Question $68($Mandatory$)(1$ point$)$Question $69(1$ point$)$

The two most compelling reasons for a company to pursue vertical integration $($either forward or backward$)$

are to:

expand into foreign markets and$/$or control more of the industry value chain.

enable use of offensive strategies and$/$or gain a first$-$mover advantage over rivals in revamping the

industry value chain.

strengthen the company's competitive position and$/$or boost its profitability.

broaden the firm's product line and$/$or avoid the need for outsourcing.

In competing in foreign markets, companies find it advantageous to concentrate their

activities in a limited number of locations in all of these situations, except when

there are significant scale economies in performing an activity.

certain locations have superior resources, allow better coordination of related

activities, or offer other valuable advantages.

the addition of new production capacity will not adversely impact the supply$-$

demand balance in the local market.

there is a steep learning or experience curve associated with performing an

activity in a single location $($thus netmaking it economical to serve the whole world

market from just one or maybe a few locations$).$

the costs of manufacturing or other activities are significantly lower in some

geographic locations than in others.