The Main Reason That IBM Is Involved in Multiple Alliances

question 110

Multiple Choice

The main reason that IBM is involved in multiple alliances is to

• A) consolidate a fragmented industry and thus gain market power.
• B) leverage its core competencies and grow and improve its performance.
• C) capture the intangible resources of competitors in order to gain a competitive advantage against them in the future.
• D) avoid government anti-trust regulations which would apply if IBM were to acquire the firms it allies itself with.

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Definitions:

Absorption Costing

A costing method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in the cost of a product.

Variable Manufacturing Costs

Costs that fluctuate directly with the level of production output, such as the costs of raw materials and direct labor.

Selling Price

The amount a company charges for its product or service, which can impact demand, revenue, and profitability.

Direct Materials

Raw materials that can be directly identified with the production of specific goods or services.