Phoenix Guitars Is Interested in Pursuing Backward Integration to Take

question 90

Multiple Choice

Phoenix Guitars is interested in pursuing backward integration to take greater ownership of the extraction of raw materials and production of components used in its signature line of guitars. Although this approach would lower the overall cost of producing a guitar, the costs associated with producing electronic pickups for sound amplification are far greater than those associated with sourcing pickups from a reliable supplier. Which of the following approaches is likely to produce superior results?

• A) Invest in vertical integration despite the cost of producing pickups.
• B) Abandon the idea of vertical integration entirely.
• C) Pursue taper integration.
• D) Introduce a budget line of guitars to diversify the firm's offerings.

Recognize the application of leading and lagging indicators in performance measurement and strategy implementation.

Understand the concept and implications of scorecard cascading in large, decentralized organizations.

Understand the components and elements of the balanced scorecard.

Identify leading and lagging indicators in performance measurement.

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Definitions:

Cleavage

A property of minerals that allows them to break along smooth, flat surfaces based on their crystal structure.

Cleavage

A property of minerals that describes how they break along certain planes where their atomic bonding is weaker, resulting in smooth, flat surfaces.

Liquid State

A phase of matter characterized by a definite volume but no definite shape, allowing it to flow and take the shape of its container.

Atoms

Atoms are the basic units of matter, consisting of a nucleus surrounded by electrons. They are the fundamental building blocks of chemical elements.