Strategic management final

In Fasehatice's Office of Alliance Management, the alliance champion is primarily responsible for? making sure that an alliance fits within the firm's existing alliance portfolio and corporate-level strategy. providing technical expertise and knowledge needed for the specific technical area in an alliance. providing alliance training and development, as well as diagnostic tools. serving as an alliance process resource and business integrator between the two alliance partners.

making sure that an alliance fits within the firm's existing alliance portfolio and corporate-level strategy.

A drawback involved in using cross-border strategic alliances to enter new foreign markets is that Multiple Choice the foreign firm will need to make larger investments when compared to entering the new market on its own. some of the firm's proprietary know-how may be appropriated by the foreign partner. all potential business risks in the new market will have to be faced alone by the foreign firm. the shareholder value of the foreign partner will decline drastically.

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

Describe the two dimensions that help explain the distinction between mergers and acquisitions. Then give a real-life example of one merger and one acquisition.

A merger describes the joining of two independent companies to form a combined entity. One dimension on which mergers and acquisitions differ is friendliness. Mergers tend to be friendly; in mergers, the target firm would like to be acquired. Acquisitions can be friendly or unfriendly. If the target firm doesn't want to be acquired, the acquisition is considered a hostile takeover. Size is the other dimension on which mergers and acquisitions differ. The combining of two companies of comparable size is often described as a merger. By contrast, when large firms buy up start-up companies, the transaction is considered an acquisition. One example of a merger is the combination of Live Nation and Ticketmaster. One example of an acquisition is Daimler's acquisition of Chrysler (which Daimler later sold).

What are the necessary conditions for selecting a partner for successful alliance formation?

Partner compatibility and partner commitment are necessary conditions for successful alliance formation. Partner compatibility captures aspects of cultural fit between different firms. Partner commitment concerns the willingness to make available necessary resources and to accept short-term sacrifices to ensure long-term rewards.

Managers in a firm hired to improve the firm's profitability and ultimately the shareholders' value will add to the overall costs if they pursue their own self-interests. What does this best illustrate? Multiple Choice diseconomies of scale principal-agent problem experience-curve effects information asymmetries

principal-agent problem

PepsiCo operates in many countries and sells a wide variety of aerated drinks, other beverages, different types of chips, and Quaker Oats goods to achieve continuous growth. From this data, we can conclude that PepsiCo has been involved in Multiple Choice strategic outsourcing .lean manufacturing product-market diversification process diversification.

process diversification

Piper Inc. is a large cosmetics company that made an initial small investment in a start-up company, Oscorp, which was developing an organic face lotion. This gave Piper controlling interests in the start-up company. However, Oscorp soon began to have financial difficulties because of principal-agent problems. As a result, Piper did not invest in the next stage of development and pulled out of the company. This approach to strategic alliance is referred to as a Multiple Choice break-even analysis. partial joint venture. credible commitment.Incorrect real-options perspective.

real-options perspective.

The Boston Consulting Group (BCG) growth-share matrix locates a firm's individual strategic business units (SBUs) in which two dimensions? Multiple Choice start-up capital required and stage of industry life cycle relative market share and speed of market growth economic value created and costs incurred amount of debt financing and equity financing

relative market share and speed of market growth

In 1990, Roche, a Swiss pharmaceutical company, initially invested $2.1 billion to purchase a controlling interest in the biotech start-up Genentech. In 2009, after witnessing the success of Genentech's drug discovery and development projects, Roche spent $47 billion to purchase the remaining minority interest in Genentech, making it a wholly owned subsidiary. In terms of strategic alliances, this scenario best indicates Multiple Choice the real-options perspective co-opetition. explicit knowledge. the stakeholder strategy.

the real-options perspective

Why did incumbent pharmaceutical firms enter into hundreds of strategic alliances with biotech start-ups? Multiple Choiceto pursue an unrelated-options perspective without disrupting existing market economics to make small-scale investments in ventures poised to disrupt existing market economics to invest their excess cash flow in the superior technology of the biotech start-ups to share their continuously updated research technology with the biotech start-ups

to make small-scale investments in ventures poised to disrupt existing market economics

A firm follows a(n) ________ when less than 70 percent of its revenues come from a single business and there are few, if any, linkages among its businesses. Multiple Choice related-constrained strategy unrelated diversification strategy differentiation strategy dominant-business strategy

unrelated diversification strategy

Rantouch is one of the largest tax-preparation firms in the United States. It wants to acquire Doncon , a smaller rival. After the merger, Rantouch will be one of the two largest income-tax preparers in the U.S. market. What should Rantouch include in its acquisition plans? Multiple Choice It should refocus its attention from the national to the international market. In addition to acquiring Doncon, it should also determine the best way to drive independent "mom and pop" tax preparers out of business .Rantouch will need to explain to the Federal Trade Commission how the acquisition will not result in an increase in prices for consumers. Rantouch should enter a price-based competition with its other major competitor to force it out of business and become a monopoly.

.Rantouch will need to explain to the Federal Trade Commission how the acquisition will not result in an increase in prices for consumers.

Describe the alliance-management capability framework?

Alliance-management capability is a firm's ability to effectively manage three alliance-related tasks concurrently: (1) partner selection and alliance formation, (2) alliance design and governance, and (3) postformation alliance management. To be effective, the capability must manage the alliance from beginning to the end.

Which of the following summarizes the benefit of the strategic alliance between HP and DreamWorks? Multiple Choice HP and DreamWorks each strengthened their separate markets without impinging on each other's markets. Both HP and DreamWorks were able to enter a new market that they would not have been able to pursue alone. HP was able to enter a new market, and DreamWorks was able to strengthen its old market.IncorrectDreamWorks was able to enter a new market, and HP was able to strengthen its old market.

Both HP and DreamWorks were able to enter a new market that they would not have been able to pursue alone.

Dana wishes to strengthen her firm's marketing department by partnering with a large marketing firm that can complement her existing value chain. However, she fears potential legal repercussions including potential lawsuits filed by U.S. federal agencies such as the Federal Trade Commission (FTC). Which of the following strategic options should Dana pursue? Multiple Choice Dana should implement green field operations with the marketing firm to strengthen her interanion reach. Dana should consider forming a strategic alliance with the marketing firm. Dana should move forward with a hostile takeover of the marketing firm.Dana should purchase the marketing firm outright via an acquisition.

Dana should consider forming a strategic alliance with the marketing firm.

A company that wants to enter a new geographic market within China or Saudi Arabia should avoid joint ventures with companies that are based in that country. Partnering with a foreign entity props up that entity's business rather than weakening it through competition. Group startsTrue or False

False

Managers who are eager to forge business alliances often forget that the expected benefits of the partnership must represent only a small percentage of its monetary and time-related costs. Group starts True or False

False

Results-only-work-environments (ROWEs) are characterized by their use of extrinsic motivations such as promotions or the threat of layoffs. True or False

False

Which of the following types of organizations comparatively requires the lowest levels of investment and control? joint ventures franchising acquisition greenfield operations

Franchising

________ refers to a firm's resistance to change the status quo that can set the stage for the firm's subsequent failure. PESTEL factors Formalization Organizational inertia Centralization

Organizational Inertia

Which of the following best illustrates a merger between the two companies Scotfind Inc. and Inity Inc.? Multiple Choice Scotfind Inc. purchases Inity Inc. for $80 billion despite Inity Inc. being against the purchase. Scotfind Inc. and Inity Inc. join together to form a third new entity, while they also operate separately. Scotfind Inc. outsources a few of its business activities to Inity Inc. for competitive advantage. Scotfind Inc. and Inity Inc. join together to form a single new company called ScotfindInity Inc

Scotfind Inc. and Inity Inc. join together to form a single new company called ScotfindInity Inc

The smartphone division of the large consumer electronics company, Streethex Inc., has a significant market share in the fast-growing cell phone market. If the company invests further into this division, it will be able to reap increased cash flows. In the Boston Consulting Group (BCG) growth-share matrix, the smartphone division of Streethex will be categorized under Multiple Choice question marks stars cash cows dogs

Stars

Which of the following is true of acquisitions? Multiple Choice They can be friendly or hostile. They can occur only when the involved entities are of comparable size. In acquisitions, two independent companies join to form a separate third entity. Acquisitions increase the competitive intensity in an industry.

They can be friendly or hostile.

How did Canada, Mexico, and the United States reduce the administrative and political distance between them? Multiple Choice by adopting similar national cultures by lowering the disparities between their per capita incomes by establishing the North American Free Trade Agreement (NAFTA) by reducing their linguistic differences

by establishing the North American Free Trade Agreement (NAFTA)

Sonron Auto Corporation generates 85 percent of its annual revenues by manufacturing luxury cars. The company derives 15 percent of its annual revenues by selling its sports merchandise that includes apparel, shoes, and other accessories under the same brand name. Which of the following terms best describes Sonron Auto Corporation? Multiple Choice a conglomerate a subsidiary a dominant-business firm a single-business firm

a dominant-business firm

Grace wants to form a voluntary arrangement with another firm in order to gain more flexibility in her supply chain, complementarity to a few of her support activities via her value chain, and strengthen her firm's overall competitive position. Grace is looking for a simple and common type of alliances, like Multiple Choice a nonequity alliance. an equity alliance .a joint venture. a merger.

a nonequity alliance.

When Aviato Inc. wanted to sell its cars in the country of Yugoslakia, it lacked access to distribution channels and marketing expertise in the country. Thus, Aviato Autos had to enter into a strategic alliance with a local automobile company to get access to the foreign partner's well-established distribution channels. Which of the following reasons for entering into a strategic alliance is best illustrated in this scenario? Multiple Choice increasing competitive intensity accessing critical complementary assets procuring additional capital investments reducing differentiation of product and service offerings

accessing critical complementary assets

Billy is the CEO of Billy's Kicks, a soccer ball retailer. He decides to purchase the synthetic rubber manufacturing firm so he can create his own soccer balls and sell them, nationally, in his retail stores. In order to do this, Billy will need to engage in ________, which is a corporate level strategy. Multiple Choice forward vertical integration backward vertical integration horizontal integration differentiation

backward vertical integration

Several notable firms like Eli Lilly, HP, Procter & Gamble, and IBM each wish to become the alliance "partner of choice" for small technology ventures, colleges, and inventors. They each know that ________ is a necessary and critical element for an alliance to be a success. Multiple Choice sharing explicit knowledge building interorganizational trust a hostile takeover partner implementation

building interorganizational trust

How did the recent horizontal integration in the U.S. airline industry provide benefits to the surviving carriers? Multiple Choice by facilitating excess capacity in the industry by preventing mergers from taking place by lowering competitive intensity in the industry overall by increasing the threat of entry in the industry

by lowering competitive intensity in the industry overall

Which of the following best illustrates site specificity? equipment necessary for mining bauxite and aluminum smelting bottling machinery to manufacture bottles with trademarked shapes investment made in human capital to master procedures of a specific organization investment made to train employees to operate computers

equipment necessary for mining bauxite and aluminum smelting

Several drawbacks exist when it comes to horizontal integration. Which of the following below is not one of the drawbacks? the possibility for legal repercussions from the FTC integration failure higher costs reduced flexibility

higher costs

Condax Autos Inc. merged with its competitor NOW Autos Inc. This allowed Condax Autos to use its technological competencies along with NOW Autos' marketing capabilities to capture a larger market share than what the two entities individually held. What type of integration does this scenario best illustrate? Multiple Choice supply-chain technological horizontal perfect

horizontal

Sterling Cooper Footware and NERV Shoes Inc., two competing shoe brands, entered into a strategic alliance to study and acquire each other's competencies. Sterling Cooper Footware entered the strategic alliance to acquire the production system pioneered by NERV Shoes. Similarly, NERV Shoes agreed to the strategic alliance to study the design process of Sterling Cooper Footware. However, Sterling Cooper Footware was more successful and faster than NERV Shoes in accomplishing its alliance goal. What does this scenario best illustrate? Multiple Choice network effects economies of scope learning races time compression diseconomies

learning races

The main reason behind Alphabet's decision to acquire the Israeli start-up company Waze for $1 billion was probably to Multiple Choice preempt its competitors from buying Waze. share its capabilities with Waze. support start-up companies with venture capital. gain access to technology that is alien to it.

preempt its competitors from buying Waze.