In a vertical complementary alliance, firms share some of their resources and
capabilities from the same stage of the value chain to create a competitive advantage.
a. True
b. False
Cross-border acquisitions are critical to U.S. firms competing internationally
a. if they are to develop differentiated products for markets served.
b. when market share growth is the focus.
c. where consolidated operations are beneficial.
d. if they wish to overcome entry barriers to international markets.
Competitor analysis focuses on
a. firms with which the company competes directly.
b. firms that produce products that are substitutes.
c. all firms in the industry.
d. companies that might enter the industry.
Normally, the more involved a board of directors is in shaping the firm’s strategic
direction, the
a. more balanced the organization is.
b. higher the corporation’s performance is.
c. more rapidly executive decisions can be make.
d. more difficult it becomes to make effective executive decisions.
The likelihood of entry of new competitors is affected by and
a. barriers to entry; expected retaliation of current industry organizations.
b. the power of existing suppliers; buyers.
c. the profitability of the industry; the market share of its leading firm.
d. the demand for the product; the profitability of the competitors.
____is the degree to which decision-making authority is retained at higher managerial
levels.
a. Formalization
b. Centralization
c. Specialization
d. Unification
The integration of a cost leadership and a differentiation strategy
a. is challenging because it increases the number of value-chain activities and support
functions in which the firm must become competent.
b. forces a firm to adapt more slowly to changes in its environment.
c. allows the firm to avoid being ‘stuck in the middle.”
d. requires such a large customer base that it is most practical for firms in the global
marketplace.
Which of the following is NOT a component of internal analysis leading to competitive
advantage?
a. tangible and intangible resources
b. analysis of supplier power
c. capabilities
d. core competencies
The I/O (industrial organization) model assumes that the uniqueness of a firm’s
resources and capabilities is its main source of above-average returns.
a. True
b. False
Ambrose is a scientist working for a pharmaceutical company. His company was
acquired by a rival pharmaceutical company, and now it is involved in downsizing and
downscoping. Ambrose is concerned about his job security, since he is actively involved
in amateur sports in his community and does not wish to disrupt his current lifestyle.
Ambrose’s job will be most likely to be secure if
a. Ambrose’s research is in a non-core activity.
b. the acquisition has been financed by junk bonds.
c. Ambrose is in a position to take a poison pill.
d. Ambrose is a key employee in the firm’s primary business.
Which of the following is FALSE about corporate governance in China?
a. The Chinese governance system may be tilting toward the Western model.
b. With increasing frequency, the compensation of top executives of Chinese companies
is closely related to prior and current financial performance of the firm.
c. The state still uses direct and/or indirect controls to influence the strategies employed
by most firms.
d. Firms with higher state ownership tend to have lower market value and more
volatility in those values over time.
The cooperation between Fiat and Chrysler to produce a Fiat-designed car in Chrysler’s
Illinois factory is a(n) _______
alliance because it allows the firms to share resources and capabilities across multiple
functions.
a. synergistic
b. opportunistic
c. horizontal
d. diversifying
What is corporate governance and how is it used to monitor and control managers’
decisions?
Discuss the potential benefits and disadvantages of innovation through cooperative
strategies.
CaseScenario2:Raptec
Raptec was incorporated in 1991 and went public on the Nasdaq Stock Market in 1996.
Raptec’s strategy is to become the global leader in innovative storage solutions. Raptec
is an S&P 500 and a Nasdaq Stock Market 100 member. The company’s hardware and
software solutions for eBusiness and Internet applications move, manage, and protect
critical data and digital content. Raptec operates in three principal business segments:
Direct Attached Storage (“DAS”), Storage Networking Solutions (“SNS”) and
Software. These hardware and software products are found in high-performance
networks, servers, workstations, and desktops from the world’s leading OEMs, and are
sold through distribution channels to Internet service providers, enterprises, medium
and small businesses, and consumers. Since the time it went public, Raptec has
experienced rapid growth and consistently profitable operations. In early 2007, the
company announced its plan to spin-off the software segment, subsequently
incorporated as Axio, Inc., in the form of a fully independent and separate company.
Software was Raptec’s most profitable and fastest growing segment. By mid-2007
Raptec had completed the initial public offering of approximately 15 percent of Axio’s
stock, and then distributed the remaining Axio stock to Raptec’s stockholders in a
tax-free distribution.
Why would a successful firm like Raptec spin off its most promising business?
Why is it important to prevent core competencies from becoming core rigidities?
What is market commonality? What is resource similarity? How are these concepts
combined to identify the level of competition between two firms?