Global Strategy exam 2
Because the resources and relationships among partners is complex, most R&D strategic alliances are what type?
Equity(Most R&D alliances are equity strategic alliances.)
A stable alliance network is formed primarily to do what?
Exploit economies of scale and/or scope that exist between the partners.
When a firm makes continual improvements to the processes used to produce, sell, distribute, and service its products across country borders, its ability to learn how to reduce costs and increase the value of its products for its customers is enhanced. The firm is:
developing economies of scale and learning.
An automotive company has entered into a strategic alliance with a motor manufacturer. The automotive company is depending on the motor manufacturer's expertise and experience in developing high horsepower motors for small sports cars. The automotive company holds a 60 percent stake in the partnership, and the motor manufacturer holds 40 percent. The strategic alliance between the two firms is best described as a(n):
equity strategic alliance. (In an equity strategic alliance, two or more firms own different percentages of a company they have formed by combining some of their resources to create a competitive advantage.)
The complexities of cooperative strategies increase the challenge of effectively implementing them and may contribute to alliance:
failure (Carefully executing the operational details of a planned cooperative strategy is foundational to its performance and influences whether it will succeed or fail)
All of the following are incentives for pursuing an international strategy EXCEPT:
gaining a bigger share of the national market. (you're already in the national market calm down)
Two American appliance firms have equal share of the market. U.S. Elite, one of the firms, has decided to implement an international strategy in China. The firm is looking to grow manufacturing and start selling internationally while increasing its competitive advantage in the process. Why is a cross-border strategic alliance the most effective option for U.S. Elite?
he alliance enables U.S. Elite to share resources for manufacturing and knowledge about the Chinese market. (U.S. Elite can learn how to adapt its business to cultural and operational differences.)
The main objective of the collaborating firms in a cooperative strategy is to:
increase competitive advantage
When a firm buys a competitor, supplier, distributor, or business in a highly related industry so a core competency can be used to gain competitive advantage, this demonstrates an acquisition strategy to gain:
increased market power. (buying more of the market increases rev)
Fast-cycle markets are markets in which the firms' capabilities that contribute to competitive advantages aren't shielded from imitation and where imitation is often _____ and _____.
rapid; inexpensive (lower quality i.e. fast fashion)
The four determinants of national advantage are factors of production; demand conditions; firm strategy, structure, and rivalry; and:
related and supporting industries
FedEx and United Parcel Service (UPS) compete in many of the same markets and have similar types of truck and airplane fleets, similar levels of financial capital, and other similarities. These tangible and intangible resources between the two firms describe the:
resource similarity (two competitors with similar competencies)
The strategy through which a firm changes its set of businesses or its financial structure is called:
restructuring. (changes in the external environment)
A firm that responds to the first mover's competitive action, typically through imitation, is called a:
second mover (second competitor to shift their product thru imitation another i.e. Google pay)
A cross-border strategic alliance is:
strategy in which firms with headquarters in different countries decide to combine some of their resources to create a competitive advantage.
An international diversification strategy creates the potential for firms to do all of the following EXCEPT:
sustain a competitive advantage without the need to continually upgrade it (you still need and advantage even if you have high diversification)
When a target firm does not solicit an acquiring firm's bid, it is known as a(n):
takeover (unfriendly acquisition)
Ishanti owns the only yoga studio in town. However, a national gym is opening in a few months. Historically, businesses like hers have closed after the national chain opened nearby. Which of the following options should Ishanti implement?
(strategic action)comes b4 business moves in
A firm whose operations are human-capital intensive would most likely use which of the following entry modes?
A cross-border acquisition
MarTech is a technology firm. It must constantly develop product innovations and seek new markets. Its products are made up of a combination of hardware, requiring multiple component parts, and software which is regularly updated. What type of alliance network will MarTech use in order to develop additional competitive advantages?
A dynamic alliance network (Dynamic alliance networks are used in industries characterized by frequent product innovations and short product life cycles)
In which of the following scenarios would a firm choose to downsize rather than downscope?
A firm has excess resources after acquiring another firm. (too much human capital for the operations i.e no need for two HR departments)
What is explicit collusion?
A form of competition-reducing strategy in which two or more firms negotiate directly to determine the amount to produce and the prices for the product. (i.e. the canadian grocery store example)
Which of the following firms is more likely to take competitive action?
A small firm (big firms with brand awareness do not need to compete as much)
What is an international diversification strategy?
A strategy through which a firm expands the sales of its goods or services across the borders of global regions and countries into a potentially large number of geographic locations or markets. (instead of a firm entering just one or a few markets, the firm uses international business-level strategy and corporate-level strategy to enter multiple regions and markets to sell its products)
A new family-owned organic grocery store has been successful since its grand opening nearly a year ago. With little competition in the area, the organic grocery store has been particularly successful in selling organic food to consumers. The grocer has just found out that Whole Foods will be starting construction on a new store nearby. The grocery store feels that its family ownership and locally grown food offerings give it a position in which to take action against the developing Whole Foods. However, as a small business, the organic grocery store does not have the financial means to launch a rivalry against Whole Foods. In this instance, the organic grocery store is missing which driver of competitive behavior?
Ability (do not have resources and $$ to compete with the Rich people food)
Which of the following relates to a firm's resources and the flexibility they provide?
Ability (without flexibility and resources firms don't have the Ability to compete)
Which of the following statements best explains how shareholders are affected by acquisitions?
Acquired firms' shareholders often earn above-average returns as a result of acquisitions, whereas acquiring firms' shareholders often earn returns that are close to zero as a result of acquisitions. (acquiring a firm is an investment for the buyer and the one being bought is to increase their power and profits)
A jewelry firm has recently acquired its gem supplier. The jewelry firm prides itself on always being the first to predict and serve new trends. For example, the firm was one of the first to introduce rose gold jewelry pieces after research predicted a large demand. Which of the following attributes of the firm helps it to maintain a long-term competitive advantage in markets?
Acquiring firm has a sustained and consistent emphasis on research and development (R&D) and innovation. (know your market and consumers)
Which of the following is an attribute of a successful acquisition?
Acquiring firm has financial slack (larger companies have more to spend during the acquisition)
Which of the following is an example of multimarket competition?
Company A makes tomato sauce sold to consumers in grocery stores and to restaurants. Company B sells tomato sauce to consumers in grocery stores. (in stores and restaurants)
Car maker BAAS is known for its risky competitive behavior, including drastically changing its prices over short time spans. Based on this information, which of the following is the most likely competitor response?
Competitors will be less likely to respond because of BAAS' risky behavior. (this behavior is not sustainable)
Based on what you know about the various cooperative strategies, which is the most costly to implement?
Corporate-level cooperative strategy (Corporate-level cooperative strategies commonly are broader in scope and more complex, making them relatively more challenging and costly to use.)
When a company in a cooperative strategy is implementing mechanisms to ensure that its partner does not use its trade secrets to benefit outside the relationship alone, a firm is practicing which cooperative strategy management practice?
Cost minimization
Two approaches used to manage cooperative strategies are:
cost minimization and opportunity maximization
A firm in France that makes locally made designer loafers has decided to expand its operation to the United States to meet the "Made in America" market demand. In order to do so, the firm has decided to partner with a United States shoe manufacturer to produce the loafers. What type of strategic alliance would best fit the partnership the firm is looking for?
Diversifying
____ generally leads to more positive outcomes in both the short and long term.
Downscoping (long-term outcome of higher performance, is a product of reduced debt costs, and has an emphasis on strategic controls derived from concentrating on the firm's core businesses)
Tommy's Toys, once the leading children's toy retailer in the region, has seen declining profits over the past decade. The firm has decided to close all of its 38 stores and move to an online-only retailing operation. Although it will need to expand its warehouse operations by about 100 employees, it will be eliminating approximately 500 retail sales employees. What is this restructuring strategy called?
Downsizing (fired) (rip that 401k)
Based on the various long-term outcomes, which restructuring strategy is the least recommended to implement?
Downsizing (improves labor costs but decreases performance)
The long-term outcomes of a leveraged buyout are higher performance and higher risk. What two short-term outcomes lead to these long-term outcomes?
Emphasis on strategic controls and high debt costs (with larger come come more controls and procedures and higher debt due to increase risk)
An appliance company is considering entering the global market. It is unsure of what steps to take and is looking for a cost-effective method to work with a company that is already in the hosting country. Based on these preferences, which of the following modes of entry should the company choose?
Entering into a strategic alliance (Entering into a strategic alliance would enable the company to share risks and costs with another host company,)
Germany is known for its excellent technical training system, which has a strong emphasis on continuous product and process improvements. If Germany did not have such a system, it would lack which of the following determinants of national advantage?
Firm strategy, structure, and rivalry (The types of firm strategy, structure, and rivalry influence Germany to consistently measure itself against competitors and surpass them through innovations.)
What are the advantages of choosing a vertical complementary strategic alliance versus a horizontal complementary strategic alliance?
Firms can partner to share resources for separate parts of the value chain, which helps them if they are pursuing projects in which they do not have previous experience in specific stages of the value chain.
Which of the following is a positive effect of downscoping?
Firms refocus on their core business. (optimizing core operations, cutting the excess)
If firms did not participate in cross-border strategic alliances, what might happen for firms expanding internationally?
Firms would struggle to implement international strategies without the ability to use the resources and expertise of local firms in the foreign markets they were trying to enter.
Which of the following statements about standard-cycle markets is true?
Firms' competitive advantages are partially sustainable (They are sustainable for longer periods of time in slow-cycle markets and not sustainable in fast-cycle markets)
Which of the following may result if Bella's Eatery does not conduct a competitor analysis?
Formation of competitive blind spots (lack of preparation would allow new entrants to steal market space)
How can firms implementing an international strategy become limited by diversification?
Greater geographic dispersion across country borders results in increased costs of coordination between units and distribution of products. (As firms develop more and more locations in various countries, it becomes more expensive to keep up with the operations of each location.)
The short-term outcomes of downscoping include reduced debt costs and an emphasis on strategic controls. What is the long-term outcome that results from the short-term outcomes?
Higher performance (concentrating on core values will creates higher performance)
A publishing company publishes books, magazines, and scholarly journals. It is making far more money from its magazines and journals, so the firm has decided to downscope its book business, which will enable it to focus exclusively on new developments and growth in magazines and journals. What is the long-term outcome of the firm's decision?
Higher performance (focusing on what sell the most cut the excess fat)
Which of the following is NOT a managerial function for top-level executives during the acquisition process?
Identifying and pursuing other opportunities with external stakeholders (Identifying and pursuing other opportunities is a normal function of top-level executives, not part of the acquisition process)
Risks associated with cooperative strategies include a partner's failure to present its resources to the other, as well as one firm acting opportunistically towards the other with the use of the partner's resources. How can these two risks be a result of each other?
If one firm feels that the other will act opportunistically, it might withhold its promised resources to keep the partner from gaining access to proprietary information.
Which of the following is an advantage of being part of a slow-cycle market as opposed to a fast-cycle market?
In slow-cycle markets, firms can shield themselves from imitation. (competitors lack the ability to imitate the firm's competitive advantages and it would be costly to do so.)
A large software company is in the process of acquiring a small tech startup that has built an app for developers to code websites on their smartphones. It is rumored that the software company has grossly overestimated the future growth as a result of the acquisition. If this turns out to be true, what common acquisition problem has the software company encountered?
Inadequate evaluation of target (they over estimated the value of this company they will incur a loss)
What are the three basic benefits that firms can enjoy by successfully using international strategies?
Increased market size, increased economies of scale and learning, and development of a competitive advantage through location
A semiconductor company has established a plant overseas in South Africa, where the power grid is somewhat unreliable. Which of the following economic risks is most relevant to the circumstances of the semiconductor company?
Infrastructure
If IKEA chose to implement a multidomestic strategy in which it practiced global efficiency and local responsiveness instead of its current successful global strategy, which of the following would be the most likely outcome?
It would sacrifice the efficiency of centralized operations and distribution, which could affect its cost position, potentially driving up costs and prices. (If IKEA implemented a multidomestic strategy, it would no longer benefit from some of its current efficiencies as it tried to tailor its product offerings to meet the local markets it sought to serve.)
A firm seeks to implement an international strategy in a location with which it is unfamiliar. The firm is unaware of the economics and cultural preferences of the location. The firm is influenced by which of the following environmental trends?
Liability of foreignness (Liability of foreignness is a set of costs associated with various issues firms face when entering foreign markets, including unfamiliar operating environments; economic, administrative, and cultural differences from their home institutional environments; and the challenges of coordination over distances.)
A company is looking to expand internationally in the least costly way as possible. Which entry mode should it choose?
Licensing (he licensee takes the risks and makes the monetary investments in facilities for manufacturing, marketing, and distributing products. As a result, licensing is possibly the least costly form of international diversification.)
A large car manufacturer has cut all but two of the employees in its marketing department to save money and return to profitability. What is the likely long-term outcome of this move?
Loss of human capital and lower performance (results of downsizing)
Which of the following characteristics can be used to describe licensing as an entry mode?
Low Risk
Which of the following is the result of a merged firm that maintains a low to moderate debt position?
Lower financing cost (lower debt= lower financing)
A firm owns a wide variety of consumer goods businesses. Its portfolio includes a grocery store, shoe store, and gas station. How might the diversification of its businesses impact its ability to have successful acquisitions?
Managers are unequipped to evaluate the success of businesses on a deeper level than finances. (non specialized market do not have the ability to focus on a new business bc they lack the insights)
Sandra is developing a competitor analysis for two florists. Which of the following information in the analysis will be the basis for predicting the competitors' behavior in the form of their competitive actions and responses?
Market commonality
Two specialty craft stores have just been bought by craft giant Ultimate Crafts. By rebranding the small stores, Ultimate Crafts' executives hope to gain strategic competitiveness in what way?
Market power (by having the majority of the market increases sales and loyalty)
Which of the following statements does NOT describe a challenge associated with the integration process of an acquisition?
Meld two or more similar businesses' cultures (their similar to procedures will be easy to implement)
In which of the following international strategies are strategic and operating decisions decentralized to the strategic business units in individual countries or regions in order to allow each unit the opportunity to tailor its products to the local market?
Multidomestic strategy
SmallTown BigWorld, Inc. created a sports game that is customized for many different locations. The company has expanded its local markets in many locations in several countries. Although the company is doing well, it has several problems. Because each location does so much on its own, the corporation doesn't share knowledge internally because of the differences across markets, decentralization, and the different international business-level strategies employed by local units. It has not been able to develop economies of scale. Which of the following strategies is the company using?
Multidomestic strategy (A multidomestic strategy is an international strategy in which strategic and operating decisions are decentralized to the strategic business units in individual countries or regions for allowing each unit the opportunity to tailor products to the local market.)
In what type of strategy do several firms form multiple partnerships in order to reach their shared objectives?
Network cooperative strategy (A network cooperative strategy is a strategy by which several firms agree to form multiple partnerships to achieve shared objectives.)
A convenience store chain recently implemented an international diversification strategy by opening stores in Canada, Australia, and several South American countries. As a U.S.-based company, the chain is still actively learning how to manage its new geographical diversification. Six months in, the firm has seen a drop in its return on investment. Should executives be concerned for the firm's future?
No, typically when a firm implements an international diversification strategy, its return on investment decreases initially and then increases quickly as the firm learns how to manage the increased geographical diversification it has created.
A car manufacturer and its partner in a cooperative strategic alliance have very minimal contract terms. Both firms are hoping to learn from each other to develop new, value-creating, innovative products. By implementing very few contractual terms in their alliance, the two firms are managing their cooperative strategy using which approach?
Opportunity maximization (By using an opportunity maximization approach, both partners make it crucial that they trust one another within their cooperative strategy.)
How is an opportunity maximization approach a more effective alternative to the cost minimization approach of managing cooperative strategy?
Opportunity maximization comes with a high level of trust between partners, which leads to an increased likelihood of success.
In order to remain relevant, firms must explore opportunities to maintain or increase their competitive advantage at all times. In doing so, some opportunities may be out of reach of the firm's normal capabilities. By entering into strategic alliances, how can a firm achieve competitive advantage?
Partnering with another firm in a strategic alliance and trading valuable resources enables both firms to further develop their products or markets to gain competitive advantage.
The probability of disruption of the operations of multinational enterprises by political forces or events whether they occur in host countries, home country, or result from changes in the international environment describes which of the following risks associated with international strategy?
Political risk
A clothing manufacturer that sells wholesale to small fashion boutiques has just expanded its operations internationally to South Korea. In that country, labor costs and various materials are cheaper. If South Korea contemplates closing its border to importing and exporting because of an international military conflict, the clothing manufacturer would suffer as a result of which of the following environmental risks to its international strategy?
Political risks
Your company, which transports medical equipment to emerging nations, is conducting a political risk analysis before signing a contract to transport equipment within a South American country. Which of the following findings in the political risk analysis would indicate that the company should NOT sign the contract?
Potential nationalization of invested assets
A popular juniors clothing store features young designers and has been very successful. To gain strategic competitiveness, the clothing store frequently acquires young social-media sensations' designs and brings their designs to life in the store. What type of acquisition is the store using to increase its strategic competitiveness?
Related acquisition (related acquisition, firms seek to create value through the synergy that can be generated by integrating their complementary resources.)
Which of the following characteristics best describes tactical actions?
Relatively easy to implement and reverse (has to be easy because tactical actions change often to adapt to market changes)
A pharmaceutical company has a patented antidepressant that has few side effects and dominates the market. The company has been conducting research and development (R&D) to improve this drug for several years. The pharmaceutical company would be categorized as part of a _____ market.
Slow-cycle (refers to time it takes to release product/quality of product)
Which of the following is a market-based move that firms take to fine-tune a strategy?
Tactical action (easy to implement and reverse)
When a firm takes over another firm in an unfriendly acquisition process, what is a challenge to its future success?
The firm will struggle to effectively integrate its operations. (culture clash and unwillingness ((i.e. that office ep))
Which of the following is NOT a reason for a firm to respond to a competitor's action?
The firms have resource dissimilarity. (they don't need to compete if the product is not similar)
Spark is the only energy company in the fictional country of Blacksburgia and therefore holds a monopoly in its home country. Spark's lack of competition in its home country can contribute to an international strategy in which of the following way?
The resources gained at home can be invested in international markets.
A small software firm has formed a cooperative strategic alliance with a startup company to develop the startup's product, an app for smartphones. The startup promised to connect the software firm with other startup companies looking for software services. So far, the startup has not followed through, while the software firm has neared completion of its portion of the app development. Based on this scenario, which risk has manifested in the alliance between the software firm and the startup company?
The startup has failed to make its resources available to the software firm. (By failing to connect the software firm with other startups who are seeking software services, the startup is not following through on making its resources available to its partner.)
Ronson Foods, a corporation that operates more than 400 large supermarkets in 12 states in the northeastern United States, is considering acquiring East Coast Organics, a small chain of 26 specialty food stores known for their friendly atmosphere and humorous advertising. While many see the potential in this acquisition, some analysts worry about the integration process following the acquisition. What is a difference between the two that might cause difficult integration?
There may be cultural differences in operations between the two firms. (the two companies follow different values and strategies)
DOS, a leader in the computer industry, implemented a new strategic action to offer a video streaming service to consumers. The move has proven to be successful. How are competitors likely to respond?
They are likely to imitate the action quickly. (if it works, steal it)
Why would firms choose to use complementary strategic alliances?
To focus on long-term product development and distribution opportunities (Complementary strategic alliances involve firms sharing resources throughout each stage of the value chain for the purpose of creating a competitive advantage.)
As web development continues to grow as a career field, more and more education options are being created for interested mid-career professionals. A software firm that has developed online courses for people to learn web development has decided to partner with a popular computer manufacturer to build a laptop with a special keyboard and interface elements for web development education. The idea came after a competitor implemented a similar strategy to develop a smartphone interface compatible with educational software. Which of the following is a motive for the education and computer firms to implement a cooperative strategy?
To outperform rivals with a similar idea (By developing a competing product, the manufacturer and software firm can seek to outperform rivals in the same industry.)
Why would a firm in a standard-cycle market want to pursue a strategic alliance?
To overcome trade barriers
An American sandal company has completely saturated its local market. The sandals, which are made of specially molded rubber soles that minimize soreness associated with unsupportive soles, have started to build a demand in Australia, a market the company is unfamiliar operating in. Why might the sandal company enter into a cooperative strategy with an Australian firm?
To share unique resources to design, produce, and launch the product in Australia
A large car manufacturer has acquired its tire supplier through a vertical acquisition. Unfortunately, instead of realizing economies of scale by adding to its value chain, the manufacturer has had a very small return on its investment. The firm is struggling to prioritize its efforts between manufacturing and acting as a tire supplier for outside businesses. With so much production power and so little use of it, the manufacturer's operations have become ineffective. What common problem of acquisitions has the manufacturer encountered?
Too large (there is not sufficient economic benefit to outweigh the cost of managing a more complex organization.)
Which of the following is an example of a problem that can prevent an acquisition from being successful?
Too much diversification (too much focus on what not making profit purely for the abundance rather than quality)
Upon reaching saturation level in the U.S. market, a fitness firm with an activity tracker decides to expand its service internationally, where its technology is superior. This illustrates which of the following incentives for implementing an international strategy?
Using rapidly developing technologies in other countries (The company has the opportunity to expand its service using a technology it has mastered that other national markets have not.)
A tech startup is exploring ways to develop an app that allows patients to visit their doctors virtually. The startup is partnering with a local practice to compile data, including symptoms, common ailments, and clinical expertise, to be accessible through the interface of the app. The company anticipates the project will take two to three years. What type of business-level strategy best fits this partnership?
Vertical complementary strategic alliance (commonly use a vertical complementary strategic alliance for long-term product developments.)
What does it mean when an acquisition is unable to achieve synergy?
When the acquiring firm and acquired firm do not effectively share resources, economies of scale, and economies of scope across the businesses. (unorganized company cannot integrate another, lack of ability)
Strategic competitiveness is achieved when a firm successfully manages political, economic, and other institutional risks while implementing its international strategies. The degree to which a firm achieves strategic competitiveness through international strategies is increased when they successfully implement:
an international diversification strategy. (By implementing an international diversification strategy, a firm expands the sales of its goods or services across the borders of global regions and countries into a potentially large number of geographic locations or markets.)
interactions among the four determinants of national advantage influence a firm's:
choice of international business-level strategy (The four determinants of national advantage influence a firm's choice of international business-level strategy and its ability to be internationally competitive)
A fast-food chain, Bob's Bussin Burgers, has just launched a campaign to market its new 10 pound-and-a-half burger against its competitor, Lou's Burgers, who previously sold the bussyest burger in town. Bob's Bussin Burgers' strategic move against Lou's Burgers is a:
competitive action. (he competing)
Awareness affects the extent to which the firm understands the consequences of its:
competitive actions and responses. (Awareness refers to the extent to which competitors recognize their place in a market)
Slow-cycle markets are markets in which the firm's:
competitive advantages are shielded from imitation, commonly for long periods of time, and where imitation is costly. (takes time for quality and unique product)
By introducing Google Pay in response to Apple Pay, Google hopes to build and defend its competitive advantages and improve its market position through:
competitive behavior (improving their market thru imitation)
Awareness, motivation, and ability are drivers of:
competitive behavior.
One constant improvement among smartphones of all brands is camera quality. As soon as Samsung, Google, or Apple introduces an updated phone, the others respond with equal or better quality in their next update. These competitive moves can be encompassed as the _____ of that market.
competitive dynamics (total set of competitive actions and responses taken by all firms competing within a market.)
The ongoing set of competitive actions and competitive responses that occurs among firms as they maneuver for an advantageous market position is:
competitive rivalry.
Rumor has it a new restaurant is coming to town called Italia Noodles. However, the owners are waiting to compare market commonalities and resource similarities to other local Italian restaurants. Italia Noodles is conducting a:
competitor analysis (step 1 for a competitor in their market)
Firms operating in the same market, offering similar products, and targeting similar customers are:
competitors
A strategy in which firms collaborate to achieve a shared objective is known as:
cooperative strategy
A strategy through which a firm collaborates with one or more companies to expand its operations is called:
corporate-level cooperative strategy. (Diversifying alliance, synergistic alliance, and franchising are types of corporate-level cooperative strategy.)
One of the biggest economic risks of international strategy that can reduce the value of a firm's assets is:
currency fluctuations. (The differences and fluctuations in the value of currencies is among the foremost economic risks of using an international strategy.)
Apple quickly launches its next wave of innovative iPhones in order to keep up with competitors, such as Samsung and Microsoft. Imitation is rapid and inexpensive in the smartphone industry. Apple is a part of a _____ market.
fast-cycle (people want new phones fast with limited innovation)
A firm can cope with differences in governmental policies and practices in the host country in which it has implemented an international strategy by:
forming a strategic alliance. (Partnering with companies in different countries allows the foreign-entering firm to rely on its partner to help deal with local laws, rules, regulations, and customs.)
A U.S.-based auto manufacturer is founded to focus on environmentally friendly smart cars. As it expands, it sets its sights on operating in France, where the population highly values compact "green" cars. By implementing an international strategy in France, the company will hope to gain:
increased market size (global market increase market power)
When a firm uses a franchise as a form of corporate-level strategy, the franchisee gains the license of the franchisor's trademark and method of doing business through a(n):
initial franchise fee and ongoing royalty rate.
A strategy through which the firm sells its goods or services outside its domestic market is called a(n) _____ strategy.
international
Environmental trends, such as liability of foreignness, can impact a firm's choice of _____ strategy.
international corporate-level (cooperate will operate differently overseas)
A common reason firms enter into cross-border strategic alliances is:
limited domestic growth opportunities and foreign government economic policies
The number of markets with which a firm and a competitor are jointly involved and the degree of importance of the individual markets to each is referred to as:
market commonality. (same markets respond to a competitor's actions not only within the market in which the competitor took an action, but also in other markets with their rival.)
FreeForAll is an online retailer for graphic T-shirts and hats. Previously, it was the only mass retailer for such goods. Hatz, an in-store retailer that sells predominantly baseball hats, has just launched an e-commerce site that also features T-shirts for sale. FreeForAll has decided to respond quickly to Hatz's competitive action. This decision is based on FreeForAll's:
market dependence.(dependent on the market (or lack of) rather than the quality and loyalty to a product)
Disney bought Pixar in 2004 to extend and begin a new partnership in its renewed focus on animation. In the deal, Steve Jobs, the CEO of Pixar at the time, vowed to preserve the independent nature of Pixar. Since then, the two have put out hits such as the Toy Story, The Incredibles, and Nemo franchises. This partnership is an example of a(n):
merger (two companies in the same field combine)
The need to create _____ for stakeholders is a primary influence on a firm's decisions to engage in merger and acquisition activity.
value
Southern Poultry, a large poultry-growing operation, has agreed to be acquired by its' best customer, Chuck's Chicken 'N Biscuits, a popular regional chain of fast-food restaurants, to ensure the long-term health of the operation. This type of acquisition is called:
vertical acquisition.(occurs when a company acquires a supplier of distributor)((Horizontal occurs when company acquires a company is the same industry i.e. Facebook & Insta))
