Which of the following is typically the strategic impetus for forward vertical integration? Show to charge lower retail prices and thereby attract a bigger, more loyal clientele of customers to make it easier to expand the company's product line to gain better access to end users and better market visibility to achieve greater control over advertising and in-store retail merchandising to gain better access to greater economies of scale to gain better access to end users and better market visibility Which of the following is not one of the principal offensive strategy options? adopting and improving on the good ideas of other companies launching preemptive strikes blocking the avenues open to challengers attacking competitors' weaknesses offering an equal or better product at a lower price blocking the avenues open to challengers Among the purposes of defensive strategies are to restrict a competitive attack by a challenger, weaken the impact of any attack that occurs, and influence challengers to aim their offensive efforts at other rivals. In which of the following situations is being first to initiate a particular move not likely to result in a positive payoff? when potential buyers are skeptical about the benefits of a new technology or product being pioneered by a first mover when pioneering helps build up a firm's image and reputation with buyers when first-time buyers remain strongly loyal to a pioneering firm in making repeat purchases when moving first can constitute a preemptive strike, making imitation extra hard or unlikely when moving first can result in a cost advantage over rivals when potential buyers are skeptical about the benefits of a new technology or product being pioneered by a first mover Which one of the following is not a good type of rival for an offensive-minded company to target? market leaders that are vulnerable runner-up firms with weaknesses in areas where the challenger is strong small local and regional companies with limited capabilities other offensive-minded companies with a sizable war chest of cash and marketable securities struggling enterprises that are on the verge of going under other offensive-minded companies with a sizable war chest of cash and marketable securities Being first to initiate a particular move can have a high payoff when early commitments to new technologies, new-style components, new or emerging distribution channels, and so on can produce an absolute cost advantage over rivals. first-time customers remain strongly loyal to pioneering firms in making repeat purchases. moving first constitutes a preemptive strike, making imitation extra hard or unlikely. All of these choices are correct. Which one of the following statements about merger and acquisition strategies is true? Merger and acquisition strategies are nearly always a superior strategic alternative to forming alliances or partnerships with these same companies. Merger and acquisition strategies tend to be far more successful than forming strategic alliances and cooperative partnerships with other companies. Mergers and acquisitions do not always produce the hoped-for outcomes. Cost savings may prove smaller than expected. Gains in competitive capabilities may take substantially longer to realize or may never materialize. Efforts to mesh the corporate cultures can stall due to formidable resistance from organization members. Mergers and acquisition strategies are very high risk because of the financial drain of using the company's cash resources to accomplish the merger or acquisition. Merger and acquisition strategies are one of the best ways for helping a company strengthen its brand image. Mergers and acquisitions do not always produce the hoped-for outcomes. Cost savings may prove smaller than expected. Gains in competitive capabilities may take substantially longer to realize or may never materialize. Efforts to mesh the corporate cultures can stall due to formidable resistance from organization members. Which of the following questions should companies ask before seeking a first-mover advantage? Are the costs of pioneering much higher than being a follower, and will only negligible buyer loyalty or cost savings accrue to the pioneer? Is new infrastructure needed before market demand can surge? Are our skills, know-how, and products easily copied, or could they even be bested by fast-followers and late movers? How rapid is technological change, and will follow-on rivals find it easy to derail us with next-generation products of their own? Two answers are correct: Is new infrastructure needed before market demand can surge? and How rapid is technological change, and will follow-on rivals find it easy to derail us with next-generation products of their own? Two answers are correct: Is new infrastructure needed before market demand can surge? and How rapid is technological change, and will follow-on rivals find it easy to derail us with next-generation products of their own? Experience indicates that strategic alliances have a high "divorce rate." A blue ocean strategy involves abandoning efforts to beat out competitors in existing markets and, instead, inventing a new industry or distinctive market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand.
Which of the following is not a potential advantage of backward vertical integration? adds to a company's differentiation capabilities and perhaps achieves a differentiation-based competitive advantage lessens a company's vulnerability to powerful suppliers inclined to raise prices at every opportunity spares a company the uncertainty of being dependent on suppliers for crucial components or support services offers enhanced R&D capability, better opportunity to establish a core competence in supply chain management, more flexibility in incorporating state-of-the-art parts and components, and better overall product quality contributes to a better-quality product/service offering offers enhanced R&D capability, better opportunity to establish a core competence in supply chain management, more flexibility in incorporating state-of-the-art parts and components, and better overall product quality Which of the following is not a strategic disadvantage of vertical integration? It greatly reduces the opportunity for capturing maximum scale economies and achieving the lowest possible operating costs. Vertical integration increases a firm's capital investment in the industry. Integrating into more industry value chain segments increases business risk if industry growth and profitability sour. Vertically integrated companies are often slow to embrace technological advances or more efficient production methods when they are saddled with older technology or facilities. Integrating backward potentially results in less flexibility in accommodating shifting buyer preferences when a new product design doesn't include parts and components that the company makes in-house. It greatly reduces the opportunity for capturing maximum scale economies and achieving the lowest possible operating costs. Which of the following is not a typical reason that many alliances do not live up to expectations? inability of partners to work well together emergence of more attractive technological paths changing conditions make the purpose of the alliance obsolete disagreement over how to divide the added market share and profits gained from joint collaboration diverging objectives and priorities disagreement over how to divide the added market share and profits gained from joint collaboration The most long-lasting strategic alliances (1) involve collaboration with suppliers or distribution allies, or (2) conclude that continued collaboration is in their mutual interest, perhaps because new opportunities for learning are emerging. Which one of the following is not a strategic choice that a company must make to complement and supplement its choice of one of the five generic competitive strategies? whether and when to go on the offensive and initiate aggressive strategic moves to improve the company's market position, or to go on the defensive which value chain activities, if any, should be outsourced whether to employ a low-cost strategy, a differentiation strategy, or a hybrid strategy whether to integrate forward or backward into more stages of the industry value chain whether to enter into strategic alliances or collaborative partnerships whether to employ a low-cost strategy, a differentiation strategy, or a hybrid strategy Architects of mergers and acquisition strategies typically set sights on which of the following objectives? revamping a company's value chain facilitating the employment of both offensive and defensive strategies creating a more cost-efficient operation, expanding a company's geographic coverage, and extending a company's business into new product categories gaining quick access to new technologies or other resources and competitive capabilities, and leading the convergence of industries whose boundaries are being blurred by changing technologies and new market opportunities Two answers are correct: creating a more cost-efficient operation, expanding a company's geographic coverage, and extending a company's business into new product categories, and gaining quick access to new technologies or other resources and competitive capabilities, and leading the convergence of industries whose boundaries are being blurred by changing technologies and new market opportunities Two answers are correct: creating a more cost-efficient operation, expanding a company's geographic coverage, and extending a company's business into new product categories, and gaining quick access to new technologies or other resources and competitive capabilities, and leading the convergence of industries whose boundaries are being blurred by changing technologies and new market opportunities Companies are often motivated to enter into strategic alliances or cooperative arrangements in order to expedite the development of promising new technologies or products. overcome any deficits in their own technical and manufacturing expertise. bring together the personnel and expertise needed to create desirable new skill sets and capabilities. acquire or improve market access. expedite the development of promising new technologies or products. overcome any deficits in their own technical and manufacturing expertise. bring together the personnel and expertise needed to create desirable new skill sets and capabilities. acquire or improve market access. Strategic alliances are formal agreements between two or more companies to work cooperatively toward some common objective. Which of the following is not an advantage of outsourcing the performance of certain value chain activities to outsiders? being able to reduce distribution costs by eliminating the use of wholesale distributors and retail dealers and, instead, selling direct to end-users at the company's website allowing a company to reduce costs if the activity is not crucial to the firm's ability to achieve sustainable competitive advantage and won't hollow out its capabilities, core competencies, or technical know-how improving organizational flexibility and speeding time to market allowing a company to concentrate on its core business, leverage its key resources and core competencies, and do even better what it already does best being able to reduce the company's risk exposure to changing technology and/or buyer preferences being able to reduce distribution costs by eliminating the use of wholesale distributors and retail dealers and, instead, selling direct to end-users at the company's website A hit-and-run or guerrilla warfare type of offensive strategy involves surprising moves by small challengers that have neither the resources nor the market visibility to mount a full-fledged attack on industry leaders. Which of the following is an example of forward vertical integration?Answer and Explanation: The answer here is option "B", a car company opening its own dealerships to sell its products directly to customers.
What was vertical integration quizlet?vertical integration is the process in which several steps in the production and/or distribution of a product or service are controlled by a single company or entity, in order to increase that company's or entity's power in the marketplace.
How has vertical integration aided the organization in building competitive advantage?Vertical integration requires a company's direct ownership of suppliers, distributors, or retail locations to obtain greater control of its supply chain. The advantages can include greater efficiencies, reduced costs, and more control along the manufacturing or distribution process.
Which of the following is a potential advantage of backward vertical integration?What makes backward vertical integration such an attractive strategic option is the opportunity to capture the profit margins of suppliers and thereby increase the company's own profitability.
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Which of the following is typically the strategic impetus for forward vertical integration quizlet?
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