International International Business, Business, 6e (Griffin/Pustay)
Chapter 13 International Strategic Alliances
1) Which of the following represents a possible form of cooperation between international firms? A) cross-licensing of proprietary technology B) sharing of production facilities C) co-funding of research projects D) mareting of each other!s products ") all of the abo#e Answer$ " Diff$ 1 %age &ef$ '( *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic strategic alliances. /) A 00000000 is a business arrangement whereby two or more firms choose to cooperate for their mutual benefit. A) competiti#e ad#antage B) licensing agreement C) franchising arrangement D) strategic alliance ") none of the abo#e Answer$ D Diff$ / %age &ef$ '( bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic strategic alliances. ') A 00000000 is a special type of strategic alliance in which two or more firms join together to create a new business entity that is legally separate and distinct from its parents. A) joint #enture B) licensing agreement C) franchising arrangement D) strategic alliance ") greenfield strategy Answer$ A Diff$ / %age &ef$ '( bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic strategic alliances.
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) 2ast 3ndustries4 Courtaulds4 and 2A* 5oldings established *limline *limline in 166'. 7his is is an e8ample of a9n) 00000000. A) franchising arrangement B) ac:uisition strategy C) joint #enture D) licensing agreement ") greenfield strategy Answer$ C Diff$ / %age &ef$ '(( *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic strategic alliances. ;) When a firm disco#ers that it lacs all the necessary internal resources to effecti#ely compete internationally4 internationally4 it may choose to participate in 00000000. A) e8porting B) portfolio in#estments C) strategic alliances D) franchising ") management contracts Answer$ C Diff$ ' %age &ef$ '(< bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic strategic alliances. () What is the primary difference between a joint #enture and a non-joint #enture strategic alliance? A) the amount of control awarded to each partner B) the le#el of ris C) whether a third4 legally separate business entity is formed D) the amount of financial in#estment re:uired ") the geographic location of the alliance Answer$ C Diff$ ' %age &ef$ '( bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic strategic alliances. ) Which of the following is not a a means of managing a joint #enture? A) with its own set of managers and board of directors B) in a jointly shared arrangement where each company appoints personnel who then report bac to the parent company C) one parent can assume primary responsibility D) with an outside team of managers ") none of the abo#e Answer$ D Diff$ / %age &ef$ '(< bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic strategic alliances.
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<) 5ow is *limline managed? A) with an independent team of managers who were hired to run it B) in a jointly shared arrangement where each parent company appointed personnel who then report bac to the parent company C) one parent company has taen charge D) with a uni:ue informal networ approach ") with a coordinating committee that gains consensus from the parent companies before implementing new strategies Answer$ A Diff$ ' %age &ef$ '(< *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic alliances. 6) Which of the following can be used to enter or e8pand international operations for a firm? A) e8porting B) licensing C) joint #enture D) ac:uisition strategy ") all of the abo#e Answer$ " Diff$ 1 %age &ef$ '(< *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic alliances. 1=) Which of the following is not a benefit of strategic alliances? A) shared nowledge B) synergy C) shared customers D) ease of maret entry ") shared ris Answer$ C Diff$ / %age &ef$ '(6 bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. 11) British Airways and American Airlines code share their flights and maret materials containing both brand names. What type of arrangement is this? A) nonjoint #enture alliance B) joint #enture alliance C) ac:uisition strategy D) turn ey project ") licensing Answer$ A Diff$ / %age &ef$ '(< *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic alliances.
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1/) When a firm anticipates major obstacles in foreign maret entry such as hostile go#ernment regulations4 what benefit of strategic alliances do they primarily see? A) ease of maret entry B) shared ris C) shared nowledge D) synergy ") all of the abo#e Answer$ A Diff$ 1 %age &ef$ '(6 *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. 1') Which of the following is a benefit of participating in a strategic alliance? A) ease of maret entry B) shared ris C) shared nowledge D) synergy ") all of the abo#e Answer$ " Diff$ 1 %age &ef$ '(6 bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. 1) Which of the following is not a hurdle firms can o#ercome by participating in a strategic alliance? A) a#oiding hostile go#ernment regulations B) achie#ing economies of scale and scope in mareting C) minimi,ing import tariffs D) controlling ris ") a#oiding entrenched competition Answer$ C Diff$ / %age &ef$ '(6 bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. 1;) Warner Brothers4 a mo#ie distribution subsidiary of 7ime Warner4 recently entered into se#eral joint #entures with "uropean mo#ie theater chains. What benefit of strategic alliances was Warner Brothers seeing? A) ease of maret entry B) shared ris C) shared nowledge D) synergy ") all of the abo#e Answer$ A Diff$ ' %age &ef$ '(6 *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances.
1() Boeing collaborated in a strategic alliance with >uji4 2itsubishi4 and awasai in the de#elopment and production of the Boeing in order to reduce its financial ris. What benefit of strategic alliances was Boeing seeing? A) ease of maret entry B) shared ris C) shared nowledge D) synergy ") all of the abo#e Answer$ B Diff$ 1 %age &ef$ '= *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. 1) tis "le#ator partners with local companies in each of the foreign marets where it does business to achie#e all of the following except to 00000000. A) share ris B) share nowledge C) gain synergies D) ease maret entry ") a#oid double ta8ation Answer$ " Diff$ / %age &ef$ '1 *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. 1<) 7oyota and +2 created a joint #enture called @223 because 7oyota wanted to learn about how to deal with labor and parts suppliers in the .*. maret while +2 wanted to obser#e apanese management practices. What benefit of strategic alliances were 7oyota and +2 seeing? A) ease of maret entry B) shared ris C) shared nowledge D) synergy ") all of the abo#e Answer$ C Diff$ 1 %age &ef$ '/ *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances.
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16) 00000000 refers to #alue achie#ed through the combination of maret entry4 ris sharing4 and learning potential that is greater than what the firm could ha#e done alone. A) *hared ris B) *hared nowledge C) *ynergy D) Competiti#e ad#antage ") Both C and D Answer$ " Diff$ / %age &ef$ '' bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. /=) %epsiCo and 7homas . ipton Co. established a joint #enture. %epsiCo supplied an e8tensi#e distribution networ and ipton pro#ided manufacturing e8pertise and brand recognition in teas. What benefit of strategic alliances were they seeing? A) ease of maret entry B) shared ris C) shared nowledge D) synergy ") all of the abo#e Answer$ D Diff$ / %age &ef$ '' bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. /1) 7he degree of collaboration in a strategic alliance will depend on the 00000000 of each partner firm. A) history B) a#ailable resources C) basic goals D) leadership ") all of the abo#e Answer$ C Diff$ ' %age &ef$ ' bjecti#e$ 1'.'$ Describe the scope of strategic alliances. //) A 00000000 occurs when the participating firms agree to perform together multiple stages of the process by which goods or ser#ices are brought to the maret. A) functional alliance B) joint #enture C) production alliance D) process alliance ") comprehensi#e alliance Answer$ " Diff$ / %age &ef$ '; bjecti#e$ 1'.'$ Describe the scope of strategic alliances.
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/') 2ost comprehensi#e alliances are organi,ed as 00000000. A) nonjoint-#enture alliance B) joint #entures C) licensing agreements D) management contracts ") turney projects Answer$ B Diff$ 1 %age &ef$ '; bjecti#e$ 1'.'$ Describe the scope of strategic alliances. /) A mareting alliance is a type of 00000000. A) business-le#el alliance B) operational alliance C) corporate-le#el alliance D) functional alliance ") ad#ertising alliance Answer$ D Diff$ 1 %age &ef$ '; bjecti#e$ 1'.'$ Describe the scope of strategic alliances. /;) Chrysler and B2W formed a joint #enture to build en gines in *outh America. What type of alliance did they ha#e? A) franchise B) mareting alliance C) financial alliance D) licensing agreement ") production alliance Answer$ " Diff$ 1 %age &ef$ '; *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.'$ Describe the scope of strategic alliances. /() +eneral 2ills and @estle created a joint #enture which fully integrated all the efforts necessary to compete against ellogg in the "uropean cereal maret. 7his is an e8ample of a9n) 00000000 alliance. A) functional B) comprehensi#e C) production D) international ") mareting Answer$ B Diff$ / %age &ef$ '; *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.'$ Describe the scope of strategic alliances.
/) A comprehensi#e alliance is formed when 00000000. A) the participating firms agree to perform together multiple stages of the process by which goods or ser#ices are brought to the maret B) two or more firms each manufacture products or pro#ide ser#ices in a shared or common facility C) two or more firms share mareting ser#ices or e8pertise D) firms form an alliance to reduce the financial riss associated with a project ") partners agree to undertae joint research to de#elop new products or ser#ices Answer$ A Diff$ 1 %age &ef$ '; bjecti#e$ 1'.'$ Describe the scope of strategic alliances. /<) Which of the following is not one of the types of functional alliances? A) production B) international C) mareting D) financial ") research and de#elopment Answer$ B Diff$ / %age &ef$ '; bjecti#e$ 1'.'$ Describe the scope of strategic alliances. /6) A9n) 00000000 alliance occurs when two or more firms each manufacture or pro#ide ser#ices in a shared or common facility. A) production B) international C) mareting D) financial ") research and de#elopment Answer$ A Diff$ / %age &ef$ '; bjecti#e$ 1'.'$ Describe the scope of strategic alliances. '=) A production alliance is formed when 00000000. A) the participating firms agree to perform together multiple stages of the process by which goods or ser#ices are brought to the maret B) two or more firms each manufacture products or pro#ide ser#ices in a shared or common facility C) two or more firms share mareting ser#ices or e8pertise D) firms form an alliance to reduce the financial riss associated with a project ") partners agree to undertae joint research to de#elop new products or ser#ices Answer$ B Diff$ 1 %age &ef$ '; bjecti#e$ 1'.'$ Describe the scope of strategic alliances.
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'1) A9n) 00000000 alliance occurs when partners share e8pertise or ser#ices related to distribution4 pricing4 and communications. A) production B) international C) mareting D) financial ") research and de#elopment Answer$ C Diff$ / %age &ef$ '; bjecti#e$ 1'.'$ Describe the scope of strategic alliances. '/) A9n) 00000000 alliance is a functional alliance of firms that want to reduce financial riss associated with a project. A) production B) international C) mareting D) financial ") research and de#elopment Answer$ D Diff$ / %age &ef$ ' bjecti#e$ 1'.'$ Describe the scope of strategic alliances. '') B2W and the >rench automobile manufacturer %*A recently created an alliance to manufacture new engines together. What type of alliance is this an e8ample of? A) production B) international C) mareting D) financial ") research and de#elopment Answer$ A Diff$ / %age &ef$ '; *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.'$ Describe the scope of strategic alliances. ') A mareting alliance is formed when 00000000. A) the participating firms agree to perform together multiple stages of the process by which goods or ser#ices are brought to the maret B) two or more firms each manufacture products or pro#ide ser#ices in a shared or common facility C) two or more firms share mareting ser#ices or e8pertise D) firms form an alliance to reduce the financial riss associated with a project ") partners agree to undertae joint research to de#elop new products or ser#ices Answer$ C Diff$ 1 %age &ef$ '; bjecti#e$ 1'.'$ Describe the scope of strategic alliances.
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';) 7he apanese company Bandai and the .*. toymaer 2attel entered into a strategic alliance. Bandai agreed to distribute 2attel products lie Barbie dolls in apan while 2attel agreed to distribute %ower &angers in atin America. What type of alliance is this an e8ample of? A) production B) international C) mareting D) financial ") research and de#elopment Answer$ C Diff$ / %age &ef$ '; *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.'$ Describe the scope of strategic alliances. '() Boeing collaborated in a strategic alliance with >uji4 2itsubishi4 and awasai in the de#elopment and production of the Boeing in order to reduce its financial ris. What type of alliance is this an e8ample of? A) production B) international C) mareting D) financial ") research and de#elopment Answer$ D Diff$ / %age &ef$ ' *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.'$ Describe the scope of strategic alliances. ') A financial alliance is formed when 00000000. A) the participating firms agree to perform together multiple stages of the process by which goods or ser#ices are brought to the maret B) two or more firms each manufacture products or pro#ide ser#ices in a shared or common facility C) two or more firms share mareting ser#ices or e8pertise D) firms form an alliance to reduce the financial riss associated with a project ") partners agree to undertae joint research to de#elop new products or ser#ices Answer$ D Diff$ 1 %age &ef$ ' bjecti#e$ 1'.'$ Describe the scope of strategic alliances.
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'<) 2icron 7echnology4 3ntel4 *amsung4 5yundai4 and *iemens ha#e formed an alliance to de#elop the ne8t generation of D&A2 chips. What type of alliance is this an e8ample of? A) production B) international C) mareting D) financial ") research and de#elopment Answer$ " Diff$ / %age &ef$ ' *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.'$ Describe the scope of strategic alliances. '6) A 00000000 is a confederation of organi,ations that band together to research and d e#elop new products and processes for world marets. A) research and de#elopment alliance B) functional alliance C) research and de#elopment consortium D) joint #enture ") production alliance Answer$ C Diff$ 1 %age &ef$ ' *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.'$ Describe the scope of strategic alliances. =) A research and de#elopment alliance is formed when 00000000. A) the participating firms agree to perform together multiple stages of the process by which goods or ser#ices are brought to the maret B) two or more firms each manufacture products or pro#ide ser#ices in a shared or common facility C) two or more firms share mareting ser#ices or e8pertise D) firms form an alliance to reduce the financial riss associated with a project ") partners agree to undertae joint research to de#elop new products or ser#ices Answer$ " Diff$ 1 %age &ef$ ' bjecti#e$ 1'.'$ Describe the scope of strategic alliances. 1) &esearch suggests that strategic alliances are more liely to be successful if the sills and resources of the partners are 00000000. A) identical B) complementary C) opposites D) incompatible ") obser#able Answer$ B Diff$ / %age &ef$ '< bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances.
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/) Which of the following is not one of the four factors a firm should consider prior to selecting a partner? A) compatibility B) potential for competitor to partner C) nature of potential partner!s products D) relati#e safeness of the alliance ") learning potential of the alliance Answer$ B Diff$ ' %age &ef$ '< bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. ') An alliance between +eneral "lectric Corporation4 which is run by financial e8p erts4 and *iemens4 which is run by engineers4 failed because of 00000000. A) a lac of trust between the partners B) a difference between the firms! products C) incompatible management styles D) the relati#e safeness of the alliance ") an inability of firms to learn from each other Answer$ C Diff$ / %age &ef$ '< *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. ) %artnerships should be formed between firms whose products 000000 00. A) compete directly B) complement one another C) compete indirectly D) are in different product categories ") none of the abo#e Answer$ B Diff$ / %age &ef$ '< bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. ;) 7he probability of a successful alliance increases when 000 00000. A) mutual trust is not present B) partners are incompatible C) partner products are in direct competition with each other D) the deal maes good business sense for both partners ") there are no learning opportunities Answer$ D Diff$ / %age &ef$ '6 bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances.
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() What form does a joint #enture usually tae? A) limited partnership B) partnership C) corporation D) +mb5 ") public-pri#ate #enture Answer$ C Diff$ / %age &ef$ '6 bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. ) Which of the following is a benefit of the corporate form for joint #entures? A) beneficial ta8 structure B) unusual ownership arrangements C) protection of other assets D) new identity ") all of the abo#e Answer$ " Diff$ 1 %age &ef$ '6 bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. <) A 00000000 is a joint #enture that in#ol#es a partnership between a pri#ately o wned firm and a go#ernment. A) limited partnership B) partnership C) corporation D) +mb5 ") public-pri#ate #enture Answer$ " Diff$ / %age &ef$ '<= bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. 6) 7he go#ernment of Abu Dhabi formed a joint #enture with "88on 2obil in /==(. What type of joint #enture is this an e8ample of? A) limited partnership B) partnership C) corporation D) +mb5 ") public-pri#ate #enture Answer$ " Diff$ / %age &ef$ '<= *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances.
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;=) *trategic alliances may be managed through 00000000. A) shared management agreements B) assigned arrangements C) delegated arrangements D) consensual arrangements ") A4 B4 and C Answer$ " Diff$ / %age &ef$ '<1 bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. ;1) 3n what type of economy are public-pri#ate #entures often necessary? A) centrally planned B) capitalist C) socialist D) 2ar8ist ") none of the abo#e Answer$ A Diff$ ' %age &ef$ '<= bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. ;/) nder a9n) 000000004 each partner in the joint #enture fully and acti#ely participates in managing the alliance. A) shared management agreement B) assigned arrangement C) delegated arrangement D) consensual arrangement ") functional alliance Answer$ A Diff$ / %age &ef$ '<1 bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. ;') Which type of #enture is the most difficult to maintain? A) an assigned arrangement B) a shared management agreement C) a delegated arrangement D) a public pri#ate #enture ") a split #enture Answer$ B Diff$ / %age &ef$ '<1 bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances.
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;) Which action below is permissible by the dominant partner in an assigned arrangement? A) set agendas B) mae decisions C) brea ties among decision maers D) o#errule partner!s decisions ") all of the abo#e Answer$ " Diff$ 1 %age &ef$ '
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;<) nder which management form are managers less accountable to managers in the partner firms? A) shared management agreement B) assigned arrangement C) delegated arrangement D) consensual arrangement ") functional alliance Answer$ C Diff$ / %age &ef$ ' uji4 2itsubishi4 and awasai. 7his is an e8ample of a9n) 00000000. A) shared management agreement B) assigned arrangement C) delegated arrangement D) consensual arrangement ") functional alliance Answer$ B Diff$ / %age &ef$ '
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(/) Which of the following is not considered to be one of the primary pitfalls of strategic alliances? A) mutual trust B) loss of autonomy C) conflicts o#er disturbing earnings D) incompatibility of partners ") changing circumstances Answer$ A Diff$ / %age &ef$ '
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(() When a firm in#ol#ed in a strategic alliance wants to maintain confidential information about its operations4 which pitfall of strategic alliances is liely to occur? A) incompatibility B) information access C) distribution of earnings D) loss of autonomy ") all of the abo#e Answer$ B Diff$ / %age &ef$ '<' bjecti#e$ 1'.;$ 3dentify the limitations of strategic alliances. () Which type of pitfall occurs when a firm belie#es it may be compromising its own competiti#eness by pro#iding certain information to a partner? A) distribution of earnings B) loss of autonomy C) incompatibility of partners D) changing circumstances ") access to information Answer$ " Diff$ / %age &ef$ '<' bjecti#e$ 1'.;$ 3dentify the limitations of strategic alliances. (<) A strategic alliance between >ord and 2a,da e8perienced problems when 2a,da refused to allow >ord officials to #isit the 2a,da research laboratory. What was the source of this problem? A) incompatibility B) information access C) distribution of earnings D) loss of autonomy ") all of the abo#e Answer$ B Diff$ / %age &ef$ '<' *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.;$ 3dentify the limitations of strategic alliances. (6) &ubbermaid ended a joint #enture in "urope when the partner firm refused to rein#est its profits into the de#elopment of new products. What was the source of this problem? A) incompatibility B) information access C) distribution of earnings D) loss of autonomy ") all of the abo#e Answer$ C Diff$ / %age &ef$ '<' *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.;$ 3dentify the limitations of strategic alliances.
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=) >irms may e8perience the pitfalls of 00000000that limits their decision-maing power. A) incompatibility B) information access C) distribution of earnings D) loss of autonomy ") all of the abo#e Answer$ D Diff$ / %age &ef$ '<' bjecti#e$ 1'.;$ 3dentify the limitations of strategic alliances. 1) Deciding how earnings should be split prior to forming an alliance can help firms a#oid which type of pitfall? A) incompatibility B) information access C) distribution of earnings D) loss of autonomy ") change in circumstances Answer$ C Diff$ / %age &ef$ '<' bjecti#e$ 1'.;$ 3dentify the limitations of strategic alliances. /) Attempts to introduce new products4 change the way the alliance does business4 or introduce other significant organi,ational changes without pre#ious discussion and agreement by all members of the alliance represents a9n) 00000000 by one or more alliance members. A) incompatibility B) information access C) distribution of earnings D) loss of autonomy ") all of the abo#e Answer$ D Diff$ / %age &ef$ '<' bjecti#e$ 1'.;$ 3dentify the limitations of strategic alliances. ') 00000000 affect9s) the #iability of strategic alliances when the conditions that first moti#ated the arrangement no longer e8ist. A) 3ncompatibility B) 3nformation access C) Distribution of earnings D) oss of autonomy ") Changing circumstances Answer$ " Diff$ 1 %age &ef$ '< bjecti#e$ 1'.;$ 3dentify the limitations of strategic alliances.
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) f the potential pitfalls facing strategic alliances4 o#er which one do the alliance members ha#e the least control? A) incompatibility B) information access C) distribution of earnings D) changing circumstances ") loss of autonomy Answer$ D Diff$ / %age &ef$ '< bjecti#e$ 1'.;$ 3dentify the limitations of strategic alliances. ;) Which pitfall of alliances e8ists when the economic circumstances that moti#ated the alliance no longer e8ist? A) changing circumstances B) loss of autonomy C) distribution of earnings D) incompatibility ") information access Answer$ A Diff$ / %age &ef$ '< bjecti#e$ 1'.;$ 3dentify the limitations of strategic alliances. () oint #entures imply a ;=$;= ownership structure. Answer$ >A*" Diff$ / %age &ef$ '(< bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic alliances. ) *trategic alliances include cooperation between international firms such as cross-licensing of proprietary technology. Answer$ 7&" Diff$ 1 %age &ef$ '( *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic alliances. <) A joint #enture is a type of strategic alliance. Answer$ 7&" Diff$ 1 %age &ef$ '( bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic alliances. 6) oint #entures are generally less stable than nonjoint #e nture strategic alliances. Answer$ >A*" Diff$ / %age &ef$ '(< bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic alliances.
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<=) oint #entures tend to ha#e a longer duration than non-joint #enture strategic alliances. Answer$ 7&" Diff$ ' %age &ef$ '(< *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic alliances. <1) Countries concerned about the influence of foreign firms on their economies may re:uire 2@Cs to wor with a local partner if they want to enter the maret. Answer$ 7&" Diff$ / %age &ef$ '(6 *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. irms can a#oid hostile go#ernment regulations by partnering with local firms. Answer$ 7&" Diff$ / %age &ef$ '= bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. <') *trategic alliances can be used to limit ris. Answer$ 7&" Diff$ 1 %age &ef$ '= bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. <) oda!s strategic alliance with its apanese competitors reduced its riss4 but perhaps negati#ely affected its profits. Answer$ 7&" Diff$ 1 %age &ef$ '= bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. <;) >unctional alliances are legally organi,ed as joint #e ntures. Answer$ >A*" Diff$ / %age &ef$ '; bjecti#e$ 1'.'$ Describe the scope of strategic alliances. <() 2areting alliances are relati#ely uncommon in the international airline industry. Answer$ >A*" Diff$ / %age &ef$ '; *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.'$ Describe the scope of strategic alliances. <) An alliance in which two or more firms each manufacture products is an &D alliance. Answer$ >A*" Diff$ / %age &ef$ '; bjecti#e$ 1'.'$ Describe the scope of strategic alliances.
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<<) Comprehensi#e alliances are usually organi,ed as nonjoint #en ture strategic alliances. Answer$ >A*" Diff$ / %age &ef$ '; bjecti#e$ 1'.'$ Describe the scope of strategic alliances. <6) 3n most cases4 &D consortiums do not in#ol#e the go#ernment. Answer$ >A*" Diff$ / %age &ef$ ' bjecti#e$ 1'.'$ Describe the scope of strategic alliances. 6=) 5a#ing a partner with products that are complementary to4 but not directly competiti#e with its own4 increases a firm!s chance of a successful alliance. Answer$ 7&" Diff$ / %age &ef$ '< bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. 61) &esearch suggests that strategic alliances are more liely to be successful if the partners compete but in different geographic marets. Answer$ >A*" Diff$ ' %age &ef$ '< bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. 6/) 2utual trust is an important component of compatibility. Answer$ 7&" Diff$ 1 %age &ef$ '< bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. 6') Because @estle does not mae cereal4 the product on which it is collaborating with +eneral 2ills4 the joint #enture between the two firms is liely to be more successful. Answer$ 7&" Diff$ / %age &ef$ '< *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. 6) 3n a limited partnership4 both firms assume full financial responsibility for the #enture4 regardless of the amount each has in#ested. Answer$ >A*" Diff$ / %age &ef$ '<= bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. 6;) >irms may pursue public-pri#ate #entures when a country does not allow wholly-owned foreign operations. Answer$ 7&" Diff$ ' %age &ef$ '<= bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances.
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6() %ublic-pri#ate #entures are typical in the oil industry. Answer$ 7&" Diff$ / %age &ef$ '<= bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. 6) %ublic-pri#ate #entures are perhaps most important in maret-dri#en economies. Answer$ >A*" Diff$ ' %age &ef$ '<= bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. 6<) *hared management agreements are the most prone to conflict among partners. Answer$ 7&" Diff$ / %age &ef$ '<1 bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. 66) nder a delegated arrangement4 partner firms are highly in#ol#ed in the day-to-day operations of the #enture. Answer$ >A*" Diff$ / %age &ef$ 'A*" Diff$ 1 %age &ef$ 'A*" Diff$ ' %age &ef$ '
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1=) Conflict o#er distributing earnings can be a#oided by negotiating such issues as part of the original contract agreement. Answer$ 7&" Diff$ 1 %age &ef$ '<' bjecti#e$ 1'.;$ 3dentify the limitations of strategic alliances. 1=;) 7echnological ad#ances can render strategic alliances obsolete. Answer$ 7&" Diff$ / %age &ef$ '< bjecti#e$ 1'.;$ 3dentify the limitations of strategic alliances. 1=() What is a strategic alliance? Answer$ A strategic alliance is a business arrangement whereby two or more firms choose to cooperate for mutual benefit. Diff$ 1 %age &ef$ '( bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic alliances. 1=) What is the relationship between a joint #enture and a strategic alliance? Answer$ A joint #enture is a type of strategic alliance in which two or more firms join together to create a new business entity that is legally separate and distinct from its parents. Diff$ 1 %age &ef$ '( bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic alliances. 1=<) 3s a joint #enture more or less stable than a non-joint #enture strategic alliance? Answer$ A non-joint #enture strategic alliance tends to be less stable than a joint #enture because the former tend to ha#e narrow missions and a lac of formal organi,ational structure. Diff$ ' %age &ef$ '(< bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic alliances. 1=6) 3s a strategic alliance the only method a firm can use to enter or e8pand its international operations? Answer$ @o. A firm can also use e8porting4 licensing4 franchising4 and foreign direct in#estment. Diff$ 1 %age &ef$ '(< bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic alliances. 11=) What are the benefits of strategic alliances? Answer$ Benefits of strategic alliances include ease of maret entry4 shared ris4 shared nowledge4 and synergyEcompetiti#e ad#antage. Diff$ / %age &ef$ '(6 bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances.
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111) Why did Warner Brothers enter into joint #entures with se#eral "uropean mo#ie theater chains? Answer$ 7o ease its entry into the "uropean maret. Diff$ / %age &ef$ '(6 *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. 11/) What influence might go#ernments ha#e on the ease of entry into its maret? Answer$ +o#ernments may re:uire that an 2@C partner with a local firm. Diff$ / %age &ef$ '(6 *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. 11') Why did oda form a strategic alliance with three apanese competitors to de#elop a new film? Answer$ oda collaborated with its apanese competitors in an effort to reduce its ris. Diff$ / %age &ef$ '= *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. 11) Why does tis "le#ator always see local partners when it e8pands into new marets? Answer$ tis "le#ator always loos for local partners to ease its entry and reduce its riss when it e8pands into new marets. Diff$ / %age &ef$ '1 *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. 11;) 7oyota wanted an opportunity to learn about .*. labor practices and +2 wanted to learn about apanese management practices when they created @223. What benefit were both partners seeing? Answer$ *hared nowledge and e8pertise. Diff$ 1 %age &ef$ '/ *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. 11() What is a comprehensi#e alliance? Answer$ A comprehensi#e alliance occurs when the participating firms agree to perform together multiple stages of the process by which go ods or ser#ices are brought to the maret. Diff$ / %age &ef$ '; bjecti#e$ 1'.'$ Describe the scope of strategic alliances. 11) What is a functional alliance? Answer$ A functional alliance is one that is narrow in scope and in#ol#es only one function of the business. Diff$ / %age &ef$ '; bjecti#e$ 1'.'$ Describe the scope of strategic alliances.
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11<) What types of functional alliances e8ist? Answer$ 7here are four types of functional alliances$ production4 financial4 mareting4 research and de#elopment. Diff$ / %age &ef$ '; bjecti#e$ 1'.'$ Describe the scope of strategic alliances. 116) Are strategic alliances important in the airline industry? Answer$ *trategic alliances are #ery important in the airline industry. 7hree mega-alliances together account for about (6 percent of the world!s air re#enue passenger miles. Diff$ ' %age &ef$ '( *ill$ AAC*B$ 7echnology bjecti#e$ 1'.'$ Describe the scope of strategic alliances. 1/=) What is an &D consortium? Answer$ An &D consortium is a confederation of organi,ations that band together to research and de#elop new products and processes for the world maret. Diff$ / %age &ef$ ' bjecti#e$ 1'.'$ Describe the scope of strategic alliances. 1/1) 3n which type of strategic alliance is go#ernment support important? Answer$ 2any countries support the efforts of &D consortia as part of their industrial policies4 so go#ernments are often in#ol#ed in their formation and continued operation. Diff$ / %age &ef$ ' bjecti#e$ 1'.'$ Describe the scope of strategic alliances. 1//) What are the four factors that should be considered prior to selecting a partner? Answer$ Compatibility4 the nature of the potential partner!s products4 the relati#e safeness of the alliance4 and the learning potential of the alliance. Diff$ / %age &ef$ '< bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. 1/') 5ow does a partner!s product affect the success of a strategic alliance? Answer$ 7o increase the chances of a successful alliance4 e8perts recommend that firms ally themsel#es with a partner whose products are complementary to but not directly competiti#e with its own. Diff$ / %age &ef$ '< bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. 1/) What is a public-pri#ate #enture? Answer$ 3t is a form of joint #enture that in#ol#es a partnership between a pri#ately owned firm and a go#ernment. Diff$ / %age &ef$ '<= bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances.
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1/;) What are the three types of management agreements used for strategic alliances? Answer$ *hared management agreements4 assigned arrangements4 and delegated arrangements. Diff$ / %age &ef$ '<1 bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. 1/() 5ow does a shared management agreement wor? Answer$ nder this agreement4 each partner fully and acti#ely participates in managing the alliance. 3t re:uires a great deal of coordination and near-perfect agreement among the partners. Diff$ / %age &ef$ '<1 bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. 1/) 5ow does an assigned arrangement wor? Answer$ nder this agreement4 one partner assumes primary responsibility for the operations of the strategic alliance. Diff$ / %age &ef$ '<1 bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. 1/<) 5ow does a delegated arrangement wor? Answer$ nder a delegated arrangement4 the partners agree not to get in#ol#ed in the ongoing operations4 but delegate control to the e8ecuti#es of the joint #enture itself. Diff$ / %age &ef$ '<1 bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. 1/6) What type of arrangement must partners ha#e to be successful in a shared management agreement? Answer$ 3n a shared management agreement4 partners must ha#e a high le#el of coordination and agreement. Diff$ / %age &ef$ '<1 bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. 1'=) What inds of things might cause incompatibility among partners in a strategic alliance? Answer$ Corporate culture4 national culture4 goals4 and objecti#es can all contribute to incompatibility among partners. Diff$ / %age &ef$ '
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1'/) "8plain the three possible methods for managing a joint #enture. Answer$ A joint #enture may be managed jointly with shared management by the founding firms. 3t may be primarily managed by one parent. >inally4 it may be run by an independent team of managers who are hired by the parent firms. Diff$ / %age &ef$ '(< bjecti#e$ 1'.1$ Compare joint #entures and other forms of strategic alliances. 1'') What benefits may accrue to firms participating in strategic alliances? Answer$ >irms may benefit from ease of maret entry4 shared ris4 shared nowledge and e8pertise4 and synergyEcompetiti#e ad#antage. >irms may e8perience entrenched competition4 go#ernment regulations4 or high costs to entering a foreign maret. *trategic alliances can ease the costs of entry. >irms may also wish to minimi,e their riss associated with maret entry. Alliances can minimi,e riss by sharing e8penses or by pro#iding non-financial assets such as brand recognition. >irms may also wish to learn about an e8pertise held by another firm. >inally4 firms can achie#e synergies and competiti#e ad#antages that were not possible woring alone. Diff$ / %age &ef$ '(6 bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. 1') "8plain why Boeing established a strategic alliance with se#eral apanese partners to help de#elop its jet. Answer$ Boeing formed a strategic alliance with se#eral apanese partners to help reduce the ris in#ol#ed in de#eloping its aircraft. De#eloping the new plane re:uired billions of dollars of &D up front. Because Boeing could not be sure how well the new aircraft would be recei#ed4 the company looed for ways to reduce its financial e8posure4 and established an alliance with >uji4 2itsubishi4 and awasai. Boeing is the controlling partner in the alliance. Diff$ / %age &ef$ '= *ill$ AAC*B$ 7echnology bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances. 1';) What does globali,ation mean to C"s of multinational firms4 worers in de#eloped countries4 and human rights acti#ists? Answer$ +lobali,ation means different things to different people. >or C"s of multinational firms4 globali,ation means access to new consumers4 opportunities to reduce production costs by locating factories in low-cost areas4 and the threat of new competition. >or worers in de#eloped countries4 globali,ation can imply job insecurity and no raised. >or human rights acti#ists4 globali,ation can imply e8ploitation of worers and the denial of human rights. Diff$ / %age &ef$ '(; *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'./$ Characteri,e the benefits of strategic alliances.
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1'() Why was it important for +eneral 2ills and @estle to form a comprehensi#e joint #enture in "urope4 rather than a mareting alliance? Answer$ +eneral 2ills and @estle formed a comprehensi#e joint #enture in "urope called Cereal %artners Worldwide. +eneral 2ills pro#ided cereal-maing technology4 while @estle contributed its "uropean distribution networ and name recognition. By forming a comprehensi#e joint #enture4 the alliance in#ol#ed a complete meshing of each firm!s relati#e strengths and created a business with significant maret power. >orming an alliance that only in#ol#ed mareting would not ha#e had the same competiti#e ad#antages. Diff$ ' %age &ef$ '; *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.'$ Describe the scope of strategic alliances. 1') Why ha#e strategic alliances become so important to the international airline industry? Answer$ 2ega alliances dominate the international airline industry. By lining up with other firms4 airlines can offer customers more flights and more destinations4 easier transfers between alliance members! flights4 and the opportunity to use fre:uent flyer miles earned on one carrier to fly on another. 3n addition4 alliances pro#ide airlines with the ability to ad#ertise to a larger audience. Diff$ / %age &ef$ ' *ill$ AAC*B$ +lobali,ation bjecti#e$ 1'.'$ Describe the scope of strategic alliances. 1'<) "8plain why go#ernments engage in public-pri#ate #entures in the oil industry. Answer$ @ational go#ernments that control access to and ownership of crude oil reser#es may not ha#e the technical e8pertise to drill for and e8tract the crude oil. 3nternational oil firms ha#e the nowledge and e8pertise4 but lac the necessary drilling rights. By woring together with the go#ernment pro#iding the drilling rights and the firm pro#iding the drilling nowledge and technical e8pertise4 the oil filed can be de#eloped. Diff$ / %age &ef$ '<= bjecti#e$ 1'.$ Describe the forms of management used for strategic alliances. 1'6) What are the fi#e primary pitfalls of strategic alliances? Describe each one. Answer$ 7he fi#e pitfalls are incompatibility of partners4 access to information4 distribution of earnings4 loss of autonomy4 and changing circumstances. 3ncompatibility of partners can lead to outright conflict. 3t can stem from corporate culture4 national culture4 goals and objecti#es4 or any fundamental decision. imited access to information is another drawbac. %artners must be willing to share information that they might otherwise eep secret. Because partners share riss4 they must also share rewards. 5owe#er4 the partners must agree on the distribution of joint earnings4 the accounting practices used to calculate earnings or profits4 and the way transfer pricing will be held. %artners also lose autonomy in that they must share control of the alliance. At the e8treme4 a strategic alliance may e#en be the first step toward a taeo#er. >inally4 circumstances may change maing the strategic alliance obsolete. Diff$ / %age &ef$ '
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