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GUIDED CASE; LVMH CHAPTER 10 TEST QUESTIONS AND ANSWERS
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GUIDED CASE; LVMH CHAPTER 10 TEST QUESTIONS AND ANSWERS...
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How does LVMH profit from economies of scale?a. It can more readily afford to open a new store in a desirable location.
b. It can open more stores at a lower cost in a wider range of locations.
b. It can produce more things for a lower cost than its competitors.
d. It can establish pricing on a sliding scale based on each consumer's ability to
pay. - Answer a.
LVMH attracts and keeps managers who may move between firms, enhancing
their talents and pursuing a successful career path. This mobility of managers
also implies that LVMH has successfully addressed what possible acquisition
pitfall?
a. Overestimating economic benefits b. Integrating acquired companies c.
Acquisition costs d. Agency issues. - Answer b.
Which label best fits LVMH's diversification strategy?
a. Value-chain diversification b. Constrained diversification c. Related
diversification d. Unrelated diversification (Answer: c)
The economy is one factor in the environment that might influence the success
of a diversification strategy. How have environmental changes affected
LVMH's sales?
a. As the global economy has slowed, the emphasis on high-priced luxury
products has resulted in a decrease in sales.
b. As the world's super-wealthy population has grown, so has the desire for
luxury items.
c. The additional expenditures connected with ethical sourcing, which
customers increasingly expect, have raised manufacturing costs and decreased
profitability.
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