Strat FINAL
Which of the following is an example of the principal-agent problem if the principal's goal is to create shareholder value?
A manager flies first class on all business trips.
Which of the following types of diversification tend to have the lowest performances?
Both Unrelated Diversification and Single Business Diversification
What is a major disadvantage of organizing economic activity within firms?
The Principal-Agent Problem
Which of the following statements about joint ventures are true?
They involve the sharing of both explicit and tacit knowledge.
Zipster is a local manufacturer of athletic shoes. Zipster has decided it wants to expand to global markets and to offer a larger selection of items. It plans to offer not just athletic shoes but also luggage and car accessories. Zipster is engaging in _______________.
diversification
Advantages of vertical integration include all of the following EXCEPT _______________.
diversifying partnerships with other firms
In the Boston Consulting Group matrix, _______________ hold the small market share in a low-growth market.
dogs
A partnership in which at least one partner takes partial ownership in the other is a(n) _______________.
equity alliance
The oldest form of internationalization is _______________, which involves producing goods in one country to sell to another country.
exporting
With a multidomestic strategy, products are manufactured on a local level. This has the potential of _______________.
increasing the risk of intellectual property appropriation
A benefit of international strategy is _______________.
leveraging core competencies
MNEs pursuing a multidomestic strategy hope that _______________.
local consumers will perceive them to be a domestic company
A firm follows a(n) _______________ diversification strategy when it drives less than 70% of its revenues from a single business activity and obtains revenues from other lines of business that are linked to the primary business activity.
related
To figure out if a firm's type of diversification is _______________, one can ask questions about the degree to which the corporation's business units share core competencies.
related or unrelated
A voluntary arrangement between firms to share knowledge, resources, and capabilities to develop products, processes, or services is known as a(n) _______________.
strategic alliance
Google's choice to hire programmers in-house suggests that they decided that the _______________ costs associated with this strategy are _______________ than the costs associated with contracting in the open market.
transaction; lower
A(n) _______________ strategy focuses on integration at the business level by attempting to reconcile product differentiations at low cost.
transnational
Which of the following is the best option if a company wants to show strong commitment to a partner firm without acquiring that firm?
Equity Alliance
Which of the following are alternatives on the make-or-buy continuum?
Equity Alliances
Which of the following is an advantage of organizing economic activity at the market level?
Increased Flexibility
Which of the following is an advantage of organizing economic activity OUTSIDE of a firm?
Lower administrative costs.
Which of the following is the term for the costs associated with an economic exchange?
Transaction Costs
Long-term contracts include which of the following forms?
Licensing
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.
Dream Donuts is a very successful business and the United Kingdom. It is contemplating global expansion. Which of the following strategies is Dream Donuts most likely to pursue at the beginning stages of expansion?
International
Which of the following statements about pursuing international expansion is true?
It can enhance a firm's competitive advantage.
Which of the following conditions does NOT suggest a multidomestic strategy might be the appropriate strategy for MNEs?
Lack a differentiation between domestic and foreign markets.
According to _______________, consumer needs and preferences throughout the world are converging and becoming increasingly homogeneous.
Levitt's globalization hypothesis
Which of the following forms of agreement do non-equity alliances typically NOT take?
Marketing
Which of the following are NOT part of culture?
National Boundaries
What is the purpose of the core competence-market matrix?
To provide guidance regarding how to diversify in order to grow the company.
Which of the following is NOT a main reason firms make acquisitions?
To reduce flexibility.
In the taper integration system, a firm has _______________ reliance on outside markets.
partial
Which the following is a necessary condition for successful alliance formation?
Partner Compatibility
Which of the following are among the reasons firms need to grow?
To motivate management.
Which of the following is NOT a primary reason a firm might pursue a merger?
To correct a negative inverted U-shaped relationship with scope.
Spex is a leading manufacturer of eyeglasses. Spex is based in the United States but opens a facility in a Japanese city known for cutting-edge eyeglass innovations. Spex is counting on which of the following?
Benefiting from location economies.
Which of the following is a reason a firm would NOT want to enter into an equity alliance instead of a short- or long-term contract?
To allow the partner to use the firm's trademark and business processes.
The extent to which members of a society feel anxious when faced with an unknown situation is known as _______________.
uncertainty avoidance
A firm with alliance management capability is able to effectively manage all of the following tasks EXCEPT?
Purchase of the Alliance Partner
Which of the following is one of the forms of specialized assets?
Site Specificity
Which of the following is an alternative to vertical integration?
Strategic Outsourcing
Specialized assets have _______________.
high opportunity cost
When two competitors merge, leading to industry consolidation, they are engaging in _______________.
horizontal integration
One notable advantage of a multidomestic strategy is _______________.
lower exchange-rate exposure
Gunther is transferred from the United States to Hong Kong for work. He notices that his colleagues at the new office, most of whom are Hong Kong natives, behave and communicate in a similar manner that is a striking contrast to what Gunther is accustomed to. Gunther is observing his colleagues' _______________.
national culture
The lemons problem suggests that information asymmetries can cause _______________.
superior goods to be replaced by inferior ones
Transaction cost economics helps managers do which of the following?
Choose which activities to carry out within the firm.
Which of the following is a disadvantage of the multidomestic strategy?
It is inefficient.
Wheels on the Go! is a company that manufactures tires for semitrucks. The company is entirely owned by North American Haulers, a large company in the semitruck industry. The two companies have formed a(n) _______________.
Parent-Subsidiary Relationship
Which of the following are the most important determinants of economic distance?
Per Capita Income
Which of the following statements about economic distance is true?
Wealthy companies benefit from trade when their competitive advantage is based on economies of experience, scale, and scope.
Olivia's, and all of oil company, grows and harvests all of us, makes all of oil, and distributes it is all of oil to its retail shop. Olivia's is an example of _______________.
a fully vertically integrated company
"Which national markets should the firm compete in?" is an example of a _______________-level strategic question.
corporate
When Walmart posted a list of banned suppliers on its website, this was an example of _______________.
corporate social responsibility
Which of the following is a cost associated with a related-diversification strategy?
Coordination Costs
