Bus 401 Vanderkelen Midterm 2 || Guaranteed Pass.
Corporate Strategy correct answers Search for value and competitive advantages through
participation in several markets.
Vertical Integration correct answers Movement into adjacent markets by a firm along its own
value chain. Buying buyers/suppliers. moving backwards towards raw materials = backwards
integration. Moving forwards towards sales= forward integration.
Horizontal Diversification correct answers Movement into unrelated or adjacent market not in a
firm's value chain. Ex: selling products to new customer groups, new products/services to
existing customers, or new products to new customers.
single business correct answers A firm earning more than 95 percent of revenues from a single
line of business.
dominant vertical business correct answers A firm that earns more than 70 percent of revenues
from its main line of business and the rest from businesses located along the value chain.
dominant business correct answers A firm that earns more than 70 percent of revenue from its
main line of business and the remainder from other lines across different value chains.
related-constrained diversification correct answers A firm that earns less than 70 percent of its
revenue from its main line of business, and its other lines of business share product,
technological, and distribution linkages with the main business.
related-linked diversification correct answers A firm that operates in related markets, but fewer
linkages exist between the new and existing markets than the elements create separately.
Unrelated Diversified Firm correct answers Competes in product categories and markets with
few or no links between them.
, Adjacent Market correct answers Market/Industry that's closely related to market/industries that
it currently competes in.
Slack correct answers Unused resource capacity
Core Competencies (Shared Knowledge) correct answers Collective Knowledge that can be
shared throughout an organization to create value.
Synergy correct answers Action between different elements of a system that creates more value
together than separate. The whole exceeds sum of parts.
Ex: Disney's movies related to parks, adds more value together.
Business Model correct answers A method to enable creation and exchange of value between
companies and their customers.
The plan and set of activities implemented by a company to offer unique value and generate
revenue and make profit from operations.
Economy of Scope correct answers Average total cost of production decreases as a result of
increasing the number of different goods produced.
Ex: Delta in freight bus, loads freight items in unused cargo space of passenger planes.
Economies of Scale correct answers A reduction in costs per unit due to increases in efficiency of
production as the number of goods being produced increases.
Why Economies of Scale Lower Costs correct answers Ability to Spread Fixed Costs:
-Production: Property, plant and
equipment.
-Non-production: R&D,
Corporate Strategy correct answers Search for value and competitive advantages through
participation in several markets.
Vertical Integration correct answers Movement into adjacent markets by a firm along its own
value chain. Buying buyers/suppliers. moving backwards towards raw materials = backwards
integration. Moving forwards towards sales= forward integration.
Horizontal Diversification correct answers Movement into unrelated or adjacent market not in a
firm's value chain. Ex: selling products to new customer groups, new products/services to
existing customers, or new products to new customers.
single business correct answers A firm earning more than 95 percent of revenues from a single
line of business.
dominant vertical business correct answers A firm that earns more than 70 percent of revenues
from its main line of business and the rest from businesses located along the value chain.
dominant business correct answers A firm that earns more than 70 percent of revenue from its
main line of business and the remainder from other lines across different value chains.
related-constrained diversification correct answers A firm that earns less than 70 percent of its
revenue from its main line of business, and its other lines of business share product,
technological, and distribution linkages with the main business.
related-linked diversification correct answers A firm that operates in related markets, but fewer
linkages exist between the new and existing markets than the elements create separately.
Unrelated Diversified Firm correct answers Competes in product categories and markets with
few or no links between them.
, Adjacent Market correct answers Market/Industry that's closely related to market/industries that
it currently competes in.
Slack correct answers Unused resource capacity
Core Competencies (Shared Knowledge) correct answers Collective Knowledge that can be
shared throughout an organization to create value.
Synergy correct answers Action between different elements of a system that creates more value
together than separate. The whole exceeds sum of parts.
Ex: Disney's movies related to parks, adds more value together.
Business Model correct answers A method to enable creation and exchange of value between
companies and their customers.
The plan and set of activities implemented by a company to offer unique value and generate
revenue and make profit from operations.
Economy of Scope correct answers Average total cost of production decreases as a result of
increasing the number of different goods produced.
Ex: Delta in freight bus, loads freight items in unused cargo space of passenger planes.
Economies of Scale correct answers A reduction in costs per unit due to increases in efficiency of
production as the number of goods being produced increases.
Why Economies of Scale Lower Costs correct answers Ability to Spread Fixed Costs:
-Production: Property, plant and
equipment.
-Non-production: R&D,
