WPC 480 Chae Final Questions With Complete Solutions
6 views 0 purchase
Course
WPC 480
Institution
WPC 480
WPC 480 Chae Final Questions With
Complete Solutions
What is Vertical integration? Process where several steps in production are controlled and
owned by a single company
Forward Integration ex) pepsi concentrate controls bottlers
Backwards integration ex) manufacturer controls design process...
Transaction Costs costs associated with economic change
Internal vs external
employees pay, benefit, office space vs. contract, supervising performance, negotiating
Opportunism Willingly taking adv of others (dishonesty)
threat of opp. is highest when paired with asset specificity problem
, WPC 480 Chae Final Questions With
Complete Solutions
Asset specificity Unique assets with high opportunity cost,
most value in first use than next best use.
Should a firm make or buy? C in house < C market= vertical integrate
Make > Buy =vertical integrate, no = outsource
Which is an example of internal trans. cost?
a. pertaining to setting up a floor
b. searching for suitable manufacturer
c. negotiating prices with business consultant
d. outsourcing papyroll maintenance
e. backward vertical integration A
T/F Threat of opportunism is the least when a party to an exchange has made transaction-specific
investments F
, WPC 480 Chae Final Questions With
Complete Solutions
T/F Flexibility is most valuable when the decision-making setting faced by a firm is uncertain.
T
T/F When depending largely on an input that is valueable, rare and costly to imitate, it is optimal
to carry out the exchange on the open market F
T/F MAKE> BUY = vertically integrate T
Levels of strategy 1. Corporate (where to compete)
2. Business (how to compete)
3. Functional (how to execute)
Diversification Range of products and service a firm should offer
Types of diversification -Single business. 95, A
-Dominant business. 70-95, AB
-Related constrained. <70 ABC
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller UpperClass. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $17.99. You're not tied to anything after your purchase.