BUS 345 CH.9

The success of the Pixar-Disney strategic alliance demonstrated that

A. Disney was in desperate need of Pixars graphic display systems. B. the two entities complementary assets matched. C. it was easier for the alliance partners to reduce the value gap created. D. the companies were effectively managing an unrelated diversification strategy.

Which of the following statements is true of an equity alliance?

A. An equity alliance is based on contractual agreements rather than partial ownership. B. In an equity alliance, the partners frequently exchange personnel to make the acquisition of tacit knowledge possible. C. In an equity alliance, a standalone organization is created that is jointly owned by two or more parent companies. D. An equity alliance creates weaker ties between the alliance partners when compared to a non- equity alliance.

The process of alliance management begins with

A. selecting the best possible partner. B. choosing an appropriate governance mechanism. C. designing the alliance. D. creating resource combinations that obey the VRIO criteria.

Which of the following scenarios best illustrates horizontal integration?

A. Regal Autos Inc. enters into a licensing contract with a distributor in a new international market. B. Regal Autos Inc. acquires a component parts manufacturer who previously supplied to Regal Autos competitor. C. Regal Autos Inc. sets up its own distribution channel and retail stores. D. Regal Autos Inc. joins with Marcus Motors Inc., one of its direct competitors.

Partner compatibility and partner commitment are necessary conditions for successful alliance formation. Partner compatibility captures

A. aspects of cultural fit between different firms in an alliance. B. features of the financial health of the different alliance partners. C. the readiness to accept short-term sacrifices to ensure long-term awards. D. the willingness to make available necessary resources.

Equity alliances are less common than non-equity alliances because they

A. depend on contractual agreements. B. produce weaker ties between partners. C. fail to facilitate the transfer of tacit knowledge. D. often require larger investments.

Which of the following reasons motivated Facebook to acquire Instagram, a photo and video- sharing social media site, for $1 billion in 2012?

A. the desire to gain a new capability B. the need to enter a new geographical market C. the need to reduce its level of horizontal integration D. the desire to pursue an unrelated diversification strategy

What is horizontal integration?

A. the process of merging with a competitor at a different stage of the value chain B. the process of merging with a competitor at the same stage of the value chain C. the process of acquiring a competitor at a higher stage of the value chain D. the process of acquiring a competitor at a lower stage of the value chain

Why did Pixar enter into a strategic alliance with Disney?

A. to develop into a live-action feature film company B. to finance and distribute high-end graphic display systems for theaters C. to develop into a computer hardware company D. to finance and distribute its newly created computer-animated movies