He partners with Loumang Inc., a fabric manufacturing company, to develop certain customized inputs. while it has the Skip to document Ask an Expert Sign inRegister Sign inRegister Home Ask an ExpertNew C. Dispute resolution clauses 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. A. turnkey Which of the following is likely to be true in this case? Which of the following is the primary objective of this strategic alliance? In the second clause, they specify how intellectual property will be shared and protected. Gray helps design products that change how Victor is perceived by young customers. It does not give a firm the tight control over strategy that is required for realizing experience AMOUNTPER$1.00INVESTED,DAILY,MONTHLY,ANDQUARTERLYCOMPOUNDING, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Fundamentals of Financial Management, Concise Edition, Chemistry 120 Chapter 1 Chemical Foundation. An equity alliance Present the feature in steps that your audience can follow easily. D. licensing agreement, In ____, the contractor agrees to handle every detail of the project for a foreign client, including the An inherent degree of uncertainty is associated with a greenfield venture because of future 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. Which of the following is one of the reasons why acquisitions fail? True False, Exporting is most appropriate when lower-cost locations for manufacturing the product can be found abroad. 8.00\% & 1.083277 & 1.082999 & 1.082432 & 1.377079 & 1.375666 & 1.372785\\ A strategic alliance is an agreement between two firms to collaborate on a mutually advantageous initiative while maintaining each company's independence. foreign market. Strategic alliances bring together complementary skills and assets from each partner. D. 10/90. whether to enter on a significant scale. D. hubris hypothesis. There is nothing as trust between the firm and its suppliers in strategic alliances. B. B. 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. B. A. This is an example of: A. a firm entering into a turnkey project with a foreign enterprise, inadvertently creating a competitor. C. Strategic alliances allow firms to bring together complementary skills and assets that neither businesses in the same country. 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 _____. A. transportation 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 Which of the following is likely to be true in this case? C. It is a specialized form of licensing. An equity alliance This encourages the supplier to align its incentives with Velara's needs. Use the table above to find the amount per $1.00 invested. C. In strategic alliances, companies may choose to cooperate at any stage along the value chain. C. faces less trade barriers. Which of the following statements is likely to be true in this case? Licensing agreements D. 2. B. Firms engaging in a _____ with a local company can benefit from a local partner's knowledge of the host country's competitive conditions, culture, language, political systems, and business systems. with a subsequent large-scale entry. The firms contribute knowledge but each performs its roles separately. D. A vertical alliance. C. Cooperation between the two firms is not likely to depend on cross-equity holdings. A. Which of the following is a distinct advantage of exporting? global competitors are also interested in establishing a presence, the firm should choose a(n) Which of the following statements about franchising is true? \text{Bicycles completed in September}&\text{400}\\ Is it fair to hold Lance responsible in either situation? competing with these firms in the world oil market. D. Firm risks giving away technological know-how and market access to its alliance partner. C. greenfield Firms benefit from a local partner's knowledge of the host country's competitive conditions. A. first-mover advantages B. pioneering costs C. economies of scale D. late-mover advantages, Which of the following is a first-mover advantage? Plateus describes the terms and conditions of different grades of partnership on its website, allowing potential partners to choose which level fits them best. SeaShade produces beach umbrellas. Which of the following is an advantage of establishing a joint venture? True False False An alliance is a way to bring together complementary skills and assets that neither company could easily develop on its own. Web1) Strategic alliances are commonly found in markets where there is a pure competition market structure. However, Stylink tried to exploit the alliance-specific investments made by Plateus. 7.50\% & 1.077875 & 1.077632 & 1.077135 & 1.349817 & 1.348599 & 1.346114\\ C. It is also an attractive option when a firm is interested in pursuing a foreign market and is ready A. It avoids the threat of tariff barriers by the host-country government. D. Franchising may inhibit the firm's ability to take profits out of one country to support, D. Franchising may inhibit the firm's ability to take profits out of one country to support, In many countries, political considerations make _____ the only feasible entry mode. Lance does not know whether Stefan has been drinking, but he watches as Abby drives the car away with Stefan in the passenger seat. 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. D. consumer durables, _____ is pursued primarily by manufacturing firms and _____ is employed primarily by service It helps a firm avoid the development costs associated with opening a foreign market. A. exporting B. licensing C. franchising D. turnkey projects, Turnkey projects are most common in which of the following industries? They enable firms to achieve goals faster, but at higher costs. C. It avoids the often substantial costs of establishing manufacturing operations in the host D. Termination issues, Two organizations that are positioned at different stages along the value chain form an alliance. Strategic alliances bring together complementary skills and assets from each partner. b)Strategic alliances usually lead to one of the firms losing its relational advantage. It the most feasible entry mode due to the political considerations. language, etc. 7.25\% & 1.075185 & 1.074958 & 1.074495 & 1.336389 & 1.335261 & 1.332961\\ The contributions made by individual firms are easy to measure. A. joint venture B. wholly owned subsidiary C. turnkey project D. franchising agreement. C. They are known as strategic alliances whether or not they have the potential to affect a firm's competitive advantage. B. advantages associated with _____. A. misvaluation theory They limit the entry of firms into foreign markets. A. franchise Lowering distribution costs at all stages of the value chain to learn from these competitors by benchmarking their operations and performance against A. B. Misrepresentation D. The firm has to bear the development costs and risks associated with opening a foreign market. An inherent degree of uncertainty is associated with a greenfield venture because of future C. licensing They enable firms to achieve goals faster, but at higher costs. \text{Quantity of direct labor used}&\text{850 hrs. A. personal trust True False, An advantage of joint ventures with a local partner is the knowledge of the local environment that the local partner contributes to the venture. C. turnkey operation A. always bid low to allow for partial failure. B. A firm is relieved of many of the costs and risks of opening a foreign market on its own. A firm is relieved of many of the costs and risks of opening a foreign market on its own. Which of the following alliances will be best suited for the organization? B. D. A supply agreement, A U.S.-based chocolate manufacturer, Browns' Inc., collaborates with a Brazilian company to source cocoa. curve and location economies. WebWhich of the following statements is true about strategic alliances with suppliers? D. Strategic alliances usually lead to competitor. the business opportunities for companies in the developing country. A. . b. A licensing agreement B. C. politically stable developed and developing nations that have free market systems. B. D. turnkey contract. B. It helps a firm avoid the development costs associated with opening a foreign market. ground up, called the _____. 4) A company that. firm's exposure to that market. C. Firms outside the network widen the scope of research solutions. Strategic alliances, while they have many benefits, do not allow firms to share the fixed costs of developing new products or processes. . WebStrategic alliances refer to cooperative agreements between potential or actual competitors. A licensing agreement C. A turnkey strategy is particularly useful where FDI is limited by host-government regulations. In strategic alliances, the power to make decisions is always evenly distributed amidst the firms. The costs of promoting and establishing a product offering when a firm enters a foreign market D. In many cases, firms make acquisitions to preempt their competitors. The firm does not have to bear the development costs and risks associated with opening a C. They give the firm a much greater ability to build the kind of subsidiary company that it wants. The arrangement is less complicated and less enforceable than a joint venture, in which two firms combine their resources to form a new company organization. Through this measure, Plateus seeks to primarily achieve _____. Through these measures, Pharmax seeks to primarily achieve _____. A. organized alliance-management knowledge Which of the following is the primary value they aim to create through this alliance? arrangements. A. minimizes exchange rate risks. A firm can establish a wholly owned subsidiary in a country by building a subsidiary from the ground up, called the _____. been exported. C. politically stable developed and developing nations that have free market systems. D. give later entrants a cost advantage over early entrants. D. Contractual safeguards, _____ refers to the building of interpersonal relationships between the firms' managers in a D. Turnkey contracts, For a company whose core competency is management know-how, which entry mode would be Strategic alliances bring together complementary skills and assets from each partner. 100 percent of the profits generated in a foreign market. the alliance partner. None of these choices The fixed costs and associated risks of developing new products or processes are borne by the alliance partner It avoids the threat of tariff barriers by the host-country government. B. True False, Franchising enables a firm to quickly build a global presence. D. In many cases, firms make acquisitions to preempt their competitors. D. Firms that enter into a turnkey deal have a long-term interest in the foreign country. partner, but in addition to a royalty payment, the firm might also request that the foreign partner True False False An alliance is a way to bring together complementary skills and assets that neither company could easily develop on its own. 4. D. licensing agreement, _____ can be used to formalize arrangements to swap skills and technology in a strategic alliance. C. It is required if a firm is trying to realize location and experience curve economies. A. A strategic alliance is an agreement between two firms to collaborate on a mutually advantageous initiative while maintaining each company's independence. Victor Corp., a high-end mobile manufacturer that targets business people, decides to increase its customer base. A . D. wholly owned subsidiaries. B. The acquired firm often overpays for the assets of the acquiring firm. Describe the proximity of the wettest areas of the savanna in East Africa to the Equator. D. It increases a firm's ability to utilize a coordinated strategy. A. A turnkey strategy can be more risky than conventional FDI. A. joint venture B. turnkey strategy C. licensing agreement D. greenfield strategy. It is the least expensive method of serving a foreign market from a capital investment The objective of this collaboration is to combine their manufacturing facilities to achieve economies of scale during production. They are less risky than greenfield ventures in the sense that there is less potential for unpleasant surprises. Strategic alliances exclude functions that are bought through bidding. Which of the following clauses specifies the above conditions? B. An arrangement whereby a firm grants the right of intangible property to another entity for a A. Which of the following is true of acquisitions? B. a firm entering into a turnkey deal having no long-term interest in the foreign country. Drew's Cafe Inc. and Cuppa Corp., two local coffee chains, combine resources to enter the global market. Conflicts are avoided by regular interaction, and any dispute that arises is resolved at an early stage. WebB. Small-scale entry is a way to gather information about a foreign market before deciding whether to enter on a significant scale. Strategic alliances are not as commonplace today as they were two decades ago. C. Bondage B. In strategic alliances, companies may choose to cooperate at any stage along the value chain. C. turnkey project D. Firms that enter into a turnkey deal have a long-term interest in the foreign country. D. Noncompete clauses, Spade Investments Corp. owns a financial stake in Loisa Inc., a manufacturing company. D. It improves the firm's ability to take profits out of one country to support competitive attacks in another. Which of the following strategic alliances is adopted by Borpon and Biocolog? D. acquisition, Patents, inventions, formulas, processes, designs, copyrights, and trademarks are all forms of 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. D. takeovers, _____ refer to cooperative agreements between potential or actual competitors. B. market development costs technological know-how, which of the following entry strategy is best? involvement. C. greenfield investment C. 75/25 acquisition. Nate, the operations head, suggests extending the prospects by looking outside their usual network. easily develop on its own. B. diseconomies of scale Hold majority ownership in the venture so that the firm has greater control over the technology. to learn from these competitors by benchmarking their operations and performance against WebB. A. Turnkey projects are most common in industries which use simple, inexpensive production technologies. revenue and profit prospects. B. \hspace{50pt}\text{Interest Period - 1 year} &\hspace{50pt} \text{Interest Period - 4 years}\\ True False, Acquisitions are quick to execute. Which of the following is being exemplified in this scenario? The firm does not have to bear the development costs and risks associated with opening a C. a plant that is ready to operate. }\\ May Wattson invested$7750 in a 4-year certificate of deposit that earns interest at a rate of 7.75% compounded monthly. A. organized alliance-management knowledge Firms entering markets where there are no incumbent competitors to be acquired should choose D. Noncompete clauses, _____ are governance clauses in which joint ventures must specify what percentage of equity is owned by each of the partners. standpoint. B.It does not give a firm the tight control over strategy that is required for realizing experience curve and location economies. C. It cannot be used when a firm possesses some intangible property that might have business applications. A wholly owned subsidiary is appropriate when: A. the firm wants to share the cost and risk of developing a foreign market. WebWhich of the following is true of strategic alliances? They are always focused on joining the same value chain activities. As Abby pulls her car onto the highway, she swerves and hits another car head-on. 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. B. D. developing nations where speculative financial bubbles have led to excess borrowing. B.Joint ventures give a firm a tight control over subsidiaries that it might need to realize experience curve or location economies. standards for an industry difficult. C. a country subsequently proving to be a major market for the output of the process that has been exported. A. top management staff B. USP C. advertisements D. brand name, Most service firms have found that _____ with local partners work best for controlling subsidiaries. C. acquisitions maximum expansion in the quickest amount of time. D. The dependency level between partners is low. A. D. turnkey contacts, The valuable asset of firms, whose competitive advantage is based on management know-how, is B. Pooling similar resources foreign market. develop. The costs and risks associated with doing business in a foreign country are typically: A. low in an economically advanced nation. WebWhich of the following statements is true about strategic alliances with suppliers? C. make it difficult for later entrants to win business. A. switching costs D. It is appropriate if lower cost locations for manufacturing the product can be found abroad. C. Bondage C. A distribution agreement In strategic alliances, companies may choose to cooperate at any stage along the value chain. There is little incentive for the franchisee to build a profitable operation as quickly as possible. C. intangible property Which of the following statements is true about how an arm's-length relationship is used in strategic alliance? D. It is employed primarily by manufacturing firms. D. Offering customized retail benefits to increase the sale of the products, Two firms that produce industrial machinery decide to form a strategic alliance. A. The alliance between the two firms is an example of _____. Strategic alliances can make entry into a foreign market difficult. D. franchising. A. Preemption rights clauses It does not give a firm the tight control over strategy that is required for realizing experience 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 _____. A. Turnkey projects are most common in industries which use simple, inexpensive production \text{Standard rate for direct labor}&\text{\$16.00 per hr. B. increased external visibility In a _____, the firm owns 100 percent of the stock. A. to share the cost and risk of developing a foreign market. A. joint venture C. pioneering costs c)Strategic alliances exclude functions that are bought through bidding. 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 The arrangement is less complicated and less enforceable than a joint venture, in which two firms combine their resources to form a new company organization. D. In many cases, firms make acquisitions to preempt their competitors. Voting rights clauses Many American firms that sold oil-refining technology to firms in the Gulf now find themselves competing with these firms in the world oil market. of developing new products or processes. They are always focused on joining the same value chain activities. B. nations where there is a dramatic upsurge in either inflation rates or private-sector debt. Under a(n) _____ agreement, a firm might license some valuable intangible property to a foreign D. gives firms access to local knowledge. 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 B. licensing contracts In strategic alliances, companies may choose to cooperate at any stage along the value chain. A. Explain ways in which the feature can be used. A. integrated licensing B. chartering C. franchising D. cross-licensing, Cross-licensing agreements are increasingly common in the _____ industries. Stefan, another friend, leaves with Abby to get a ride home. D. It is particularly useful where FDI is limited by host-government regulations. Activity Plan and demonstrate how to use the feature. Drew's Cafe Inc. and Cuppa Corp., two local coffee chains, combine resources to enter the global market. B. He knows that some of his friends have driven to his house, but he doesn't pay much attention to whether or not they are drinking. According to the _____, top managers typically overestimate their ability to create value from an acquisition. D. Profit stealing. A. D. to test a market. A firm takes profits out of one country to support competitive attacks in another. 4. 2003-2023 Chegg Inc. All rights reserved. Which of the following is likely to be covered under the clause that deals with governance issues? C. Lowering distribution costs When an exporting firm finds that its local agent is also carrying competitors' products, the firm D. Dispute clauses, Teal Inc., forms a strategic alliance with White Corp. Web1) Strategic alliances are commonly found in markets where there is a pure competition market structure. A. managers. They are always focused on joining the same value chain activities. C. operational assets A. Strategic alliances exclude functions that are bought through bidding. WebWhich of the following is true of strategic alliances? subsidiary company that it wants. B. Which of the following is being exemplified in this case? They enter into a strategic alliance in which they create and own a legally independent company. An advantage of forming a strategic alliance is that it helps firms: The choice of which markets to enter should be driven by an assessment of relative long-run growth and profit potential. D. the firm wants to test a market. B. franchising B. Which category of issues does the second clause address? A. What performance is expected by Teal and White from each other country. A supply agreement True False, A joint venture is often politically more acceptable than a wholly owned subsidiary and brings a degree of local knowledge to the subsidiary. Revenues, expenses, and profits are equally shared by both firms. B. D. Exporting; licensing, If a service firm wants to build a global presence quickly and at a relatively low cost and risk, it He believes that a contractual alliance will be ideal for this collaboration, but other senior members of the management oppose a contractual alliance. C. licensing agreement Which of the following statements is true about strategic alliances? D. Integrated license, There are several disadvantages of franchising as an entry mode. The parent organizations create a legally independent firm. 60/40 C. acquisitions. specified time period in exchange for royalties is a(n) _____ agreement. In strategic alliances, the power to make decisions is always evenly distributed amidst the firms. A. drive early entrants out of the market. C. make it difficult for later entrants to win business. In strategic alliances, companies may choose to cooperate at any stage along the value chain. D. Creating product differentiation, _____ occurs when one partner tries to exploit the alliance-specific investments made by another partner. B. franchises A. licensing agreements B. joint ventures. A wholly owned subsidiary limits a firm's control over operations in different countries. What is the primary advantage of licensing? Marcel, the CEO of an automobile company, considers extending his research and development facility by collaborating with a multinational company. C. They are known as strategic alliances whether or not they have the potential to affect a firm's competitive advantage. B. D. Strategic alliances usually lead to In order to accommodate these factors, they decide to start a legally independent firm. Which of the following is an advantage of franchising? C. It is required if a firm is trying to realize location and experience curve economies. systems. gain by sharing these costs and or risks with a local partner. D. seek companies only from similar national cultures. C. franchising A firm that enters long-term alliances is expanding its strategic flexibility by committing to its alliance partners. A. A. C. Subsidiaries In strategic alliances, the firm-supplier relationship remains market mediated and terminable if the supplier fails to perform. D. acquisition, A(n) _____ is a way to bring together complementary skills and assets that neither company could B. make it easy for later entrants to win business. WebQuestion: QUESTION 13 Which of the following statements is true of strategic alliances? B. company could easily develop on its own. How intellectual property will be shared by Teal and White training of operating personnel. 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. optimal? A. An equity alliance firms. The commitment associated with a small-scale entry makes it possible for the small-scale They are less risky than greenfield ventures in the sense that there is less potential for C. low transaction costs Firms within the network prevent against opportunism. Combining unique resources along different stages of the value chain B. greenfield investment To increase the potential for a successful acquisition, a firm should: A. always bid low to allow for partial failure. Many American firms that sold oil-refining technology to firms in the Gulf now find themselves A. protect their procedures and technologies. D. Apparel, shoes, and leather products, B. 60/40 C. 75/25 D. 10/90. Strategic alliances usually lead to one of the firms losing their relational advantage. them. Spade's resources help the organization increase productivity, which results in increased sales and profits. D. The firm is deprived of the knowledge of the host country's competitive conditions, culture, primarily seeks to achieve _____. C. Wholly owned subsidiaries Residual rights clauses True False, Relational capital refers to the building of interpersonal relationships between the firms' managers in a strategic alliance. A turnkey strategy can be more risky than conventional FDI. b)Strategic alliances usually lead to one of the firms losing its relational advantage. B. make it easy for later entrants to win business. country. C. A turnkey strategy is particularly useful where FDI is limited by host-government regulations. A firm takes profits out of one country to support competitive attacks in another. True False, Costs that an early entrant has to bear that a later entrant can avoid are known as first-mover costs. A. WebB. They are a way to bring together complementary skills and assets that both companies Through this measure, J.L. C. Strategic alliances A. Which of the following statements is true about firms that establish strategic alliances? An advantage of _____ with a local partner is the knowledge of the local environment that the local B. licensing agreements Managing an alliance successfully requires building interpersonal relationships between the firms' managers. B. revenue and profit prospects. After the survey, the management discusses the issues brought up by the employees and their suggestions. B. licensing C. screen the foreign enterprise to be acquired. In the first clause, they specify how decisions will be made, how profits will be split, and how disputes will be resolved. A. C. greenfield investments applications. WebStrategic alliances refer to cooperative agreements between potential or actual competitors. D. A profit agreement, Velara Inc., a healthcare company, owns 35% stake in the firm that supplies most of its raw materials. B. relational assets B.It does not give a firm the tight control over strategy that is required for realizing experience curve and location economies. It tends to involve more short-term commitments than licensing. D. A joint venture. Franchising; licensing C. Franchising; exporting D. Exporting; licensing, If a service firm wants to build a global presence quickly and at a relatively low cost and risk, it must employ _____. Scale d. late-mover advantages, which of the following is one of the costs and risks with. Where there is a ( n ) _____ agreement organization increase productivity, of... On joining the same value chain activities firms that sold oil-refining technology to firms in the foreign to! Realize location and experience curve and location economies which of the following statements is true of strategic alliances now find themselves a. protect their procedures and.... 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Victor is perceived by young customers an economically advanced nation perceived by young customers young customers top! Clauses, Spade investments Corp. owns a financial stake in Loisa Inc., a high-end mobile manufacturer targets! Either situation amount per $ 1.00 invested oil-refining technology to firms in the venture that.
