Question

QUESTION 30

1. The two basic approaches to successfully manage cooperative strategic alliances involve ____ and ____.

   	a.	cost minimization, opportunity maximization
   	b.	monitoring systems, multiple management approaches
   	c.	equity approaches, nonequity approaches
   	d.	contractual systems, financial systems

5 points   

QUESTION 31

1. In managing cooperative strategies, research indicates that ____ can be a capability that is valuable, rare, imperfectly imitable, and often nonsubstitutable giving these firms a competitive advantage.

   	a.	Internet competency
   	b.	trustworthiness
   	c.	stability
   	d.	extensive capitalization

5 points   

QUESTION 32

1. The ultimate test of the value of a corporate-level strategy is whether the

   	a.	businesses in the portfolio increase the firm’s financial returns.
   	b.	top management team is satisfied with the corporation's performance.
   	c.	businesses in the portfolio are worth more under the management of the company in question than they would be under any other ownership.
   	d.	corporation earns a great deal of money.

5 points   

QUESTION 33

1. Backward integration occurs when a company

   	a.	is concentrated in a single industry.
   	b.	owns its own source of distribution of outputs.
   	c.	produces its own inputs.
   	d.	is divesting unrelated businesses.

5 points   

QUESTION 34

1. Sales of watches among teenagers and 20-somethings are declining rapidly as this age group uses cellphones, iPods, and other devices to tell time. A company that specializes in selling inexpensive watches to this age group may wish to consider ____ in order to develop new products other than watches.

   	a.	horizontal acquisitions.
   	b.	unrelated diversification.
   	c.	forward integration.
   	d.	backward integration.

5 points   

QUESTION 35

1. Market power is derived primarily from the

   	a.	quality of a firm’s top management team.
   	b.	depth of a firm’s strategy.
   	c.	size of a firm and its resources and capabilities.
   	d.	core competencies of the firm.

5 points   

QUESTION 36

1. The problems associated with exporting include

   	a.	high transportation costs and the expense of tariffs.
   	b.	difficulty in negotiating relationships.
   	c.	merging corporate cultures.
   	d.	a partner’s incompatibility.

5 points   

QUESTION 37

1. In general, cross-border alliances are more ____ and ____ than domestic alliances, especially in emerging markets.

   	a.	complex, risky
   	b.	uncertainty reducing, diversifying
   	c.	flexible, trust-based
   	d.	highly leveraged, tightly monitored

5 points   

QUESTION 38

1. All of the following complicate the implementation of an international diversification strategy EXCEPT

   	a.	cultural diversity.
   	b.	increased costs of coordination between business units.
   	c.	widespread multilingualism.
   	d.	logistical costs.

5 points   

QUESTION 39

1. After a leveraged buyout, ____ typically occur(s).

   	a.	private synergy
   	b.	selling of assets
   	c.	further rounds of acquisitions
   	d.	due diligence

5 points   

QUESTION 40

1. A friendly acquisition

   	a.	allows joint ventures to be developed.
   	b.	enhances the complementarity of the two firms’ assets.
   	c.	facilitates the integration of the acquired and acquiring firms.
   	d.	raises the price that has to be paid for a firm.

Answer 1

Question 30- a. cost minimization, opportunity maximization- Minimization of costs and maximization of opportunities helps to manage cooperative strategic alliances better.

Question 31- b. trustworthiness- Trustworthiness can give firms managing cooperative strategies, a big competitive advantage

Question 32- c. businesses in the portfolio are worth more under the management of the company in question than they would be under any other ownership.- Under a corporate-level strategy, a business should worth more than any other ownership option.

Question 33- c. produces its own inputs- In backward integration, an organization increases its control on the supply chain by producing its own inputs.

Question 34- b. unrelated diversification- Moving from watches to unrelated products like cellphones, Ipods, etc is an unrelated diversification.

Question 35- c. size of a firm and its resources and capabilities- A firm can have more market power if it has a large size and more number of resources and capabilities.

Question 36- a. high transportation costs and the expense of tariffs- For exporting any product, organizations have to bear high transportation costs and also the tariffs involved in export business.

Question 37- a. complex, risky - Cross border alliances, especially in emerging markets are very complex and risky because of trade barriers and uncertainty of economic conditions.

Question 38- c. widespread multilingualism- Multilingualism does not complicate the implementation of an international diversification strategy.

Question 39- b. selling of assets- Assets are sold generally after a leveraged buyout

Question 40- c. facilitates the integration of the acquired and acquiring firms- Friendly acquisitions help in the smooth integration of the firms involved.