Ch. 9 Quiz

Stable alliance networks will most often:

Appear in mature industries where demand is relatively constant and predictable.

Which of the following statements is true? -Most cooperative strategies are successful if the basic agreements are well written and include appropriate monitoring strategies. -As many as 50 percent of cooperative strategies fail. -Opportunistic behaviors are usually focused on gaining the use of the partner's manufacturing and financial resources. -Problems with international cooperative strategies usually concern financial-system differences between the partners.

As many as 50 percent of cooperative strategies fail.

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?

BPM and J3 will both own 50 percent of the venture and a new company will be formed.

If a firm pursues a strategic alliance in order to reduce industry overcapacity, that firm most likely operates in what type of market?

Standard-cycle

What might be a reason that the number of cross-border alliances are continuing to increase?

They can occur in virtually all industries.

__________ are LEAST likely to involve potential or current competitors.

Vertical complementary strategic alliances

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 questions that Greentech should consider before entering this alliance include all of the following EXCEPT: -Has AsiaFoods accurately represented its competencies? -Will AsiaFoods make alliance-specific investments? -Can Greentech expect opportunistic behavior from AsiaFoods? -Will Greentech be able to use a cost-minimization management strategy in the AsiaFoods alliance?

Will Greentech be able to use a cost-minimization management strategy in the AsiaFoods alliance?

A strategy in which firms work together to achieve a shared objective is a:

cooperative strategy

Legitimately, a firm may pursue an international strategic alliance for all of the following reasons EXCEPT to: -enhance the compensation packages of top managers. -leverage core competencies in new markets. -operate within government restrictions in the local country. -escape limited domestic growth opportunities.

enhance the compensation packages of top managers.

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 market containing products with a 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:

excess resources for investing.

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:

gain access to Pet Resort's tacit knowledge.

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:

internalize the knowledge about the successes and failures of this alliance so FrameCo can learn from the experience.

Moon Flower Cosmetics Company's 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 the United States. Beyond being a cross-border alliance, this partnership can be called a(n):

joint venture

In a franchising strategy, the franchisee __________ to the franchisor.

pays an initial franchise fee and ongoing royalties

In a cross-border alliance, the local partner is often a useful source of information about:

sources of capital.

All of the following are business-level cooperative strategic alliances EXCEPT: -synergistic strategic alliances. -uncertainty-reducing strategic alliances. -complementary strategic alliances. -competition-response strategic alliances.

synergistic strategic alliances.

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:

tacit collusion.

The opportunity-maximization approach is more difficult to establish in international relationships than in domestic relationships because of differences in all of the following EXCEPT: -laws. -culture. -trade policies. -technology.

technology

In free-market economies, __________ must decide how rivals can collaborate with their competitors without violating established regulations.

the government

Of the various business-level strategic alliances, __________ alliances have the most probability of creating sustainable competitive advantage, and __________ have the lowest.

vertical complementary; competition-reducing