Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Chapter 09 Corporate Strategy: Strategic Alliances, Mergers and
Acquisitions Answer Key
Multiple Choice Questions
1.
The success of the Pixar-Disney strategic alliance demonstrated that
2.
Disney became the world's leading media company to a large extent by pursuing a
corporate strategy of
3.
Which of the following best illustrates a merger between the two companies GD Inc. and
VS Inc.?
4.
When does a merger between companies typically occur?
5.
The Mansion Hotel Group purchased Red Brick Hotels for an estimated value of $120
billion. All the hotels previously owned by Red Brick Hotels are now managed by the
Mansion Hotel Group and are known as Mansion hotels. What does this scenario best
illustrate?
6.
Which of the following is true of acquisitions?
7.
When large, incumbent firms buy start-up companies, the transaction is generally
described as a(n)
8.
Olympia Autos Inc. merged with its competitor Vaca Autos Inc. This allowed Olympia Autos
to use its technological competencies along with Vaca Autos' marketing capabilities to
capture a larger market share than what the two entities individually held. What does this
scenario best illustrate?
9.
Which of the following scenarios best illustrates horizontal integration?
10.
How does horizontal integration within an industry affect the surviving firms?
11.
Which of the following is a result of horizontal integration in terms of Porter's five forces
model?
12.
How did the recent horizontal integration in the U.S. airline industry provide benefits to the
surviving carriers?
13.
It is necessary for government authorities such as the Federal Trade Commission (FTC)
and/or the European Commission to approve any large horizontal integration activity
because
14.
PureSource Pharma Inc. recently acquired BioChem Pharmaceuticals Inc. It now sells its
own products along with the products originally sold by BioChem Pharmaceuticals. As a
result, PureSource Pharma's sales force will also be marketing the acquired company's
products. How will this horizontal integration most likely affect PureSource Pharma?
15.
Which of the following is a disadvantage of a horizontal integration corporate strategy?
16.
How does Kraft Foods benefit from its hostile takeover of Cadbury PLC in 2010?
17.
The Hershey Company, the largest U.S. chocolate manufacturer, decided to enter the
Chinese market in 2013 because
18.
Google, the leader in online search and advertisement, engaged in a number of smaller
acquisitions of tech ventures. It did this in order to
19.
Which of the following reasons motivated Facebook to acquire Instagram, a photo and
video-sharing social media site, for $1 billion in 2012?
20.
The main reason behind Google's decision to acquire the Israeli start-up company Waze
for $1 billion was to
21.
The managers at Movo Automobile Inc. want to diversify their business by acquiring a
consumer electronics company. This acquisition would mean increased job security, higher
compensation, and greater decision-making authority for the managers. The managers
correlate this acquisition to greater power for them rather than to the appreciation in
shareholder value. In this scenario, this acquisition by Movo Automobile is most likely a
result of
22.
JetStream Airway's decision to acquire Rex Fuels Inc. proved to be ill-fated because its
managers had overestimated their abilities and skills. They believed that they had the
skills to manage such diversified businesses and create additional shareholder value.
However, the acquisition failed to create the anticipated synergies because the managers'
capabilities were restricted to the airlines industry. What does this scenario best
illustrate?
23.
Adidas acquired Reebok primarily to
24.
What causes the winner's curse?
25.
Dream Slope Inc. is a leader in producing winter sports equipment, including skis and
skates. Recently, the firm decided to expand into the bobsled market and acquired Sleek
Phantom Inc. This company produced bobsleds, but its sales had slowed. The managers of
Dream Slope convinced themselves that they were able to manage the business of Sleek
Phantom more effectively even though they had no experience in the bobsled market.
However, this move backfired and the sale of Sleek Phantom's bobsleds plummeted.
Which of the following terms is often used to describe this scenario?
26.
A _____ is best described as a voluntary arrangement between firms that involves the
sharing of knowledge, resources, and capabilities with the intent of developing processes,
products, or services.
27.
Which of the following statements is true of strategic alliances?
28.
Vibgyor Inc., a manufacturer of smartphones, has entered into a 15-year partnership with
a software company to develop sophisticated operating systems and innovative mobile
applications for its cell phones. This would mean that both the companies will have to
mutually share their resources, knowledge, and capabilities to develop a superior product.
What is the relationship between Vibgyor and the software company best referred to as in
this scenario?
29.
The _____ is a strategic management framework that proposes that critical resources and
capabilities frequently are embedded in strategic alliances that span firm boundaries.
30.
What does the relational view of competitive advantage propose?
