BUSN 450 - Final Quiz 3

In the United States, the time period for the right to exclude others from the use of a patented technology is ________ from the filing date of a patent application.

20 years

Which of the following is true of acquisitions?

They can be friendly or hostile.

To be successful and to survive the shakeout stage of the industry life cycle, a firm should

gain economies of scale

The four-step innovation process ends with

imitation

The downside of equity alliances is

the amount of investment that can be involved.

Which of the following stakeholders of a company would most likely be responsible for formulating a corporate strategy?

the chief executive officer

The key objective for firms during the growth phase is to

stake out a strong strategic position not easily imitated by rivals

When does a merger between companies typically occur?

when two firms of comparable size join to form a combined entity

How is an equity alliance different from a joint venture?

An equity alliance involves taking ownership in a partner; a joint venture involves two or more entities owning a firm.

Which quadrant in the core competence-market matrix is the hardest to pursue?

building new core competencies to create and compete in markets of the future

Which of the following summarizes the benefit of the strategic alliance between HP and DreamWorks?

Both HP and DreamWorks were able to enter a new market that they would not have been able to pursue alone.

________, which are incurred when pursuing a related-diversification strategy, are a function of the number, size, and types of businesses that are linked to one another.

Coordination costs

On which of the following tenets is the crossing-the-chasm framework, suggested by Geoffrey Moore, based?

Each stage of the industry life cycle is dominated by a different customer group.

Which of the following examples describes the task of an alliance manager?

Hussein trained the employees of his alliance partner in the skills needed to create a display for an e-notebook.

Why is following an unrelated diversification strategy especially advantageous in an emerging economy?

It allows the conglomerate to overcome institutional weaknesses in emerging economies.

Which of the following is a drawback of vertical integration?

It increases the potential of legal repercussions.

What is the main reason that most mergers and acquisitions negatively effect shareholder value?

Promised synergies never take place.

Which of the following scenarios would be characteristic of an entrepreneur?

Rachel implemented a new and more efficient way to produce pottery.

How does a conglomerate benefit from following an unrelated diversification strategy?

The conglomerate can overcome institutional weaknesses, such as a lack of capital markets, in emerging economies.

Which of the following is a feature of the growth stage of the industry life cycle?

The consumer demand increases.

Which of the following is a competitive benefit experienced by the first mover firm in an industry?

The first mover will be able to reduce costs through economies of scale.

Which of the conditions prevail when an industry is at the end of its life cycle?

The level of process innovation reaches its maximum as firms attempt to lower cost.

A primary advantage of organizing economic activity within firms is the

ability to coordinate highly complex tasks to allow for specialized division of labor.

When firms innovate by leveraging existing technologies into new markets, they are said to be involved in

architectural innovations.

Firms that use taper integration also use ________ when they rely on outside-market firms for some of their supplies.

backward vertical integration

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

building downstream complementary assets can be expensive and time-consuming.

Which of the following best illustrates site specificity?

equipment necessary for mining bauxite and aluminum smelting

The customers entering the market in the growth stage are primarily

early adopters.

It is important for a firm to win over the early majority section of the market to ensure the commercial success of an innovation because they

enter into the market in large numbers, creating a herding effect

Which of the following is an ineffective practice in alliance management?

focusing on developing an alliance-management capability in isolation

Each stage of the vertical value chain typically represents a distinct ________ in which a number of different firms are competing.

industry

Which of the following lists the stages of the industry life cycle in the correct order?

introduction, growth, shakeout, maturity, and decline

Which of the following motivations for business growth involves principal-agent problems?

motivating managers

In a radical innovation, a firm targets A. existing markets by using new technologies. B. new markets by using existing technologies. C. new markets by using new technologies. D. existing markets by using existing technologies.

new markets by using new technologies

The strategic objective of a first mover during the introduction stage of the industry life cycle is to

pursue a harvest strategy.

The process of alliance management begins with

selecting the best possible partner

In terms of the build-borrow-or-buy framework, a firm's internal resources are considered to be relevant when they are

similar to those that need to be developed and superior to those of competitors in the targeted area.

A drawback involved in using cross-border strategic alliances to enter new foreign markets is that

some of the firm's proprietary know-how may be appropriated by the foreign partner.

A voluntary arrangement between firms that involves the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services is best described as a

strategic alliance

In a non-equity alliance, which of the following types of information would firms most likely share?

the documented information about the material composition of a product

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

the horizontal integration activity has the potential to reduce competitive intensity in an industry.

What is horizontal integration?

the process of merging with a competitor at the same stage of the value chain

A drawback of short-term contracting as an alternative to making a component in-house is that

the supplying firm has no incentive to make any transaction-specific investments to increase performance or quality.

A firm follows a(n) ________ when less than 70 percent of its revenues come from a single business and there are few, if any, linkages among its businesses.

unrelated diversification strategy

Decisions relating to "what stages of the industry value chain to participate in" determine a firm's

vertical integration