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Exam 9: Cooperative Strategy

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Question 61

Multiple Choice

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The two types of complementary strategic alliances are

A) vertical and horizontal.
B) macro and micro.
C) outsourcing and insourcing.
D) network and complementary.

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Question 62

Multiple Choice

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Meredith Inc. is a manufacturer of art supplies. The company has announced plans to enter into an equity strategic alliance with JaZz Paper to develop a line of specialty papers for use with a line of specialty paints Meredith manufactures. Which of the following would be the accurate interpretation of this announcement?

A) Meredith will own a majority equity stake in the new venture.
B) JaZz will own a majority equity stake in the new venture.
C) Meredith or JaZz will own an equal equity stake in the new venture.
D) Either Meredith or JaZz will own a majority equity stake, but we do not know which one based on the announcement.

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Question 63

Multiple Choice

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Smith Commercial Lighting, Inc., which sells lighting for factories and businesses, has entered into an alliance with Revelation Lighting, Inc., a retailer of home decor lighting, in order to expand into the trend of using industrial-type lighting in non-traditional style homes. Smith has invested 40% and Revelation has invested 60% into the new operation. This is an example of a(an)

The alliance between Nokia and Microsoft (Chapter 9 Strategic Focus) calls for Nokia to transition its smartphone portfolio to Microsoft's Windows phone platform. This is an example of using an alliance in a ____________ to speed up development of new products and services.

The Renault Nissan alliance (Chapter 9 Opening Case) is an example of a _______ created to gain economies of scope by sharing resources and capabilities.

____ strategic alliances have stronger focus on value creation than do ____ alliances.

A nonequity strategic alliance exists when

A firm creates a competitive advantage when it develops and manages corporate-level cooperative strategies in a way that is valuable, rare, imperfectly imitable and nonsubstitutable.

The Renault Nissan alliance discussed in the Opening Case is an example of a ________ in that the firms seek to create economies of scope by sharing their resources and capabilities to develop manufacturing platforms that can be used to produce cars that will be either a Renault or a Nissan.

Identify and define the two different types of network strategies.

Case Scenario : Norning International Norning International (NI) states that both its past successes and future growth strategies are based on an evolving network of wholly owned businesses and joint ventures around its core competency in glass making. Through their alliances and owned divisions they compete in four global business sectors: Specialty Glass and Materials (including materials for HDTV and LCD displays), Consumer Housewares (including microwavable dishware), Laboratory Sciences Products and Services (test tubes, testing equipment, and drug trials testing), and Communications (fiber optics and related technologies). Per the company's annual report, "binding all four sectors together is the glue of a commitment to leading edge glass making technologies, shared resources, and dedication to total quality." Each sector is composed of divisions, subsidiaries and alliances. However, the central role played by alliances is demonstrated by the fact that the combined revenue of its 30-some alliances is more than double that of NI on its own. Most of the alliances provide NI with access to particular geographic markets, industries, or channels, although an increasing number of alliances involve both market access and technological development. -(Refer to the above Case Scenario) What risks arise from a strategy based on such a "network of alliances"?

Identify the competitive risks associated with cooperative strategies.

A businessperson in Atlanta who wishes to develop a luxury pet kennel approaches the owner of the highly successful Pet Resort and Day Spa in Houston to see if the owner is interesting in franchising the Pet Resort brand. The Atlanta businessperson's goal is to

Tacit collusion tends to be least used as a business-level, competition-reducing strategy in highly concentrated industries such as airlines and breakfast cereals even though it results in higher prices for consumers.

Firms in a standard-cycle market may form alliances in order to

In the U.S., cooperative strategies to reduce competition may result in ____ if they are explicit.

The collaboration between Volvo Aero (a subsidiary of Sweden's AB Volvo) and U.S.-based Pratt & Whitney to produce a new jet engine would be characterized as a(an)

A state-wide alliance of independent hospitals has formed in order to do group purchasing of medical supplies. Group purchasing allows the hospital alliance to negotiate lower prices with suppliers because of the large quantity of materials ordered. This is an example of the advantage of ____ resulting from an alliance.

____ are LEAST likely to involve potential or current competitors.

Which of the following statements is FALSE?