MGMT Capstone exam 2 Practice Questions and Answers

MGMT Capstone exam 2 Practice Questions and Answers A contractual alliance involves writing a contract that describes how much equity each partner receives. T/F - ANSWER-F To achieve economies of scale in a strategic alliance, two or more companies combine unique resources. T/F - ANSWER-F Which one of the following is NOT one of the basic alliance arrangements? Contractual alliance Equal alliance Equity alliance Copyright © KAYLIN 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH NOVEMBER, 2024 Copyright © Stuvia International BV Page 2/93 Joint venture - ANSWER-Equal alliance Why should a company create a strategic alliance with one or more other companies? To differentiate more from competitors To combine resources and capabilities to create new value To make employees happy that may have connections with other companies Both to differentiate more from competitors and to combine resources and capabilities to create new value Both to combine resources and capabilities to create new value and to make employees happy that may have connections with other companies Copyright © KAYLIN 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH NOVEMBER, 2024 Copyright © Stuvia International BV Page 3/93 All of the choices are correct. - ANSWER-Both to differentiate more from competitors and to combine resources and capabilities to create new value Which of the following are ways a firm can take advantage of another firm in an alliance? Vertically integrating Misrepresentation Hold-up Both vertically integrating and hold-up Both misrepresentation and hold-up - ANSWER-Both misrepresentation and hold-up Toyota's seat supplier built its factory next door to Toyota's main factory and built a conveyor built that transferred seats from the supplier into the Toyota factory. This is an example of _____________. Copyright © KAYLIN 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH NOVEMBER, 2024 Copyright © Stuvia International BV Page 4/93 combining unique resources creating alliance specific resources pooling similar resources making the best out of their situation - ANSWER-creating alliance specific resources Zeal Inc., a software firm, decides to enter the publishing industry. While it has the financial resources required to enter the new market, it lacks the expertise and technical knowledge required to establish itself in the new industry. So, Zeal Inc. enters into strategic alliance with Chrome Corp., a leading e- publisher. Which of the following is likely to be true in this case? Zeal's vision is likely to contradict that of Chrome. Chrome is likely to provide its expertise only at the marketing stage. Copyright © KAYLIN 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH NOVEMBER, 2024 Copyright © Stuvia International BV Page 5/93 Chrome is likely to lose its relational advantage through this alliance. Zeal and Chrome are likely to cooperate even at the stage of research and development. - ANSWER- Zeal and Chrome are likely to cooperate even at the stage of research and development. Which of the following statements is true about strategic alliances? Strategic alliances exclude functions that are bought through bidding. In strategic alliances, companies may choose to cooperate at any stage along the value chain. In strategic alliances, the power to make decisions is always evenly distributed amidst the firms. Strategic alliances usually lead to one of the firms losing their relational advantage. - ANSWER-In strategic alliances, companies may choose to cooperate at any stage along the value chain. Drew's Cafe Inc. and Cuppa Corp., two local coffee chains, combine resources to enter the global market. 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. The arrangement Copyright © KAYLIN 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH NOVEMBER, 2024 Copyright © Stuvia International BV Page 6/93 made by the two retail chains to combine resources and collaborate for a common objective refers to a _________. mass-customization strategy standardization venture product-differentiation strategy strategic alliance - ANSWER-strategic alliance Which of the following statements is true about how an arm's-length relationship is used in strategic alliance? Firms use the arm's-length relationship to purchase inputs at the lowest price. Firms cannot buy inputs from multiple sources using the arm's-length relationship. Copyright © KAYLIN 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH NOVEMBER, 2024 Copyright © Stuvia International BV Page 7/93 Firms typically use the arm's-length relationship between internal departments. Firms that use the arm's-length relationship acquire the production facilities of other firms. - ANSWER-Firms use the arm's-length relationship to purchase inputs at the lowest price. Timber Inc. enters an exclusive partnership to ally with Teal Corp. in order to enter a foreign market. Which of the following statements is likely to be true in this case? Timber is likely to buy an activity from Teal using an arm's-length relationship. Timber and Teal are unlikely to receive inputs or activity from each other. Timber is likely to send a bid to Teal along with other suppliers