Business poliCy quiz 9

The managers at Movo Automobile Inc. want to diversify their business by acquiring a consumer electronics company. This acquisition would mean increased job security, higher compensation, and greater decision-making authority for the managers. The managers correlate this acquisition to greater power for them rather than to the appreciation in shareholder value. In this scenario, this acquisition by Movo Automobile is most likely a result of A. time compression diseconomies. B. experience-curve effects. C. principal-agent problems. D. resource ambiguity.

C. principal-agent problems.

Which alliance type is the Renault-Nissan alliance, where Nissan owns 15 percent of Renault, and Renault owns 44.4 percent in Nissans

Equity Alliance

What did Microsoft do to gain a foothold in the online search and advertising market dominated by Google?

It entered into a strategic alliance with Yahoo.

Which of the following statements is NOT true of tacit knowledge?

It is regularly shared between partners in a non-equity alliance.

A consumer electronics company is in the process of evaluating whether it should pursue an internal development strategy or an external growth strategy. To make this decision, the management needs to assess whether the company's internal resources are superior to those of competitors in the targeted area. Which of the following strategic management models would be most useful in this assessment?

VRIO framework

When entering a foreign market, it is advisable for a new venture that has a core competency only in R&D to form a strategic alliance with a local partner because:

building downstream complementary assets can be expensive and time-consuming.

Titan Autos Inc. merged with its competitor, Cadvia Autos Inc. This allowed Titan Autos to use its technological competencies along with Cadvia Autos's marketing capabilities to capture a larger market share than what the two entities individually held. What does this scenario best illustrate?

horizontal integration

The main reason behind Google's decision to acquire the Israeli startup company Waze for $1 billion was to:

preempt its competitors from buying Waze.

A drawback involved in using cross-border strategic alliances to enter new foreign markets is that

some of the firm's proprietary know-how may be appropriated by the foreign partner.

The success of the Pixar-Disney strategic alliance demonstrated that:

the two entities' complementary assets matched.