Exam 9: Cooperative Strategy

The risks of being accused of collusion are MOST likely under which of the following types of alliance?

If a large Asian cosmetics firm was to engage in a 50-50 partnership with a large American chemical company to form a new company focused on creating advanced skin care products, this would be considered a joint venture.

Firms participate in strategic alliances for all of the following reasons EXCEPT to:

One area in which joint ventures are effective is the transfer of tacit knowledge as illustrated in the joint venture that created Shanghai GM Co.

Franchising is an alternative to pursuing growth through mergers and acquisitions.

Offshore Oil Exploration Partners (OOEP) has entered into a cooperative strategy with Malay Petroleum.The resulting documents are long, formal, and detailed.They specify detailed responsibilities of each partner and include methods of monitoring accounting and technical procedures.OOEP and Malay Petroleum are using the __________ management approach.

Cooperation in slow-cycle markets is extremely rare because these industries are declining.

Close monitoring, formal contracts, and constant vigilance against opportunism increase the probability of alliance success.

U.S.Steel and Nucor (the two remaining major players in the U.S.steel industry) have been forming alliances as a means to enter markets in Europe and Asia.The steel industry is an example of a(n) __________ market in which firms typically use alliances to gain market access.

In a vertical complementary alliance, firms share some of their resources and capabilities from the same stage of the value chain to create a competitive advantage.

In the United States, cooperative strategies to reduce competition may result in __________ if they are explicit.

Moon Flower Cosmetics Company's executives are aware that their Asian customer base is interested in advanced skin care treatments beyond Moon Flower's traditional herbal and organic compounds.Moon Flower and a large American chemical company are in discussions to create a 50-50 partnership in a new firm, which would create skin care treatments based on innovative chemical formulations that would be marketed both in Asia and the United States.Beyond being a cross-border alliance, this partnership can be called a(n):

Japanese telecom NTT DoCoMo Inc.and Chinese Internet search operator Baidu Inc.established an alliance to distribute games and other mobile-phone content.Baidu will own 80 percent of this collaboration with DoCoMo holding the remaining 20 percent.This collaborative arrangement is an example of a(n):

Network cooperative strategies among Silicon Valley firms have been successful, in part, because they are geographically close together.

A cross-border strategic alliance occurs when firms based in the same country combine their resources to create a competitive advantage that can be realized in international markets.

A strategic alliance in which the partners own different percentages of the new company they have formed is called a(n):

In a franchising strategy, the franchisee __________ to the franchisor.

Collusion is a form of cooperative strategy.

Microsoft and Nokia formed an alliance that had hundreds of pages to specify each partner's responsibilities.This would be closest to the __________ approach to managing cooperative ventures.In contrast, the Renault and Nissan formed an alliance that was based on trust, respect, and transparency.This is an example of the __________ approach to managing cooperative ventures.

Renault and Nissan Motor Company have formed vertical complementary strategic alliance to create synergy.