Chapter 6

Question 1

a strategy that focuses on gaining long-term revenue, profits, and market value through managing operations in multiple businesses.

Answer 1

corporate-level strategy

Question 2

the process of firms expanding their operations by entering new businesses.

Answer 2

diversification

Question 3

a firm entering a different business in which it can benefit from leveraging core competencies, sharing activities, or building market power.

Answer 3

related diversification

Question 4

cost savings from leveraging core competencies or sharing related activities among businesses in a corporation.

Answer 4

economies of scope

Question 5

a firm’s strategic resources that reflect the collective learning in the organization.

Answer 5

core competencies

Question 6

having activities of two or more businesses’ value chains done by one of the businesses.

Answer 6

sharing activities

Question 7

firms’ abilities to profit through restricting or controlling supply to a market or coordinating with other firms to reduce investment.

Answer 7

market power

Question 8

the improvement in bargaining position relative to suppliers and customers.

Answer 8

pooled negotiating power

Question 9

an expansion or extension of the firm by integrating preceding or successive production processes.

Answer 9

vertical integration

Question 10

a perspective that the choice of a transaction’s governance structure, such as vertical integration or market transaction, is influenced by transaction costs, including search, negotiating, contracting, monitoring, and enforcement costs, associated with each choice.

Answer 10

transaction cost perspective