chapter 8 reading quiz

Greyer Corp. has developed a special drug that kills cancer cells. While the scientists at Greyer have the knowledge, they are short on equipment, money, and marketing know-how. In this situation, the most appropriate step for Greyer would be to:

find a partner to collaborate with to sell the drug

Alumplus Aluminum Company has come up with a new type of metal. However, producing it would take up 75 percent of its manufacturing capacity and would hinder its ability to continue producing its other products. Alumplus Aluminum hires LM Group of Manufacturers to manufacture the new type of metal. This collaborative arrangement is most likely to be classified as _____.

outsourcing

when technology is progressing rapidly, firms are more likely to:

use linkages with other specialized firms to access resources they do not possess

Carl owns a software firm, and Mike owns a computer hardware manufacturing firm. They decide to create an alliance in order to manufacture laptops and desktops using the shared competencies of their respective firms. When creating the alliance, they make sure that each of them invests 50% capital and that they would each own a specified right to a percentage of the profits from the alliance. The collaborative relationship in this scenario is known as _____.

equity ownership

which of the following statements is true of a collective research organization?

it allows a firm to share the cost and risk of basic research

which of the following is an advantage of collaborating?

it gives firms more flexibility

Easymake Corp. developed a new Web design software to build Web pages for its clients. However, Easymake soon realized it could make more money by selling this software to those who wish to quickly build Web pages to sell their products. Which of the following would be the most appropriate strategy for Easymake?

it should become a licensor of the new web design software

Allured Architecture Inc. collaborated with Maze & Matiz Corp. to form a new architecture firm called AllureAmaze Inc. Both the firms had a significant equity stake in the new entity. This collaboration would most accurately be termed a(n) _____.

joint venture

The R&D team of Zelda Technozone Inc. has developed a prototype for a two-seater car that runs primarily on solar energy. Since the firm usually manufactures household appliances, the management acknowledges that it does not have the required competencies to manufacture this car on a large scale. It decides to access another firm's manufacturing competencies. Which of the following collaborative arrangements is most appropriate in this scenario?

joint venture

Allured Cosmetics Corp. enters into a contractual agreement with Pure Cosmetics Inc., a manufacturing firm in the West Coast. According to the contract, Pure Cosmetics can use the manufacturing processes of Allured Cosmetics to produce cosmetics in return for a specific fee. Pure Cosmetics is bound to use the manufacturing process only to make complementary products for the cosmetics manufactured by Allured Cosmetics. This collaborative arrangement is classified as _____.

licensing