Exam 7: Vertical Integration and Outsourcing

Hydrus Corp. contracted most of its business processes to various other companies. This helped the company generate immediate profits, but Hydrus was losing competitive advantage over its rivals in the long run due to its lack of innovation. Which of the following is a danger of outsourcing that Hydrus Corp. experienced?

White Flower Corp. and DLG Inc. are competitors in the crockery industry. Claude, the head of operations at White Flower, says that the company is able to undertake its in-house business processes and activities much better than DLG. This, Claude says, helps White Flower produce better quality products that DLG. In the context of vertical integration, Claude's statements refer to the concept of _________.

Which of the following best illustrates a vertically integrated company with control?

In the context of the primary reasons for vertical integration in companies, what do capabilities refer to?

Pulse Corp., a vertically integrated company, is finding it difficult to adapt to current technology that is capable of speeding up its manufacturing process. The company is used to performing work in a specific manner using the old technology. However, in order to maintain competitive advantage, it has to upgrade itself to the current technology. This scenario is an example of __________ that is one of the disadvantages of vertical integration.