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Indicate whether the statement is true or false.
1. The Renault Nissan approach to managing its collaboration involves less reliance on contracts and more reliance on
trust, respect, and transparency (i.e., the opportunity-maximization approach to managing cooperative strategies).
a.
True
b.
False
2. Cooperation in slow-cycle markets is extremely rare because these industries are declining.
a.
True
b.
False
3. Tacit collusion is not explicitly illegal in the United States even though it results in higher prices for consumers.
a.
True
b.
False
4. Mutual forbearance is a form of explicit collusion between firms in which competitors avoid attacking rivals they meet
in multiple markets.
a.
True
b.
False
5. Franchising is an alternative to pursuing growth through mergers and acquisitions.
a.
True
b.
False
6. Although growing in popularity with small and medium-sized firms because they can gain economies of scale, large
companies tend to avoid strategic alliances.
a.
True
b.
False
7. Firms in slow-cycle markets can use alliances to enter restricted markets or to establish franchises in new markets.
a.
True
b.
False
8. A major risk of a network cooperative strategy is that firms gain access to their partner’s partners thus exposing their
proprietary processes to loss or theft.
a.
True
b.
False
9. One area in which joint ventures are effective is the transfer of tacit knowledge as illustrated in the Chevron/China
National Petroleum joint venture.
a.
True
b.
False
10. Collusion is a form of cooperative strategy.
a.
True
b.
False
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11. The alliance between BP Plc and OAO Rosneft to extract oil from Russia’s Arctic Ocean was managed using
contracts, i.e., the cost minimization approach.
a.
True
b.
False
12. Franchising is most attractive in concentrated industries.
a.
True
b.
False
13. The cost minimization approach of managing alliances is more expensive to put into place and to use than is the
opportunity maximization management approach.
a.
True
b.
False
14. A firm creates a competitive advantage when it develops and manages corporate-level cooperative strategies in a way
that is valuable, rare, imperfectly imitable, and nonsubstitutable.
a.
True
b.
False
15. 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
16. Network cooperative strategies among Silicon Valley firms have been successful, in part, because they are
geographically close together.
a.
True
b.
False
17. Only about 50 percent of cooperative strategies succeed.
a.
True
b.
False
18. Firms consider entering international alliances because multinational firms outperform firms operating only in their
home markets.
a.
True
b.
False
19. An alliance can be used to test whether the partners would benefit from a future merger.
a.
True
b.
False
20. Tacit collusion tends to be least used as a business-level, competition-reducing strategy in highly concentrated
industries such as airlines and breakfast cereals even though it results in higher prices for consumers.
a.
True
b.
False
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21. High levels of trust allow less formal contracts to govern the relationship between alliance partners and increases the
likelihood of alliance success.
a.
True
b.
False
22. According to the Chapter 9 Mini Case, in addition to their corporate-level alliance, Renault and Nissan have each
formed vertical complementary strategic alliances with other companies.
a.
True
b.
False
23. A stable alliance network is used in industries characterized by frequent product innovations and short product life
cycles.
a.
True
b.
False
24. A network strategy involves a series of horizontal acquisitions by firms that are committed to dominating a particular
industry.
a.
True
b.
False
25. Horizontal complementary strategic alliances are designed so that each partner realizes equal benefits from equal
investments in the alliance.
a.
True
b.
False
26. Because of U.S. legal restrictions concerning large foreign acquisitions, American firms can only enter into
diversifying alliances with other U.S. firms.
a.
True
b.
False
27. Firms in standard-cycle markets seek to gain economies of scale through cooperative alliances.
a.
True
b.
False
28. In the cost minimization approach to managing competitive strategies, the relationship between the firms is based on
trust of the other partner.
a.
True
b.
False
29. Using business-level strategic alliances to hedge against risk and uncertainty is most common in the slow-cycle
markets.
a.
True
b.
False
30. The probability of alliance success is increased when partnering firms internalize successful alliance experiences.
a.
True
b.
False
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31. Nonequity strategic alliances exist when two or more firms join together to create an independent firm.
a.
True
b.
False
32. The advantages of alliances designed to respond to competition and to reduce uncertainty are more temporary than
those developed through complementary alliances, such as vertical and horizontal strategic alliances.
a.
True
b.
False
33. If a large Asian cosmetics firm was to engage in a 50–50 partnership with a large American chemical company to
form a new company focused on creating advanced skin care products, this would be considered a joint venture.
a.
True
b.
False
34. Strategic alliances are cooperative strategies between firms that combine their resources and capabilities to create a
competitive advantage.
a.
True
b.
False
35. When a firm is in the early stages of geographic diversification, cross-border alliances may be a good learning step
before other forms of international expansion.
a.
True
b.
False
36. A cooperative strategy is a means by which firms work together to achieve a shared objective.
a.
True
b.
False
37. Strategic alliances have become the cornerstone of many firms’ competitive strategy, particularly large global
competitors.
a.
True
b.
False
38. International strategic alliances are less risky than domestic strategic alliances because of diversification across
countries.
a.
True
b.
False
39. Acquisitions are the most common cooperative strategy used in standard-cycle markets.
a.
True
b.
False
40. Nonequity strategic alliances are formed when one partner owns a much larger (or inequitable) share of the joint
venture than do the remaining partner(s).
a.
True
b.
False
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41. Horizontal business-level strategic alliances have greater probability of creating sustainable competitive advantage
than do vertical business-level strategic alliances.
a.
True
b.
False
42. Some cooperative strategies fail when it is discovered that a firm has misrepresented the competencies it can bring to
the partnership.
a.
True
b.
False
43. Of the four business-level cooperative strategies, the competition-reducing strategy has the lowest probability of
creating a sustainable advantage.
a.
True
b.
False
44. The primary responsibility of the franchiser is to transfer capital to the franchisee.
a.
True
b.
False
45. Close monitoring, formal contracts, and constant vigilance against opportunism increase the probability of alliance
success.
a.
True
b.
False
46. Research in the airline industry suggests that tacit collusion reduces service quality and on-time performance.
a.
True
b.
False
47. A cooperative agreement between a hotel chain and a casino operator would be viewed as a horizontal complementary
strategic alliance because as separate entities, the two firms would compete for the same customer.
a.
True
b.
False
Indicate the answer choice that best completes the statement or answers the question.
48. Meredith Inc. is a manufacturer of art supplies. The company has announced plans to enter into an equity strategic
alliance with JaZz Paper to develop a line of specialty papers for use with a line of specialty paints Meredith
manufactures. Which of the following would be the accurate interpretation of this announcement?
a.
Meredith will own a majority equity stake in the new venture.
b.
JaZz will own a majority equity stake in the new venture.
c.
Meredith or JaZz will own an equal equity stake in the new venture.
d.
Either Meredith or JaZz will own a majority equity stake, but we do not know which one based on the
announcement.
49. ____ are LEAST likely to involve potential or current competitors.
a.
Mutual forbearance strategies
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b.
Tacit collusion strategies
c.
Horizontal complementary strategic alliances
d.
Vertical complementary strategic alliances
50. Stable alliance networks will most often:
a.
be used to enhance a firm’s internal operations.
b.
appear in mature industries where demand is relatively constant and predictable.
c.
emerge in industries with short product life cycles.
d.
emerge in declining industries as a way to increase process innovations.
51. Of the various business-level strategic alliances, ____ alliances have the most probability of creating sustainable
competitive advantage, and ____ have the lowest.
a.
horizontal complementary; vertical complementary
b.
vertical complementary; competition reducing
c.
competition reducing; horizontal complementary
d.
uncertainty reducing; competition reducing
52. In a cross-border alliance, the local partner is often a useful source of information about:
a.
sources of capital.
b.
the strengths of the foreign firm’s technology.
c.
market synergies.
d.
long-term planning.
53. Amylin Pharmaceuticals has an alliance with Eli Lilly & Co. to produce diabetes drugs. Lilly, however, recently
signed an alliance agreement with another company to also produce diabetes drugs. As a result, Amylin sued Lilly for
breach of the alliance agreement. Which of the following risks of cooperative strategies discussed in the chapter is most
likely occurring here?
a.
Having a true perception of the partner’s trustworthiness
b.
Failing to make available to its partners the resources and capabilities that it committed to the cooperative
strategy
c.
The partner misrepresenting competencies it can bring to the partnership
d.
Opportunistic behavior
54. FrameCo, a maker of commercial greenhouses, has just extricated itself from a failing cooperative alliance with
another firm. The expected synergies never were achieved, and FrameCo lost most of its investment. The top management
of FrameCo should:
a.
avoid future cooperative alliances because they lack the skills needed to manage them successfully.
b.
enter into future cooperative alliances only if the alliance is closely monitored by a third party to prevent
opportunistic behavior by the alliance partner.
c.
realize that most cooperative alliances fail and that it should ally itself only with an experienced alliance
partner in the future.
d.
internalize the knowledge about the successes and failures of this alliance so FrameCo can learn from the
experience.
55. A ____________ is a strategy in which firms share some of their resources and capabilities to create economies of
scope and is similar to the business-level horizontal complementary alliance.
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a.
joint venture
b.
synergistic strategic alliance
c.
diversifying strategic alliance
d.
dynamic alliance network
56. The fact that the prices consumers pay for branded breakfast cereals are above the prices that would exist if there were
true competition suggests that the cereal manufacturers are engaging in:
a.
excessive cooperation.
b.
joint ventures.
c.
tacit collusion.
d.
horizontal strategic alliances.
57. In general, cross-border alliances are more ____ and ____ than domestic alliances, especially in emerging markets.
a.
uncertainty reducing; diversifying
b.
complex; risky
c.
highly leveraged; tightly monitored
d.
flexible; trust-based
58. Offshore Oil Exploration Partners (OOEP) has entered into a cooperative strategy with Malay Petroleum. The
resulting documents are long, formal, and detailed. They specify detailed responsibilities of each partner and include
methods of monitoring accounting and technical procedures. OOEP and Malay Petroleum are using the ____ management
approach.
a.
cost minimization
b.
trust but verify
c.
opportunity maximization
d.
pragmatic realism
59. ____ strategic alliances have stronger focus on value creation than do ____ alliances.
a.
competition reducing; complementary
b.
complementary; competition reducing
c.
uncertainty reducing; complementary
d.
collusive; uncertainty reducing
60. Firms participate in strategic alliances for all the following reasons EXCEPT to:
a.
create value that they could not develop by acting independently.
b.
enter competitive markets more quickly.
c.
gain access to resources.
d.
retain tight control over intangible core competencies.
61. The primary responsibility of the franchisor, such as McDonald’s or Hilton International is to:
a.
learn about the brand and technology from the franchisee.
b.
test the franchisee for potential future acquisition.
c.
transfer to the franchisee knowledge and skills needed to compete at the local level.
d.
provide feedback to the franchisee regarding how the franchisor could become more effective and efficient.
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62. All of the following are business-level cooperative strategic alliances EXCEPT:
a.
synergistic strategic alliances.
b.
uncertainty reduction strategic alliances.
c.
complementary strategic alliances.
d.
competition response strategic alliances.
63. A ____ cooperative strategy helps the firm diversify in terms of products offered, markets served, or both.
a.
corporate-level
b.
business-level
c.
national-level
d.
industry-level
64. A strategy in which firms work together to achieve a shared objective is a:
a.
functional-level strategy.
b.
business-level strategy.
c.
corporate-level strategy.
d.
cooperative strategy.
65. One disadvantage of developing effective monitoring systems to manage a strategic alliance is that:
a.
firms will have to accept greater risks.
b.
trust will be eroded.
c.
spontaneous opportunities are minimized.
d.
power coalitions will still develop.
66. In the United States, cooperative strategies to reduce competition may result in ____ if they are explicit.
a.
increased tax liabilities
b.
litigation
c.
government takeover of the firms
d.
dissolution of the firm
67. A cooperative strategy:
a.
is an integrated and coordinated set of commitments and actions designed to exploit core competencies and
gain a competitive advantage.
b.
is a strategy in which firms work together to achieve a shared objective.
c.
is an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage
by exploiting core competencies in specific product markets.
d.
specifies actions a firm takes to gain a competitive advantage by selecting and managing a group of different
businesses competing in different product markets.
68. Which of the following statements is FALSE?
a.
Franchising is most appropriate in fragmented industries.
b.
Franchising provides corporate growth with less risk than do mergers and acquisitions.
c.
Successful franchising allows transfer of knowledge and skills from the franchisor to the franchisee.
d.
Franchising agreements require more trust between firms than do other cooperative strategies.
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69. The collaboration between Volvo Aero (a subsidiary of Sweden’s AB Volvo) and U.S.-based Pratt & Whitney to
produce a new jet engine would be characterized as a(n):
a.
collusive tactic.
b.
merger.
c.
cross-border strategic alliance.
d.
international acquisition.
70. Legitimately, a firm may pursue an international strategic alliance for all of the following reasons EXCEPT:
a.
to enhance the compensation packages of top managers.
b.
to leverage core competencies in new markets.
c.
to operate within government restrictions in the local country.
d.
to escape limited domestic growth opportunities.
71. A manufacturer of specialty jams and jellies has decided to ally itself with an orchard and vineyard growing rare
strains of fruit. This is a(n) ____ strategy.
a.
vertical complementary
b.
horizontal complementary
c.
uncertainty reduction
d.
network
72. Firms in a standard-cycle market may form alliances in order to:
a.
take advantage of opportunities in emerging market countries.
b.
more quickly distribute new products.
c.
capture economies of scale.
d.
share risky R&D investments.
73. In free-market economies, ____ must decide how rivals can collaborate with their competitors without violating
established regulations.
a.
the invisible hand
b.
the government
c.
consumers
d.
the business community
74. When using cooperative strategies, firms most frequently develop strategic alliances that:
a.
enhance the firm’s reputation in the marketplace.
b.
are long-lived.
c.
will reduce the firm’s political risk.
d.
create a competitive advantage.
75. Dynamic alliance networks work best in industries:
a.
characterized by frequent product innovations and short product life cycles.
b.
that are mature and stable in nature.
c.
where the coordination of product and global diversity is critical.
d.
that are characterized by predictable market cycles and demand.
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76. Japanese telecom NTT DoCoMo Inc. and Chinese Internet search operator Baidu Inc. established an alliance to
distribute games and other mobile-phone content. Baidu will own 80 percent of this collaboration with DoCoMo holding
the remaining 20 percent. This collaborative arrangement is an example of a(n):
a.
joint venture.
b.
network strategy.
c.
equity strategic alliance.
d.
nonequity strategic alliance.
77. In practice, the cost minimization strategy can be more expensive than the opportunity maximization strategy. Which
of the following is a way in which the cost minimization strategy is less expensive than the opportunity minimization
strategy?
a.
The loss of unexpected opportunities
b.
The cost of extensive monitoring mechanisms
c.
The costs of writing detailed contracts
d.
The prevention of opportunistic behavior by the partner(s)
78. The use of strategic alliances:
a.
is unlikely to yield success if partnering firms are headquartered in the same country.
b.
may be too restrictive to facilitate entry into new markets.
c.
usually increases the investment necessary to introduce new products.
d.
is more frequent than other types of cooperative strategies.
79. The two basic approaches to successfully manage cooperative strategic alliances involve ____ and ____.
a.
cost minimization; opportunity maximization
b.
monitoring systems; multiple management approaches
c.
contractual systems; financial systems
d.
equity approaches; nonequity approaches
80. Greentech, Inc., is a bioengineering firm specializing in food crops. It is considering a cooperative alliance with an
Asian agribusiness firm, AsiaFoods, to jointly produce improved crops for the Asian market. The risks that Greentech
should consider before entering this alliance include all of the following EXCEPT:
a.
Has AsiaFoods accurately represented its competencies?
b.
Will AsiaFoods make alliance-specific investments?
c.
Can Greentech expect opportunistic behavior from AsiaFoods?
d.
Will Greentech be able to use a cost-minimization management strategy in the AsiaFoods alliance?
81. A nonequity strategic alliance exists when:
a.
two firms join together to create a new company.
b.
two or more firms have a contractual relationship to share resources and capabilities.
c.
two partners in an alliance own unequal shares in the combined entity.
d.
the partners agree to sell bonds instead of stock in order to finance a new venture.
82. In the Chapter 9 Mini Case, 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.
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a.
synergistic
b.
opportunistic
c.
horizontal
d.
diversifying
83. The Microsoft/Nokia alliance that had hundreds of pages to specify each partner’s responsibilities would be closest to
the _______ approach to managing cooperative ventures. In contrast, the Renault/Nissan alliance (Chapter 9 Mini Case)
was based on trust, respect, and transparency and is an example of the ________ approach to managing cooperative
ventures.
a.
cost minimization; opportunity maximization
b.
opportunity maximization; cost minimization
c.
cost maximization; opportunity minimization
d.
bureaucratic; organic
84. Fujitsu Siemens Computers is a legally independent company of which Fujitsu and Siemens each own 50 percent.
This collaboration is an example of a ________, which is effective at transferring ________.
a.
nonequity strategic alliance; explicit knowledge
b.
joint venture; tacit knowledge
c.
joint venture; explicit knowledge
d.
equity strategic alliance; tacit knowledge
85. U.S. Steel and Nucor (the two remaining major players in the U.S. steel industry) have been forming alliances as a
means to enter markets in Europe and Asia. The steel industry is an example of a ________ market in which firms
typically use alliances to gain market access.
a.
fast-cycle
b.
standard-cycle
c.
slow-cycle
d.
intermediate-cycle
86. Mutual forbearance is:
a.
illegal in the United States.
b.
a type of competition-reducing strategy.
c.
a variety of risk-sharing by firms in highly fragmented industries.
d.
exercised when alliance partners refrain from opportunistic behaviors.
87. A competitive advantage that is developed through a cooperative strategy is called a collaborative or a(n) ____
advantage.
a.
economic
b.
collusive
c.
alliance
d.
relational
88. The opportunity maximization approach is more difficult to establish in international relationships than in domestic
relationships because of differences in all EXCEPT:
a.
laws.
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b.
culture.
c.
trade policies.
d.
technology.
89. In managing cooperative strategies, research indicates that ____ can be a capability that is valuable, rare, imperfectly
imitable, and often nonsubstitutable giving these firms a competitive advantage.
a.
extensive capitalization
b.
stability
c.
trustworthiness
d.
Internet competency
90. The two types of complementary strategic alliances are:
a.
vertical and horizontal.
b.
macro and micro.
c.
outsourcing and insourcing.
d.
network and complementary.
91. The Renault Nissan alliance discussed in the Mini Case is an example of a ________ in that the firms seek to create
economies of scope by sharing their resources and capabilities to develop manufacturing platforms that can be used to
produce cars that will be either a Renault or a Nissan.
a.
joint venture
b.
synergistic alliance
c.
horizontal complementary alliance
d.
dynamic alliance network
92. In a(n) ____, two or more firms create a legally independent company to share some of their resources and capabilities
to develop a competitive advantage.
a.
equality-based strategic alliance
b.
non-equity strategic alliance
c.
joint venture
d.
equity strategic alliance
93. Which type of strategic alliance is best at passing tacit knowledge between firms?
a.
primary cooperative strategic alliances
b.
Joint ventures
c.
Equity strategic alliances
d.
Nonequity strategic alliances
94. Which of the following is NOT a risk for firms engaged in cooperative strategies?
a.
Misrepresentation of a partner’s competencies
b.
Partner acts opportunistically
c.
Insufficient variation in firms’ core competencies
d.
Failure of partners to make complementary resources available to the partnership
95. DDD Partners, a U.S. business consulting firm is considering a cooperative alliance with an Indian business consulting
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firm that has a wide practice in the Middle East and Asia. DDD has some European clients, but it sees the Middle East and
Asia as growth opportunities. It hopes to learn how to navigate the different cultures and business practices in this part of
the world from its alliance with the Indian firm. DDD’s greatest risk here is that the Indian firm will:
a.
insist on excessively close monitoring of DDD’s actions.
b.
gain access to DDD’s core competencies and use them to become a future competitor.
c.
not fully share its intangible resources.
d.
not make equivalent investments to the alliance as does DDD.
96. A businessperson in Atlanta who wishes to develop a luxury pet kennel approaches the owner of the highly successful
Pet Resort and Day Spa in Houston to see if the owner is interesting in franchising the Pet Resort brand. The Atlanta
businessperson’s goal is to:
a.
get venture capital from Pet Resort.
b.
gain access to Pet Resort’s tacit knowledge.
c.
collude with Pet Resort to diminish competition in the kennel industry in Atlanta.
d.
join in a vertical complementary alliance with Pet Resort.
97. Moon Flower cosmetics company executives are aware that their Asian customer base is interested in advanced skin
care treatments beyond Moon Flower’s traditional herbal and organic compounds. Moon Flower and a large American
chemical company are in discussions to create a 50–50 partnership in a new firm, which would create skin care treatments
based on innovative chemical formulations that would be marketed both in Asia and in the United States. Beyond being a
cross-border alliance, this partnership can be called a(n):
a.
nonequity strategic alliance.
b.
joint venture.
c.
horizontal complementary alliance.
d.
equity strategic alliance.
98. For the purpose of diversification, a corporate-level cooperative strategy may be preferable to a merger or acquisition
for all the following reasons EXCEPT:
a.
a host nation may forbid a merger or acquisition.
b.
opportunistic behaviors are less likely.
c.
cooperative strategies require fewer resources.
d.
cooperative strategies allow greater flexibility in diversifying the firm’s portfolio.
99. In some countries, the only legal way for foreign firms to invest in the country is through:
a.
acquisitions.
b.
mergers.
c.
greenfield ventures.
d.
strategic alliance with a local firm.
100. The three main luxury hotels in a major tourist destination keep very close track of their competitors’ room pricing,
restaurant offerings, tour packages, and special services, such as airport transportation and spa privileges. When one hotel
makes adjustments in prices or offerings, the other hotels follow suit. It is possible that these hotels are:
a.
engaging in tacit collusion.
b.
following uncertainty reducing strategies.
c.
monitoring business competitors for opportunistic behaviors.
d.
following a competitive response strategy.
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101. Firms entering into synergistic strategic alliances expect to attain:
a.
technological complexity.
b.
economies of scope.
c.
monopolistic market power.
d.
learning curve efficiencies.
102. A state-wide alliance of independent hospitals has formed in order to do group purchasing of medical supplies.
Group purchasing allows the hospital alliance to negotiate lower prices with suppliers because of the large quantity of
materials ordered. This is an example of the advantage of ____ resulting from an alliance.
a.
explicit collusion
b.
economies of scale
c.
opportunistic behavior
d.
distribution opportunities
103. Reduction of competition can be accomplished through all of the following EXCEPT:
a.
predatory alliances.
b.
explicit collusion.
c.
tacit collusion.
d.
mutual forbearance.
104. A relatively young firm has developed a method of transferring photographic images of surface textures onto any
type of hard surface. This potentially has a huge market in the home-decorating field as well as any hard surface that is
typically painted, such as car bodies. The type of alliance partner this firm would be searching for would be one with:
a.
low-cost labor production facilities in another country.
b.
similar products who could help the firm establish economies of scale.
c.
access to franchises in new markets.
d.
excess resources for investing.
105. Which of the following statements is TRUE?
a.
Most cooperative strategies are successful if the basic agreements are well written and include appropriate
monitoring strategies.
b.
As many as 50 percent of cooperative strategies fail.
c.
Opportunistic behaviors are usually focused on gaining the use of the partner’s manufacturing and financial
resources.
d.
Problems with international cooperative strategies usually concern financial-system differences between the
partners.
106. A strategic alliance in which the partners own different percentages of the new company they have formed is called
a(n):
a.
equity strategic alliance.
b.
joint venture.
c.
nonequity strategic alliance.
d.
cooperative arrangement.
107. Burgess Corp. manufactures a line of heavy construction equipment. The company has announced a contractual
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relationship with FS Electronics whereby FS will supply Burgess with advanced GPS navigation and guidance systems.
These systems will be an option on all bulldozers, dump trucks, and road graders Burgess produces. What type of alliance
is this?
a.
Joint venture
b.
Equity strategic alliance
c.
Nonequity strategic alliance
d.
Competition reduction alliance
108. The risks of being accused of collusion are MOST likely under what type of alliance?
a.
Equity-based vertical complementary alliance
b.
Equity-based horizontal complementary alliance
c.
Nonequity-based vertical complementary alliance
d.
Nonequity-based horizontal complementary alliance
109. In the franchising strategy, the most important competitive advantage for the franchisee is the franchisor’s:
a.
brand name.
b.
capital resources.
c.
access to a consolidated market.
d.
geographic locations.
110. McDonald’s, Hilton International, and Subway all heavily rely on the ____ strategy.
a.
transnational
b.
network cooperative
c.
cross-border alliances
d.
franchising cooperative
111. To increase the likelihood of success between partners assuming that trust exists, ____ approach(es) should be used
to manage cooperative strategies.
a.
the cost minimization
b.
the opportunity maximization
c.
both the cost minimization and opportunity maximization
d.
None of the these options are correct.
112. Why are alliances in the airline industry unstable?
a.
Unstable industries make for unstable alliances.
b.
The potential for firms to take opportunistic actions is too widespread.
c.
The industry is declining and profits are not sufficient to divide among alliance partners.
d.
The alliances require cooperation among firms that must also compete with one another.
113. The Renault Nissan alliance (Chapter 9 Mini Case) is an example of a _______ created to gain economies of scope
by sharing resources and capabilities.
a.
diversifying strategic alliance
b.
vertical complementary alliance
c.
synergistic strategic alliance
d.
nonequity-based horizontal complementary alliance
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114. Within the Renault Nissan alliance (Chapter 9 Mini Case), both Renault and Nissan have each formed ____________
strategic alliances at the business-unit level with other companies.
a.
vertical complementary
b.
horizontal complementary
c.
synergistic
d.
diversifying
115. BPM Corp. is a manufacturer of radar systems for regional-sized jet aircraft. The company has announced plans to
enter into a joint venture with J3 Composites, a producer of advanced composite materials. The announced venture will
produce a new, combined product consisting of the radar unit and protective composite cover. Which of the following
ownership arrangements would be most typical for a joint venture?
a.
BPM will own more than 50 percent of the venture and a new company will be formed.
b.
J3 will own more than 50 percent of the venture and a new company will be formed.
c.
BPM and J3 will both own 50 percent of the venture and a new company will be formed.
d.
BPM and J3 will both own 50 percent of the venture but no new company will be formed.
116. Identify and define the different types of strategic alliances.
117. Identify the three types of corporate-level cooperative strategies.
118. Identify the four types of business-level cooperative strategies and the advantages and disadvantages of each.
119. Identify and define the two different types of network strategies.
120. Describe the two strategic management approaches to managing alliances.
121. Identify the competitive risks associated with cooperative strategies.
122. Why are cooperative strategies often used when firms pursue international strategies? What are the advantages and
disadvantages of international cooperative strategies?
123. Explain the rationales for a cooperative strategy under each of the three types of basic market situations (i.e., slow,
standard, and fast cycles).
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