Question 1

Identify and define the two different types of network strategies.

Accepted Answer

A network cooperative strategy is a cooperative strategy wherein several firms form multiple partnerships to achieve shared objectives. Stable alliance networks (primarily found in mature industries) usually involve exploitation of economies of scale or scope. In this type of network, the firms try to extend their competitive advantages to other settings while continuing to profit from operations in their core industries. Dynamic alliance networks (witnessed mainly in rapidly changing industries) are used to help a firm keep up when technologies shift rapidly by stimulating product innovation and successful market entries. Dynamic alliance networks explore new ideas and typically generate frequent product innovations with short product life cycles.

Question 2

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. C

Question 3

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 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. D

Question 4

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 5

The Renault Nissan alliance (Chapter 9 Mini Case) 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 6

A relatively young firm has developed a method of transferring photographic images of surface textures onto any type of hard surface. This potentially has a huge market in the home-decorating field as well as any hard surface that is typically painted, such as car bodies. The type of alliance partner this firm would be searching for would be one with:

Accepted Answer

A)  low-cost labor production facilities in another country. 
B)  similar products who could help the firm establish economies of scale. 
C)  access to franchises in new markets. 
D)  excess resources for investing. 
A)  low-cost labor production facilities in another country. 
B)  similar products who could help the firm establish economies of scale. 
C)  access to franchises in new markets. 
D)  excess resources for investing.

Question 7

In some countries, the only legal way for foreign firms to invest in the country is through:

Accepted Answer

A)  acquisitions. 
B)  mergers. 
C)  greenfield ventures. 
D)  strategic alliance with a local firm. 
A)  acquisitions. 
B)  mergers. 
C)  greenfield ventures. 
D)  strategic alliance with a local firm.

Question 8

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 9

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

Accepted Answer

A) True 
 B)False

Question 10

Firms in slow-cycle markets can use alliances to enter restricted markets or to establish franchises in new markets.

Accepted Answer

A) True 
 B)False

Question 11

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 12

The two types of complementary strategic alliances are:

Accepted Answer

A)  vertical and horizontal. 
B)  macro and micro. 
C)  outsourcing and insourcing. 
D)  network and complementary. 
A)  vertical and horizontal. 
B)  macro and micro. 
C)  outsourcing and insourcing. 
D)  network and complementary.

Question 13

Of the various business-level strategic alliances, ____ alliances have the most probability of creating sustainable competitive advantage, and ____ have the lowest.

Accepted Answer

A)  horizontal complementary; vertical complementary 
B)  vertical complementary; competition reducing 
C)  competition reducing; horizontal complementary 
D)  uncertainty reducing; competition reducing 
A)  horizontal complementary; vertical complementary 
B)  vertical complementary; competition reducing 
C)  competition reducing; horizontal complementary 
D)  uncertainty reducing; competition reducing

Question 14

An alliance can be used to test whether the partners would benefit from a future merger.

Accepted Answer

A) True 
 B)False

Question 15

Acquisitions are the most common cooperative strategy used in standard-cycle markets.

Accepted Answer

A) True 
 B)False

Question 16

Reduction of competition can be accomplished through all of the following EXCEPT:

Accepted Answer

A)  predatory alliances. 
B)  explicit collusion. 
C)  tacit collusion. 
D)  mutual forbearance. 
A)  predatory alliances. 
B)  explicit collusion. 
C)  tacit collusion. 
D)  mutual forbearance.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

In the Chapter 9 Mini Case, the cooperation between Fiat and Chrysler to produce a Fiat-designed car in Chrysler's Illinois factory is a(n) _________ alliance because it allows the firms to share resources and capabilities across multiple functions.

Accepted Answer

A)  synergistic 
B)  opportunistic 
C)  horizontal 
D)  diversifying 
A)  synergistic 
B)  opportunistic 
C)  horizontal 
D)  diversifying

Question 19

DDD Partners, a U.S. business consulting firm is considering a cooperative alliance with an Indian business consulting firm that has a wide practice in the Middle East and Asia. DDD has some European clients, but it sees the Middle East and Asia as growth opportunities. It hopes to learn how to navigate the different cultures and business practices in this part of the world from its alliance with the Indian firm. DDD's greatest risk here is that the Indian firm will:

Accepted Answer

A)  insist on excessively close monitoring of DDD's actions. 
B)  gain access to DDD's core competencies and use them to become a future competitor. 
C)  not fully share its intangible resources. 
D)  not make equivalent investments to the alliance as does DDD. 
A)  insist on excessively close monitoring of DDD's actions. 
B)  gain access to DDD's core competencies and use them to become a future competitor. 
C)  not fully share its intangible resources. 
D)  not make equivalent investments to the alliance as does DDD.

Question 20

Firms consider entering international alliances because multinational firms outperform firms operating only in their home markets.

Accepted Answer

A) True 
 B)False

Identify and define the two different types of network strategies.

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

The Renault Nissan alliance (Chapter 9 Mini Case) is an example of a _______ created to gain economies of scope by sharing resources and capabilities.

In some countries, the only legal way for foreign firms to invest in the country is through:

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

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

Firms in slow-cycle markets can use alliances to enter restricted markets or to establish franchises in new markets.

The use of strategic alliances:

The two types of complementary strategic alliances are:

Of the various business-level strategic alliances, alliances have the most probability of creating sustainable competitive advantage, and have the lowest.

An alliance can be used to test whether the partners would benefit from a future merger.

Acquisitions are the most common cooperative strategy used in standard-cycle markets.

Reduction of competition can be accomplished through all of the following EXCEPT:

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

In the Chapter 9 Mini Case, the cooperation between Fiat and Chrysler to produce a Fiat-designed car in Chrysler's Illinois factory is a(n) _________ alliance because it allows the firms to share resources and capabilities across multiple functions.

Firms consider entering international alliances because multinational firms outperform firms operating only in their home markets.

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

Identify and define the two different types of network strategies.

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

The Renault Nissan alliance (Chapter 9 Mini Case) is an example of a _______ created to gain economies of scope by sharing resources and capabilities.

In some countries, the only legal way for foreign firms to invest in the country is through:

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

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

Firms in slow-cycle markets can use alliances to enter restricted markets or to establish franchises in new markets.

The use of strategic alliances:

The two types of complementary strategic alliances are:

Of the various business-level strategic alliances, ____ alliances have the most probability of creating sustainable competitive advantage, and ____ have the lowest.

An alliance can be used to test whether the partners would benefit from a future merger.

Acquisitions are the most common cooperative strategy used in standard-cycle markets.

Reduction of competition can be accomplished through all of the following EXCEPT:

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

In the Chapter 9 Mini Case, the cooperation between Fiat and Chrysler to produce a Fiat-designed car in Chrysler's Illinois factory is a(n) _________ alliance because it allows the firms to share resources and capabilities across multiple functions.

Firms consider entering international alliances because multinational firms outperform firms operating only in their home markets.

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 .

Of the various business-level strategic alliances, alliances have the most probability of creating sustainable competitive advantage, and have the lowest.