Globus Test 3 Questions with Complete Solutions (Latest 2025) Corporate Strategy - Correct Answers ✅the decisions that senior management makes and the goal-directed actions it takes to gain and sustain competitive advantage in several industries and markets simultaneously
-vertical integration: industry value chain describes the
transformation of raw materials into finished goods and services along distinct vertical changes
-diversification: what range of products and services should
the company offer?
-geographic scope: where should the company compete
geographically in terms of regional, national, or international markets?Why firms need to grow? - Correct Answers ✅1. increase profits
- lower costs
- increase market power
- reduce risk
- motivate management
transaction cost economics - Correct Answers ✅a theoretical framework in strategic management to explain and predict the boundaries of the firm, which is central to 1 / 3
Globus Test 3 Questions with Complete Solutions (Latest 2025) formulating a corporate strategy that is more likely to lead to competitive advantage transaction costs - Correct Answers ✅all internal and external costs associated with an economic exchange, whether within a firm or in markets external transaction costs - Correct Answers ✅costs of searching for a firm or an individual with whom to contract, and then negotiating, monitoring, and enforcing the contract internal transaction costs - Correct Answers ✅costs pertaining to organizing an economic exchange within a hierarchy; also called administrative costs Backward vertical integration - Correct Answers ✅changes in an industry value chain that involve moving ownership of activities upstream to the originating (inputs) point of the value chain Forward vertical integration - Correct Answers ✅changes in an industry value chain that involve moving ownership of activities closer to the end (customer) point of the value chain Benefits of Vertical Integration - Correct Answers ✅- lowering costs 2 / 3
Globus Test 3 Questions with Complete Solutions (Latest 2025) -improving quality -facilitating scheduling and planning -facilitating investments in specialized assets -securing critical supplies and distribution channels Risks of Vertical Integration - Correct Answers ✅increasing costs, reducing quality, reducing flexibility, increasing the potential for legal repercussions taper integration - Correct Answers ✅a way of orchestrating value activities in which a firm is backwardly integrated but also relies on outside market firms for some of its supplies, and/or is forwardly integrated but also relies on outside market firms for some of its distribution strategic outsourcing - Correct Answers ✅moving one or more internal value chain activities outside the firm's boundaries to other firms in the industry value chain
- main types of business diversification - Correct Answers
✅single business: low level of diversification. derives more
than 95 percent of its revenues from 1 business.
dominant business: derive between 70-95 percent of its
revenues from a single business but it peruses at least one other business activity
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