Ch. 9 Questions

Which of the following are the three options used by executives to drive firm growth?

organic growth alliances acquisitions

What are the two necessary conditions for successful alliance formation?

partner compatibility partner commitment

Which of the following are extremely important aspects of alliance success?

partner compatibility inter-organizational trust

A voluntary arrangement between firms to share knowledge, resources, and capabilities to develop products, processes, or services is known as a

strategic alliance

A partnership that is based on contracts between companies is referred to as a

non-equity alliance

How can firms build alliance management capability?

through repeated experiences over time

How do mergers and acquisitions differ?

A merger describes the joining of two independent companies, while an acquisition describes the purchase or takeover of a firm

T or F: In most cases, mergers and acquisitions create competitive advantage?

False

Which approach to strategic decision making takes a larger investment decision and divides it into multiple smaller decision that happen over time?

a real-options perspective

What is the term for the purchase or takeover of one company by another?

acquisition

Which of the following terms refers to a company's ability to handle three tasks related to an alliance concurrently and effectively?

alliance management capability

A conceptual model that helps strategists choose between seeking internal development, entering into an alliance, or acquiring new resources, capabilities, and competencies is the "________ framework"

build-borrow-or-buy

Agreeing to _________ Pixar helped Disney at a time when the company's performance was lackluster.

enter a strategic alliance with

What must strategic alliances do in order to create the foundation for a competitive advantage?

form unique resource combinations that obey the VRIO criteria

In 2010, Kraft Foods bought UK-based Cadbury PLC in a hostile takeover. Kraft felt that (a) ______ with Cadbury would help Kraft break into emerging countries, since Cadbury had strong positions in countries such as India, Egypt, and Thailand.

horizontal integration

When two competitors merge, leading to industry consolidation, they are engaging in

horizontal integration

One possible source of COSTS in a horizontal integration strategy is ________

integration failure

A standalone organization that two or more parent companies create and jointly own is a

joint venture

What are the three mechanisms that alliances can be governed by?

joint ventures equity alliances non-equity alliances

When Pfizer and Wyeth merged, they reduced the size of their combines sales force while also increasing the number of drugs they could promote. This is an example of which source of value in creation for M&As?

lower costs

Gaining new capabilities or competencies is one of the three main reasons why companies

make acquisitions

Which of the following are advantages of joint ventures?

strong ties commitment trust

Knowledge that involves knowing how to do a certain task and that cannot be codified is _____ knowledge.

tacit

Which of the following are reasons why firms enter into strategic alliances?

to learn new capabilities to enter new markets to strengthen their competitive position