Firms sometimes 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 a number of unrelated business units.

Question

Quizplus · Accepted Answer

A chaining strategy involves opening multiple locations within a geographic region, which allows firms to achieve economies of scale in purchasing, marketing, and distribution. This results in cost savings and increased productivity that a single location would not be able to achieve. Therefore, the objective of pursuing a chaining strategy is to obtain the advantages of economies of scale.

Firms Sometimes Pursue a Chaining Strategy To