Question

5. Staying within one industry through horizontal integration enables a company to allocate which resources and capabilities to compete in one area?

a. Backward in the value chain

b. Core and specialized suppliers not owned by the company

c. Managerial, financial, technological

d. Specialized assets, customers, and suppliers

6. An American car maker and a Japanese car maker have entered into a strategic alliance. Both have valuable technology that they need in order to perform their aspect of the manufacturing process for particular lines of vehicles. Since both need each other's technology, it is unlikely the other will use the proprietary information about the other to take advantage for fear of their own technology becoming disclosed. To guarantee that each partner maintains the agreement, the two companies are participating in:

a. parallel sourcing policy.

b. hostage taking.

c. quasi integration.

d. credible commitment

9. Which is NOT an example of a motive for companies to use horizontal integration?

a. High management turnover rate in the acquired company

b. Reduce industry rivalry

c. Increase bargaining power

d. Eliminate excess capacity in an industry through merging or acquisition

10. In what way does vertical integration increase product differentiation, lower cost, or reduce industry competition?

a. Exposes product quality

b. Facilitates investments in efficiency-enhancing specialized assets

c. Reduces competitive position

d. Worsens scheduling

11. In vertical integration, each stage in the chain:

a. adds value.

b. takes away value.

c. operates together.

d. supports the next stage.

12. An alternative to vertical integration that enables companies to obtain differentiation and cost savings without having to deal with the problems and costs associated with vertical integration is called:

a. uncooperative relationships.

b. horizontal integration.

c. cooperative relationships.

d. forward integration.

Answer 1

5) ANS. (c) Managerial,Financial,Technological

Staying in one industry which refers to horizontal integration helps company to all its area of financial,technological,managerial ans also fuctional capabilities on completing successfully in one area.

6)ANS. (b)Hostage Taking

since both need to use each other technology, it is unlikely the other will use the proprietary information about the other to take advantage for fear of their own technology becoming disclosed.

9)ANS. (c) increase bargaining power

As this refers to the Merging two business at same level of value chain or mostly same or different industry.

10)ANS.(b) facilitates investments in efficiency-enhancing specialized assets.

As vertical integration refers new industries are added to company to support its core business model.

11)ANS. (a) Adds value

In vertical Integration each stage in chain adds value

12) ANS. (b)Horizontal Integrations

Horizontal Integrations allows companies to obtain differentiation and cost savings without having to deal with the problems and costs associated with vertical integration