Deck 8: Collaboration Strategies

Question 1

Solo internal development is,on average,a relatively fast way of developing a technology.

Answer 1

False

Question 2

A joint venture between two companies often results in a new separate company.

Answer 2

True

Question 3

Building the necessary capabilities and resources in-house reduces a firm's asset commitment.

Answer 3

False

Question 4

The pooling of supplementary resources can enable partners to achieve market power.

Question 5

Prosthesis Inc.is developing a superior prosthetic leg and has world-renowned researchers on its staff.It also has the financial and marketing resources to take the product to the market as it has done in the past.Most likely,Prosthesis will not need take on a partner.

Question 6

After licensing a technology,the firm typically has limited discretion over what it can do with the technology.

Question 7

FootsTrend Co.and AmazeDeals entered into an alliance.FootsTrend wanted access to online sales but did not have the same expertise in this field as Amaze Deals.AmazeDeals wanted to sell FootsTrend exercise mats from its online Web site.This is an example of quadrant C-individual alliance with capability transfer.

Question 8

It is unusual for a company to lack certain complementary assets required to transform a body of technological knowledge into a commercial product.

Question 9

Firms can use strategic alliances to exploit their own capabilities by leveraging them in another firm's development efforts.

Question 10

Collective research organizations can take the form of trade associations.

Question 11

A firm's effectiveness at managing its collaborations will increase with the number of collaborations to which it is committed.

Question 12

Equity ownership helps to align the incentives of the partners.

Question 13

Some firms avoid collaboration for fear of giving up their proprietary technologies.

Question 14

Product life cycles shorten with high-speed technological changes.

Question 15

Strategic fit refers to the degree to which potential partners have resources that can be effectively integrated into a strategy that creates value.

Question 16

Busche Copiers has developed and patented a new copy machine.It wishes to penetrate a wider market but is short on funds.It can use licensing arrangement to accomplish this goal.

Question 17

Some collaboration agreements include provisions for periodic auditing either by the partner organizations or a third party.

Question 18

A firm cannot collaborate with its competitor.

Question 19

Licensing a technology from another firm is typically more expensive for a licensee than developing a new technology in-house.

Question 20

Joint ventures are less appropriate than strategic alliances when a firm places great importance on access to other firms' competencies.

Question 21

ATP Tech Inc.is a firm that manufactures high quality microprocessors.The firm formed a joint venture with Ace Computers Inc.As per the agreement,ATP Tech would provide Ace Computers with the microprocessors which the latter firm would use in its desktops and laptops.However,there was no exchange of proprietary technology between the two firms.Which of the following technology alliance strategies is being used by the firms?

A) Quadrant A-individual alliance with capability complementation
B) Quadrant B-network of alliances with capability complementation
C) Quadrant C-individual alliance with capability transfer
D) Quadrant D-network of alliances with capability transfer

Question 22

Greyer Co.manufactures surgical instruments.Systems Medico establishes a contractual arrangement with Greyer Co.,according to which the firm can use Greyer manufacturing methods and management structure to produce and sell surgical instruments.Systems Medico must pay a yearly fee to Greyer Co.for the use of its trademark and manufacturing processes.In this scenario,Systems Medico is the _____.

A) licensor
B) contract manufacturer
C) licensee
D) intrapreneur

Question 23

Allured Cosmetics Co.establishes a contractual agreement with Pure Cosmetics Inc.,a manufacturing firm in the West Coast.According to the contract,Pure Cosmetics can use the manufacturing process and formulas of Allured Cosmetics Co.to produce cosmetics in return for a specific fee.Pure Cosmetics Inc.is bound to sell its products under the trade name of Allured Cosmetics and adhere strictly to its product specifications.This collaborative arrangement is most likely to be classified as _____.

A) licensing
B) outsourcing
C) a joint venture
D) capability complementation

Question 24

When technology is progressing rapidly,firms are more likely to:

A) commit themselves to fixed assets.
B) focus on developing the necessary skills in-house.
C) use linkages with other specialized firms to access resources they do not possess.
D) avoid becoming more narrowly specialized.

Question 25

Dynamix Developers Co.wants to develop its technology very fast,with low cost and low control.It would also like to leverage its existing competencies without developing new competencies,and may need to access the competencies of other firms.Which of the following is the best mode of development for Dynamix Developers to meet these criteria?

A) Solo internal development
B) Joint venture
C) License out
D) Collective research organization

Question 26

Which of the following collaborative arrangements is usually thought to offer the most opportunity for firms to access other firms' competencies?

A) Outsourcing
B) Joint venture
C) Licensing
D) Sole internal development

Question 27

True Tarmac Co.entered into an alliance with Sam's Trucks to use high tech communications to manage its trucks across the nation.In this arrangement,both firms will help each other keep a track of each other's trucks and will share their knowledge about other ways to make the businesses more effective and efficient.This alliance falls in:

A) quadrant A-individual alliance with capability complementation.
B) quadrant B-network of alliances with capability complementation.
C) quadrant C-individual alliance with capability transfer.
D) quadrant D-network of alliances with capability transfer.

Question 28

Easymake Webmakers Co.developed new Web designing software to build Web pages for its clients.However,Easymake soon realized it could make more money by selling this software to others wishing to quickly build Web pages to sell their products.Which of the following is the most appropriate strategy for Easymake?

A) It should not sell the Web designing software as it will give rise to competition on the Internet.
B) It should become a licensor of the new Web designing software.
C) It should become a licensee of the new Web designing software.
D) It should make the Web designing software available to users as open source software.

Question 29

Which of the following is true of outsourcing?

A) It involves significantly less transaction costs.
B) It is a way to meet market demand with a long-term capital commitment.
C) It is a great way for a company to develop in-house manufacturing capabilities.
D) It carries a risk of proprietary technology being expropriated by the contract manufacturer.

Question 30

Alumplus Aluminum Company has come up with a new type of metal.However,producing it would take up 75 percent of its manufacturing capacity and would hinder its ability to continue producing its other products.Alumplus Aluminum hires LM Group of Manufacturers to manufacture the new type of metal.This collaborative arrangement is most likely to be classified as _____.

A) outsourcing
B) disintermediation
C) capability complementation
D) solo internal development

Question 31

Greyer Co.has developed a special chemical to kill cancer cells.While the scientists at Greyer have the knowledge,they are short on equipment,money,and marketing know-how.Greyer should:

A) give up the idea altogether.
B) find a partner to collaborate with.
C) forge forward and develop the technology on its own.
D) come up with a new concept in which it can possess all the necessary capabilities.

Question 32

Gerden Price Co.and New Ware Systems formed an alliance to develop a new line of technologically advanced cooking stoves.What outcomes can they expect from this alliance?

A) Getting the product to the market faster
B) Increased security of proprietary knowledge
C) Lesser opportunities to pursue other projects
D) Fewer resources to cope with contingencies

Question 33

Combining the capabilities and other resources of partner firms,but not necessarily transferring those resources between the partners is referred to as _____.

A) capability transfer
B) capability complementation
C) resource modification
D) disintermediation

Question 34

_____ offers a fast way for a firm to extend the reach of its technology that is nearly free and offers the potential for royalties.

A) Licensing out a technology
B) Forming a joint venture
C) Solo internal development
D) Vertical integration

Question 35

Allured Architecture collaborated with Maze & Matiz to form a new architecture firm called AllureAmaze Inc.Both the firms had a significant equity stake in the new entity.This collaboration is an example of _____.

A) licensing
B) a joint venture
C) outsourcing
D) contract manufacturing

Question 36

Which of the following is true of contract manufacturing?

A) It enhances a firm's in-house capabilities.
B) It allows firms to meet the scale of market demand by committing to long-term capital investments.
C) It enables a firm to tap the greater economies of scale.
D) It decreases organizational responsiveness to the environment.

Question 37

Which of the following is an advantage of collaborating?

A) It enables a firm to obtain necessary skills quickly by developing them in-house.
B) It increases a product's cycle time.
C) It gives firms more flexibility.
D) It helps firms to increase their asset commitment.

Question 38

What is the advantage of collaborating at the development stage of a technology?

A) To increase asset commitment
B) To ensure cooperation in the commercialization stage
C) To increase a product's cycle time
D) To facilitate the emergence of multiple competing standards for a product

Question 39

Which of the following differentiates a joint venture from other forms of alliances?

A) It usually does not result in the creation of a new business entity.
B) It increases asset commitment.
C) It increases cycle time of a technology.
D) It involves a significant equity stake.

Question 40

True Tarmac Co.entered into an alliance with several trucking companies to use high tech communications to manage its trucks across the nation.In this arrangement,firms will help each other keep a track on trucks of the entire alliance,but will not share other information.This alliance falls in:

A) quadrant A-individual alliance with capability complementation.
B) quadrant B-network of alliances with capability complementation.
C) quadrant C-individual alliance with capability transfer.
D) quadrant D-network of alliances with capability transfer.

Question 41

What are the advantages and disadvantages of collaborating for research and product development?

Question 42

Which of the following is true of a collective research organization?

A) It does not help firms to leverage their competencies.
B) It is a short-term commitment.
C) It is a great way to gain immediate returns.
D) It allows a firm to share the cost and risk of basic research.

Question 43

Self-enforcing norms based on goodwill,trust,and reputation of the partners is known as _____.

A) capability complement
B) alliance contract
C) equity ownership
D) relational governance

Question 44

What are the characteristics of collective research organizations?

Question 45

How can firms evaluate potential partners?

Question 46

Greyer Co.has developed a method of killing cancer cells with light in a process called Photodynamic Therapy (PDT).While their scientists have the medical knowledge,they are short on equipment,money,and marketing know-how.As a consultant what would you advise Greyer to do?

Question 47

NetTech Inc.is a software manufacturing firm.Since it lacks advertising and marketing capabilities,the firm collaborates with Matrix Advertisers Inc.to improve its marketing efforts.This collaboration is based on the combination of _____.

A) supplementary stocks of resources
B) primary resources
C) complementary resources
D) secondary resources

Question 48

What are the disadvantages of licensing?

Question 49

_____ refers to the degree to which partners have compatible objectives and styles.

A) Resource fit
B) Strategic fit
C) Capability complementation
D) Contractual fit

Question 50

When each partner contributes capital and owns a specified right to a percentage of the proceeds from the alliance,the collaborative relationship is referred to as _____.

A) equity ownership
B) relational governance
C) alliance contracts
D) solo internal development