Exam 8: Strategic Alliances

Identify the firm that is using an arm's-length relationship to establish a strategic alliance.

Pearltech Inc., an information technology company, decides to establish a business alliance in order to differentiate its products.The manager of research and development, Sanah, is willing to form an alliance only with individuals she has known for a long time or a company within Pearltech's business network.Nate, the operations head, suggests extending the prospects by looking outside their usual network.Which of the following statements strengthens Sanah's argument?

Timber Inc.enters an exclusive partnership to ally with Teal Corp.in order to enter a foreign market.Which of the following statements is likely to be true in this case?

What are the different types of nonequity alliances?

Crimson Corp., a painting unit, collaborates with a car manufacturing company.They sign a contract that specifies the tasks of each party in alliance.Which of the following is being exemplified in this scenario?

With respect to categories of issues, _____ issues deal with how decisions will be made, how profits will be split, and how disputes will be resolved.

Two organizations that are positioned at different stages along the value chain form an alliance.The contract includes the conditions under which the contract will be closed and the consequences of closure for each partner.Which of the following clauses specifies the above conditions?

A(n) _____ is a cooperative arrangement in which two or more firms combine their resources and capabilities to create new value.

Sands Inc., a financial firm, partners with another organization that is at a similar stage along the value chain.The parent organizations create a legally independent firm.However, Sands brings more resources to the new firm than the other partner.Which of the following is being exemplified in this case?

An alliance is likely to rely most on relationships between individuals when it is based on _____.

An organization forms an alliance contract.It specifies in detail the duties and obligations of each of the partners, how the profits are to be split by the partners, and the process by which disputes will be resolved.Which of the following clauses is likely to cover the duties and obligations of the partners, including warranties and minimum output levels required to satisfy the contract?

A(n) _____ is a type of contractual alliance in which a retailer may agree to provide certain customized services in order to help sell a product.

Companies have three choices-make, buy, or ally-when it comes to conducting any particular activity that needs to be done to offer a product or service to a customer.Explain the three choices and the process involved in each.

Plateus Inc., a software company, has a website that gives detailed information about partnering processes for firms that seek collaboration with Plateus.Plateus describes the terms and conditions of different grades of partnership on its website, allowing potential partners to choose which level fits them best.Through this measure, Plateus seeks to primarily achieve _____.

Green Dye Inc., a manufacturing firm that produces organic products, is approached by Zoe, a leading clothes designer owning her own label.Together, they create a line of clothes using organic dye and fabric made from pure cotton.Which of the following is likely to be the primary value created by this alliance?

A(n) _____ is a type of strategic alliance in which cooperation between firms is managed directly through contracts, without cross-equity holdings, or an independent firm being created.

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 _____.

Pharmax Inc., a pharmaceutical firm, holds annual surveys for its employees and the alliance partners' employees.After the survey, the management discusses the issues brought up by the employees and their suggestions.Conflicts are avoided by regular interaction, and any dispute that arises is resolved at an early stage.Through these measures, Pharmax seeks to primarily achieve _____.

Two organizations, Purple Inc.and Spring Corp., are positioned at a common stage of the value chain.However, they do not have a supplier-buyer relationship.They form an alliance to benefit from complementary activities.Which of the following is exemplified in this scenario?

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 _____.