Starbucks Owns and Operates Most of Its Retail Outlets; McDonalds

question 1

Multiple Choice

Starbucks owns and operates most of its retail outlets; McDonalds franchises most of its retail outlets.An advantage of franchising over vertical integration is:

• A)Franchising permits superior coordination of retail activities with upstream activities.
• B)Franchising subjects the operators of retail outlets being subject to "high-powered" incentives.
• C)Franchising permits more effective quality control of the retail outlet.
• D)Franchising is always more profitable than vertical integration because the franchisor does not bear the costs of owning the retail outlets and paying their staff.

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Definitions:

Dominance Hierarchy

A social organizing principle where individuals within a group are ranked relative to each other in terms of authority, status, and access to resources.

Socio-Economic Status

An individual or group's position within a hierarchical social structure, which is determined by their income, education, occupation, and social network.

Epinephrine

A hormone and neurotransmitter also known as adrenaline, involved in the body's fight-or-flight response, increasing heart rate and blood pressure, and expanding air passages of the lungs.

Norepinephrine

A neurotransmitter and hormone involved in the body's fight or flight response, playing a key role in attention and reactions to stress.