Exam 8: Strategic Alliances

Zeal Inc., a software firm, decides to enter the publishing industry. While it has the financial resources required to enter the new market, it lacks the expertise and technical knowledge required to establish itself in the new industry. So, Zeal Inc. enters into strategic alliance with Chrome Corp., a leading e-publisher. Which of the following is likely to be true in this case?

A contractual alliance is preferred when:

When do firms tend to opt for equity alliances?

J.L. Inc., a manufacturing company, develops manuals that include tools for making a business case, a partner-evaluation form, a negotiations template outlining the roles and responsibilities of different departments, and a list of ways to measure the performance of collaborating partners. Through this measure, J.L. primarily seeks to achieve _________.

Which of the following is a key function of an effective dedicated alliance function?

Identify a true statement about a nonequity alliance.

Velara Inc., a healthcare company, owns 35% stake in the firm that supplies most of its raw materials. This encourages the supplier to align its incentives with Velara's needs. Which of the following is being exemplified in this case?

John requires 500 shirts of a particular fabric and quality. He partners with Loumang Inc., a fabric manufacturing company, to develop certain customized inputs. Which of the following is being exemplified in this scenario?

Which of the following statements best describes a strategic alliance?

Drew's Cafe Inc. and Cuppa Corp., two local coffee chains, combine resources to enter the global market. They retain their individual ownership; however, they agree to share production facilities and manpower, and they also decide to market their products through combined promotional tools. The arrangement made by the two retail chains to combine resources and collaborate for a common objective refers to a _________.

Sepia Inc., a fertilizer company, needs permission to test its new products on plantations owned by an agro-based industry. In return, the company is willing to pay a percentage of revenue to the agro-based industry. In this case, which of the following contractual alliances should be adopted by Sepia?

Identify a way firms create value through alliance.

In the context of the alliance lifecycle, which of the following tools are used in alliance management?

Spade Investments Corp. owns a financial stake in Loisa Inc., a manufacturing company. Spade's resources help the organization increase productivity, which results in increased sales and profits. These profits are shared among the partners in a particular ratio. In this case, the relationship between the two firms is based primarily on _________.

Stylink Inc. and Plateus Inc. formed an alliance to create and own a legally independent company. However, Stylink tried to exploit the alliance-specific investments made by Plateus. Which of the following is being exemplified in this case?

An organization wants to form a strategic alliance with another firm. The second firm is at the same level along the value chain. It cannot contribute the same level of financial resources, although it can contribute an extensive level of knowledge. In order to accommodate these factors, they decide to start a legally independent firm. Which of the following alliances will be best suited for the organization?

How can firms protect themselves against misrepresentation?

The research and development department of a pharmaceutical company is in the process of developing a new drug to cure Parkinson's disease. It requires additional resources to complete the process. To convince another pharmaceutical company to provide the necessary resources, it gives false information about how long the drug has been in the developmental pipeline and the guidelines followed in the production process. Which of the following is being exemplified in this case?

Redwood Inc. has an arm's-length relationship with Blue Ink Corp. Which of the following is likely to be true in this case?

Identify a true statement about a horizontal alliance.