You have become the owner-manager of a small local bubble tea seller that has outlets in 10 prime shopping-centre locations across Singapore. Given the structure of this market discussed in question 3, you are considering vertical and horizontal integration. Using the theory of the optimal boundary of the firm, discuss the make-or-buy decision as well as the scope for horizontal integration and diversification of your firm. What stages of the vertical chain should you consider conducting in-house? What other horizontal markets may you integrate into?
QUESTION 4
You have become the owner-manager of a small local bubble tea seller that has outlets in 10 prime shopping-centre locations across Singapore. Given the structure of this market discussed in question 3, you are considering vertical and horizontal integration. Using the theory of the optimal boundary of the firm, discuss the make-or-buy decision as well as the
scope for horizontal integration and diversification of your firm. What stages of the vertical chain should you consider conducting in-house? What other horizontal markets may you integrate into?
QUESTION 5
A computer manufacturer, firm A, is considering whether or not to move from the USB-C connector standard to a new, more efficient and cheaper to produce standard called USB4. Most of the accessories for firm A’s computers are produced by firm B. In turn, firm B’s accessories are mainly sold to people using firm A computers. Firm B is currently using the USB-C interface for all the accessories it makes and has been told about firm A considering USB4. Analyse the interaction between the two firms using
firms or government to make society’s best outcome more likely?
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