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TerraLoc Competes in the Market for Global Positioning Devices and Services

question 49

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TerraLoc competes in the market for global positioning devices and services. The company manufactures its own GPS units, which are smaller than those of any other competitor and include a proprietary battery that lasts 200% longer than any other competitor's battery and that TerraLoc manufacturers on-site. TerraLoc also has developed proprietary software that is much faster and more precise than that of any competitor. When developing the proprietary battery, TerraLoc decided to manufacturer the battery in-house to reduce the possibility that the company it outsourced the battery manufacturing to might reverse engineer the battery and sell a similar product to competitors. This possibility was especially troubling given that the company expected a significant increase in demand due to the improved battery life. Additionally, TerraLoc sells its products and services through its own direct sales force to ensure that its representatives highlight the longer battery life of TerraLoc's units.
-TerraLoc's decision to manufacture the battery in-house is most consistent with which explanation of vertical integration?

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Definitions:

Positive Self-talk

The practice of making affirming or encouraging statements to oneself to foster a positive mindset.

Effort-to-performance Expectancy

The belief that one's effort will lead to successful performance in tasks, often associated with motivational theories.

Job Status Rewards

This refers to benefits and recognitions provided to employees based on their position or level within an organization.

Organizational Politics

Refers to activities within an organization that are aimed at improving an individual's or group's power and status, often at the expense of others.

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