The Two Most Compelling Reasons for a Company to Pursue

question 49

Multiple Choice

The two most compelling reasons for a company to pursue vertical integration (either forward or backward) are to

• A)expand into foreign markets and/or control more of the industry value chain.
• B)broaden the firm's product line and/or avoid the need for outsourcing.
• C)enable use of offensive strategies and/or gain a first-mover advantage over rivals in revamping the industry value chain.
• D)strengthen the company's competitive position and/or boost its profitability.
• E)achieve product differentiation and/or lengthen the company's value chain to include more activities performed in-house and thereby gain greater ability to reduce internal operating costs.

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Definitions:

Marginal Tax Rate

The rate at which the last dollar of income is taxed, indicating the percentage of any additional dollar of income that will be paid in taxes.

State-Run Lotteries

Government-operated lotteries, which serve as a revenue source for the state, typically contributing to public sectors such as education.

Higher-Income Families

Refers to households that have an income level significantly above the median or average income for their area or country.

Local Governments

Governmental authorities that operate at a level below the state or national, managing local affairs such as city, town, or village administration.