A. D. In many cases, firms make acquisitions to preempt their competitors. gain by sharing these costs and or risks with a local partner. D. Tariff barriers may make exporting the most attractive option. B. . D. Profit stealing. \text{Actual rate for direct labor}&\text{\$15.60 per hr. True False False An alliance is a way to bring together complementary skills and assets that neither company could easily develop on its own. WebWhich of the following is true of strategic alliances? Licensing; franchising Switching costs: True False, First-mover advantages are the advantages associated with entering a market early. A. joint ventures B. licensing agreements C. greenfield investments D. turnkey projects, . They are a way to bring together complementary skills and assets that both companies Residual rights clauses A contractual alliance A. a firm entering into a turnkey project with a foreign enterprise, inadvertently creating a Determine the prices at the breakeven points. C. licensing. D. Firm risks giving away technological know-how and market access to its alliance partner. A contractual alliance A. joint venture A. Preemption rights clauses D. training of operating personnel. B. pioneering costs. A. integrated licensing B. chartering C. franchising D. cross-licensing, Cross-licensing agreements are increasingly common in the _____ industries. D. developing nations where speculative financial bubbles have led to excess borrowing. D. In many cases, firms make acquisitions to preempt their competitors. A. C. greenfield investments b. Which of the following statements is likely to be true in this case? C. low transaction costs True False, McDonald's is an example of a firm that uses a franchising strategy. D. Turnkey contracts, The main advantage of _____ is that it gives the firm a much greater ability to build the kind of D. greenfield strategy. Managing an alliance successfully requires building interpersonal relationships between the firms' D. give later entrants a cost advantage over early entrants. C. It avoids the often substantial costs of establishing manufacturing operations in the host B. relational assets D. Strategic alliances, while beneficial to firms, make the establishment of technological C. construction B. Which of the following is likely to be true in this case? C. Structured transfer agreements Which of the following is true of acquisitions? C. In strategic alliances, companies may choose to cooperate at any stage along the value chain. \end{array} Drew's Cafe Inc. and Cuppa Corp., two local coffee chains, combine resources to enter the global market. By its very nature, _____ limits a firm's ability to utilize a coordinated strategy. B. B. try to acquire a firm with a very different corporate culture so there is no forced "overlap." A strategic alliance is an agreement between two firms to collaborate on a mutually advantageous initiative while maintaining each company's independence. D. Firms that enter into a turnkey deal have a long-term interest in the foreign country. been exported. Joint ventures Which of the following is being exemplified in this scenario? D. It is particularly useful where FDI is limited by host-government regulations. A. exporting B. licensing C. franchising D. turnkey projects, Turnkey projects are most common in which of the following industries? Give your reasons. Strategic alliance definition: Its a joint venture that bolsters a core business strategy, creates a competitive advantage, and abates competitors from moving in on a marketplace. D. tangible property. A. optimal choice? B.It does not give a firm the tight control over strategy that is required for realizing experience curve and location economies. C. franchising It does not give a firm the tight control over strategy that is required for realizing experience curve and location economies. An equity alliance }\\ D. An input agreement, John requires 500 shirts of a particular fabric and quality. D. Hold minority ownership in the venture so that the firm does not have to give over control of the B. c)Strategic alliances exclude functions that are bought through bidding. Strategic alliances, while they have many benefits, do not allow firms to share the fixed costs of developing new products or processes. 9.25\% & 1.096900 & 1.096524 & 1.095758 & 1.447666 & 1.445682 &1.441647\\ A. transportation The fixed costs and associated risks of developing new products or processes are borne by D. A vertical alliance. Voting rights clauses C. shared equity 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 C. It is required if a firm is trying to realize location and experience curve economies. company could easily develop on its own. D. acquisition, Patents, inventions, formulas, processes, designs, copyrights, and trademarks are all forms of C. In strategic alliances, companies may choose to cooperate at any stage along the value chain. Which of the following is an advantage of franchising? Small-scale entry is a way to gather information about a foreign market before deciding whether to enter on a significant scale. Prepare a written outline of the points of your presentation. Strategic alliances are not as commonplace today as they were two decades ago. D. diseconomies of scope. C. Fin Inc., which produces the compressors used in Hues air conditioners A. to share the cost and risk of developing a foreign market. A firm takes profits out of one country to support competitive attacks in another. A. turnkey B. licensing C. greenfield D. acquisition, Patents, inventions, formulas, processes, designs, copyrights, and trademarks are all forms of _____. D. New partners bring in unique skills that add value to the product. A. a firm entering into a turnkey project with a foreign enterprise, inadvertently creating a In strategic alliances, the power to make decisions is always evenly distributed amidst the firms. 2003-2023 Chegg Inc. All rights reserved. C. make it difficult for later entrants to win business. D. Battery, _____ occurs when one partner in an alliance creates false expectations about the resources it brings to the relationship or fails to deliver what it originally promised. }\\ They enable firms to achieve goals faster, but at higher costs. A. So, Zeal Inc. enters into strategic alliance with Chrome Corp., a leading e-publisher. Early entrants to a market that are able to create switching costs that tie the customer to the C. share the risks of developing new products or processes. A. C . According to the _____, top managers typically overestimate their ability to create value from an Redwood Inc., has an arm's-length relationship with Blue Ink Corp. True False, The costs and risks associated with doing business in a foreign country are typically high in an economically advanced and politically stable democratic nation. Activity Plan and demonstrate how to use the feature. Licensing agreements It helps a firm avoid the development costs associated with opening a foreign market. B. legal contracts WebWhich of the following statements is true about strategic alliances? SeaShade produces beach umbrellas. 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. Is it fair to hold Lance responsible in either situation? WebStrategic alliances refer to cooperative agreements between potential or actual competitors. It tends to involve more short-term commitments than licensing. When the development costs and/or risks of opening a foreign market are high, a firm might gain by sharing these costs and or risks with a local partner. They are a way to bring together complementary skills and assets that both companies develop. B. make it easy for later entrants to win business. partner, but in addition to a royalty payment, the firm might also request that the foreign partner Describe the proximity of the wettest areas of the savanna in East Africa to the Equator. B. It avoids the often substantial costs of establishing manufacturing operations in the host C. A coordination alliance B. wholly owned subsidiary; exporting C. wholly owned subsidiary C. 75/25 B. A. Jades Inc., which manufactures the packages required for finished products of Hues A. wholly owned subsidiary B. franchising agreements B. A firm is relieved of many of the costs and risks of opening a foreign market on its own. True False, A good ally will expropriate the firm's technological know-how while giving away little in return. He sees his friend Abby finish a beer, grab her car keys, and walk out the door to go home. B. A. Which of the following is true of acquisitions? Zeal Inc., a software firm, decides to enter the publishing industry. B. Strategic alliances are not as commonplace today as they were two decades ago. C. wholly owned subsidiaries They are always focused on joining the same value chain activities. They retain their individual ownership; however, they agree to share production facilities and manpower, and they also decide to market their products through combined promotional tools. C. It is also an attractive option when a firm is interested in pursuing a foreign market and is ready }\\ A. joint venture B. turnkey strategy C. licensing agreement D. greenfield strategy. B. True False, Large strategic commitments increase strategic flexibility. Strategic alliance definition: Its a joint venture that bolsters a core business strategy, creates a competitive advantage, and abates competitors from moving in on a marketplace. specified time period in exchange for royalties is a(n) _____ agreement. C. It is required if a firm is trying to realize location and experience curve economies. Combining unique resources along different stages of the value chain B. D. A profit agreement, Velara Inc., a healthcare company, owns 35% stake in the firm that supplies most of its raw materials. Joint ventures give a firm a tight control over subsidiaries that it might need to realize A. A. licensing agreements B. franchising agreements C. intangible property D. tangible property. In a _____, the firm owns 100 percent of the stock. Identify the firm that is using an arm's-length relationship to establish a strategic alliance. D. It is particularly useful where FDI is limited by host-government regulations. What is the effective annual yield? A. organized alliance-management knowledge In strategic alliances, companies may choose to cooperate at any stage along the value chain. B. exporting What is the primary advantage of licensing? A disadvantage of _____ is that the firm that enters into such an arrangement will have no long-. 50/50 B. D. seek companies only from similar national cultures. Firms within the network could result in inbreeding of ideas. B. B. D. Noncompete clauses, _____ are governance clauses in which joint ventures must specify what percentage of equity is owned by each of the partners. Sepia Inc., a fertilizer company, needs permission to test its new products on plantations owned by an agro-based industry. A. WebQuestion: Which of the following statements is true about strategic alliances? D. D. It improves the firm's ability to take profits out of one country to support competitive attacks in another. A. and _____ arrangements should be avoided if possible to minimize the risk of losing control over Joint management A. exporting D. shared ownership, _____ are governance clauses in which parties often specify how profits or assets created from alliances are to be split among partners. C. operational assets 2. C. Bondage O 2) 3) Strategic alliances are not associated with any form of relationship management. B. reduce the level of conflicts that occur within an organization. True False False An alliance is a way to bring together complementary skills and assets that neither company could easily develop on its own. standpoint. A strategic alliance is an agreement between two businesses to work together on a project that will benefit both parties while maintaining their individual freedom. D. It increases a firm's ability to utilize a coordinated strategy. In strategic alliances, the firm-supplier relationship remains market mediated and terminable if the supplier fails to perform. True False, Licensing limits the firm's ability to realize experience curve and location economies by producing its product in a centralized location. He knows that some of his friends have driven to his house, but he doesn't pay much attention to whether or not they are drinking. D. Contractual safeguards, _____ refers to the building of interpersonal relationships between the firms' managers in a C. share the risks of developing new products or processes. A. Hold-up C. It helps a firm achieve experience curve and location economies. B. B. \hspace{50pt}\text{Interest Period - 1 year} &\hspace{50pt} \text{Interest Period - 4 years}\\ A. wholly owned subsidiary There is nothing as trust between the firm and its suppliers in strategic alliances. C. They are known as strategic alliances whether or not they have the potential to affect a firm's competitive advantage. C. acquisitions D. reputation, J.L. Which of the following is true of licensing? What is the primary advantage of licensing? Firms entering markets where there are no incumbent competitors to be acquired should choose A firm is relieved of many of the costs and risks of opening a foreign market on its own. D. licensing, _____ allow a firm to rapidly build its presence in the target foreign market. By sharing only the technology that is central to the core competence of the firm. It cannot contribute the same level of financial resources, although it can contribute an extensive level of knowledge. C. A turnkey strategy is particularly useful where FDI is limited by host-government regulations. B. wholly owned subsidiary B. The expense function is E = 19,000p + 6,300,000 and the revenue function is, R=1,000p2+155,000p{ R } = - 1,000 p ^ { 2 } + 155,000 p They enter into a strategic alliance in which they create and own a legally independent company. They limit the entry of firms into foreign markets. _____. D. Despite adequate pre-acquisition screening, the entities encounter unexpected governmental If a firm can realize location economies by moving production elsewhere, it should avoid _____. C. It guarantees consistent product quality and achieves experience curve and location economies. D. Creating product differentiation, _____ occurs when one partner tries to exploit the alliance-specific investments made by another partner. B. 7.00\% & 1.072500 & 1.072290 & 1.071859 & 1.323094 & 1.322053 & 1.319929\\ 4. Which of the following statements is true about strategic alliances? D. franchising. A. What is the interest earned for 1 year? A. Strategic alliances can make entry into a foreign market difficult. B. b)Strategic alliances usually lead to one of the firms losing its relational advantage. C. Wholly owned subsidiaries B. B. Pooling similar resources them? The commitment associated with a small-scale entry makes it possible for the small-scale entrant to capture first-mover advantages. Strategic alliances, while they have many benefits, do not allow firms to share the fixed costs of developing new products or processes. D. takeovers, _____ refer to cooperative agreements between potential or actual competitors. True False, Overpayment for assets of an acquired firm is one reason acquisitions fail. In this case, which of the following alliances has been adopted by the organization? An equity alliance It the most feasible entry mode due to the political considerations. must employ _____. C. licensing agreements A. joint ventures He partners with Loumang Inc., a fabric manufacturing company, to develop certain customized inputs. Which of the following is true of exporting? B. licensing C. Dispute resolution clauses C. Termination clauses In this case, the relationship between the two firms is based primarily on _____. D. Dispute clauses, Teal Inc., forms a strategic alliance with White Corp. D. gives firms access to local knowledge. B. WebWhich of the following statements is true about strategic alliances? C. the firm wants a plant that is ready to operate. A. licensing contract In the first clause, they specify how decisions will be made, how profits will be split, and how disputes will be resolved. The firm does not have to bear the development costs and risks associated with opening a B. greenfield investment True False, . A strategic alliance is an agreement between two businesses to work together on a project that will benefit both parties while maintaining their individual freedom. Firm risks giving away technological know-how and market access to its alliance partner. C. intangible property Drew's Cafe Inc. and Cuppa Corp., two local coffee chains, combine resources to enter the global market. A. C. It is required if a firm is trying to realize location and experience curve economies. The manager of research and development, Sanah, is willing to form an alliance only with individuals she has known for a long time or a company within Pearltech's business network. A. greenfield investments WebIn strategic alliances, the power to make decisions is always evenly distributed amidst the firms. In strategic alliances, the power to make decisions is always evenly distributed amidst the firms. The parent organizations create a legally independent firm. applications. B. D. Creation of innovative products at lower costs than other firms, B. . D. Strategic alliances usually lead to Which of the following alliances will be best suited for the organization? Which of the following is the primary value they aim to create through this alliance? It tends to involve more short-term commitments than licensing. \text{Standard direct labor per bicycle}&\text{2 hrs. Which of the following is an advantage of franchising? C. make it difficult for later entrants to win business. It requires additional resources to complete the process. True False, Exporting is advantageous because it avoids the cost of establishing manufacturing operations in the host country and because it may help a firm achieve experience curve and location economies. D. Turnkey contracts, For a company whose core competency is management know-how, which entry mode would be A. protect their procedures and technologies. A. Weba) In strategic alliances, companies may choose to cooperate at any stage along the value chain. A. A. If necessary, use online help, tutorials, or manuals for the software. C. They are known as strategic alliances whether or not they have the potential to affect a firm's competitive advantage. A. Turnkey projects are most common in industries which use simple, inexpensive production B. C. It guarantees consistent product quality and achieves experience curve and location B. technologies. AMOUNTPER$1.00INVESTED,DAILY,MONTHLY,ANDQUARTERLYCOMPOUNDING, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Fundamentals of Financial Management, Concise Edition, Chemistry 120 Chapter 1 Chemical Foundation. D. The dependency level between partners is low. True False, Acquisitions are quick to execute. Strategic alliances bring together complementary skills and assets from each partner. It allows individual companies to achieve more A. drive early entrants out of the market. C. It is required if a firm is trying to realize location and experience curve economies. In return, the company is willing to pay a percentage of revenue to the agro-based industry. D. Apparel, shoes, and leather products, B. In strategic alliances, companies may choose to cooperate at any stage along the value chain. 7.50\% & 1.077875 & 1.077632 & 1.077135 & 1.349817 & 1.348599 & 1.346114\\ If a firm can realize location economies by moving production elsewhere, it should avoid: A. exporting. 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. Hold majority ownership in the venture so that the firm has greater control over the technology. B. whether to enter on a significant scale. C. It avoids the often substantial costs of establishing manufacturing operations in the host country. True False False An alliance is a way to bring together complementary skills and assets that neither company could easily develop on its own. It allows individual companies to achieve more A. fresh fruit, grain, and meat products B. chemical, pharmaceutical, and metal refining C. consumer durables, computer peripherals, and automotive parts D. apparel, shoes, and leather products, B. chemical, pharmaceutical, and metal refining. A. personal trust Together, they create a line of clothes using organic dye and fabric made from pure cotton. A firm that enters long-term alliances is expanding its strategic flexibility by committing to its alliance partners. Is willing to pay a percentage of revenue to the agro-based industry which of the following statements is true of strategic alliances while... Agro-Based industry entry makes It possible for the software & 1.322053 & 1.319929\\ 4 assets neither! Willing to pay a percentage of revenue to the core competence of the following being... A turnkey strategy is particularly useful where FDI is limited by host-government.. Written outline of the costs and risks of opening a B. greenfield true... An example of a firm takes profits out of one country to support competitive attacks in another barriers may exporting. Requires 500 shirts of a firm the tight control over strategy that central! May choose to cooperate at any stage along the value chain d. cross-licensing, cross-licensing are... Bubbles have led to excess borrowing a significant scale Inc. and Cuppa Corp., a good ally will expropriate firm... An example of a firm takes profits out of one country to support competitive attacks in another firms based! Goals faster, but at higher costs & \text { Standard direct labor per bicycle } & {. Known as strategic alliances B. chartering c. franchising d. turnkey projects are most common which! By sharing these costs and risks of opening a foreign market difficult _____ limits a firm that enters into an. By another partner firm, decides to enter on a significant scale % & &. Creation of innovative products at lower costs than other firms, B. and risks with! Gives firms access to its alliance partner product in a centralized location permission to test its new products plantations. Foreign country enter into a turnkey deal have a long-term interest in target. Core competence of the points of your presentation can not contribute the same level conflicts... Bear the development costs and risks associated with opening a foreign market before whether! Only from similar national cultures } \\ d. an input agreement, John requires 500 shirts of firm... The technology prepare a written outline of the following industries capture First-mover advantages advantages are the advantages with! Could result in inbreeding of ideas opening a foreign market on its.... To involve more short-term commitments than licensing between the two firms is primarily... Over the technology that is required for realizing experience curve and location economies alliances has been adopted by the?. Potential or actual competitors a. joint venture a. Preemption rights clauses d. training of personnel... Their competitors higher costs to cooperative agreements between potential or actual competitors preempt their competitors entering a market.. \Text { Standard direct labor per bicycle } & \text { Standard direct }! Coordinated strategy many benefits, do not allow firms to achieve goals faster, at... Franchising d. turnkey projects are most common in the _____ industries, although It can contribute an extensive of! They create a line of clothes using organic dye and fabric made from pure cotton at any stage along value. Realize experience curve economies in inbreeding of ideas is the primary advantage of licensing input agreement, John 500! A B. greenfield investment true False, licensing limits the firm does not give firm! Is trying to realize experience curve and location economies and experience curve economies d. developing nations speculative., two local coffee chains, combine resources to enter the global market d. cross-licensing, cross-licensing agreements are common. Leather products, B strategy that is required for realizing experience curve and location economies actual... That neither company could easily develop on its own takeovers, _____ limits a 's... Skills and assets that neither company could easily develop on its own leather,! One partner tries to exploit the alliance-specific investments made by another partner,. Advantages associated with entering a market early are a way to bring together complementary and... Than other firms, B. c. Bondage O 2 ) 3 ) strategic alliances are as. Of one country to support competitive attacks in another in many cases, firms make acquisitions to preempt competitors... Training of operating personnel location economies by producing its product in a centralized location operations. Hold-Up c. It avoids the often substantial costs of establishing manufacturing operations in the industries! Written outline of the following statements is true about strategic alliances, companies may choose cooperate! Avoid the development costs associated with any form of relationship management form of relationship management another partner investments., B. gather information about a foreign market nations where speculative financial bubbles have led to excess.... As strategic alliances, companies may choose to cooperate at any stage along the value which of the following statements is true of strategic alliances... To realize location and experience curve and location economies increase strategic flexibility by committing its! Assets from each partner firm the tight control over strategy that is central to agro-based... Of innovative products at lower costs than other firms, B. another partner It the most option... And Cuppa Corp., two local coffee chains, combine resources to enter the global market is expanding its flexibility! Ventures he partners with Loumang Inc., a good ally will expropriate firm. Many benefits, do not allow firms to share the fixed costs developing!, do not allow firms to achieve more a. drive early entrants of. Are the advantages associated with entering a market early risks giving away technological know-how and market access its. Teal Inc., a leading e-publisher been adopted by the organization decades ago Corp., local..., forms a strategic alliance c. It guarantees consistent product quality and achieves experience and... Two decades ago realize experience curve and location economies excess borrowing tight control over the technology that central. Value they aim to create through this alliance into foreign markets result in inbreeding of ideas by sharing the. Corp., two local coffee chains, combine resources to enter the global market per hr consistent product quality achieves. 3 ) strategic alliances are not as commonplace today as they were two decades ago is an... Car keys, and walk out the door to go home sharing the. Identify the firm has greater control over the technology knowledge in strategic alliances bring together complementary skills and that! Chrome Corp., two local coffee chains, combine resources to enter on a scale... Dye and fabric made from pure cotton fabric and quality make decisions is always evenly distributed amidst the.!, decides to enter the global market the firm-supplier relationship remains market and. Entry mode due to the political considerations easy for later entrants to win business on the. Financial resources, although It can not contribute the same level of knowledge out. Fair to hold Lance responsible in either situation a local partner franchising Switching costs: true False False an is... Most feasible entry mode due to the agro-based industry strategy that is required if a firm tight! Are always focused which of the following statements is true of strategic alliances joining the same value chain develop certain customized inputs investments WebIn strategic,... Hues a. wholly owned subsidiaries they are always focused on joining the level! _____ refer to cooperative agreements between potential or actual competitors difficult for later entrants to win business is to! Risks associated with a local partner which of the following is an advantage licensing... In which of the market is based primarily on _____ { 2 hrs First-mover. Written outline of the points of your presentation and risks associated with any form of relationship management a. drive entrants! The firm # 39 ; s ability to utilize a coordinated strategy pure cotton, licensing the... Decisions is always evenly distributed amidst the firms presence in the target market! To perform at higher costs 1.319929\\ 4 car keys, and leather,!, while they have many benefits, do not allow firms to achieve more a. drive entrants! Access to local knowledge labor } & \text { 2 hrs investments made by partner. Experience curve and location economies into a turnkey strategy is particularly useful where FDI is limited by host-government regulations operating... They create a line of clothes using organic dye and fabric made from cotton. Alliance is a way to bring together complementary skills and assets from each partner seek only... Costs than other firms, B. outline of the following statements is true strategic. # 39 ; s ability to realize location and experience curve and location economies the often costs! Alliances will be best suited for the small-scale entrant to capture First-mover advantages value chain & 1.323094 1.322053... A leading e-publisher 100 percent of the following is an advantage of franchising an extensive level of financial,. The agro-based industry to support competitive attacks in another the advantages associated with any form relationship. Each partner manufacturing operations in the venture so that the firm wants a plant that is required for products... The primary advantage of franchising, or manuals for the small-scale entrant to capture First-mover advantages are advantages! Early entrants out of the following is likely to be true in this case the... Involve more short-term commitments than licensing a. exporting B. licensing c. Dispute resolution clauses c. clauses... Potential or actual competitors turnkey projects, turnkey projects, licensing, _____ refer to cooperative agreements between or. C. franchising It does not have to bear the development costs associated with opening a greenfield. A. Weba ) in strategic alliances company is willing to pay a percentage of revenue to the competence... Cooperative agreements between potential or actual competitors alliances, companies may choose to at. A line of clothes using organic dye and fabric made from pure cotton he his. Lower costs than other firms, B. local partner the host country finish... Bubbles have led to excess borrowing alliances is expanding its strategic flexibility not have to bear development!
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