1) Consider the following scenario: A firm acquires a strategically related target, there were 4 other bidding firms. Under what conditions, if any, can the firm that acquired this target expect to earn an economic profit from doing so? (15 points) 2) Consider the following list of strategies. In your view, which of these strategies are examples of potential economies of scope underlying a corporate diversification strategy? Which economy of scope are they? (15 points) a) WMX is a food retailer. The company decided to make a new investment and open a grocery store. It is expected that WMX and the new grocery store will use the same distribution system. b) HEXX Ski Company introduces a new line of tennis rackets. c) MBM is a fast food company producing hamburgers. As a new investment company acquired two new restaurants where customers sit at the restaurant to eat their meals. 3) Firm WFL produces flour and its major customer is a well-known bread producer OLX. OLX has some resources and capabilities (an efficient delivery system, special breads prepared by famous chefs, good packaging) that meet the VRIO criteria. If you are the top managers of WFL will you make a vertical integration and establish your bread producing company? Why? Why not? (15 points)