Vertical coordination can facilitate stronger customer-seller ties but at the same time may increase the risk to the customer's and supplier's specific investments. What are specific investments and why are they risky?
What will be an ideal response?
Specific investments are those expenditures tailored to a particular company and value chain partner. These might include investments in company-specific training, equipment, and operating procedures or systems. Because these investments are partially sunk, they lock the firm that makes them into a particular relationship. A buyer may be vulnerable to holdup because of switching costs; a supplier may be more vulnerable to holdup in future contracts because of dedicated assets and/or expropriation of technology/knowledge.
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Supercenters retail grocery items as well as a huge selection of nonfood merchandise
Indicate whether the statement is true or false
Which of the following is not a critical element in a total quality management system?
a. employee involvement b. activity-based costing c. continuous improvement d. problem prevention emphasis
A good positioning statement should help marketers
A) find the best distribution channels for their products. B) conduct effective interviews of new sales personnel. C) understand what consumers think and will learn about their products. D) determine which department public relations reports to in an organization. E) avoid using promotion to sell their products.
When new organizations and jobs fuse together diverse knowledge and experience, relevant markets appear more like ________.
A. fuzzy markets B. knowledge markets C. monopolies D. defined markets E. equity firms