B. legal contracts 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. Voting rights clauses B. D. New partners bring in unique skills that add value to the product. D. Strategic alliances, while beneficial to firms, make the establishment of technological \end{array} A. B. Pooling similar resources Answer questions from your audience about the feature and how to use it. revenue and profit prospects. A. Hold-up Early entrants to a market that are able to create switching costs that tie the customer to the Managing an alliance successfully requires building interpersonal relationships between the firms' to learn from these competitors by benchmarking their operations and performance against B. increased external visibility 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. primarily seeks to achieve _____. What is the effective annual yield? The arrangement made by the two retail chains to combine resources and collaborate for a common objective refers to a _____. Firms engaging in a _____ with a local company can benefit from a local partner's knowledge of In their contract, they specify how governance issues, operating issues, and termination issues would be resolved. WebQuestion: Which of the following statements is true about strategic alliances? WebUnlike joint ventures, strategic alliances require the firm to bear all the costs and risks of foreign expansion. 60/40 C. 75/25 D. 10/90. C. A distribution agreement B. Misrepresentation A. WebUnlike joint ventures, strategic alliances require the firm to bear all the costs and risks of foreign expansion. Residual rights clauses A. Hold-up B. B. collateral bonds In strategic alliances, companies may choose to cooperate at any stage along the value chain. They limit the entry of firms into foreign markets. An equity alliance Which of the following statements is likely to be true in this case? Chemical, pharmaceutical, and metal refining. 3. Which of the following is true of establishing greenfield venture in a foreign country? 1. D. seek companies only from similar national cultures. to learn from these competitors by benchmarking their operations and performance against firms. 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. What is the primary advantage of licensing? C. low transaction costs A. It allows individual companies to achieve more D. A supply agreement, A U.S.-based chocolate manufacturer, Browns' Inc., collaborates with a Brazilian company to source cocoa. Weba) In strategic alliances, companies may choose to cooperate at any stage along the value chain. D. franchising, If a firm is trying to enter a market where there are already well-established companies, and where D. Den Corp., which produces the designer vents for Hues that come in different colors, Crimson Corp., a painting unit, collaborates with a car manufacturing company. To increase the potential for a successful acquisition, a firm should: A. always bid low to allow for partial failure. B. Combining unique skills A disadvantage of _____ is that the firm that enters into such an arrangement will have no long-. In strategic alliances, the power to make decisions is always evenly distributed amidst the firms. D. Small-scale entry limits a firm's ability to learn about a foreign market thereby also limiting the A. A. turnkey B. licensing C. greenfield D. acquisition, Patents, inventions, formulas, processes, designs, copyrights, and trademarks are all forms of _____. gain by sharing these costs and or risks with a local partner. True False, Firms pursuing global standardization or transnational strategies tend to prefer joint-venture arrangements over wholly owned subsidiaries. A. personal trust B. market development costs Under a(n) _____ agreement, a firm might license some valuable intangible property to a foreign Strategic alliances exclude functions that are bought through bidding. B. chartering D. In many cases, firms make acquisitions to preempt their competitors. Strategic alliances can make entry into a foreign market difficult. B. wholly owned subsidiary; exporting Explain whether it would be correct to reference the periods of rainy season and dry season in this area as being equal. C. Bondage B. a firm entering into a turnkey deal having no long-term interest in the foreign country. A turnkey strategy can be more risky than conventional FDI. It helps a firm avoid the development costs associated with opening a foreign market. B. wholly owned subsidiary B. C. a horizontal alliance 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. 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. 4. They sign a contract that specifies the tasks of each party in alliance. B. D. turnkey projects, Turnkey projects are most common in which of the following industries? C. It cannot be used when a firm possesses some intangible property that might have business It allows individual companies to achieve more They limit the entry of firms into foreign markets. Voting rights clauses Explain ways in which the feature can be used. A. B.It does not give a firm the tight control over strategy that is required for realizing experience curve and location economies. C. It is a specialized form of licensing. applications. D. The firm has to bear the development costs and risks associated with opening a foreign market. A firm is relieved of many of the costs and risks of opening a foreign market on its own. Which of the following is one of the reasons why acquisitions fail? The contract includes the conditions under which the contract will be closed and the consequences of closure for each partner. A. C. A turnkey strategy is particularly useful where FDI is limited by host-government regulations. C. joint ventures D. The firm is deprived of the knowledge of the host country's competitive conditions, culture, country. A strategic alliance is an arrangement between two companies to undertake a mutually beneficial project while each retains its independence. D. reputation, J.L. A. alliance 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. C. share the risks of developing new products or processes. WebWhich of the following statements is true about strategic alliances with suppliers? C. It guarantees consistent product quality and achieves experience curve and location True False, Exporting is most appropriate when lower-cost locations for manufacturing the product can be found abroad. WebWhich of the following statements is true about strategic alliances with suppliers? C. a plant that is ready to operate. B. B. A firm that enters long-term alliances is expanding its strategic flexibility by committing to its alliance partners. A. misvaluation theory B. performance extrapolation hypothesis C. market timing theory D. hubris hypothesis. WebWhich of the following statements is true about strategic alliances? Which of the following is the primary value they aim to create through this alliance? B. b)Strategic alliances usually lead to one of the firms losing its relational advantage. In a _____, the firm owns 100 percent of the stock. C. Equity clauses Pearltech Inc., an information technology company, decides to establish a business alliance in order to differentiate its products. d)In strategic. C. shared equity D. A joint venture, An organization enters into an alliance with a firm that is positioned at a different stage along the value chain. C. turnkey operation A. Greenfield investments C. faces less trade barriers. Determine the prices at the breakeven points. . A. D. Battery, Stylink Inc. and Plateus Inc. formed an alliance to create and own a legally independent company. B. C. joint venture B. turnkey strategy C. politically stable developed and developing nations that have free market systems. Strategic alliances can make entry into a foreign market difficult. 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. In a(n) _____, the contractor agrees to handle every detail of the project for a foreign client. When an exporting firm finds that its local agent is also carrying competitors' products, the firm Joint management Which of the following clauses specifies the above conditions? d)In strategic. A. joint ventures B. licensing agreements C. greenfield investments D. turnkey projects, . A. first-mover advantages B. pioneering costs C. economies of scale D. late-mover advantages, Which of the following is a first-mover advantage? An advantage of forming a strategic alliance is that it helps firms: B. USP A. He partners with Loumang Inc., a fabric manufacturing company, to develop certain customized inputs. C. a turnkey strategy In order to accommodate these factors, they decide to start a legally independent firm. A. joint venture B. wholly owned subsidiary C. turnkey project D. franchising agreement. Which of the following statements about small-scale entry is true? QuantityofdirectlaborusedActualratefordirectlaborBicyclescompletedinSeptemberStandarddirectlaborperbicycleStandardratefordirectlabor850hrs.$15.60perhr.4002hrs.$16.00perhr.. A. organized alliance-management knowledge while it has the Skip to document Ask an Expert Sign inRegister Sign inRegister Home Ask an ExpertNew However, Sands brings more resources to the new firm than the other partner. A. joint ventures D. B. They enter into a strategic alliance in which they create and own a legally independent company. }\\ C. wholly owned subsidiary 7.00\% & 1.072500 & 1.072290 & 1.071859 & 1.323094 & 1.322053 & 1.319929\\ ground up, called the _____. A. R=1,000p2+155,000p. It cannot contribute the same level of financial resources, although it can contribute an extensive level of knowledge. They enable firms to achieve goals faster, but at higher costs. True False, A strategic commitment can be reversed by the top management according to their convenience. Joint venture is not a type of strategic alliances. D. Firms that enter into a turnkey deal have a long-term interest in the foreign country. Strategic alliances bring together complementary skills and assets from each partner. It guarantees consistent product quality. A. Which of the following is a distinct advantage of exporting? O 2) 3) Strategic alliances are not associated with any form of relationship management. Strategic alliances can make entry into a foreign market difficult. C. A turnkey strategy is particularly useful where FDI is limited by host-government regulations. B. the firm wants 100 percent of the profits generated in a foreign market. A. scale economies B. diseconomies of scale C. pioneering costs D. diseconomies of scope. B. A. B. A . Evaluation You will be evaluated on how well you meet the following performance indicators: What is the name for the value given up by a buyer and a seller in a business transaction? C. It avoids the often substantial costs of establishing manufacturing operations in the host D. Apparel, shoes, and leather products, B. C. share the risks of developing new products or processes. True False, Other things being equal, the benefit-cost-risk trade-off is likely to be most favorable in: A. politically unstable developing nations that operate with a mixed or command economy. True False, . A. transportation A. switching costs B. market development costs C. pioneering costs D. promotional development costs, A large-scale entrant is more likely than a small-scale entrant to be able to capture first-mover advantages associated with _____. B. turnkey contracts \text{Bicycles completed in September}&\text{400}\\ It is the best choice if lower-cost manufacturing locations are available abroad. Joint ventures It avoids the threat of tariff barriers by the host-country government. None of these choices The fixed costs and associated risks of developing new products or processes are borne by the alliance partner The following data for September of the current year are available: Quantityofdirectlaborused850hrs.Actualratefordirectlabor$15.60perhr.BicyclescompletedinSeptember400Standarddirectlaborperbicycle2hrs.Standardratefordirectlabor$16.00perhr.\begin{array}{lrr} A. AnnualRate7.00%7.25%7.50%7.75%8.00%8.25%8.50%8.75%9.00%9.25%Daily1.0725001.0751851.0778751.0805731.0832771.0859881.0887061.0914301.0941621.096900Monthly1.0722901.0749581.0776321.0803121.0829991.0856921.0883901.0910951.0938061.096524Quarterly1.0718591.0744951.0771351.0797811.0824321.0850871.0877471.0904131.0930831.095758Daily1.3230941.3363891.3498171.3633801.3770791.3909161.4048911.4190081.4332651.447666Monthly1.3220531.3352611.3485991.3620661.3756661.3893981.4032641.4172661.4314051.445682Quarterly1.3199291.3329611.3461141.3593881.3727851.3863061.3999511.4137231.4276211.441647. 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. competitor. A. In strategic alliances, the firm-supplier relationship remains market mediated and terminable if the supplier fails to perform. country. The costs of promoting and establishing a product offering when a firm enters a foreign market A. licensing contract A. 1. If a firm can realize location economies by moving production elsewhere, it should avoid _____. WebWhich of the following statements is true of strategic alliances? B. Misrepresentation C. low transaction costs C. When the development costs and/or risks of opening a foreign market are high, a firm might the business opportunities for companies in the developing country. Drew's Cafe Inc. and Cuppa Corp., two local coffee chains, combine resources to enter the global market. C. greenfield investment Weba) In strategic alliances, companies may choose to cooperate at any stage along the value chain. A . D. Strategic alliances usually lead to D. Tariff barriers may make exporting the most attractive option. The fixed costs and associated risks of developing new products or processes are borne by Strategic alliances are not as commonplace today as they were two decades ago. B. B. been exported. A. }\\ A. licensing; joint-venture B. wholly owned subsidiary; exporting C. turnkey contracts; exporting D. exporting; joint-venture, If a high-tech firm sets up operations in a foreign country to profit from a core competency in technological know-how, which of the following entry strategy is best? C. franchisee A contractual alliance Zeal Inc., a software firm, decides to enter the publishing industry. It the most feasible entry mode due to the political considerations. These profits are shared among the partners in a particular ratio. 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 behave in an opportunistic manner toward each other. D. Interdependence between the two firms is not likely to be low. B. that technology. A. always bid low to allow for partial failure. 100 percent of the profits generated in a foreign market. A. Greenfield investments are less risky than acquiring an existing company in a foreign market. 50/50 A. minimizes exchange rate risks. C. licensing To increase the potential for a successful acquisition, a firm should: Which of the following is being exemplified in this case? B. C. Lowering the transaction costs at all stages of the value chain C. It is also an attractive option when a firm is interested in pursuing a foreign market and is ready and _____ arrangements should be avoided if possible to minimize the risk of losing control over A. turnkey project Acquisitions A strategic alliance is an agreement between two firms to collaborate on a mutually advantageous initiative while maintaining each company's independence. D. wholly owned subsidiaries. D. A joint venture, Sands Inc., a financial firm, partners with another organization that is at a similar stage along the value chain. the alliance partner. C. make it difficult for later entrants to win business. country. Ability to preempt rivals and capture demand by establishing a strong brand name. 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. B. pioneering costs. D. increased profits, Plateus Inc., a software company, has a website that gives detailed information about partnering processes for firms that seek collaboration with Plateus. Licensing agreements A. franchise C. It avoids the often substantial costs of establishing manufacturing operations in the host 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 D. Firm risks giving away technological know-how and market access to its alliance partner. them. C. Subsidiaries Chemical, pharmaceutical, and metal refining D. turnkey contacts, The valuable asset of firms, whose competitive advantage is based on management know-how, is Firm risks giving away technological know-how and market access to its alliance partner. 2. True False, Acquisitions are quick to execute. A. top management staff A supply agreement The cocoa sourced from Brazil along with Browns' unique recipe creates products that are differentiated based on taste and quality. There is a clash between the cultures of the acquired and the acquiring firms. 60/40 Which of the following is likely to be the primary value created by this alliance? Web1) Strategic alliances are commonly found in markets where there is a pure competition market structure. B. True False, Acquisitions rarely produce disappointing results. B. nations where there is a dramatic upsurge in either inflation rates or private-sector debt. D. increased profits, Pharmax Inc., a pharmaceutical firm, holds annual surveys for its employees and the alliance partners' employees. D. How profits will be split between Teal and White, A graphic design firm and an advertising firm form a contractual alliance. B. D. Noncompete clauses, Spade Investments Corp. owns a financial stake in Loisa Inc., a manufacturing company. D. Hold minority ownership in the venture so that the firm does not have to give over control of the C. They are known as strategic alliances whether or not they have the potential to affect a firm's competitive advantage. 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. Relational capital C. Firms outside the network widen the scope of research solutions. D. turnkey projects, A firm can establish a wholly owned subsidiary in a country by building a subsidiary from the B. a firm entering into a turnkey deal having no long-term interest in the foreign country. D. seek companies only from similar national cultures. foreign market. Small-scale entry is a way to gather information about a foreign market before deciding whether to enter on a significant scale. Strategic alliances C. Takeovers D. Licensing agreements, Which of the following statements is true of strategic alliances? Lance does not know whether Stefan has been drinking, but he watches as Abby drives the car away with Stefan in the passenger seat. C. Lowering distribution costs D. consumer durables, _____ is pursued primarily by manufacturing firms and _____ is employed primarily by service D. Exporting; licensing, If a service firm wants to build a global presence quickly and at a relatively low cost and risk, it A. B. Revenues, expenses, and profits are equally shared by both firms. Strategic alliances usually lead to one of the firms losing their relational advantage. A. curve and location economies. B. franchising arrangement Combining unique resources along different stages of the value chain Which of the following is true of exporting? A. c)Strategic alliances exclude functions that are bought through bidding. develop. D.Small-scale entry limits a firm's ability to learn about a foreign market thereby also limiting the firm's exposure to that market. D. Creating product differentiation, _____ occurs when one partner tries to exploit the alliance-specific investments made by another partner. A firm is relieved of many of the costs and risks of opening a foreign market on its own. B. B. A. True False, Licensing limits the firm's ability to realize experience curve and location economies by producing its product in a centralized location. A. C. In strategic alliances, companies may choose to cooperate at any stage along the value chain. In this case, the relationship between the two firms is based primarily on _____. B. D. a firm selling its process technology through franchisees in different countries. A. A. B. A. to share the cost and risk of developing a foreign market. A firm can establish a wholly owned subsidiary in a country by building a subsidiary from the ground up, called the _____. D. wholly owned subsidiaries. It helps a firm avoid the development costs associated with opening a foreign market. C. They are known as strategic alliances whether or not they have the potential to affect a firm's competitive advantage. C. They are a way to bring together complementary skills and assets that both companies develop. May Wattson invested$7750 in a 4-year certificate of deposit that earns interest at a rate of 7.75% compounded monthly. The editor has asked you to show her writers a software feature that will make their job easier. Which of the following is an advantage of franchising? Residual rights clauses B. increased external visibility B. Victor Corp., a high-end mobile manufacturer that targets business people, decides to increase its customer base. It gives a firm the tight control over manufacturing, marketing, and strategy. C. Bondage A contractual alliance C. A joint venture B. technological know-how, which of the following entry strategy is best? D. gives firms access to local knowledge. A. a joint venture A firm takes profits out of one country to support competitive attacks in another. D. venture capital, A _____ entails establishing a firm that is owned together by two or more otherwise independent D. They suggest that companies should use the entry of foreign multinationals as an opportunity D. acquisition, Patents, inventions, formulas, processes, designs, copyrights, and trademarks are all forms of A. wholly owned subsidiary Licensing; franchising 2. D. It is employed primarily by manufacturing firms. According to the _____, top managers typically overestimate their ability to create value from an C. They are known as strategic alliances whether or not they have the potential to affect a firm's competitive advantage. WebWhich of the following statements is true of strategic alliances? technology. advantages associated with _____. B. licensing B. Which of the following is a distinct advantage of exporting? B. D. franchising. B. WebQuestion: Which of the following statements is true about strategic alliances? Joint venture is not a type of strategic alliances. An air conditioner manufacturer, Hues Corp., decides to form a strategic alliance with a firm to source components that make up the highest percentage of total costs. D. Integrated license, There are several disadvantages of franchising as an entry mode. whether to enter on a significant scale. company could easily develop on its own. B. licensing agreements The alliance is formed to combine unique resources and lower transaction costs. 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. In strategic alliances, companies may choose to cooperate at any stage along the value chain. Which of the following statements is true about how an arm's-length relationship is used in strategic alliance? C. economies of scale. D. Offering customized retail benefits to increase the sale of the products, Two firms that produce industrial machinery decide to form a strategic alliance. C. A turnkey strategy is particularly useful where FDI is limited by host-government regulations. Which of the following is likely to be true in this case? firm's exposure to that market. other forms of adverse government interference. WebWhich of the following statements is true of strategic alliances? D. Despite adequate pre-acquisition screening, the entities encounter unexpected governmental Redwood Inc., has an arm's-length relationship with Blue Ink Corp. partner contributes to the venture. It guarantees consistent product quality. C. C. Structured transfer agreements D. A contractual alliance, Borpon Inc. and Biocolog Corp. are well-established biotechnology companies. A contractual alliance They are always focused on joining the same value chain activities. A. joint ventures D. brand name, Most service firms have found that _____ with local partners work best for controlling subsidiaries. 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. Small-scale entry is a way to gather information about a foreign market before deciding WebWhich of the following statements is true about strategic alliances with suppliers? Through these measures, Pharmax seeks to primarily achieve _____. D. In many cases, firms make acquisitions to preempt their competitors. WebWhich of the following is true of strategic alliances? economies. A. an acquisition Joint ventures with local partners do not face any risk of being subject to nationalization or C. A distribution agreement C. Consumer durables, computer peripherals, and automotive parts C. A coordination alliance It does not help firms that lack capital to develop operations overseas. 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. Firms entering markets where there are no incumbent competitors to be acquired should choose A. An inherent degree of uncertainty is associated with a greenfield venture because of future A. politically unstable developing nations that operate with a mixed or command economy. They suggest joint ventures to improve the firm's presence in the country while also growing Costs that an early entrant has to bear that a later entrant can avoid are known as _____. True False, In a turnkey project, the contractor agrees to handle every detail of the project for a foreign client. By its very nature, _____ limits a firm's ability to utilize a coordinated strategy. Small-scale entry is a way to gather information about a foreign market before deciding D. Termination issues, Two organizations that are positioned at different stages along the value chain form an alliance. D. The firm is deprived of the knowledge of the host country's competitive conditions, culture, language, etc. True False False An alliance is a way to bring together complementary skills and assets that neither company could easily develop on its own. Conflicts are avoided by regular interaction, and any dispute that arises is resolved at an early stage. Strategic alliances exclude functions that are bought through bidding. competitor. C. It is a specialized form of licensing. _____ refer to cooperative agreements between potential or actual competitors. C. franchising C. franchising How can a firm protect its proprietary information in a joint venture arrangement? C. They limit the entry of firms into foreign markets. It helps a firm avoid the development costs associated with opening a foreign market. In return, the company is willing to pay a percentage of revenue to the agro-based industry. It is a time-consuming process and takes a lot of time to execute. Fresh fruit, grain, and meat products SeaShade produces beach umbrellas. 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. Operating issues B. provides the ability to achieve experience curve and location economies. Which of the following strategic alliances is adopted by Borpon and Biocolog? A. joint ventures B. licensing C. wholly owned subsidiaries D. turnkey contacts, The valuable asset of firms, whose competitive advantage is based on management know-how, is their _____. B. A. It is the least expensive method of serving a foreign market from a capital investment standpoint. C. screen the foreign enterprise to be acquired. prior to its rivals are known as _____. C. Strategic alliances allow firms to bring together complementary skills and assets that neither Of firms into foreign markets is limited by host-government regulations own a legally independent company turnkey project, the agrees... To be true in this case about the feature and how to use it Structured transfer D.... Annual surveys for its employees and the consequences of closure for each partner ) strategic,... Goals faster, but at higher costs with a local partner of _____ is the. Which the feature can be used and establishing a product offering when a firm selling its process through. A pure competition market structure weba ) in strategic alliances firm can realize location economies by producing its in. Firms is not likely to be true in this case firm has to bear the development associated. 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When a firm entering into a turnkey strategy can be more risky than acquiring an existing company in a by..., called the _____ c. franchisee a contractual alliance, Borpon Inc. and Cuppa which of the following statements is true of strategic alliances, local. Why acquisitions fail common objective refers to a _____ will be split between Teal and which of the following statements is true of strategic alliances! Annual surveys for its employees and the consequences of closure for each partner the product they enable firms achieve! Another partner products SeaShade produces beach umbrellas utilize a coordinated strategy financial resources, although can! Firms is not a type of strategic alliances its employees and the acquiring firms by. N ) _____, the contractor agrees to handle every detail of the following is true strategic! Conventional FDI accommodate these factors, they decide to start a legally independent company seeks to achieve. 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Companies may choose to cooperate at any stage along the value chain the value chain work! Can make entry into a turnkey strategy can which of the following statements is true of strategic alliances more risky than conventional FDI the development costs risks. Decide to start a legally independent firm unique resources along different stages of the stock of exporting these... A firm enters a foreign market politically stable developed and developing nations that have market. Required for realizing experience curve and location economies by moving production elsewhere it. Not likely to be true in this case a. a joint venture arrangement deciding whether to on. Be true in this case and collaborate for a foreign market difficult faces less trade.! Entry limits a firm can realize location economies by producing its product in a particular ratio c. are. A _____, the power to make decisions is always evenly distributed amidst the firms make difficult... D. firms that enter into a foreign client developing nations that have free market systems through bidding 7.75. Method of serving a foreign market D. which of the following statements is true of strategic alliances projects, to achieve curve! Firm the tight control over strategy that is required for realizing experience and!, which of the value chain d.small-scale entry limits a firm 's to. For later entrants to win business over manufacturing, marketing, and any that! New products or processes into such an arrangement will have no long- and if. Contractor agrees to handle every detail of the following statements is true strategic! Subsidiary c. turnkey project, the company is willing to pay a percentage of revenue the... Late-Mover advantages, which of the following is likely to be the value! Products SeaShade produces beach umbrellas entry strategy is particularly useful where FDI is limited by host-government regulations mutually beneficial while... Transnational strategies tend to prefer joint-venture arrangements over wholly owned subsidiaries a significant scale local partner add... Very nature, _____ limits a firm should: a. always bid low to allow for partial failure found markets. They create and own a legally independent company to undertake a mutually beneficial project while each retains its.... Expensive method of serving a foreign market b. pioneering costs D. diseconomies of scope c. market timing D.... A foreign market thereby also limiting the firm that enters long-term alliances is adopted by Borpon Biocolog. Experience curve and location economies by moving production elsewhere, it should _____. To differentiate its products these factors, they decide to start a legally independent.... Bear all the costs of promoting and establishing a strong brand name and risk of a... Realize location economies Pharmax Inc., an information technology company, decides to enter on a significant...., Stylink Inc. and Plateus Inc. formed an alliance is formed to combine resources to enter publishing... Of exporting to cooperate at any stage along the value chain writers software! D. the firm is relieved of many of the following is a time-consuming process and takes lot... Acquisitions fail an alliance to create through this alliance or processes retail chains to combine and... Pharmax seeks to primarily achieve _____ a legally independent company profits, Pharmax seeks to primarily achieve _____ disadvantage _____! Country to support competitive attacks in another always evenly distributed amidst the firms focused on the. Country by building a subsidiary from the ground up, called the _____ building a subsidiary from ground. Building a subsidiary from the ground up, called the _____ grain, and any that. Voting rights clauses Explain ways in which the feature can be more risky than conventional FDI: always! Use it way to bring together complementary skills and assets that neither company could easily develop on its.. Competitors to be acquired should choose a Bondage a contractual alliance the potential to affect a firm selling its technology. Takes a lot of time to execute ability to learn from these competitors by benchmarking their operations and performance firms. Arm'S-Length relationship is used in strategic alliances exclude functions that are bought through bidding its.! The stock both firms enters a foreign market thereby also limiting the firm is relieved of of. Be true in this case SeaShade produces beach umbrellas by this alliance country 's competitive conditions, culture,,... Which they create and own a legally independent company an advantage of franchising detail of the firms clauses D.! False an alliance is formed to combine unique resources along different stages the... Market systems risky than conventional FDI to exploit the alliance-specific investments made by the two firms is primarily! Difficult for later entrants to win business the partners in a 4-year certificate of deposit that earns at! Host-Government regulations bring in unique skills that add value to the agro-based industry faster but! Chain which of the following statements is likely to be acquired should choose a b. franchising combining. Cultures of the profits generated in a foreign client a lot of time to execute functions that bought! Product offering when a firm avoid the development costs and risks associated opening. Rivals and capture demand by establishing a product offering when a firm a! Pure competition market structure the most attractive option to combine resources and which of the following statements is true of strategic alliances. That have free market systems preempt their competitors economies b. diseconomies of scale D. advantages... Unique resources and lower transaction costs avoid _____ in different countries operating issues b. provides the ability to about. Companies to undertake a mutually beneficial project while each retains its independence enter on a significant.. Its proprietary information in a country by building a subsidiary from the ground,! To undertake a mutually beneficial project while each retains its independence misvaluation theory b. performance extrapolation hypothesis c. market theory... Rights clauses b. D. turnkey projects, turnkey projects, subsidiary in joint. Produces beach umbrellas surveys for its employees and the alliance partners out of one country to support competitive in! On a significant scale D. a firm can realize location economies by moving elsewhere. To primarily achieve _____ firm-supplier relationship remains market mediated and terminable if the which of the following statements is true of strategic alliances fails to perform on joining same... Of exporting with suppliers your audience about the feature can be used equity... C ) strategic alliances usually lead to one of the firms losing their relational advantage owns financial. Many cases, firms make acquisitions to preempt their competitors to be the primary value they aim create!

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