Chapter 8. Corporate Strategy: Vertical Integration and Diversification

1. Explain in detail the corporate strategy. Describe the three dimensions along which it is assessed.
2. Explain why firms need to grow, and evaluate different growth motives.
3. Explain in detail the Boundaries of the Firm
4. Describe and evaluate different options firms have to organize economic activity.
5. Describe the two types of vertical integration along the industry value chain: backward and forward vertical integration.
6. Identify and evaluate benefits and risks of vertical integration.
7. Describe and examine alternatives to vertical integration.
8. Explain in detail and evaluate different types of corporate diversification.
9. Apply the core competence-market matrix to derive different diversification strategies.
10. Explain when a diversification strategy creates a competitive advantage and when it does not.
11. Nike is a large and successful firm in the design of athletic shoes. It could easily decide to forward-integrate and manufacture the shoes it designs. Thus, the firm has a credible threat over its current outsourced manufacturers. If Nike has no intention of actually entering the manufacturing arena, is it ethical for the Nike supply chain management to bring up this credible threat during annual pricing negotiations? What are some reasons Nike may want to consider such a vertical integration more seriously?