Which of the following would be a factor in the decision of strategic managers to vertically disintegrate to strengthen their core business model?
A) There is a substantial increase in low-cost, global, component parts suppliers that compete for the company's business.
B) The disadvantages of expanding the boundaries of their company by entering adjacent industries outweighs the advantages.
C) The firm's asset investments are at greater risk of rapid decrease due to technological change or changing customer demands.
D) There have been major shifts in institutional norms or competitive dynamics.
E) All of these are factors in the decision of strategic managers to vertically disintegrate to strengthen their core business model.

Question

Quizplus · Accepted Answer

All of these factors can be a reason for strategic managers to consider vertical disintegration as a way to strengthen their core business model. The increase in low-cost global component part suppliers can make it more cost-effective to outsource certain aspects of the production process. Disadvantages of expanding can include increased risk and the diversion of resources from core competencies. Rapid technological change or changing customer demands may lead to the need for more flexibility, which could be achieved through vertical disintegration. Finally, major shifts in institutional norms or competitive dynamics may require restructuring and disintegration to remain competitive.

Which of the Following Would Be a Factor in the Decision