Which one of the following is NOT a problem with Vertical Integration*when technology is changing fastwhen demand is unpredictablewhen product differentiation can be madeIncreasing cost structure
Question
Which one of the following is NOT a problem with Vertical Integration*when technology is changing fastwhen demand is unpredictablewhen product differentiation can be madeIncreasing cost structure
Solution
The option that is NOT a problem with Vertical Integration is "when product differentiation can be made".
Here's why:
-
"When technology is changing fast": This can be a problem with vertical integration because if a company is fully integrated, it may be slower to adapt to new technologies. This is because it has to change its entire operation, rather than just one part of it.
-
"When demand is unpredictable": This can also be a problem with vertical integration. If a company produces all of its own materials and the demand for its product decreases, it could end up with a surplus of materials that it can't use or sell.
-
"Increasing cost structure": Vertical integration can lead to increased costs, especially in the short term. This is because the company has to invest in all the resources needed to produce its own materials.
-
"When product differentiation can be made": This is not necessarily a problem with vertical integration. In fact, it could be a benefit. If a company is vertically integrated, it has more control over its production process and can therefore make its product more unique.
Similar Questions
In some cases, backward vertical integration can increase efficiency byMultiple choice question.giving a company proprietary knowledge that is expensive to keep from rivals.coordinating production flows and preventing bottlenecks.allowing a company to outsource activities that are too costly to perform in-house.improving the competitive position of existing suppliers in the value chain.
Which of the following is NOT an advantage for a firm of vertical integration? Reduced uncertainty The ability to erect entry barriers Economies of scale A greater range of products
The two alternatives to vertical integration are which of the following?Multiple select question.strategic outsourcinghorizontal integrationtaper integrationspecialized disintegrationnominal innovation
Select all that applyUnder which of the following circumstances might backward vertical integration lower costs?Multiple select question.when the item being supplied is a minor but costly component of the final productwhen there are many suppliers competing for market position by keeping prices lowwhen there are few suppliers in the marketwhen the item being supplied is a major component of the final product
Horizontal integration can reduce Blank______.Multiple choice question.the threat of entryindustry consolidationbargaining power with suppliers in favor of the firmnon-price competition
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.