Quiz 7 Mangt 595

Which of the following is true about acquisitions? A. Acquisitions can be friendly or hostile B. Acquisitions can only succeed when the involved firms are of comparable size. C. In acquisitions, two independent companies join resources to form a separate third entity D. Acquisitions increase the competitive intensity in an industry

A

In 2014, Disney cancelled its licensing agreement with Mattel and transferred the licensing rights to manufacture the princess dolls line to Mattel's biggest rival - Hasbro. Since Hasbro has traditionally focused on boys' toys, they conducted additional research and redesigned all of Disney's princess dolls. Which of the following benefits of non-equity alliance is Disney taking advantage of in this case? A.They produce strong ties between alliance partners as they are permanent in nature. B. They are flexible and easy to initiate and terminate. C. They facilitate the sharing of tacit knowledge between the alliance partners. D. They are based on ownership rather than contracts.

B

In terms of the build-borrow-or-buy framework, a firm's internal resources are considered to be relevant when they are A. similar to those that need to be developed and inferior to those of competitors in the targeted area B. similar to those that need to be developed and superior to those of competitors in the targeted area C. different from those that need to be developed and inferior to those of competitors in the targeted area D.different from those that need to be developed and superior to those of competitors in the targeted area

B

All of the following are among the reasons why a large proportion of acquisitions fail to achieve desired results, EXCEPT: A.managerial hubris B. principal-agent problem C. low acquisition premiums D. poor due diligence E. integration difficulties

C

If a firm does not have any of the resources needed for pursuing a new product development opportunity, and if those resources are highly tradable in factor markets, then the firm will likely A. buy the required resources via an acquisition B. pursue internal resource development C. enter into a contractual agreement to obtain the required resources D. consider engaging in an equity alliance or acquisition to obtain the required resources

C

According to the build-borrow-buy framework, which of the following examples of build, borrow, buy decisions is NOT correct? A. Build - internal development B. Borrow - equity alliance C. Borrow - licensing agreement D. Buy - joint venture

D

All of the following are likely consequences of Walt Disney's recent acquisitions of 21st Century Fox, EXCEPT: A. Disney will be less dependent on content distributors (e.g., Netflix) B. Disney will face lower competitive threats from smaller movie studios C. Disney will increase its differentiation by adding new content/channels to its portfolio D. Disney's industry will become less consolidated

D

Which of the following is a disadvantage of equity alliances when compared to non-equity alliances? A. They are reflective of weaker relationships between firms. B. They do not allow firms to exchange explicit knowledge. C. They are more likely to be characterized by lack of trust and commitment between partners. D. They require significantly higher levels of investment.

D