midterm 2 Exam Questions and Answers
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WPC 480 Midterm 2 Exam Questions andAnswers
coporate iistrategy ii- iiAnswers ii-determining iiboundaries iiof iia iifirm ii(scope iiof iia iifirm)
iiWhere iito iicompete?
Vertical iiIntegration ii- iiAnswers ii-process iiin iiwhich iiseveral iisteps iiin iithe iiproduction
iiand/or iidistribution iiof iia iiproduct iior iiservice iiare ii*controlled iiand iiowned iiby iia iisingle
iicompany*
forward iiintegration ii- iiAnswers ii-takes iiinformation iientered iiinto iia iigiven iisystem iiand
iisends iiit iiautomatically iito iiall iidownstream iisystems iiand iiprocesses
buys iiapart iiof iithe iieconomic iivalue iichain iithat iihappens iiafter iimanufacturing
backward iiintegration ii- iiAnswers ii-takes iiinformation iientered iiinto iia iigiven iisystem iiand
iisends iiit iiautomatically iito iiall iiupstream iisystems iiand iiprocesses
buying iia iipart iiof iithe iieconomic iivalue iichain iithat iihappens iibefore iimanufacturing
ex. iiHermes
Boundaries iiof iithe iifirm ii- iiAnswers ii-"why iidoes iia iifirm iiexist iiand iito iiwhat iiextent
iishould iithe iifirm iiexpand?"
transaction iicost iieconomies ii- iiAnswers ii-helps iiexplain iiand iipredict iiboundaries iiof iithe
iifirm ii
helps iimanagers iidecide
-which iiactivities iito iiperform iiin iihouse ii(Internal iiCost) ii
-services iiand iiproducts iito iiobtain iifrom iithe iiexternal iimarket ii(External iiCost)
asset iispecificity ii- iiAnswers ii-unique iiassets iiwith iihigh iiopportunity iicost
ex. iiAuto iiparts iiand iiassembly
Firm iivs. iiMarket ii(make iior iibuy) ii- iiAnswers ii-Firm: iimore iicontrol iibut iiless iiflexibility
Market: iimore iiflexibility iibut iiless iicontrol
Diversification ii- iiAnswers ii-range iiof iiproducts iishould iia iifirm iioffer iiand iiwhat
iigeographic iimarkets iito iitarget
, Single iiBusiness ii- iiAnswers ii-Leverages iiits iicompetencies
ex. iiCoca-Cola, iiFacebook
Dominat iiBusiness ii- iiAnswers ii-dominant iiand iiminor iibusiness iishare iicompetencies
ex. iiHarley iiDavidson
related iiconstrained ii- iiAnswers ii-businesses iigeneral iishare iicompetencies
ex. iiNike, iiExxonMobil
related iilinked ii- iiAnswers ii-some iibusinesses iishare iicompetencies
ex. iiAmazon, iiDisney
Unrelated ii(conglomerate) iidiversification ii- iiAnswers ii-businesses iishare iifew, iiif iiany,
iicompetencies
ex. iiBerkshire iiHathway--> iiowns iiGeico ii& iiDuracell
Operational iiEconomies iiof iiScope ii- iiAnswers ii-shared iiactivities iiand iileveraging iicore
iicompetencies
Financial iiEconomies iiof iiScope ii- iiAnswers ii-Internal iiCapital iiMarkets ii(info iiprovide
iimore iiefficient iibudgeting)
Restructuring--> iiexecutives iican iirestructure iithe iibusiness iiportfolio
Boston iiConsulting iiGroup iiMatrix ii- iiAnswers ii-helps iiguide iiportfolio iiplanning
each iicategory iiwarrants iia iidifferent iiinvestment iistrategy
4 iiStrategies:
1. iiQuestion iiMark
2.Dog
3. iiCash iiCow
4. iiStar
question iimark iistrategy ii- iiAnswers ii-earning iiare iilow/unstable iior iigrowing
cash iiflow iiis iinegative
Increase iimarket iishare iior iiharvest/divest
HIGH iimarket iigrowth iiLOW iimarket iishare
dog iistrategy ii- iiAnswers ii-earnings iiare iilow
cash iiflow iiis iineutral
Harvest/divest
LOW iimarket iigrowth iiLOW iimarket iishare
Cash iiCow ii- iiAnswers ii-earnings: iihigh, iistable
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