QUESTION 6

1. John Deere is considering backward integration into supplying parts for their products. The suppliers hold some power since some parts are made specifically for John Deere.? This industry has slow technological change and the business environment is not dynamic. Should they backward integrate and why

   	a.	No, they will be unprepared for technological change.
   	b.	Yes, it will weaken the power of suppliers.
   	c.	Yes, they will become more profitable.
   	d.	No, they will have less flexibility to adapt their products.
   	e.	Yes, they will achieve the same scale economies.

4 points

QUESTION 7

1. How does vertical integration compare with outsourcing?

   	a.	Vertical integration creates matching problems while outsourcing doesnt
   	b.	Vertical integration and outsourcing both allow the company to reduce risk exposure to changing technology.
   	c.	Vertical integration reduces business risk while outsourcing increases it.
   	d.	Vertical integration and outsourcing are used for activities that are critical to the firms ability to achieve a sustained competitive advantage.
   	e.	Vertical integration and outsourcing try to preserve core competencies.

4 points

QUESTION 8

1. McDonalds operates worldwide. In India, some of their stores have a vegetarian menu. In Germany, they serve beer and serve wine in France. However, they still seek to maintain low costs. What is their strategy?

   	a.	Greenfield
   	b.	Exporting
   	c.	Transnational
   	d.	Multidomestic
   	e.	Global

4 points

QUESTION 9

1. You want to sell shoes in Afghanistan. The country has little infrastructure and money for American goods is limited to a few people. We are engaged in an active war there and the country has significant political unrest. What is the best entry strategy?

   	a.	Greenfield
   	b.	Franchising
   	c.	Exporting
   	d.	Licensing
   	e.	Strategic alliance

4 points

QUESTION 10

1. You manufacture smartphones and are offshoring parts of the manufacturing process to drive down costs. There is a steep learning curve in the process of some of the parts. You have found additionally that labor is highly skilled and inexpensive in China you

   	a.	Want to concentrate internal processes due to significant scale economies.
   	b.	Want to concentrate internal processes due to the steep learning curve and lower cost of manufacturing.
   	c.	You want to disperse internal processes to hedge against exchange rate risks.
   	d.	You want to disperse internal processes due to buyer related activities such as distribution.
   	e.	Want to concentrate internal processes due to the steep learning curve.