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Braintree Inc., a manufacturer of smartphones, has entered into a 15-year partnership with a software company to develop sophisticated operating systems and innovative mobile applications for its phones. This would mean that both the companies will have to mutually share their resources, knowledge, and capabilities to develop a superior product. What is the relationship between Braintree and the software company best referred to as in this scenario?


A) an acquisition
B) a strategic alliance
C) a leveraged buyout
D) a proprietorship

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Disney became the world's leading media company to a large extent by pursuing a corporate strategy of


A) related-linked diversification.
B) cost-leadership.
C) unrelated diversification.
D) hostile takeovers.

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The Palace Hotel Group purchased Orange Roof Hotels for an estimated value of $120 billion. All the hotels previously owned by Orange Roof Hotels are now managed by the Palace Hotel Group and are known as Palace hotels. What does this scenario best illustrate?


A) a merger
B) a joint venture
C) an acquisition
D) an equity alliance

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When entering a foreign market, it is advisable for a new venture that has a core competency only in R&D to form a strategic alliance with a local partner because


A) the local partner can better protect its proprietary know-how.
B) building downstream complementary assets can be expensive and time-consuming.
C) the strategic alliance will reduce the differentiation of its product and service offerings.
D) the value gap created by the firm can be easily lowered in an alliance.

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How did the strategic alliance between HP and DreamWorks Animation SKG affect HP?


A) It helped HP pursue a taper integration strategy.
B) It enabled HP to compete head on with Cisco's videoconferencing solution.
C) It resulted in depreciation of HP's shareholder value.
D) It failed because HP lacked the expertise in selecting and integrating technology acquisitions.

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How can strategists decide between borrowing and buying the resource in question?

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When building the new resource through i...

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Google, the leader in online search and advertisement, engaged in a number of smaller acquisitions of tech ventures. It did this in order to


A) imitate the actions of its competitors like Apple and Facebook.
B) solve its principal-agent problems.
C) fill gaps in its competency lineup.
D) expand through unrelated diversification.

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A voluntary arrangement between firms that involves the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services is best described as a


A) proprietorship.
B) cooperative.
C) strategic alliance.
D) leveraged buyout.

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The downside of equity alliances is


A) the weaker ties and reduced trust between partners.
B) the amount of investment that can be involved.
C) that the alliances cannot be abandoned if not promising.
D) that they are not useful stepping-stones toward full integration of the partner firms.

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Sanibel Autos Inc. merged with its competitor Vroom Autos Inc. This allowed Sanibel Autos to use its technological competencies along with Vroom Autos' marketing capabilities to capture a larger market share than what the two entities individually held. What type of integration does this scenario best illustrate?


A) supply-chain
B) technological
C) horizontal
D) perfect

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The managers at Speed Automobile Inc. want to diversify the business by acquiring a consumer electronics company. This acquisition would mean increased job security, higher compensation, and greater decision-making authority for the managers. The managers correlate this acquisition to greater power for them rather than to the appreciation in shareholder value. In this scenario, this acquisition by Speed Automobile is most likely a result of


A) time compression diseconomies.
B) experience-curve effects.
C) principal-agent problems.
D) resource ambiguity.

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How does horizontal integration help firms increase differentiation?

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Horizontal integration through mergers a...

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

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Partner compatibility and partner commit...

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Organizations seeking strategic alliances often pursue non-equity alliances because they are the easiest to create and to sever. However, the short duration of these alliances often means there is little trust or commitment on either side.

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Which of the following statements about managing alliance-related tasks is true?


A) Forming an alliance with another firm prohibits that firm from forming other alliances.
B) Alliance management capability is based on three alliance-related tasks.
C) A merger is one of the three options for alliance design and governance.
D) In post-formation alliance management, none of the firms in an alliance is permitted to gain a competitive advantage.

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Describe an equity alliance with the help of an example.

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Student examples will vary. A sample ans...

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Which of the following statements is true about managing alliance-related tasks?


A) Forming an alliance with another firm prohibits that firm from forming other alliances.
B) Alliance management capability is based on three alliance-related tasks.
C) A merger is one of the three options for alliance design and governance.
D) In post-formation alliance management, none of the firms in an alliance is permitted to gain a competitive advantage.

Correct Answer

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It is necessary for government authorities such as the Federal Trade Commission (FTC) and/or the European Commission to approve any large horizontal integration activity because


A) the horizontal integration activity changes the industry structure from oligopolistic to monopolistically competitive.
B) the surviving firms will need to be protected against the increasing bargaining power of the suppliers.
C) the horizontal integration activity has the potential to reduce competitive intensity in an industry.
D) the surviving firms will need protection against the relaxed entry barriers.

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

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Student examples will vary. A sample ans...

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Which of the following is an example of explicit knowledge?


A) knowing how to create surveys
B) a research skill
C) knowing how to assemble semiconductors
D) a research summary

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Showing 61 - 80 of 100

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