62) Why might a company not choose to outsource certain value chain activities presently
performed in-house?
A) because it streamlines company operations in ways that improve organizational flexibility and
cuts the time it takes to get new products into the marketplace
B) because it allows a company to concentrate on its core business, leverage its key resources,
and do even better what it already does best
C) because it helps the company assemble diverse kinds of expertise speedily and efficiently
D) because it enables a company to gain better access to end users and better market visibility
E) because it improves a company’s ability to innovate
63) What might be considered to be a major drawback of employing an outsourcing strategy?
A) It allows a company to concentrate on its core business, leverage its key resources and core
competencies, and do even better what it already does best.
B) It can hollow out a firm’s own capabilities and cause it to lose touch with activities and
expertise that contribute fundamentally to the firm’s competitiveness and market success.
C) It reduces the company’s risk exposure to changing technology and/or buyer preferences.
D) It improves organizational flexibility and speeds time to market.
E) It involves an activity that can be performed better or more cheaply by outside specialists.
64) Relying on outsiders to perform certain value chain activities offers such strategic
advantages as
A) ensuring more costly components or services.
B) improving the company’s inability to innovate by allying with “best-in-class” suppliers.
C) reducing the company’s risk exposure to changing technology and/or changing buyer
preferences.
D) increasing the firm’s inability to assemble diverse kinds of expertise speedily and efficiently.
E) reducing its information technology and operational costs so that organizational flexibility is
maintained.
65) Outsourcing strategies can offer such advantages as
A) increasing a company’s ability to strongly differentiate its product and be successful with
either a broad differentiation strategy or a focused differentiation strategy.
B) obtaining higher quality and/or cheaper components or services, improving a company’s
ability to innovate, and reducing its risk exposure.
C) speeding a company’s entry into foreign markets.
D) permitting greater use of strategic alliances and collaborative partnerships.
E) giving a firm more direct control over the costs of value chain activities.
66) The big risk of employing an outsourcing strategy is
A) causing the company to become partially integrated instead of being fully integrated.
B) hollowing out a firm’s own capabilities and losing touch with activities and expertise that
contribute fundamentally to the firm’s competitiveness and market success.
C) hurting a company’s R&D capability.
D) putting the company in the position of being a late mover instead of an early mover.
E) increasing the firm’s risk exposure to both supply chain management failures and shifts in the
composition of the industry value chain.
67) Strategic alliances are
A) the cheapest means of developing new technologies and getting new products to market
quickly.
B) collaborative formal arrangements where two or more companies join forces and agree to
work cooperatively toward some strategically relevant objective.
C) a proven means of reducing the costs of performing value chain activities.
D) best used to insulate a company from the impact of the five competitive forces.
E) the best way to help insulate a firm from the adverse impacts of industry driving forces.
68) A formal agreement, or ________, is between two or more separate companies in which they
agree to work cooperatively toward some common objective.
A) joint venture
B) vertical integration
C) strategic alliance
D) forward integration
E) outsourcing
69) Under which circumstance can an alliance be considered just a convenient business
arrangement rather than “strategic”?
A) The alliance is critical to the company’s achievement of an important objective.
B) The alliance helps block a competitive threat.
C) The alliance helps open up important new market opportunities.
D) The alliance helps build, enhance, or sustain a core competence or competitive advantage.
E) The alliance helps the company obtain additional financing on better credit terms.
70) Daimler’s 2017 agreement with automotive supplier Robert Bosch GmbH to develop self-
driving taxis that customers can hail with a smartphone app is called a
A) joint venture.
B) joint liability company.
C) partnership.
D) dual proprietorship.
E) double-S corporation.
71) Entering into strategic alliances and collaborative partnerships can be competitively valuable
because
A) working closely with outsiders is essential in developing new technologies and new products
in virtually every industry.
B) cooperative arrangements with other companies are very helpful in racing against rivals to
build a strong global presence and/or racing to seize opportunities on the frontiers of advancing
technology.
C) they represent highly effective ways to achieve low-cost leadership and capture first-mover
advantages.
D) they are a powerful way for companies to build loyalty and goodwill among customers with
diverse needs and expectations.
E) they are quite effective in helping a company transfer the risks of threatening external
developments to other companies.
72) Microsoft’s alliance with immuno-sequencing company Adaptive Biotechnologies can be
called “strategic” because it serves all of the following strategic purposes except
A) builds, sustains, or enhances Microsoft’s core competence in artificial intelligence.
B) blocks a competitive threat from Amazon to become a healthcare industry player.
C) accelerates drug development and bring new therapies to patients sooner than if each party
had “gone it alone.”
D) opens up important new healthcare market opportunities for both alliance members.
E) contracts out certain value chain activities by both parties to outside vendors.
73) The best strategic alliances
A) are highly selective, focusing on particular value chain activities and on obtaining a particular
competitive benefit.
B) are those whose purpose is to create an industry key success factor.
C) are those that help a company move quickly from one strategic group to another.
D) involve joining forces in R&D to develop new technologies cheaper than a company could
develop the technology on its own.
E) aim at raising an industry’s barriers to entry.
74) What might not be considered as a strategically beneficial reason why a company may enter
into strategic partnerships or cooperative arrangements with key suppliers, distributors, or
makers of complementary products?
A) to improve access to new markets
B) to expedite the development of promising new technologies or products
C) to enable greater opportunities for employee advancement
D) to improve supply chain efficiency
E) to overcome disadvantages of small production volumes that limit scale economies and low
production costs
75) Companies racing against rivals for global market leadership need strategic alliances and
collaborative partnerships with companies in foreign countries to
A) combat the bargaining power of foreign suppliers and help defend against the competitive
threat of substitute products produced by foreign rivals.
B) help raise needed financial capital from foreign banks and use the brand names of their
partners to make sales to foreign buyers.
C) get into critical country markets quickly, gain inside knowledge about unfamiliar markets and
cultures, and access valuable skills and competencies that are concentrated in particular
geographic locations.
D) help wage price wars against foreign competitors.
E) exercise better control over efforts to revamp the global industry value chain.
76) A company racing to seize opportunities on the frontiers of advancing technology often
utilizes strategic alliances and collaborative partnerships to
A) discourage rival companies from merging with or acquiring the very companies that it is
partnering with.
B) reduce overall business risk and raise entry barriers into the newly emerging industry.
C) help master new technologies and build new expertise and competencies, establish a stronger
beachhead for participating in the target industry, and open up broader opportunities in the target
industry.
D) help defeat competitors that are employing broad differentiation strategies.
E) enhance its chances of achieving global low-cost leadership.
77) Carlos, the CEO of a local HR recruiting and staffing company, is considering a strategic
alliance with a local payroll company. What would not likely be a consideration for Carlos with
respect to whether the proposed alliance could become successful and realize its intended
benefits?
A) picking a good partner
B) recognizing that the alliance must benefit both sides
C) minimizing the amount of resources that the partners commit to the alliance
D) ensuring that both parties live up to their commitments
E) structuring the decision-making process so actions can be taken swiftly when needed
78) Strategic alliances are more likely to be long lasting when they involve
A) partners that respectively have considerable resource weaknesses in the marketplace.
B) partners that are not only experienced with strategic alliances, but who also routinely enter
into collaborative agreements with firms in peripheral industries.
C) partners based in countries with distinctly different cultures and consumer buying habits and
preferences.
D) joining forces in R&D to develop new technologies cheaper than a company could develop
the technology on its own.
E) collaboration with suppliers or distribution allies, or when both parties conclude that
continued collaboration is in their mutual interests.
79) If you were advising Hoffmann-LaRoche, which set up Roche Partnering to manage more
than 190 alliances in the healthcare industry, what might not be a reason why some of those
alliances could prove to be unstable or break apart?
A) Anticipated gains may fail to materialize for Roche Partnering due to an overly optimistic
view of the synergies.
B) Anticipated gains for Roche Partnering may fail to materialize due to a poor fit in terms of the
combination of resources and capabilities.
C) One or more of the 190 partners in Roche Partnering could gain access to another company’s
proprietary knowledge base, technologies, or trade secrets.
D) The partners may disagree among themselves over how to divide the profits gained from joint
collaboration.
E) There is a risk for any or all of the 190 partners in Roche Partnering to become overly
dependent on other companies within the partnership.
80) Experience indicates that strategic alliances
A) are generally successful.
B) work well in cooperatively developing new technologies and new products but seldom work
well in promoting greater supply chain efficiency.
C) work best when they are aimed at achieving a mutually beneficial competitive advantage for
the allies.
D) can suffer culture clash and integration problems due to different management styles and
business practices.
E) are rarely useful in helping a company win the race for global industry leadership.
81) The Achilles’ heel (or biggest disadvantage/pitfall) of relying heavily on alliances and
cooperative strategies is
A) that partners will not fully cooperate or share all they know, preferring instead to guard their
most valuable information and protect their more valuable know-how.
B) becoming dependent on other companies for essential expertise and capabilities.
C) the added time and extra expenses associated with engaging in collaborative efforts.
D) having to compromise the company’s own priorities and strategies in reaching agreements
with partners.
E) the collaborative arrangements will not live up to expectations.
82) The principal advantages of strategic alliances over vertical integration or horizontal
mergers/acquisitions are
A) resource pooling and risk sharing, more adaptive response capabilities, and greater speed of
deployment.
B) potential profitability of the alliance and related experience-curve economics.
C) the facilitation of best practices, more production capacity, and relevant synergistic savings.
D) the transactional and relational concept of operating practices and competencies.
E) material additions to a company’s technological capabilities, strengthening of the firm’s
competitive position, and boosting of its profitability.
83) A company that has greater success in managing its strategic alliance can credit all of the
following, except
A) establishing strong interpersonal relationships to facilitate communication.
B) incorporating contractual safeguards.
C) making opportunities for learning a routine management process.
D) establishing a system to manage alliances in a systematic fashion.
E) creating organizational learning barriers across boundaries.
84) A company that fails to manage its strategic alliance probably has
A) incorporated contractual safeguards.
B) made opportunities for learning a routine management process.
C) created a system to manage alliances in a systematic fashion.
D) established strong interpersonal relationships and established trust.
E) refrained from making commitments to its partners and ensured they do the same.
85) Samsung Group, which includes Samsung Electronics, successfully manages an ecosystem
of over 1,300 partnerships that enable productive activities from global procurement to local
marketing to collaborative R&D. Samsung Group’s alliance management capability can be said
to have
A) developed over time, out of effort and learning.
B) decreased the company’s knowledge assets.
C) created successful strategic alliances.
D) diminished the company’s knowledge capabilities.
E) expedited the transfer of new assets into the strategic alliance.
86) Identify and briefly explain five types of offensive strategies.
87) Strategic offensives should, as a general rule, be grounded in a company’s strategic assets
and employ a company’s strengths to attack rivals. Define and discuss the term strategic assets
and its significance in gaining a competitive advantage.