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U.S. Chem Exam 2
Terms in this set (50)
1. Describe forward and backward integration in terms of upstream and downstream operations.
Forward integration- movement in a downstream direction
Backward integration- movement in an upstream integration
2. Describe some typical problems with backward integrations.
A lower profit margin product often makes it very difficult to recoup the investment put into the backward integration venture
3. What would be the terms involved with the acquisition of a chain of jewelry stores by chemical company and the marketing of plastic toys by a plastics manufacturer?
A chain of jewelry stores being acquired by a chemical company would be considered a diversification. The marketing of plastic toys by the plastic manufacturer would be forward integration
4. A manufacturer of aluminum foil purchases an aluminum recycling plant. They also begin to make aluminum powder for sale to trade. What terms are applicable to these operations?
The purchase of aluminum recycling plant would be backward integration. Production of aluminum powder would be horizontal integration.
5. Give some important reasons for companies to pursue various types of integration.
-Control of raw materials
-Higher value added product to sell is the largest region to pursue forward integration
-Rounding out product line for horizontal integration
6. How do divestitures mirror expansions in times of industry contraction
In times of expansion, companies will add workers and expand product lines. During difficult times, companies tend to divest and cut their work force.
7. How would you explain the favorable in balance of trade with countries like Japan?
Japan has no natural resources amenable to use in the chemical industry, while the United States has ample resources.
8. What market segment offers the best ROI?
Narrow market base
9. What is ROI?
Return on investment or a measure of how much is made for every dollar invested in the company.
10. Describe three keys to Air Products and chemicals "Game Plan." How do they avoid criticism of "Yankee Imperialism?"
- Get into markets where they can the industry leader
- Seek alliance with other companies that have technologies that can benefit Air Products to help defray R&D costs
-Push export sales
-Avoid the criticism of Yankee Imperialism by their philosophy of Think Globally, Act Locally
11. Which country currently has the top volume chemical producers in the world?
12. What is the difference between an INDA and an NDA?
Investigational New Drug Application- submitted prior to the beginning of testing on humans and will include all information gathered about the drug candidate on in vitro and animal testing.
New Drug Application- submitted at the end of clinical trials and would include information about the effects of the drug on humans.
13. Which one contains information on a new drug called?
The New Drug Application (NDA)
14. What is a pilot plant? What advantages and disadvantages are there to building a pilot plant?
A small-scale version of a full-scale manufacturing facility. Operates at 5-10% the capacity of the full scale
-Test factory equipment
-Gather info about manufacturing process
-Change design to full scale manufacturer
-Time delay, allow competitor to move into market niche
-Decision what to do with pilot plant after the full scale facility is done
15. What are the steps in testing a new drug called?
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