Quiz on Corporate and Business Strategy
ISCA PROFESSIONAL EXAMINATION
PILOT PAPER
(NOVEMBER 2013)
CORPORATE AND BUSINESS STRATEGY (CBS)
SUGGESTED SOLUTIONS
ISCA PROFESSIONAL EXAMINATION 2013 Term 2
Corporate and Business Strategy – Pilot Paper for Nov 2013
ISCA PROFESSIONAL EXAMINATION
CORPORATE AND BUSINESS STRATEGY (CBS)
15 NOV 2013
SUGGESTED SOLUTIONS
I. True or False questions (Q1 to Q10) (Total: 10 marks)
1. (F) High volume/low cost different from upward differentiation.
2. (F) Also depends on settling operations in low labor cost countries, efficiency, innovation.
3. (F) Due to duplications
4. (F) More than less
5. (F) Should be ‘and’ not ‘or”
6. (F) Should be backward, not forward
7. (F) It is for concentrated markets
8. (F)
9. (F) Mix of products, including questions marks
10. (F) It enables a grouping of specialists.
Multiple choice questions (Q11 to Q20) (Total: 10 marks)
11. A
12. B
13. D
14. E
15. C
16. A
17. C
18. A
19. B
20. A
Page 2 of 10
ISCA PROFESSIONAL EXAMINATION 2013 Term 2
Corporate and Business Strategy – Pilot Paper for Nov 2013
Part II. Open-Ended Essay (Total: 20 marks)
Looking at competitive and cost advantages, how does horizontal acquisition differ from vertical integration?
(20 marks)
In an industry, you can either chose to integrate forward or backward along the value chain. By integrating forward, you try to reach out to the final customers, and thus gain a better understanding of client needs. Moreover, forward integration allows a better tracking of sales. Another objective of forward integration is to capture the margin of the distributors, and reduce their bargaining power. Moreover, if you own or control the distribution, you can also prevent your competitors from reaching the market, a process known as market foreclosure. This can be done by a full acquisition or a quasi-vertical integration (contracting).
Looking at backward integration, it is a recommended strategy to secure an access to a
scarce
PILOT PAPER
(NOVEMBER 2013)
CORPORATE AND BUSINESS STRATEGY (CBS)
SUGGESTED SOLUTIONS
ISCA PROFESSIONAL EXAMINATION 2013 Term 2
Corporate and Business Strategy – Pilot Paper for Nov 2013
ISCA PROFESSIONAL EXAMINATION
CORPORATE AND BUSINESS STRATEGY (CBS)
15 NOV 2013
SUGGESTED SOLUTIONS
I. True or False questions (Q1 to Q10) (Total: 10 marks)
1. (F) High volume/low cost different from upward differentiation.
2. (F) Also depends on settling operations in low labor cost countries, efficiency, innovation.
3. (F) Due to duplications
4. (F) More than less
5. (F) Should be ‘and’ not ‘or”
6. (F) Should be backward, not forward
7. (F) It is for concentrated markets
8. (F)
9. (F) Mix of products, including questions marks
10. (F) It enables a grouping of specialists.
Multiple choice questions (Q11 to Q20) (Total: 10 marks)
11. A
12. B
13. D
14. E
15. C
16. A
17. C
18. A
19. B
20. A
Page 2 of 10
ISCA PROFESSIONAL EXAMINATION 2013 Term 2
Corporate and Business Strategy – Pilot Paper for Nov 2013
Part II. Open-Ended Essay (Total: 20 marks)
Looking at competitive and cost advantages, how does horizontal acquisition differ from vertical integration?
(20 marks)
In an industry, you can either chose to integrate forward or backward along the value chain. By integrating forward, you try to reach out to the final customers, and thus gain a better understanding of client needs. Moreover, forward integration allows a better tracking of sales. Another objective of forward integration is to capture the margin of the distributors, and reduce their bargaining power. Moreover, if you own or control the distribution, you can also prevent your competitors from reaching the market, a process known as market foreclosure. This can be done by a full acquisition or a quasi-vertical integration (contracting).
Looking at backward integration, it is a recommended strategy to secure an access to a
scarce