In Which Situation Would Horizontal Integration Be an Especially Effective

question 96

Multiple Choice

In which situation would horizontal integration be an especially effective strategy?

• A) When an organization can gain monopolistic characteristics in a particular area or region without being challenged by the federal government for "tending substantially" to reduce competition
• B) When an organization competes in a slowing industry
• C) When decreased economies of scale provide major competitive advantages
• D) When an organization has neither the capital nor human talent needed to successfully manage an expanded organization
• E) When competitors are succeeding due to managerial expertise or having particular resources an organization possesses

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Definitions:

Statement of Cash Flows

A financial document that provides a detailed analysis of a company's cash inflow and outflow over a certain period, showing how the company's cash position changes.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year or within the business's operating cycle, whichever is longer.

Net Working Capital

The gap between a firm's current assets and its current liabilities, showcasing its operational effectiveness and short-term financial stability.

Current Liabilities

Obligations that a company needs to pay within a year.