SOLVED

31) According to the author, which of the following best explains the lack of multinational business activity in sub-Saharan Africa? A) non-standard market practices and procedures B) nonexistent distribution infrastructures C) uneducated, unskilled labor pools D) low economic development E) significant political risk 32) The LEAST likely reason that manufacturers vertically integrate is to ________. A) handle thin markets B) learn from customers C) achieve economies of scale D) reduce performance ambiguity E) cope with environmental uncertainty 33) A manufacturer of a discontinuous innovation would most likely vertically integrate forward because of ________. A) idiosyncratic knowledge B) performance ambiguity C) limited infrastructures D) unreliable outputs E) market demands 34) According to the text, the purchase of Lens Crafters by Luxottica provided the manufacturer with an “observatory” to ________. A) monitor distribution B) establish brand equity C) motivate salespeople D) learn from customers E) cover the market 35) Intermarché best serves as an example of a firm that has engaged in ________. A) localization B) global outsourcing C) forward integration D) mass merchandising E) backward integration 36) According to the text, the make-or-buy decision begins with the base case that ________. A) outsourcing is more attractive than vertical integration B) vertical integration offers higher ROI than outsourcing C) idiosyncratic assets decrease with environmental uncertainty D) backward integration is more profitable than forward integration E) outsourcing is best when company-specific capabilities are tangible 37) Which of the following is most likely a characteristic of relational governance? A) employees monitored and motivated completely by a third party B) major decisions formed and implemented by a third party C) costs and benefits shared by a third party and the principal D) brand equity established and maintained by a third party E) risks and responsibilities controlled by the principal 38) Charlton Manufacturing relies on manufacturers’ representatives, independent wholesalers, and third-party retailers to perform channel functions. Charlton Manufacturing is most likely engaged in _________. A) quasi-vertical integration B) classical market contracting C) backward integration D) forward integration E) relational governance 39) Which term refers to the revenues that accrue under vertical integration minus the direct costs incurred after integrating? A) overhead B) variable costs C) fixed costs D) net effectiveness E) return on investment 40) Which statement about vertical integration in an uncertain environment is most likely true? A) Backward vertical integration is best for all firms. B) Vertical integration is best for multinational corporations. C) Outsourcing is best for firms with significant specificities. D) Outsourcing will lead to far less performance ambiguities. E) Outsourcing is best for firms without significant specificities. 41) Franchising exhibits characteristics of a quasi-vertical integration. 42) Overhead refers to the revenues that accrue under vertical integration minus the direct costs incurred after integrating. 43) Since upstream and downstream channel activities are so similar and conform to the same financial models, many firms decide to engage in vertical integration. 44) Research indicates that under normal circumstances in developed economies, vertical integration is more efficient than outsourcing and should be viewed as the default option for most firms. 45) The greater the value of company-specific capabilities, the greater the economic rationale for th