Chapter 07 – Strategic Relationships
Chapter 07
Strategic Relationships
1. Environmental diversity increases the capacity of an organization to respond quickly to
customer needs and new product development.
2. Environmental diversity makes it difficult to link buyers and the goods and services that
meet buyers’ needs and wants in the marketplace.
3. Competence in specialized technology can give smaller firms extensive bargaining power
with larger firms.
4. Marketing intermediaries such as wholesalers and retailers are horizontal channels of
distribution.
5. Horizontal relationships have often been established between competing firms to access
global markets not served by the cooperating firms.
6. Opportunity costs should be considered when assessing and comparing costs in an alliance.
7. Value chain relationships provide access to consumer and organizational end-users.
8. Strategic account management primarily deals with customers who do not directly invest
time or resources in their relationship with the firm.
Chapter 07 – Strategic Relationships
9. Alliances are agreements between two or more firms to establish a separate entity.
10. A disengagement plan should consider detailed description of the rights of each partner to
alliance assets and products on disengagement.
11. _____ consists of “building a complex product or process from smaller subsystems that
can be designed independently yet function together as a whole.”
A. Sifting
B. Modularity
C. Scaffolding
D. Encoding
12. _____ reduces the capacity of an organization to respond quickly to customer needs and
new product development.
A. Market-sensing
B. Organizational learning
C. Environmental diversity
D. Vertical integration
13. An organization that primarily competes through its relationships with other organizations
to deliver value to end-users is referred to as a _____.
A. memory organization
B. knowledge organization
C. horizontal organization
D. hollow organization
14. Which of the following relationships is an example of an intermediate customer
Chapter 07 – Strategic Relationships
relationship of a firm?
A. Relationship to the distributors of the firm’s products
B. Relationship to the consumers of the firm’s products
C. Relationship to the suppliers of the firm
D. Relationship to the employees of the firm
15. Which of the following is considered as an end-use customer of a firm?
A. Competitor
B. Supplier
C. Distributor
D. Consumer
16. Which of the following is an example of lateral relationships?
A. Relationship with suppliers
B. Relationship with customers
C. Relationship with competitors
D. Relationship with functional departments
17. Supplier relationships are similar to customer relationships in that they are both
considered as _____ to the firm.
A. horizontal relationships
B. vertical relationships
C. internal relationships
D. lateral relationships
18. Moving products through various stages in the value-added process often involves linking
suppliers, manufacturers, distributors, and consumer and business end-users of goods and
services into _____ channels.
A. lateral
B. vertical
C. horizontal
D. parallel
Chapter 07 – Strategic Relationships
19. Which of the following is true of strategic alliances?
A. It is a type of acquisition by one firm of another.
B. It does not involve joint purchasing of stocks of another company.
C. It is not a merger between two independent firms.
D. It does not involve the sharing of existing distribution channels between the firms.
20. A _____ between two organizations is an agreement to cooperate to achieve one or more
common important objectives without forming a separate entity.
A. joint venture
B. merger
C. divestiture
D. strategic alliance
21. Collaborative relationships between companies that are competitors or in related
industries are referred to as _____.
A. outsources
B. alliances
C. joint ventures
D. internal partnerships
22. _____ are agreements between two or more firms to establish a separate entity.
A. Franchises
B. Consortiums
C. Strategic alliances
D. Joint ventures
23. Which of the following relationships would be considered an internal partnership?
A. Relationships between functional units and employees of a firm
B. Relationships between a firm and a competitor
C. Relationships between a firm and its supplier
D. Relationships between a firm and its customers
Chapter 07 – Strategic Relationships
24. Strategic leadership of a partnership can be achieved by:
A. developing an interdependent leadership structure.
B. assigning the responsibility to one of the partners.
C. efficient outsourcing.
D. initiating independent value chain functions.
25. Companies may miss opportunities to reduce costs and generate additional income by:
A. assessing the venture’s strategic fit for continuing the alliance.
B. generating extensive restructuring options.
C. assigning accountability for making changes.
D. failing to launch a process.
26. Which of the following should be considered for a successful alliance disengagement
plan?
A. Identifying and agreeing on the events that will trigger exit from the alliance
B. Design of the engagement process
C. Restructuring and cost-reduction
D. Developing new markets and building market position
27. Corporate alliances must demonstrate that their joint activities do not lead to price fixing
or other forms of _____.
A. boycotts
B. market limitation
C. benefits
D. comfort letters
28. Industry alliances for any purpose must avoid _____, treat codes of conduct as voluntary
while issues of breach of the code by suppliers must be addressed by individual companies.
A. market manipulation
B. benefits
C. boycotts
Chapter 07 – Strategic Relationships
D. comfort letters
29. An alliance should demonstrate the low risk of anticompetitive harm and pro-competitive
_____ and efficiencies to be gained.
A. market manipulation
B. boycotts
C. benefits
D. comfort letters
30. Alliances can seek official _____ from bodies like the US Justice Department stating the
authority does not intent to challenge the activities of the alliance.
A. patents
B. copyrights
C. laurels
D. comfort letters
31. Mention the factors that create a need to establish cooperative strategic relationships
between organizations.
32. Describe the different forms of organizational relationships.
Chapter 07 – Strategic Relationships
33. What are the advantages and disadvantages of outsourcing firm activities?
34. What is the rationale for Strategic Account Management (SAM) and what are the risks of
SAM?
35. What features should a successful disengagement plan for a strategic alliance contain?