Delegating Certain Noncore Functions to Outside Vendors Is a Strategy

question 7

Multiple Choice

Delegating certain noncore functions to outside vendors is a strategy known as ________.

• A) franchising
• B) licensing
• C) outsourcing
• D) diversifying

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Definitions:

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing as scale is increased.

Value Chains

The full range of activities that businesses go through to bring a product or service from conception to delivery to the end user.

Economies of Scope

Cost advantages that a business obtains due to a broader range of operations or production levels.

Horizontal Integration

A strategy where a company acquires or merges with other companies at the same stage of production in its industry, seeking to increase market share.