3 generic ways to expand a business correct answers -building
-acquisition
-alliance
vertical integration correct answers bring activities along a value chain into the boundary of a firm
two types of vertical integration correct answers forward and backward
two ways to govern transaction...
MGT 499 final exam(All answered)
3 generic ways to expand a business correct answers -building
-acquisition
-alliance
vertical integration correct answers bring activities along a value chain into the boundary of a firm
two types of vertical integration correct answers forward and backward
two ways to govern transactions correct answers -market using price as the governance mechanism
-hierarchy using fiat or authority as the governance mechanism
market failure correct answers market is not perfectly competitive to generate efficient price
typical conditions that can create market failure correct answers -small numberness
-uncertainty
-opportunism
-asset specificity
-frequency of transaction
3 rationales for vertical transaction correct answers -transaction cost economics (buy or make)
-resource-based view (competitive advantage consideration)
-power dependence
what creates high transaction costs? correct answers the five reasons that markets fail
PepsiCo's acquisition of bottlers is ________ and acquisition of Frito-Lay ________. correct answers
forward integration, horizontal expansion
, Luxottica is an Italia eyewear production company. During its business expansion, Luxottica's acquisition
of eyewear stores (e.g., Lens Crafter, Sunglass Hut) has helped itself gain competitive advantage through
___________. correct answers building a powerful market position
When a firm decides how to conduct a transaction (i.e., economic exchange), "buy" refers to the use of
______ and "make" refers to the use of _____. correct answers market, hierarchy
"Market failure" is likely to occur when _______. correct answers all of the above
In the milk power scandal in China in 2008, milk farmers were found to add melamine into milk
purchased by milk product producers such Mengniu. This case illustrates that ________ increases
transaction costs for milk product producers. correct answers partner opportunism
Under which of the following condition is a firm likely to pursue backward integration? correct answers
all of the above
two types of relatedness correct answers -vertical relatedness (parenting and restructuring)
-horizontal relatedness (sharing activities, core competency, and market power)
downsides of sharing activities correct answers -costs of creating sharing
-compromise the design and performance of products
-negative spillover across products
types of vertical relatedness correct answers -parenting
-restructuring
-risk management
the relationship between the degree of diversification and firm financial performance is... correct answers
inverted U-Shape
For diversified firms, horizontal relatedness refers to the relatedness between _____. correct answers
business units
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