Deck 6: Obtaining Technology: Planning

Question 1

The strategic reasons a firm would look to use a merger or acquisition include all of the following except:

A) the firm's current product line is falling quickly behind that of its competitors
B) a new competitor is about to enter the market the dynamics of the industry will change
C) the firm discoveries its processes are not as efficient or effective as competitors'
D) the firm believes its current products or processes are not going to be successful in long run
E) the firm wishes to eliminate all potential competitors

Answer 1

the firm wishes to eliminate all potential competitors

Question 2

The key element of planning externally focused technology acquisition efforts is to:

A) determine the nature of competitors
B) determine the nature of the external activity that will occur
C) determine the industry structure
D) determine the firm's internal resources
E) determine the top management's orientation to such activities.

Answer 2

determine the nature of the external activity that will occur

Question 3

A ____ is defined as a partnership of two more corporations to achieve strategically significant objectives that are mutually beneficial.

A) Limited Partnership
B) Strategic Partnership
C) Strategic Alliance
D) Limited Alliance
E) Informal Alliance

Answer 3

Strategic Alliance

Question 4

In a strategic alliance the firm must evaluate whether the strategic benefits outweigh the ____.

A) time
B) lost opportunities
C) ideas not pursued
D) value destruction
E) transaction costs

Question 5

____ refers to two or more firms combine equity and form a new third entity.

A) franchising
B) joint venture
C) licensing
D) subcontracting
E) acquisition

Question 6

All of the following are part of the three broad categories that Kogut summarized as the reasons for alliances except:

A) organizational learning
B) cost savings
C) strategic behavior
D) profit maximization
E) all of these choices

Question 7

Which of the following is not a concern when forming an alliance?

A) losing your employees to the other company
B) finding the proper partner
C) getting the timing right
D) measuring real costs and profits from the alliance
E) protecting intellectual property

Question 8

All of the following are concerns in forming an alliance except:

A) finding proper partner
B) lack of shared vision
C) allocation of resources
D) timing
E) communication

Question 9

Alliances that are ____ in their formality have agreements that include clear documentation but where less interaction and agreement is required of each party in the alliance.

A) advanced
B) intermediate
C) sophisticated
D) strong
E) strategic

Question 10

In a licensing arrangement, a firm agrees to pay a firm for the right to do what?

A) to buy the firm
B) to manufacture or sell the firm's product
C) to outsource
D) to form an alliance
E) to informally work together

Question 11

The goal in forming a strategic alliance is to develop relationships where:

A) everyone experiences higher costs
B) there are no strategic advantages
C) there are no transaction costs
D) the strategic advantages do not outweigh the transaction costs involved with the alliance
E) the strategic advantages equal the equity costs involved with the alliance

Question 12

The party that sells the concept of the franchise to the entrepreneur is the:

A) franchisee
B) franchise broker
C) franchisor
D) corporate entrepreneur
E) franchise connector

Question 13

A consortia is described as ____.

A) organizations that invest together to create a third entity
B) organizations joining together to share expertise and funding for development of new products or processes
C) an organization that sells the model to conduct a business to another entity
D) ownership in a firm that is transferred to a new party
E) an organization created based on the direction of the government

Question 14

Which are examples of intermediate alliances?

A) consortia and franchises
B) franchises and subcontracting
C) joint ventures and franchising
D) subcontracting and joint ventures
E) consortia and licensing agreements

Question 15

Franchising:

A) Is growing at a very slow pace
B) Is one of the most rapidly growing business arrangements in the global economy
C) Is very hard to get into
D) Can be a large liability to you
E) Requires little paperwork

Question 16

The franchisor typically provides all of the following except:

A) directions on running the business
B) operating systems
C) inputs into the product produced
D) standards for operations
E) royalty fee

Question 17

The success of franchisees is:

A) very risky
B) not used in technology focused firms
C) a small proportion of the United States economy
D) higher than most small business
E) not likely in international settings

Question 18

Subcontracting of a firm's activities should focus on:

A) those that are strategically the most critical
B) those that are the most expensive
C) those that are the smallest part of the organization
D) those the firm does not like to do
E) those that concern things which do not concern the firm's competitive advantage

Question 19

Joint ventures and franchise agreements are both examples of:

A) Formal alliances
B) Informal alliances
C) Semiformal alliances
D) Intermediate alliances
E) Temporary alliances

Question 20

International alliances are:

A) easier to successfully implement
B) harder to successfully implement
C) rare
D) difficult only if it involves an emergent market
E) only now occurring in great numbers

Question 21

Subcontracting is an example of a(n):

A) informal alliance
B) formal alliance
C) mixture of formal and informal alliance
D) joint venture
E) licensing agreement

Question 22

The disadvantage of belonging to a consortia include:

A) strategic drift
B) contract monitoring costs
C) little control over quality
D) knowledge leakage
E) culture class

Question 23

The duration of a subcontract is:

A) long term
B) short term
C) term mixed
D) as long as either party finds it a benefit
E) as long as a contract is in force

Question 24

Mergers and acquisitions can allow a firm to accomplish a variety of strategic goals. Which one is not associated with the purchasing firm?

A) Enter a market quickly or increase speed to market
B) Avoid costs and risks of new product development
C) Gain market power
D) Earn premiums from the stock market
E) Acquire knowledge

Question 25

Over the past decade, approximately ____ percent of mergers/acquisitions have failed or significantly under performed within three years of the deal.

A) 40
B) 50
C) 60
D) 70
E) 80

Question 26

The outright purchase of a firm or some part of that firm is known as:

A) Acquisition
B) Merger
C) Joint Venture
D) Franchising
E) Alliance

Question 27

Agency theory is grounded in the belief:

A) managers emphasize their own self interest
B) managers are resources
C) resources are the key reason for the success of firms
D) relatedness is the key to success in acquisitions
E) technology is grounded by the founding agent

Question 28

Second movers are successful when:

A) the industry grows slowly
B) there is high customer loyalty
C) there is low customer loyalty
D) technology changes quickly
E) the industry is fragmented

Question 29

Market power refers to:

A) market demand for the product
B) when a firm is large enough to shape a market's actions
C) the ability to advertise a product actively
D) the ability to attract key employees
E) the gathering of key resources for the firm

Question 30

Relatedness is decided by whether the firms:

A) have the same SIC code
B) are in the same value chain
C) share managerial backgrounds
D) appear to be from the same industry
E) require similar skills to operate key functions

Question 31

Firms that pursue ____ perform better than firms that pursue ____.

A) related acquisitions, unrelated acquisitions
B) unrelated acquisitions, related acquisitions
C) informal alliances, acquisitions
D) formal alliances, informal alliances
E) licensing, informal alliances

Question 32

A firm that is a supplier to a firm that is acquired would be a(n):

A) related acquisition
B) vertical acquisition
C) horizontal acquisition
D) unrelated acquisition
E) joint venture

Question 33

Typically a vertical acquisition is motivated by:

A) market power
B) reaching new customers
C) cost reduction
D) risk diffusion
E) increased size

Question 34

The keys in planning for a merger or acquisition includes all of the following except:

A) whether the merger and acquisition creates value
B) the evaluation of whether the technology has the ability to maintain competitive advantage
C) compatibility
D) immediate ability to be profitable
E) design of organizational systems, structures and processes

Question 35

In managing a merger or acquisition the ____ should be involved.

A) the accounting department
B) the engineering department
C) the marketing department
D) the legal department
E) there is expertise throughout the organization that needs to be involved

Question 36

A merger is:

A) a combination of equals
B) when one firm dominates the combination
C) an informal arrangement
D) typically a better approach
E) the typical format of most combinations in the United States

Question 37

A spinoff:

A) occurs when a firm splits its stock
B) is a rare event
C) occurs when a unit of a firm is sold
D) typically occurs with a merger
E) is the suggested strategy for growing firms

Question 38

The goal in forming a strategic alliance is to develop relationships where the strategic advantages outweigh the transaction costs involved with the alliance.

Question 39

Success rates for franchisees are slightly lower than most other forms of startup businesses.

Question 40

In mergers the parties are not considered equal partners.

Question 41

A strategic alliance is defined as a partnership of two or more corporations or business units to achieve strategically significant objectives that are mutually beneficial.

Question 42

Franchising is one of the most rapidly growing business arrangements in the global economy.

Question 43

An acquisition refers to the outright purchase of a firm or some part of a firm, whereas a merger occurs when two firms combine as relative equals.

Question 44

A firm can gain access to external technological capabilities through joint ventures and/or mergers with companies who possess the desired technology.

Question 45

The development and maintenance of alliances have monitoring costs.

Question 46

An example of a formal form of alliance is a franchise agreement.

Question 47

In recent years the number and amounts of mergers and acquisitions in the U.S. and around the world have leveled off.

Question 48

Subcontracting is the easiest alliance that can occur.

Question 49

In general, firms that pursue related mergers or acquisitions perform better than those that pursue unrelated mergers or acquisitions.

Question 50

There is always value created in a merger and acquisition.

Question 51

Franchises are typically short term alliances.

Question 52

Subcontracting has strong controls over quality.

Question 53

Discuss why a firm may need to change its technology mix through alliance formation.

Question 54

Explain the different types of mergers and acquisitions.

Question 55

What are the major concerns for a firm trying to acquire technology through alliance building?

Question 56

Discuss the three reasons for alliances:

Question 57

Describe the different types of strategic alliances:

Question 58

What are the critical questions for partners entering a strategic alliance?

Question 59

Discuss the major mistakes to avoid in a merger or acquisition.