MGMT Capstone exam 2 UPDATED ACTUAL Exam Questions and CORRECT Answers
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Module
MGMT Capstone
Institution
MGMT Capstone
MGMT Capstone exam 2 UPDATED
ACTUAL Exam Questions and
CORRECT Answers
A contractual alliance involves writing a contract that describes how much equity each
partner receives. T/F - CORRECT ANSWER- F
To achieve economies of scale in a strategic alliance, two or more companies combine unique ...
MGMT Capstone exam 2 UPDATED
ACTUAL Exam Questions and
CORRECT Answers
A contractual alliance involves writing a contract that describes how much equity each
partner receives. T/F - CORRECT ANSWER- ✔✔F
To achieve economies of scale in a strategic alliance, two or more companies combine unique
resources. T/F - CORRECT ANSWER- ✔✔F
Which one of the following is NOT one of the basic alliance arrangements?
Contractual alliance
Equal alliance
Equity alliance
Joint venture - CORRECT 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
All of the choices are correct. - 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 - CORRECT 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
_____________.
combining unique resources
creating alliance specific resources
pooling similar resources
making the best out of their situation - CORRECT 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.
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. -
CORRECT 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. -
CORRECT 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 made by the two retail chains to combine
resources and collaborate for a common objective refers to a _________.
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.
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. -
CORRECT 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 for the lowest price.
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