True False False An alliance is a way to bring together complementary skills and assets that neither company could easily develop on its own. The arrangement is less complicated and less enforceable than a joint venture, in which two firms combine their resources to form a new company organization. True False, Tangible property includes patents, designs, copyrights, and trademarks. Which of the following alliances will be best suited for the organization? D. acquisition, A(n) _____ is a way to bring together complementary skills and assets that neither company could Which of the following is being exemplified in this scenario? B.It does not give a firm the tight control over strategy that is required for realizing experience curve and location economies. B. This is sometimes referred to as ____. B. turnkey contracts. D. Strategic alliances usually lead to D. Despite adequate pre-acquisition screening, the entities encounter unexpected governmental There is nothing as trust between the firm and its suppliers in strategic alliances. B. increased external visibility Strategic alliances are not as commonplace today as they were two decades ago. C. A turnkey strategy is particularly useful where FDI is limited by host-government regulations. Strategic alliances are not as commonplace today as they were two decades ago. \text{Bicycles completed in September}&\text{400}\\ The costs and risks associated with doing business in a foreign country are typically: A. low in an economically advanced nation. WebUnlike joint ventures, strategic alliances require the firm to bear all the costs and risks of foreign expansion. C. A turnkey strategy is particularly useful where FDI is limited by host-government regulations. A _____ is more likely to capture first-mover advantages associated with demand preemption, _____ is advantageous because it avoids the cost of establishing manufacturing operations in the. strategic alliance. D. Firm risks giving away technological know-how and market access to its alliance partner. Through this measure, Plateus seeks to primarily achieve _____. subsidiary company that it wants. Which of the following is one of B. B. C. A distribution agreement A contractual alliance specified time period in exchange for royalties is a(n) _____ agreement. In their contract, they specify how governance issues, operating issues, and termination issues would be resolved. Weba) In strategic alliances, companies may choose to cooperate at any stage along the value chain. D. In many cases, firms make acquisitions to preempt their competitors. D. exporting; joint-venture, If a high-tech firm sets up operations in a foreign country to profit from a core competency in 3. D. tangible property. What is the interest earned for 1 year? C. screen the foreign enterprise to be acquired. C. Subsidiaries D. give later entrants a cost advantage over early entrants. Strategic alliances can make entry into a foreign market difficult. language, etc. 7.50\% & 1.077875 & 1.077632 & 1.077135 & 1.349817 & 1.348599 & 1.346114\\ They are always focused on joining the same value chain activities. True False, Firms pursuing global standardization or transnational strategies tend to prefer joint-venture arrangements over wholly owned subsidiaries. Pearltech Inc., an information technology company, decides to establish a business alliance in order to differentiate its products. }\\ D. In many cases, firms make acquisitions to preempt their competitors. They limit the entry of firms into foreign markets. A. A. They enter into a strategic alliance in which they create and own a legally independent company. B. Which of the following statements is true about firms that establish strategic alliances? A. top management staff maximum expansion in the quickest amount of time. C. Bondage WebUnlike joint ventures, strategic alliances require the firm to bear all the costs and risks of foreign expansion. B. D. gives firms access to local knowledge. AMOUNTPER$1.00INVESTED,DAILY,MONTHLY,ANDQUARTERLYCOMPOUNDING, InterestPeriod-1yearInterestPeriod-4years\begin{array}{c} B. \text{Annual Rate} & \text{Daily} & \text{Monthly} & \text{Quarterly} & \hspace{20pt}\text{Daily} & \text{Monthly} & \text{Quarterly}\\ C. Greenfield investments virtually eliminate the possibility of a more aggressive global competitor B. collateral bonds In strategic alliances, the firm-supplier relationship remains market mediated and terminable if the supplier fails to perform. 7.75\% & 1.080573 & 1.080312 & 1.079781 & 1.363380 & 1.362066 & 1.359388\\ to commit substantial resources to a foreign market. According to the _____, top managers typically overestimate their ability to create value from an acquisition. Foreign franchises controlled by joint ventures them. WebQuestion: QUESTION 13 Which of the following statements is true of strategic alliances? Which of the following is one of the reasons why acquisitions fail? C. acquisitions If a firm can realize location economies by moving production elsewhere, it should avoid: A. exporting. _____. prepared for full integration. B. C. Fin Inc., which produces the compressors used in Hues air conditioners R=1,000p2+155,000p. 100 percent of the profits generated in a foreign market. A firm takes profits out of one country to support competitive attacks in another. Which of the following is an advantage of establishing a joint venture? systems. A. B. greenfield investment They limit the entry of firms into foreign markets. An advantage of _____ with a local partner is the knowledge of the local environment that the local B. legal contracts D. increase the cultural similarities between employees. So, Zeal Inc. enters into strategic alliance with Chrome Corp., a leading e-publisher. D. Strategic alliances are not as commonplace today as they were two decades ago. In strategic alliances, companies may choose to cooperate at any stage along the value chain. C. a country subsequently proving to be a major market for the output of the process that has True False, The value an international business creates in a foreign market depends on the suitability of its product offering to that market and the nature of indigenous competition. A. lower research and development costs and marketing costs than other firms B. ability to preempt rivals and capture demand by establishing a strong brand name C. ability to capitalize on the work done by other firms D. creation of innovative products at lower costs than other firms, B. ability to preempt rivals and capture demand by establishing a strong brand name, Switching costs: A. drive early entrants out of the market. Small-scale entry is a way to gather information about a foreign market before deciding C. advertisements WebQuestion: QUESTION 13 Which of the following statements is true of strategic alliances? McDonald's is an example of a firm that uses _____. True False, In a turnkey project, the contractor agrees to handle every detail of the project for a foreign client. A. D. wholly owned subsidiaries. Which of the following is exemplified in this scenario? A. greenfield investments B. joint ventures The acquired firm often overpays for the assets of the acquiring firm. Which of the following statements about franchising is true? C. A coordination alliance \text{Standard direct labor per bicycle}&\text{2 hrs. Joint ventures give a firm a tight control over subsidiaries that it might need to realize Drew's Cafe Inc. and Cuppa Corp., two local coffee chains, combine resources to enter the global market. A. relational capital B. relational assets C. operational assets D. venture capital. B. provides the ability to achieve experience curve and location economies. Drew's Cafe Inc. and Cuppa Corp., two local coffee chains, combine resources to enter the global market. Strategic alliances exclude functions that are bought through bidding. The arrangement is less complicated and less enforceable than a joint venture, in which two firms combine their resources to form a new company organization. Firms entering markets where there are no incumbent competitors to be acquired should choose competitor. a They are a way to bring together complementary skills and assets that both companies O b Important technological know-how and market access will have to be given away (shared) with its alliance partner, and this can pose a risk. C. When the development costs and/or risks of opening a foreign market are high, a firm might Strategic alliances exclude functions that are bought through bidding. C. a plant that is ready to operate. A. Turnkey contracts C. In strategic alliances, companies may choose to cooperate at any stage along the value chain. This is an example of: A. a firm entering into a turnkey project with a foreign enterprise, inadvertently creating a competitor. B. Misrepresentation Under a(n) _____ agreement, a firm might license some valuable intangible property to a foreign What is the primary advantage of licensing? The firms contribute knowledge but each performs its roles separately. WebChapter 8 - Multiple Choice - Chapter 8: Strategic Alliances Multiple Choice Questions Zeal Inc., a - Studocu Multiple Choice chapter strategic alliances multiple choice questions zeal inc., software firm, decides to enter the publishing industry. D. to test a market. C. A vertical alliance A. 50/50 B. True False, First-mover advantages are the advantages associated with entering a market early. A. A. True False, Acquisitions are quick to execute. WebFor a strategic alliance, firms should seek partners that are: a.willing to share costs and risks of new-product development.b.known for being opportunistic.c.similar when it comes to capabilities.d.radically different when it comes to strategic 50/50 C. It is a specialized form of licensing. D. seek companies only from similar national cultures. 9.25\% & 1.096900 & 1.096524 & 1.095758 & 1.447666 & 1.445682 &1.441647\\ A. a joint venture C. Structured transfer agreements D. wholly owned subsidiaries. D. Noncompete clauses, _____ are governance clauses in which joint ventures must specify what percentage of equity is owned by each of the partners. D. They suggest that companies should use the entry of foreign multinationals as an opportunity It does not give a firm the tight control over strategy that is required for realizing experience D. New partners bring in unique skills that add value to the product. B. performance extrapolation hypothesis 8.00\% & 1.083277 & 1.082999 & 1.082432 & 1.377079 & 1.375666 & 1.372785\\ C. They limit the entry of firms into foreign markets. A turnkey strategy can be more risky than conventional FDI. other forms of adverse government interference. C. The synergies of the two firms happens quickly and neither acquired nor acquiring firm are WebB. An equity alliance C. A distribution agreement Situation You are the assistant information technology manager for a local newspaper. A. protect their procedures and technologies. D. The firm is deprived of the knowledge of the host country's competitive conditions, culture, There is little incentive for the franchisee to build a profitable operation as quickly as possible. D. brand name, Most service firms have found that _____ with local partners work best for controlling subsidiaries. It forms a strategic alliance with Gray Inc. to produce new instruments designed to attract students. Activity Plan and demonstrate how to use the feature. A. an acquisition True False, Franchising enables a firm to quickly build a global presence. Joint ventures An equity alliance D. Strategic alliances usually lead to C. Wholly owned subsidiaries firms. C. licensing C. Termination clauses D. It increases a firm's ability to utilize a coordinated strategy. curve and location economies. competing with these firms in the world oil market. A. the host country's competitive conditions, culture, language, political systems, and business D. Firms that enter into a turnkey deal have a long-term interest in the foreign country. WebIn strategic alliances, the power to make decisions is always evenly distributed amidst the firms. By sharing only the technology that is central to the core competence of the firm. C. greenfield investment B.It does not give a firm the tight control over strategy that is required for realizing experience curve and location economies. B. Managing an alliance successfully requires building interpersonal relationships between the firms' managers. B. market development costs 7.00\% & 1.072500 & 1.072290 & 1.071859 & 1.323094 & 1.322053 & 1.319929\\ C. By giving a firm time to collect information, small-scale entry increases the risks associated C. It is also an attractive option when a firm is interested in pursuing a foreign market and is ready D. Firm risks giving away technological know-how and market access to its alliance partner. A. Early entrants to a market that are able to create switching costs that tie the customer to the It gives a firm the tight control over manufacturing, marketing, and strategy. Strategic alliances C. Takeovers D. Licensing agreements, Which of the following statements is true of strategic alliances? There is nothing as trust between the firm and its suppliers in strategic alliances. B. increased external visibility their _____. In this case, which of the following contractual alliances should be adopted by Sepia? As Abby pulls her car onto the highway, she swerves and hits another car head-on. Which of the following statements is likely to be true in this case? B. provides the ability to achieve experience curve and location economies. 4) A company that. If a firm's core competency is based on control over proprietary technological know-how, _____ and _____ arrangements should be avoided if possible to minimize the risk of losing control over that technology. ground up, called the _____. C. market timing theory 3. partner, but in addition to a royalty payment, the firm might also request that the foreign partner A. scale economies They are less risky than greenfield ventures in the sense that there is less potential for WebWhich of the following is true of strategic alliances? A. Which of the following clauses specifies the above conditions? 4) A company that. B. turnkey contract \end{array} A. applications. A. Greenfield investments Joint management B. 1. . A. Greenfield investments are less risky than acquiring an existing company in a foreign market. D. An input agreement, John requires 500 shirts of a particular fabric and quality. However, Sands brings more resources to the new firm than the other partner. B. An advantage of forming a strategic alliance is that it helps firms: B. make it easy for later entrants to win business. An inherent degree of uncertainty is associated with a greenfield venture because of future A. An arrangement whereby a firm grants the right of intangible property to another entity for a 2. a They are a way to bring together complementary skills and assets that both companies O b Important technological know-how and market access will have to be given away (shared) with its alliance partner, and this can pose a risk. A. misvaluation theory C. It is a specialized form of licensing. A. C. shared equity D. It is employed primarily by manufacturing firms. economies. It helps a firm avoid the development costs associated with opening a foreign market. the business opportunities for companies in the developing country. WebA 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 Mansion Hotel Group purchased Red Brick Hotels for an estimated value of $120 billion. C. franchising O 2) 3) Strategic alliances are not associated with any form of relationship management. Use the table above to find the amount per $1.00 invested. C. economies of scale. A. turnkey B. licensing C. greenfield D. acquisition, Patents, inventions, formulas, processes, designs, copyrights, and trademarks are all forms of _____. Strategic alliances can make entry into a foreign market difficult. He sees his friend Abby finish a beer, grab her car keys, and walk out the door to go home. WebQuestion: Which of the following statements is true about strategic alliances? B. franchises True False, Acquisitions rarely produce disappointing results. A. D. promotional development costs, A large-scale entrant is more likely than a small-scale entrant to be able to capture first-mover D. greenfield strategy. WebFor a strategic alliance, firms should seek partners that are: a.willing to share costs and risks of new-product development.b.known for being opportunistic.c.similar when it comes to capabilities.d.radically different when it comes to strategic D. Firms that enter into a turnkey deal have a long-term interest in the foreign country. C. They suggest turnkey operations that allow for a rapid startup. Which of the following is likely to be true in this case? Fresh fruit, grain, and meat products A horizontal alliance WebIn strategic alliances, the power to make decisions is always evenly distributed amidst the firms. True False, The attractiveness of a country as a potential market for an international business depends on balancing the benefits, costs, and risks associated with doing business in that country. global competitors are also interested in establishing a presence, the firm should choose a(n) C. a turnkey strategy C. It is a specialized form of licensing. Inc., a manufacturing company, develops manuals that include tools for making a business case, a partner-evaluation form, a negotiations template outlining the roles and responsibilities of different departments, and a list of ways to measure the performance of collaborating partners. B. joint ventures. A. a firm entering into a turnkey project with a foreign enterprise, inadvertently creating a True False, A joint venture is often politically more acceptable than a wholly owned subsidiary and brings a degree of local knowledge to the subsidiary. C. A distribution agreement It helps a firm avoid the development costs associated with opening a foreign market. They enable firms to achieve goals faster, but at higher costs. A. Which of the following is likely to be true in this case? _____. How much direct labor should be debited to Work in Process? C. construction A. Hold-up Through this measure, J.L. B. \hspace{50pt}\text{Interest Period - 1 year} &\hspace{50pt} \text{Interest Period - 4 years}\\ 2. A. A. first-mover advantages B. pioneering costs C. economies of scale D. late-mover advantages, Which of the following is a first-mover advantage? None of these choices The fixed costs and associated risks of developing new products or processes are borne by the alliance partner When technological know-how constitutes a firm's core competence, which entry mode is the C. franchisee A. relational capital D. It is appropriate if lower cost locations for manufacturing the product can be found abroad. D. Termination issues, Two organizations that are positioned at different stages along the value chain form an alliance. C. Under which circumstances Teal or White can exit the alliance It cannot contribute the same level of financial resources, although it can contribute an extensive level of knowledge. B. O 2) 3) Strategic alliances are not associated with any form of relationship management. A. Strategic alliances can make entry into a foreign market difficult. A. WebQuestion: Which of the following statements is true about strategic alliances? C. Strategic alliances A. Turnkey projects are most common in industries which use simple, inexpensive production technologies. been exported. advantages associated with _____. D. Battery, Stylink Inc. and Plateus Inc. formed an alliance to create and own a legally independent company. with a subsequent large-scale entry. InterestPeriod-1yearInterestPeriod-4years, AnnualRateDailyMonthlyQuarterlyDailyMonthlyQuarterly7.00%1.0725001.0722901.0718591.3230941.3220531.3199297.25%1.0751851.0749581.0744951.3363891.3352611.3329617.50%1.0778751.0776321.0771351.3498171.3485991.3461147.75%1.0805731.0803121.0797811.3633801.3620661.3593888.00%1.0832771.0829991.0824321.3770791.3756661.3727858.25%1.0859881.0856921.0850871.3909161.3893981.3863068.50%1.0887061.0883901.0877471.4048911.4032641.3999518.75%1.0914301.0910951.0904131.4190081.4172661.4137239.00%1.0941621.0938061.0930831.4332651.4314051.4276219.25%1.0969001.0965241.0957581.4476661.4456821.441647\begin{array}{c c c c c c c} Suggest turnkey operations that allow for a foreign market risks of foreign expansion & 1.079781 1.363380! At higher costs visibility strategic alliances are not associated with opening a foreign market as commonplace today as they two. 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