Exam 9: Cooperative Strategy

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

In a(n) ____, two or more firms create a legally independent company to share some of their resources and capabilities to develop a competitive advantage.

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

Firms in a standard-cycle market may form alliances in order to:

All of the following are business-level cooperative strategic alliances EXCEPT:

A manufacturer of specialty jams and jellies has decided to ally itself with an orchard and vineyard growing rare strains of fruit. This is a(n) ____ strategy.

Moon Flower cosmetics company 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 in the United States. Beyond being a cross-border alliance, this partnership can be called a(n):

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

One disadvantage of developing effective monitoring systems to manage a strategic alliance is that:

A cooperative strategy is a means by which firms work together to achieve a shared objective.

Strategic alliances have become the cornerstone of many firms' competitive strategy, particularly large global competitors.

Tacit collusion is not explicitly illegal in the United States even though it results in higher prices for consumers.

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

The risks of being accused of collusion are MOST likely under what type of alliance?

Some cooperative strategies fail when it is discovered that a firm has misrepresented the competencies it can bring to the partnership.

Explain the rationales for a cooperative strategy under each of the three types of basic market situations (i.e., slow, standard, and fast cycles).

Using business-level strategic alliances to hedge against risk and uncertainty is most common in the slow-cycle markets.

Firms entering into synergistic strategic alliances expect to attain:

A stable alliance network is used in industries characterized by frequent product innovations and short product life cycles.

Research in the airline industry suggests that tacit collusion reduces service quality and on-time performance.