Question 1

The use of strategic alliances:

Accepted Answer

A)  is unlikely to yield success if partnering firms are headquartered in the same country. 
B)  may be too restrictive to facilitate entry into new markets. 
C)  usually increases the investment necessary to introduce new products. 
D)  is more frequent than other types of cooperative strategies. 
A)  is unlikely to yield success if partnering firms are headquartered in the same country. 
B)  may be too restrictive to facilitate entry into new markets. 
C)  usually increases the investment necessary to introduce new products. 
D)  is more frequent than other types of cooperative strategies.

Question 2

In the cost-minimization approach to managing competitive strategies, the relationship between the firms is based on trust of the other partner.

Accepted Answer

A) True 
 B)False

Question 3

Identify the four types of business-level cooperative strategies and the advantages and disadvantages of each.

Accepted Answer

Through vertical and horizontal compleme

Question 4

Part of the attractiveness of cross-border alliances is that the full range of entry modes is available in virtually all countries in which firms seek to geographically diversify.

Accepted Answer

A) True 
 B)False

Question 5

Although growing in popularity with small and medium-sized firms because they can gain economies of scale, large companies tend to avoid strategic alliances.

Accepted Answer

A) True 
 B)False

Question 6

One reason to use a strategic alliance in a fast-cycle market is to:

Accepted Answer

A)  maintain market stability. 
B)  share risky R&D expenses. 
C)  gain access to complementary resources. 
D)  overcome trade barriers. 
A)  maintain market stability. 
B)  share risky R&D expenses. 
C)  gain access to complementary resources. 
D)  overcome trade barriers.

Question 7

International strategic alliances are less risky than domestic strategic alliances because of diversification across countries.

Accepted Answer

A) True 
 B)False

Question 8

A cross-border strategic alliance can help foreign partners from an operational perspective because the local partner can share information about factors contributing to competitive success.

Accepted Answer

A) True 
 B)False

Question 9

BPM Corp.is a manufacturer of radar systems for regional-sized jet aircraft.The company has announced plans to enter into a joint venture with J3 Composites, a producer of advanced composite materials.The announced venture will produce a new, combined product consisting of the radar unit and protective composite cover.Which of the following ownership arrangements would be MOST typical for a joint venture?

Accepted Answer

A)  BPM will own more than 50 percent of the venture and a new company will be formed. 
B)  J3 will own more than 50 percent of the venture and a new company will be formed. 
C)  BPM and J3 will both own 50 percent of the venture and a new company will be formed. 
D)  BPM and J3 will both own 50 percent of the venture but no new company will be formed. 
A)  BPM will own more than 50 percent of the venture and a new company will be formed. 
B)  J3 will own more than 50 percent of the venture and a new company will be formed. 
C)  BPM and J3 will both own 50 percent of the venture and a new company will be formed. 
D)  BPM and J3 will both own 50 percent of the venture but no new company will be formed.

Question 10

Meredith Inc.is a manufacturer of art supplies.The company has announced plans to enter into an equity strategic alliance with JaZz Paper to develop a line of specialty papers for use with a line of specialty paints Meredith manufactures.Which of the following would be the MOST accurate interpretation of this announcement?

Accepted Answer

A)  Meredith will own a majority equity stake in the new venture. 
B)  JaZz will own a majority equity stake in the new venture. 
C)  Meredith or JaZz will own an equal equity stake in the new venture. 
D)  Either Meredith or JaZz will own a majority equity stake, but we do not know which one based on the announcement. 
A)  Meredith will own a majority equity stake in the new venture. 
B)  JaZz will own a majority equity stake in the new venture. 
C)  Meredith or JaZz will own an equal equity stake in the new venture. 
D)  Either Meredith or JaZz will own a majority equity stake, but we do not know which one based on the announcement.

Question 11

The two basic approaches to successfully manage cooperative strategic alliances involve __________ and __________.

Accepted Answer

A)  cost minimization; opportunity maximization 
B)  monitoring systems; multiple management approaches 
C)  contractual systems; financial systems 
D)  equity approaches; nonequity approaches 
A)  cost minimization; opportunity maximization 
B)  monitoring systems; multiple management approaches 
C)  contractual systems; financial systems 
D)  equity approaches; nonequity approaches

Question 12

Which of the following statements is false?

Accepted Answer

A)  Franchising is most appropriate in fragmented industries. 
B)  Franchising provides corporate growth with less risk than do mergers and acquisitions. 
C)  Successful franchising allows transfer of knowledge and skills from the franchisor to the franchisee. 
D)  Franchising agreements require more trust between firms than do other cooperative strategies. 
A)  Franchising is most appropriate in fragmented industries. 
B)  Franchising provides corporate growth with less risk than do mergers and acquisitions. 
C)  Successful franchising allows transfer of knowledge and skills from the franchisor to the franchisee. 
D)  Franchising agreements require more trust between firms than do other cooperative strategies.

Question 13

The primary responsibility of the franchisor, such as McDonald's or Hilton International, is to:

Accepted Answer

A)  learn about the brand and technology from the franchisee. 
B)  test the franchisee for potential future acquisition. 
C)  transfer to the franchisee knowledge and skills needed to compete at the local level. 
D)  provide feedback to the franchisee regarding how the franchisor could become more effective and efficient. 
A)  learn about the brand and technology from the franchisee. 
B)  test the franchisee for potential future acquisition. 
C)  transfer to the franchisee knowledge and skills needed to compete at the local level. 
D)  provide feedback to the franchisee regarding how the franchisor could become more effective and efficient.

Question 14

Nonequity strategic alliances are formed when one partner owns a much larger (or inequitable) share of the joint venture than do the remaining partner(s).

Accepted Answer

A) True 
 B)False

Question 15

The Renault Nissan alliance is an example of a __________ created to gain economies of scope by sharing resources and capabilities.

Accepted Answer

A)  diversifying strategic alliance 
B)  vertical complementary alliance 
C)  synergistic strategic alliance 
D)  nonequity-based horizontal complementary alliance 
A)  diversifying strategic alliance 
B)  vertical complementary alliance 
C)  synergistic strategic alliance 
D)  nonequity-based horizontal complementary alliance

Question 16

A __________ is a strategy in which firms share some of their resources to create economies of scope and is similar to the business-level horizontal complementary strategic alliance.

Accepted Answer

A)  joint venture 
B)  synergistic strategic alliance 
C)  diversifying strategic alliance 
D)  dynamic alliance network 
A)  joint venture 
B)  synergistic strategic alliance 
C)  diversifying strategic alliance 
D)  dynamic alliance network

Question 17

Amylin Pharmaceuticals has an alliance with Eli Lilly & Co.to produce diabetes drugs.Lilly, however, recently signed an alliance agreement with another company to also produce diabetes drugs.As a result, Amylin sued Lilly for breach of the alliance agreement.Which of the following risks of cooperative strategies is MOST likely occurring here?

Accepted Answer

A)  Having a true perception of the partner's trustworthiness 
B)  Failing to make available to its partners the resources and capabilities that it committed to the cooperative strategy 
C)  The partner misrepresenting competencies it can bring to the partnership 
D)  Opportunistic behavior 
A)  Having a true perception of the partner's trustworthiness 
B)  Failing to make available to its partners the resources and capabilities that it committed to the cooperative strategy 
C)  The partner misrepresenting competencies it can bring to the partnership 
D)  Opportunistic behavior

Question 18

A strategy in which firms work together to achieve a shared objective is a:

Accepted Answer

A)  functional-level strategy. 
B)  business-level strategy. 
C)  corporate-level strategy. 
D)  cooperative strategy. 
A)  functional-level strategy. 
B)  business-level strategy. 
C)  corporate-level strategy. 
D)  cooperative strategy.

Question 19

The opportunity-maximization approach is more difficult to establish in international relationships than in domestic relationships because of differences in all of the following EXCEPT:

Accepted Answer

A)  laws. 
B)  culture. 
C)  trade policies. 
D)  technology. 
A)  laws. 
B)  culture. 
C)  trade policies. 
D)  technology.

Question 20

__________ are LEAST likely to involve potential or current competitors.

Accepted Answer

A)  Mutual forbearance strategies 
B)  Tacit collusion strategies 
C)  Horizontal complementary strategic alliances 
D)  Vertical complementary strategic alliances 
A)  Mutual forbearance strategies 
B)  Tacit collusion strategies 
C)  Horizontal complementary strategic alliances 
D)  Vertical complementary strategic alliances

The use of strategic alliances:

In the cost-minimization approach to managing competitive strategies, the relationship between the firms is based on trust of the other partner.

Identify the four types of business-level cooperative strategies and the advantages and disadvantages of each.

Part of the attractiveness of cross-border alliances is that the full range of entry modes is available in virtually all countries in which firms seek to geographically diversify.

Although growing in popularity with small and medium-sized firms because they can gain economies of scale, large companies tend to avoid strategic alliances.

One reason to use a strategic alliance in a fast-cycle market is to:

International strategic alliances are less risky than domestic strategic alliances because of diversification across countries.

A cross-border strategic alliance can help foreign partners from an operational perspective because the local partner can share information about factors contributing to competitive success.

The two basic approaches to successfully manage cooperative strategic alliances involve and .

Which of the following statements is false?

The primary responsibility of the franchisor, such as McDonald's or Hilton International, is to:

Nonequity strategic alliances are formed when one partner owns a much larger (or inequitable) share of the joint venture than do the remaining partner(s).

The Renault Nissan alliance is an example of a __________ created to gain economies of scope by sharing resources and capabilities.

A __________ is a strategy in which firms share some of their resources to create economies of scope and is similar to the business-level horizontal complementary strategic alliance.

A strategy in which firms work together to achieve a shared objective is a:

The opportunity-maximization approach is more difficult to establish in international relationships than in domestic relationships because of differences in all of the following EXCEPT:

__________ are LEAST likely to involve potential or current competitors.

Strategic Management and Strategic Competitiveness

The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis

The Internal Organization: Resources, Capabilities, Core Competencies, and Competitive Advantages

Business-Level Strategy

Competitive Rivalry and Competitive Dynamics

Corporate-Level Strategy

Merger and Acquisition Strategies

International Strategy

Corporate Governance

Organizational Structure and Controls

Strategic Leadership

Strategic Entrepreneurship

Filters

Exam 9: Cooperative Strategy

The use of strategic alliances:

In the cost-minimization approach to managing competitive strategies, the relationship between the firms is based on trust of the other partner.

Identify the four types of business-level cooperative strategies and the advantages and disadvantages of each.

Part of the attractiveness of cross-border alliances is that the full range of entry modes is available in virtually all countries in which firms seek to geographically diversify.

Although growing in popularity with small and medium-sized firms because they can gain economies of scale, large companies tend to avoid strategic alliances.

One reason to use a strategic alliance in a fast-cycle market is to:

International strategic alliances are less risky than domestic strategic alliances because of diversification across countries.

A cross-border strategic alliance can help foreign partners from an operational perspective because the local partner can share information about factors contributing to competitive success.

The two basic approaches to successfully manage cooperative strategic alliances involve __________ and __________.

Which of the following statements is false?

The primary responsibility of the franchisor, such as McDonald's or Hilton International, is to:

Nonequity strategic alliances are formed when one partner owns a much larger (or inequitable) share of the joint venture than do the remaining partner(s).

The Renault Nissan alliance is an example of a __________ created to gain economies of scope by sharing resources and capabilities.

A __________ is a strategy in which firms share some of their resources to create economies of scope and is similar to the business-level horizontal complementary strategic alliance.

A strategy in which firms work together to achieve a shared objective is a:

The opportunity-maximization approach is more difficult to establish in international relationships than in domestic relationships because of differences in all of the following EXCEPT:

__________ are LEAST likely to involve potential or current competitors.

Strategic Management and Strategic Competitiveness

The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis

The Internal Organization: Resources, Capabilities, Core Competencies, and Competitive Advantages

Business-Level Strategy

Competitive Rivalry and Competitive Dynamics

Corporate-Level Strategy

Merger and Acquisition Strategies

International Strategy

Corporate Governance

Organizational Structure and Controls

Strategic Leadership

Strategic Entrepreneurship

Filters

The two basic approaches to successfully manage cooperative strategic alliances involve and .