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What should managers consider when trying to determine whether an investment creates a sustainable advantage for a firm? whether it leverage expertise expansion of scope whether it supports vertical integration next best use of resources Why is it important for managers to understand different activities in the organization when formulating a strong corporate-level strategy? to identify areas of value creation to determine who true competitors are to expand the firm's scope to improve rates of growth and expansion Based on corporate-level strategy, how can a company's business model lead to competitive advantage? by pursuing opportunities and countering threats by eliminating changes in the industry by focusing on the long-term perspective by narrowing down the industries in which the firm will compete Why are the goals of corporate-level strategy more long-term in nature than other strategies used by a firm? They focus on the short-term profitability of the business. They provide exit strategies for a business. They are used to redefine the business model. They include new businesses or industries a firm might enter in the future. How do corporate-level strategies impact the role of managers in the organization? It determines which distinctive competencies to pursue. It determines whether the manager will focus on short-term or long-term objectives. It helps managers determine how to differentiate their products. It drives their choice of functional-level strategies. How can corporate-level strategy increase profitability? by expanding the business beyond one industry by analyzing the true cost of entry by reducing the threat of damaging price competitions by maintaining functional competencies in new industries Which type of information would strategic managers find in a multibusiness model? how existing competencies can be used in a new industry whether the firm can continue to be successful in a single market threats and opportunities in the industry whether industry expansion can pass a better off test When a company decides to expand into new industries, what should it establish within its own firm in addition to a higher-level multibusiness model the value of having multiple businesses under one roof strategies for each business unit in every industry in which it competes how to focus resources and capabilities to compete successfully in its main business the additional value of the new business over the cost of buying the business Why would a business choose to pursue a single market or industry for value creation as a corporate-level strategy? It can maximize long-term profitability. It can focus resources and capabilities in one area. New industries cannot pass the better off test. The industry is stable and experiencing slow growth. How can a firm use horizontal integration to improve its potential for increased profitability? to increase competitive rivalry within the industry to maintain the current cost structure to reduce the need for differentiation to increase bargaining power over suppliers How can a company lower its cost structure and create economies of scale when horizontally integrating with another firm? increase diversification bundle products eliminate excess capacity in the industry eliminate a plant or facility Why is it important for firms to consider antitrust laws before using horizontal integration? The core industry might be altered beyond a reasonable scope. The merger or acquisition may be blocked. Transfer prices may no longer be allowed. Product quality may decline, which is a violation of the FTC. Why would a company that uses horizontal integration also use vertical integration as a corporate-level strategy? to prevent antitrust violations to support its core industry to decrease differentiation to shorten the value chain Why would a company pursuing vertical integration need to develop a multibusiness model? to explain how the new industry enhances long-term profitability to explain how to successfully compete within a single but expanded market to determine the scope and boundaries of the new firm to verify it can pass the better off test How would a multibusiness model justify the pursuit of vertical integration when a company is entering a new industry? less holdup and trust issues lower cost structure improved scheduling new value chains