Deck 14: Collaboration Strategies

Question 1

Vertically integrated means that your company owns all of the parts of the value chain.

Answer 1

True

Question 2

Vertical integration is particularly important if a technology is discrete and technical standards have not been established.

Answer 2

False

Question 3

Established companies have an advantage over new companies in the development of innovations that are based on systemic technologies

Answer 3

True

Question 4

A vertical alliance occurs when alliances are made between firms at the same stage in the value chain.

Question 5

A strategic alliance increases the expense of building the business's value chain.

Question 6

An advantage associated with strategic alliances is the reduction of antitrust problems.

Question 7

A joint venture is a legal partnership between two firms to own equity in a third firm formed by the two partners.

Question 8

Joint research is an arrangement under which one organization permits another to use its technology in return for the payment of a fee.

Question 9

An advantage associated with licensing is that it can provide a mechanism to earn a financial return on a technology that the company has developed, even if the company lacks the capabilities or resources to develop or manufacture new products or services from the technology.

Question 10

In order to make your company more effective at licensing, you need to make sure to involve legal counsel in all legal issues.

Question 11

Sun Microsystems and Microsoft considered cross-licensing as part of an effort to make their technologies compatible.

Question 12

Cross-licensing occurs when you assign some aspect of operations to another company under contract.

Question 13

Outsourcing allows companies to expand their operations without investing in additional plants and equipment or increasing their labor force.

Question 14

The costs and benefits of outsourcing suggests that you should contract out only those activities at which significant cost savings can be achieved and which are not central to the mission of your company.

Question 15

When determining whether or not to collaborate, you first need to identify the trade-offs between the different modes of doing business across several different dimensions.

Question 16

Contractual forms of doing business are more valuable in industries in which opportunities are long-lived.

Question 17

With strategic alliances there is a high chance of having antitrust problems but there is also a high chance of assisting in standard setting.

Question 18

Licensing is the fastest collaborative strategy for bringing a product to market.

Question 19

To design an effective contractual organizational arrangement, you have to verify the credentials of your transaction partners.

Question 20

Conflict in a collaborative relationship between a large and small firm may develop because new firms often want to delay the introduction of new products.

Question 21

What is it called when your company owns all of the parts of the value chain?

A) contractual
B) vertically integrated
C) horizontally integrated
D) contract manufacturing

Question 22

What is called when your company signs agreements with independent firms to provide part of the value chain?

A) contractual
B) vertically integrated
C) horizontally integrated
D) systemic

Question 23

Which of the following is a contractual part of the value chain?

A) licensing
B) joint ventures
C) strategic alliances
D) all of the above

Question 24

Under which situation would you be more likely to use a contractual mode?

A) when the technology is discrete
B) when the technology is systemic
C) when there is horizontal integration
D) could work for any of the above

Question 25

Under which situation would you be more likely to use vertical integration?

A) if a technology is discrete and technical standards have been established
B) if a technology is discrete and technical standards have not been established
C) if a technology is systemic and technical standards have been established
D) if a technology is systemic and technical standards have not been established

Question 26

With what type of technology can the value generated by the new product be reaped only if a firm has in place the other technology with which the new product will operate?

A) integrated
B) systemic
C) codified
D) discrete

Question 27

What type of technology does not require the creation of a system of other technologies to be deployed?

A) integrated
B) systemic
C) codified
D) discrete

Question 28

With what form of technology do established firms not have an advantage over new firms in the development of products based on these technologies?

A) discrete
B) codified
C) systemic
D) integrated

Question 29

What type of knowledge is easily written down and enforceable?

A) discrete
B) codified
C) systemic
D) tacit

Question 30

With what type of knowledge do people learn how to do something by doing it and usually cannot write down all of the steps in the process?

A) discrete
B) codified
C) systemic
D) tacit

Question 31

What type of knowledge makes it difficult to contract between independent organizations?

A) discrete
B) codified
C) tacit
D) systemic

Question 32

What is a relationship between two firms that work together to achieve a common business goal called?

A) strategic alliance
B) licensing
C) joint venture
D) outsourcing

Question 33

What type of contractual form of governance is made between firms at different stages of the value chain?

A) vertical venture
B) vertical alliance
C) horizontal venture
D) horizontal alliance

Question 34

What type of contractual form of governance is made between firms at the same stage in the value chain?

A) vertical venture
B) vertical alliance
C) horizontal venture
D) horizontal alliance

Question 35

What is not an advantage associated with strategic alliances?

A) helps develop new competitive advantages
B) reduces the importance of industry standards
C) reinforces market power
D) all of the above are advantages

Question 36

What is not an advantage associated with strategic alliances?

A) allows specialization of capabilities
B) facilitates learning about new markets and technologies
C) increases the cost of creating the value chain
D) allows the investigation of acquisition targets

Question 37

What is not a disadvantage associated with strategic alliances?

A) reduces the cost of creating the value chain
B) hinders the development of capabilities
C) risks the loss of proprietary knowledge
D) can create antitrust problems

Question 38

What advantage associated with strategic alliances are drug companies exploiting when they hire people with different skills and attitudes from the ones that they need to develop those drugs?

A) reinforce market power
B) facilitate learning about new markets and technologies
C) allow specialization of capabilities
D) establish technical standards

Question 39

When Imax Inc. was developing fuel cells for the army, what advantage associated with strategic alliance were they exploiting when it formed an alliance with W. L. Gore & Associates to avoid incurring the cost of creating its own fuel cell membrane from scratch?

A) reinforcing market power
B) establishing technical standards
C) allowing specialization of capabilities
D) reducing the cost of creating the value chain

Question 40

What advantage associated with strategic alliances was Sony exploiting when it partnered with Samsung to make flat-panel television sets to move up the learning curve in liquid crystal display technology?

A) allowing specialization of capabilities
B) developing new competitive advantages
C) reinforcing market power
D) establishing technical standards

Question 41

What advantage associated with strategic alliances are pharmaceutical firms trying to exploit when they form alliances with biotechnology companies after the genetic engineering revolution so that their R&D units would learn how to conduct drug development using genetic engineering and genomics?

A) facilitate learning about new markets and technologies
B) help develop competitive advantages
C) reduce the cost of creating the value chain
D) allow specialization of capabilities

Question 42

What advantage associated with strategic alliances was General Motors trying to exploit when it formed a strategic alliance with Toyota to develop common ways to make fuel cell and electronic vehicles in the hopes that it would encourage customer adoption of such vehicles?

A) reduce the cost of creating the value chain
B) facilitate learning about new markets and technologies
C) establish technical standards
D) reinforce market power

Question 43

What contractual form of governance is a legal partnership between two firms to own equity in a third firm formed by the two partners?

A) strategic alliance
B) joint venture
C) licensing
D) contract manufacturing

Question 44

What contractual form of governance did 3Com and the Chinese firm Huawei enter into when they formed H-3C to produce Ethernet switches and IP routers?

A) strategic alliance
B) licensing
C) contract manufacturing
D) joint venture

Question 45

What advantage associated with joint ventures was Samsung attempting to exploit when the formed a joint venture with Sony to make flat-panel televisions to learn how to make better displays than the versions it used in cell phones?

A) help companies to improve their efficiency
B) establish technical standards
C) help companies to learn new capabilities
D) reinforce market power

Question 46

What contractual form of governance uses an arrangement under which one organization permits another to use its technology in return for the payment of a fee?

A) alliance
B) licensing
C) joint venture
D) contract manufacturing

Question 47

What percent of Texas Instruments' net income is derived from licensing agreements?

A) 15 percent
B) 25 percent
C) 45 percent
D) 55 percent

Question 48

Which of the following is not an advantage associated with licensing?

A) provides a mechanism to earn a financial return on a technology your firm has developed
B) facilitates rapid market penetration
C) helps to avoid intellectual property disputes
D) all of the above are advantages associated with licensing

Question 49

Which of the following is something you should do to make your company more effective at technology licensing?

A) include more than just patents
B) assume that you have all the information
C) give rights to future discoveries
D) consider the agreement to be the end of the relationship

Question 50

Which of the following is something you should not do to make your company more effective at technology licensing?

A) look for comparable transactions
B) give rights to future discoveries
C) include a best effort clause
D) involve legal counsel in all legal issues

Question 51

What contractual form of governance provides a license to use a technology to only one company?

A) exclusive license
B) contract manufacturing
C) outsourcing
D) joint venture

Question 52

What contractual form of governance provides a license to use a technology to many companies?

A) contract manufacturing
B) nonexclusive licensing
C) outsourcing
D) joint ventures

Question 53

What contractual form of governance might two companies pursue when each company has patents to technologies necessary to develop a product but neither party will invest in the development of that product for fear of a patent infringement lawsuit?

A) exclusive licensing
B) nonexclusive licensing
C) cross-licensing
D) all of the above could be used

Question 54

What contractual form of governance were Sun Microsystems and Microsoft engaged in when, as part of an effort to make their technologies compatible, the two organizations each valued their own and each other's patent portfolios to determine which company would have to pay net royalties to the other?

A) exclusive licensing
B) contract manufacturing
C) nonexclusive licensing
D) cross-licensing

Question 55

What contractual form of governances involves assigning some aspect of operation to another company under contract?

A) strategic alliance
B) contract manufacturing
C) outsourcing
D) joint venture

Question 56

When auto companies like Honda or Toyota contract with engineers who are not employees to complete design work for them, they are engaged in which contractual form of governance?

A) strategic alliance
B) outsourcing
C) joint venture
D) all of the above

Question 57

What is not an advantage associated with outsourcing?

A) allows companies to not have to developing capabilities at the activities they outsource
B) allows companies to specialize in the parts of the value chain where their core capabilities lie
C) allows companies to expand their operations without investing in additional plant and equipment
D) allows a company to accelerate the pace at which it begins operations

Question 58

When companies outsource the manufacturing of their products to another company, it is called?

A) strategic alliance
B) joint venture
C) contract manufacturing
D) licensing

Question 59

Which of the following is not a dimension that needs to be considered when determining if you should collaborate with another company or go it alone?

A) mode of doing business
B) nature of technology
C) size of industry
D) strategic factor

Question 60

If your company was most concerned with getting your product as quickly as possible, which contractual form of governance would be most effective?

A) integration
B) strategic alliance
C) licensing
D) outsourcing

Question 61

Which of the contractual forms of governance has the highest cost?

A) integration
B) licensing
C) strategic alliance
D) joint venture

Question 62

If your company was particularly interested in protecting your intellectual property, which contractual form of governance would best meet your needs?

A) licensing
B) joint venture
C) strategic alliances
D) integration

Question 63

If your company was very risk adverse, what collaborative strategy would probably be best for you?

A) integration
B) strategic alliance
C) licensing
D) joint venture

Question 64

If your company was interested in maximizing the specialization of your capabilities, which collaborative strategy would work best for you?

A) strategic alliance
B) licensing
C) outsourcing
D) all of these can result in high specialization of capabilities

Question 65

Which collaborative strategy provides the greatest opportunity for the development of new capabilities?

A) outsourcing
B) integration
C) licensing
D) joint ventures

Question 66

Which collaborative strategy it best at reducing the risk of antitrust problems?

A) outsourcing
B) joint ventures
C) licensing
D) integration

Question 67

If you were interested in attempting to set a standard in an industry, which collaborative strategy would be most effective?

A) strategic alliance
B) outsourcing
C) integration
D) joint ventures

Question 68

What needs to be done to design an effective contractual arrangement?

A) conduct due diligence
B) assess the match between your business and your prospective counterparts
C) know your firm's strategy and capabilities at different parts of the value chain
D) all of the above

Question 69

What percent of all contractual business arrangements fail?

A) 20 percent
B) 35 percent
C) 50 percent
D) 65 percent

Question 70

Which of the following is not an issue that frequently arises between large and small firms when they enter a collaborative arrangement?

A) large companies are more willing to terminate the contract
B) small companies are less willing to bring marginal products to market
C) large companies frequently want to delay bringing the product to market
D) all of the above are issues

Question 71

Define and distinguish between vertical and horizontal integration. Discuss the advantages and disadvantages of both.

Question 72

Define strategic alliances and discuss their advantages and disadvantages.

Question 73

Define joint venture and discuss their advantages and disadvantages

Question 74

Define licensing and discuss what should and should not be done to make your company more effective at technology licensing.

Question 75

Define outsourcing and explain the conditions under which outsourcing would be effective.

Question 76

Describe what you would need to consider making the decision to either enter into a collaborative arrangement or go it alone.

Question 77

Describe what needs to be done to design an effective contractual organizational arrangement.

Question 78

Discuss the various managerial issues that frequently arise when collaborative agreements are arranged between large, established and small, new firms.