WPC 480 Final Exam questions with
correct answers
corporate-level strategy - correct answer ✔✔specifies actions a firm takes to gain a competitive
advantage by selecting and managing a group of different businesses competing in different product
markets
economies of scope - correct answer ✔✔cost savings a firm creates by successfully sharing resources
and capabilities or transferring one or more corporate-level core competencies that were developed in
one of its businesses to another one of its businesses
corporate-level core competencies - correct answer ✔✔complex sets of resources and capabilities that
link different businesses, primarily through managerial and technological knowledge, experience, and
expertise
market power - correct answer ✔✔exists when a firm is able to sell its products above the existing
competitive level or to reduce the costs of its primary and support activities below the competitive level,
or both
multipoint competition - correct answer ✔✔exists when two or more diversified firms simultaneously
compete in the same product areas or geographical markets
vertical integration - correct answer ✔✔exists when a company produces its own inputs (backward
integration) or owns its own source of output distribution (forward integration)
financial economies - correct answer ✔✔are cost savings realized through improved allocations of
financial resources based on investments inside or outside the firm.
synergy - correct answer ✔✔exists when the value created by business units working together exceeds
the value that those same units create working independently
, business-level cooperative strategy - correct answer ✔✔is a strategy through which firms combine some
of their resources and capabilities for the purpose of creating a competitive advantage by competing in
one or more product markets.
complementary strategic alliances - correct answer ✔✔are business-level alliances in which firms share
some of their resources in complementary ways to create a competitive advantage.
Cooperative Strategy - correct answer ✔✔a means by which firms collaborate to achieve a shared
objective
corporate-level cooperative strategy - correct answer ✔✔a strategy through which a firm collaborates
with one or more companies for the purpose of expanding its operations
cross-border strategic alliance - correct answer ✔✔is a strategy in which firms with headquarters in
different countries decide to combine some of their resources and capabilities for the purpose of
creating a competitive advantage.
diversifying strategic alliance - correct answer ✔✔is a strategy in which firms share some of their
resources and capabilities to engage in product and/or geographic diversification
Equity Strategic Alliance - correct answer ✔✔an alliance in which two or more firms own different
percentages of the company they have formed by combining some of their resources and capabilities for
the purpose of creating a competitive advantage
franchising - correct answer ✔✔is a strategy in which a firm (the franchisor) uses a franchise as a
contractual relationship to describe and control the sharing of its resources with its partners (the
franchisees)
joint venture - correct answer ✔✔is a strategic alliance in which two or more firms create a legally
independent company to share some of their resources to create a competive advantage
network cooperative strategy - correct answer ✔✔a strategy where several firms agree to form multiple
partnerships to achieve shared objectives
correct answers
corporate-level strategy - correct answer ✔✔specifies actions a firm takes to gain a competitive
advantage by selecting and managing a group of different businesses competing in different product
markets
economies of scope - correct answer ✔✔cost savings a firm creates by successfully sharing resources
and capabilities or transferring one or more corporate-level core competencies that were developed in
one of its businesses to another one of its businesses
corporate-level core competencies - correct answer ✔✔complex sets of resources and capabilities that
link different businesses, primarily through managerial and technological knowledge, experience, and
expertise
market power - correct answer ✔✔exists when a firm is able to sell its products above the existing
competitive level or to reduce the costs of its primary and support activities below the competitive level,
or both
multipoint competition - correct answer ✔✔exists when two or more diversified firms simultaneously
compete in the same product areas or geographical markets
vertical integration - correct answer ✔✔exists when a company produces its own inputs (backward
integration) or owns its own source of output distribution (forward integration)
financial economies - correct answer ✔✔are cost savings realized through improved allocations of
financial resources based on investments inside or outside the firm.
synergy - correct answer ✔✔exists when the value created by business units working together exceeds
the value that those same units create working independently
, business-level cooperative strategy - correct answer ✔✔is a strategy through which firms combine some
of their resources and capabilities for the purpose of creating a competitive advantage by competing in
one or more product markets.
complementary strategic alliances - correct answer ✔✔are business-level alliances in which firms share
some of their resources in complementary ways to create a competitive advantage.
Cooperative Strategy - correct answer ✔✔a means by which firms collaborate to achieve a shared
objective
corporate-level cooperative strategy - correct answer ✔✔a strategy through which a firm collaborates
with one or more companies for the purpose of expanding its operations
cross-border strategic alliance - correct answer ✔✔is a strategy in which firms with headquarters in
different countries decide to combine some of their resources and capabilities for the purpose of
creating a competitive advantage.
diversifying strategic alliance - correct answer ✔✔is a strategy in which firms share some of their
resources and capabilities to engage in product and/or geographic diversification
Equity Strategic Alliance - correct answer ✔✔an alliance in which two or more firms own different
percentages of the company they have formed by combining some of their resources and capabilities for
the purpose of creating a competitive advantage
franchising - correct answer ✔✔is a strategy in which a firm (the franchisor) uses a franchise as a
contractual relationship to describe and control the sharing of its resources with its partners (the
franchisees)
joint venture - correct answer ✔✔is a strategic alliance in which two or more firms create a legally
independent company to share some of their resources to create a competive advantage
network cooperative strategy - correct answer ✔✔a strategy where several firms agree to form multiple
partnerships to achieve shared objectives
