A firm may pursue a chaining strategy to:
A) obtain the advantages of economies of scale.
B) create product diversity.
C) generate revenue by licensing the patents it owns.
D) spread overhead costs.
E) establish several unrelated business units.

Question

Quizplus · Accepted Answer

Pursuing a chaining strategy can help a firm obtain the advantages of economies of scale, which refers to the cost advantages that accrue to a firm when it increases its production output and reduces its per-unit costs. This allows the firm to offer its products at a lower price than its competitors, which can help it gain a competitive advantage in the market. By opening multiple locations and centralizing certain functions such as purchasing and marketing, a firm can reduce its overhead costs and achieve economies of scale.

A Firm May Pursue a Chaining Strategy To