WPC470 Ch 9

Which of the following best illustrates a strategic alliance?

All Pharma Inc. teaming up with a research company to invent and market breakthrough vaccines

What happens in the third phase of alliance management?

Alliance partners make relation-specific investments.

Which of the following best illustrates horizontal integration?

Rich Industries Inc. acquires its competitor, Keenbean Electronics Inc., to gain access to its core competencies.

Which of the following statements is true of the real-options perspective?

The approach allows the incumbent firm to obtain additional information at predetermined stages.

The management at Fast Autos Inc. and All Start Automobiles Inc. realized that by combining the two entities, the stakeholders of both the companies would benefit. Their core competencies would act as complementary assets to each other. Consequently, All Start Automobiles joined with FastAutos to form a combined entity called Just All Start Inc. Which of the following does this scenario best illustrate?

a merger

There are several benefits of horizontal integration. Which of the following below is not a benefit?

access to new marketing and sales divisions

In order to rejuvenate its floundering product lineup, Disney

acquired Pixar.

Builder's Square, a do-it-yourself home improvement store recently purchased Tiny Tool Inc, a smaller incumbent. This would be best described as a(n)

acquisition

The purchase or takeover of one company by another is a(n)

acquisition.

Trek Inc., a large conglomerate, took over a small startup company that had made some breakthrough innovations in the field of telecommunications. This purchase would help Trek to gain access to the startup company's superior technology and human capital. This transaction is an example of a(n)

acquisition.

The local real estate companies in a city have joined together and arranged a "Property Fair." The sponsors will equally share the expenses of the event. Although many companies compete against each other, they have joined together because the medium will help the companies market themselves through a dedicated forum at an extremely low cost. This arrangement is best referred to as

co-opetition.

A strategic alliance has the potential to help a firm gain and sustain a competitive advantage when it joins resources and knowledge that are

difficult to imitate.

Firms enter strategic alliances to

have a positive effect on economic value creation.

To secure a strong strategic position in fast-growing emerging markets, which of the following corporate strategies did Kraft Foods primarily pursue by acquiring Cadbury?

horizontal integration

The process of merging with a competitor at the same stage of the value chain is best described as

horizontal integration.

When a firm wishes to consolidate the industry in which they compete by merging with their competitors, they are engaging in

horizontal integration.

The starting point of the build-borrow-or-buy framework is management's

identification of a strategic resource gap that will impede future growth.

A nonequity alliance is the most common type of strategic alliance because

it is easy to initiate and terminate.

"A form of self-delusion in which managers convince themselves of their superior skills in the face of clear evidence to the contrary" is the definition of

managerial hubris.

A(n) ________ is used to describe the combining of two companies that are equal in size.

merger

"The process of joining two independent companies with their consent to form a combined entity on a permanent basis" is the definition of a

merger.

Which of the following is an example of explicit knowledge?

the findings of a research published in a scientific journal

Which of the following is one of the reasons that firms make acquisitions?

to gain access to a new capability or competency

Which of the following was one of the primary reasons why Adidas acquired Reebok?

to overcome a competitive disadvantage