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Exam 9: Corporate Strategy: Strategic Alliances, Mergers and Acquisitions

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Question 41

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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.

E) C) and D)
F) A) and C)

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Question 42

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In terms of the build-borrow-or-buy framework, when are a firm's internal resources considered to be relevant?

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A firm's internal resources are relevant...

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Question 43

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What is meant by managerial hubris? In what forms does it appear?

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

List the reasons that bring about the existence of mergers, though they tend to destroy rather than create shareholder value.

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

Vibgyor 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 cell 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 Vibgyor and the software company best referred to as in this scenario?

Which of the following is NOT a reason why firms enter alliances?

How does horizontal integration help firms increase differentiation?

Fervana Autos Inc., a large automobile company, made an initial small investment in a startup company that was developing a solar-powered car.This gave Fervana Autos controlling interests in the startup company.However, Fervana Autos had no obligations to make continued investments in the experiments of the startup company.It could invest in small amounts depending on the new product's success at each stage of its development.If the product proved to be successful, Fervana Autos would have the right to buyout the startup company.This approach to strategic alliance is referred to as _____.

Supply, distribution, and licensing contractual agreements between firms, which result in vertical strategic alliances, are all examples of _____.

When large, incumbent firms buy startup companies, the transaction is generally described as a(n) _____.

A consumer electronics company is in the process of evaluating whether it should pursue an internal development strategy or an external growth strategy.To make this decision, the management needs to assess whether the company's internal resources are superior to those of competitors in the targeted area.Which of the following strategic management models would be most useful in this assessment?

_____ is best described as cooperation by competitors to achieve a strategic objective.

How is explicit knowledge different from tacit knowledge?

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

When should a strategist resort to merger and acquisition (M&A)as a growth option?

NorthStar Inc.and The Royal Group have together established The Royal Star Group of hotels.NorthStar owns 49 percent and The Royal Group has a 51 percent share in The Royal Star Group of hotels.However, the management of The Royal Star Group of hotels is separate from its parent companies.What alliance type does this scenario best illustrate?

Dow Corning is a company owned by Dow Chemical and Corning.This is most likely an example of a(n) _____.

Which of the following scenarios best illustrates horizontal integration?