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Which of the following forms of agreement do non-equity alliances typically take?

- distribution - licensing - supply

What three of the following are the primary benefits of horizontal integration?

- increased differentiation - lower costs - a reduction in competitive intensity

Sources of costs in a horizontal integration strategy include which of the following?

- integration failure - reduced flexibility

Which of the following are the three choices in the build-borrow-or-buy framework? (Check all that apply.)

- internal development - acquisition of new resources - strategic alliances

What are the three mechanisms that alliances can be governed by?

- joint ventures - non-equity alliances - equity alliances

What are three options used by executives to drive firm growth?

- organic growth - acquisitions - alliances

What are the phases of alliance management?

- partner selection and alliance formation - alliance design and governance - post-formation alliance management

A firm with alliance management capability is able to effectively manage which of the following tasks?

- post-formation alliance management - alliance design and governance - partner selection and alliance formation

Which of the following are benefits of a horizontal integration?

- reduced competition - increased differentiation

Horizontal integration through mergers and acquisitions can create costs. Which of the following are sources of such costs?

- reduced flexibility - increased potential for legal repercussions

Why might a firm create a joint venture when entering a new geographic market?

- to access local contacts - to access local expertise - to adhere to local law

Which of the following are reasons why firms enter into strategic alliances?

- to enter new markets - to strengthen their competitive position - to learn new capabilities

Which are the three main reasons firms make acquisitions?

- to preempt rivals - to gain access to new distribution channels and markets - to gain access to a new capability or competency

Why does Facebook acquire startups?

Strategic preemption

What are some managerial advantages of building a firm into a large organization?

- Increased power - More job security - Greater prestige

How does horizontal integration affect Porter's Five Forces for the surviving firms?

- It reduces the threat of entry. - It reduces rivalry among existing firms.

Which statements about joint ventures are true?

- They are the least common of the three types of strategic alliances. - They involve the sharing of both explicit and tacit knowledge.

What is the main goal of corporate venture capital investments?

to create real options in terms of gaining access to new technologies

What is a major problem for between 30% and 70% of all strategic alliances?

At least one partner in the alliance considers the venture to be a failure.

True or false: In most cases, mergers and acquisitions create competitive advantage.

False

How do foreign governments typically influence a firm's use of strategic alliances to enter new markets?

Governments may require that foreign firms have a local joint venture partner in order to conduct business within the country's borders.

How does Lyft benefit from its strategic alliances with GM and Waymo?

It allows Lyft to more effectively compete against Uber.

Which of the following is true of tacit knowledge?

It can only be acquired through actively participating in the process.

In what way does the strategic alliance between GM and Lyft allow GM to hedge against uncertainty?

It gives GM access to the market of the future, in which private car ownership model is likely to shift in favor of fleet ownership and management.

What is a true statement about strategic alliances?

They have a high failure rate.

True or false: A horizontal integration strategy leads to industry consolidation.

True

True or false: Firms can use strategic alliances to strengthen their competitive advantage when competing in battles to control industry standards.

True

Vasily is a manager at a large snack foods company. Vasily believes his company would benefit from being larger and thinks the shareholders would support such growth. The company is doing relatively well but needs to focus on stabilizing profits and expenditures. Vasily pushes for an acquisition anyway. The reason for this acquisition is ______.

a principal-agent problem

Which approach to strategic decision making takes a larger investment decision and divides it into multiple smaller decisions that happen over time?

a real-options perspective

What allows firms to manage both strategic alliances and mergers and acquisitions?

a relational capability

Which of the following terms refers to when one firm purchases or takes over another firm?

acquisition

Which term refers to a company's ability to handle the three specific tasks related to an alliance concurrently and effectively?

alliance management capability

At which level of the corporation should strategic alliances and mergers and acquisitions be managed?

at the corporate level

A conceptual model that helps strategists choose between seeking internal development, entering into an alliance, or acquiring new resources, capabilities, and competencies is called the "______ framework."

build-borrow-or-buy

A firm might want to use a strategic alliance to ______.

change the industry structure

How willing the firms in an alliance are to share necessary resources and make sacrifices in the name of long-term rewards is referred to as partner ______.

commitment

How well the firms in an alliance fit together culturally is referred to as partner ______.

compatibility

When an established firm makes an equity investment in an entrepreneurial venture it is known as a(n) ______ investment.

corporate venture capital

On average, mergers and acquisitions ______ shareholder value.

destroy

A partnership in which at least one partner takes partial ownership in the other is a(n) ______.

equity alliance

True or false: Firms tend to enter strategic alliances when they have no other choice.

false

An advantage of using a non-equity alliance to govern a strategic alliance is its ______.

flexibility and ease of initiation

When two competitors merge, leading to industry consolidation, they are engaging in ______.

horizontal integration

A firm must decide whether to build, borrow, or buy to answer the question of ______.

how it will achieve growth

What is an important aspect of alliance success?

inter-organizational trust

The three mechanisms to govern alliances are non-equity alliances, equity alliances, and ______.

joint venture

Some foreign countries require companies to be structured as ______ in order to enter that foreign market. The companies gain access to the market, while the country gains advanced technology and know-how.

joint ventures

A(n) ______ is when two firms agree to join and create a combined entity, and a(n) ______ is when one firm buys or takes over another firm.

merger; acquisition

The most common type of alliance is a(n) ______.

non-equity alliance

Although the three tasks of alliance management capability often occur at the same time, in general what is the first phase of alliance management?

partner selection and alliance formation

When a company makes incremental investments as part of a larger investment and takes the time to analyze the information gained following each incremental investment, the company is taking a ______.

real-options perspective

In order for an alliance to qualify as ______, it must have the potential to alter a company's competitive advantage.

strategic

A voluntary arrangement between firms to share knowledge, resources, and capabilities to develop products, processes, or services is known as a ______.

strategic alliance

Equity alliances allow for the sharing of ______, which involves information that cannot be codified for completing tasks.

tacit knowledge

Which type of knowledge cannot be codified and can only be gained through active participation in the task?

tacit knowledge

The partners in non-equity alliances can have weak ties because such alliances are often ______ in nature, which can cause lack of trust and commitment.

temporary

Horizontal integration is a good option if ______.

the target firm will have more value when combined with the acquiring firm

Horizontal integration can reduce ______.

the threat of entry

If an alliance between two firms succeeds, it is likely that the firms in the alliance ______.

trust each other