Question 1

Adidas acquired Reebok primarily to _____.

Accepted Answer

A)   overcome its competitive disadvantage against Nike
B)   get access to the superior technology of Reebok
C)   overcome its principal-agent problems
D)   pursue an unrelated diversification strategyE) A) and D)
F) A) and C)

Question 2

What is meant by corporate venture capital (CVC)investments?

Accepted Answer

A governance mechanism that falls under ...

Question 3

Describe an equity alliance with the help of an example.

Accepted Answer

Student answers will vary.
In an equity ...

Question 4

What is a joint venture?

Accepted Answer

A joint venture is a standalone organiza...

Question 5

Partner compatibility and partner commitment are necessary conditions for successful alliance formation.Partner compatibility captures:

Accepted Answer

A)   aspects of cultural fit between different firms in an alliance.
B)   features of the financial health of the different alliance partners.
C)   the readiness to accept short-term sacrifices to ensure long-term awards.
D)   the willingness to make available necessary resources.E) A) and C)
F) B) and C)

Question 6

_____ are best described as contractual alliances in which the participants regularly exchange codified knowledge.

Accepted Answer

A)   Cartels
B)   Licensing agreements
C)   Equity alliances
D)   AcquisitionsE) A) and D)
F) A) and C)

Question 7

What does the relational view of competitive advantage propose?

Accepted Answer

A)   A strategic alliance has the potential to help a firm gain a competitive advantage when it joins together resources that are common, inexpensive, and easy to imitate.
B)   The locus of competitive advantage is often not found within the individual firm but within a strategic partnership.
C)   Strategic alliances fail to provide competitive advantage when they involve joining different parts of a firm's value chain, such as R&D and marketing.
D)   A firm has a competitive advantage over its rivals when it can provide goods or services similar to the competitors' at a higher price.E) None of the above
F) All of the above

Question 8

In Eli Lilly's Office of Alliance Management, who is responsible for providing the technical expertise and knowledge needed for the specific technical area and the day-to-day management of the alliance?

Accepted Answer

A)   The alliance champion
B)   The alliance leader
C)   The alliance manager
D)   The alliance bossE) A) and B)
F) A) and C)

Question 9

Discuss the pros and cons of a non-equity alliance.

Accepted Answer

Non-equity alliances are flexible, fast,...

Question 10

Amiware Inc., a manufacturer of ceramic cookware, has entered into a contractual agreement with Micoware Inc.The agreement involves vertical strategic alliances connecting different parts of the industry value chain.This arrangement between the two companies best illustrates a(n) _____.

Accepted Answer

A)   joint venture
B)   acquisition
C)   non-equity alliance
D)   greenfield ventureE) A) and B)
F) B) and C)

Question 11

How can firms build alliance management capabilities?

Accepted Answer

The systematic differences in firms' all...

Question 12

Which of the following statements is true of an equity alliance?

Accepted Answer

A)   An equity alliance is based on contractual agreements rather than partial ownership.
B)   In an equity alliance, the partners frequently exchange personnel to make the acquisition of tacit knowledge possible.
C)   In an equity alliance, a standalone organization is created that is jointly owned by two or more parent companies.
D)   An equity alliance creates weaker ties between the alliance partners when compared to a non-equity alliance.E) A) and B)
F) A) and C)

Question 13

How does horizontal integration decrease competitive intensity within an industry?

Accepted Answer

Horizontal integration changes the under...

Question 14

How does Kraft Foods benefit from its hostile takeover of Cadbury PLC in 2010?

Accepted Answer

A)   Its main strategic focus is now on the domestic market.
B)   It opens a market for it that is growing slowly but has high profit margins.
C)   It has access to convenience stores and a new distribution channel.
D)   It automatically gains monopoly in the chocolate-manufacturing industry.E) A) and C)
F) None of the above

Question 15

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?

Accepted Answer

A)   A merger
B)   A joint venture
C)   An acquisition
D)   An equity allianceE) A) and B)
F) None of the above

Question 16

Which of the following statements is true of explicit knowledge?

Accepted Answer

A)   Explicit knowledge is about knowing how to do a certain task.
B)   Explicit knowledge is knowledge that cannot be codified.
C)   Explicit knowledge is shared in non-equity alliance firms.
D)   Equity knowledge is acquired only through actively participating in a process.E) None of the above
F) B) and D) C

Question 17

When entering a foreign market, it is advisable for a new venture that has a core competency only in R&D to form a strategic alliance with a local partner because:

Accepted Answer

A)   the local partner can better protect its proprietary know-how.
B)   building downstream complementary assets can be expensive and time-consuming.
C)   the strategic alliance will reduce the differentiation of its product and service offerings.
D)   the value gap created by the firm can be easily lowered in an alliance.E) B) and D)
F) None of the above B

Question 18

Which of the following reasons motivated Facebook to acquire Instagram, a photo and video-sharing social media site, for $1 billion in 2012?

Accepted Answer

A)   The desire to gain a new capability
B)   The need to enter a new geographical market
C)   The need to reduce its level of horizontal integration
D)   The desire to pursue an unrelated diversification strategyE) B) and D)
F) C) and D) A

Question 19

Why do firms make acquisitions?

Accepted Answer

Firms make acquisitions for two main rea...

Question 20

Which of the following is an advantage of joint ventures?

Accepted Answer

A)   They create strong ties, trust, and commitment between the partners.
B)   They are based on contractual agreements rather than partial ownership.
C)   They require the lowest amount of investment relative to the other alliance types.
D)   They can be easily initiated and terminated.E) All of the above
F) B) and D)

Exam 9: Corporate Strategy: Strategic Alliances, Mergers and Acquisitions

Adidas acquired Reebok primarily to _____.

Correct AnswerverifiedShow Answer

What is meant by corporate venture capital (CVC)investments?

Correct AnswerverifiedA governance mechanism that falls under ...View AnswerShow Answer

Describe an equity alliance with the help of an example.

Correct AnswerverifiedStudent answers will vary.In an equity ...View AnswerShow Answer

What is a joint venture?

Correct AnswerverifiedA joint venture is a standalone organiza...View AnswerShow Answer

Partner compatibility and partner commitment are necessary conditions for successful alliance formation.Partner compatibility captures:

Correct AnswerverifiedShow Answer

_____ are best described as contractual alliances in which the participants regularly exchange codified knowledge.

Correct AnswerverifiedShow Answer

What does the relational view of competitive advantage propose?

Correct AnswerverifiedShow Answer

In Eli Lilly's Office of Alliance Management, who is responsible for providing the technical expertise and knowledge needed for the specific technical area and the day-to-day management of the alliance?

Correct AnswerverifiedShow Answer

Discuss the pros and cons of a non-equity alliance.

Correct AnswerverifiedNon-equity alliances are flexible, fast,...View AnswerShow Answer

Amiware Inc., a manufacturer of ceramic cookware, has entered into a contractual agreement with Micoware Inc.The agreement involves vertical strategic alliances connecting different parts of the industry value chain.This arrangement between the two companies best illustrates a(n) _____.

Correct AnswerverifiedShow Answer

How can firms build alliance management capabilities?

Correct AnswerverifiedThe systematic differences in firms' all...View AnswerShow Answer

Which of the following statements is true of an equity alliance?

Correct AnswerverifiedShow Answer

How does horizontal integration decrease competitive intensity within an industry?

Correct AnswerverifiedHorizontal integration changes the under...View AnswerShow Answer

How does Kraft Foods benefit from its hostile takeover of Cadbury PLC in 2010?

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Which of the following statements is true of explicit knowledge?

Correct AnswerverifiedC

When entering a foreign market, it is advisable for a new venture that has a core competency only in R&D to form a strategic alliance with a local partner because:

Correct AnswerverifiedB

Which of the following reasons motivated Facebook to acquire Instagram, a photo and video-sharing social media site, for $1 billion in 2012?

Correct AnswerverifiedA

Why do firms make acquisitions?

Correct AnswerverifiedFirms make acquisitions for two main rea...View AnswerShow Answer

Which of the following is an advantage of joint ventures?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
A governance mechanism that falls under ...
View Answer

Correct Answer
verified
Student answers will vary.
In an equity ...
View Answer

Correct Answer
verified
A joint venture is a standalone organiza...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Non-equity alliances are flexible, fast,...
View Answer

Correct Answer
verified

Correct Answer
verified
The systematic differences in firms' all...
View Answer

Correct Answer
verified

Correct Answer
verified
Horizontal integration changes the under...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified
B

Correct Answer
verified
A

Correct Answer
verified
Firms make acquisitions for two main rea...
View Answer

Correct Answer
verified