8/12/2019 Chapter Test 6

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Out of 10 questions, you answered 10 correctly with a final grade o f 100%

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The correct answer for each question is indicated by a .

1

CORRECTWhich one of the following is not a factor that makes an alliance "strategic" as opposed to just a convenient businessarrangement?

A) The alliance involves joint contribution of resources and is mutually beneficial.

B) The alliance helps block a competitive threat or open up new market oppo rtunities.

C) The alliance he lps mitigate a significant risk to a company's business.

D) The alliance he lps build, enhance, or sustain a core competence or competitive advantage .

E) The alliance is critical to the company's achievement of an important objective.

2

CORRECTCompanies are motivated to enter into strategic alliances or cooperative arrangements

A) to expedite the de velopment of promising new technologies or products.

B) to bring together the pe rsonnel and expertise needed to create de sirable new skill sets and capabilities to improvesupply chain efficiency, and/or gain economies of scale in production and/or marketing.

C) to acquire o r improve market access through joint marketing agreements.

D) to help w in the race against rivals for global market leadership.

E) All of these.

3CORRECT

The best s trategic alliances

A) aim at teaming up with world-class suppliers or else companies with world-class know-how in product innovation.

B) are those whose purpose is helping a company master a new technology.

C) are those formed to enable the pa rtners to be consistent first movers or fast followers.

D) are highly selective, focusing on pa rticular value chain activities and on obta ining a pa rticular competitive bene fit.

E) aim at insulating the partners against the impacts of the five competitive forces and industry driving forces.

4

CORRECT Mergers and acquisitions are a much used strategy because they are an e ffective means o f

A) revamping a company's value chain.

B) facilitating the employment of both offensive and defensive strategies.

C) creating a more cost-efficient operation, expanding a company's geographic coverage, and extending a company'sbusiness into new product categories.

D) gaining quick access to new technologies or other resources and competitive capabilities and trying to invent a newindustry and lead the convergence of industries whose boundaries are being blurred by changing technologies andnew market opportunities.

E) gaining quick access to new technologies or other resources and competitive capabilities and; plus creating a morecost-efficient ope ration, expanding a company's geographic coverage, and extending a company's business into neproduct categories.

5

CORRECTWhich one of the following statements about merger and acquisition strategies is true?

A) Merger and acquisition strategies are nearly always a superior strategic alternative to forming alliances o rpartnerships with these same companies.

B) Merger and a cquisition strategies tend to be far more successful that forming strategic alliances and cooperativepartnerships with other companies.

C) Despite many successes, mergers and acquisitions do not always produce the hope d-for outcomes. Cost savings mprove smaller than expected. Gains in competitive capabilities may never materialize at all.

D) Mergers and acquisition strategies are a very high-risk strategy because of the financial drain of using the compancash resources to accomplish the merger or acquisition.

E) Merger and acquisition strategies are one o f the best ways for helping a company strengthen its brand image.

6

CORRECTWhich of the following is typically the strategic impetus for forward vertical integration?

A) To charge lower retail prices and the reby attract a bigge r, more loyal clientele of customers

B) To make it easier to expand the company's product line

C) To gain better access to end users and bette r market visibility

D) To achieve greate r control over advertising and in-store retail merchandising

E) To gain better access to greate r economies of scale

7CORRECT

Which of the following is not a strategic disadvantage of vertical integration?

A) It greatly reduces the opportunity for capturing maximum scale economies and achieving the low est possibleoperating costs.

B) Vertical integration poses all kinds of capacity-matching problems.

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8/12/2019 Chapter Test 6

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C) It boosts a firm's capital investment in the industry and thus increases business risk if the industry becomesunattractive later.

D) Vertical integration can result in less flexibility in accommodating shifting buyer p references when a new productdesign doesn't include parts and components that the company makes in-house.

E) Vertically integrated companies are o ften slow to embrace technological advances or more efficient productionmethods when they are saddled with older technology or facilities

8

CORRECTWhich of the following is not an advantage of outsourcing the performance of certain value chain activities to outsiders?

A) Being able to reduce d istribution costs by eliminating the use of wholesa le distributors and retail dealers and,instead, selling direct to end-users at the company's Web s ite.

B) Allowing a company to concentrate on its core business, leverage its key resources, and do even better w hat italready does best

C) Improving the company's ab ility to innovate by allying w ith "world-class" suppliers who have cutting edge intellectucapital and a re first-to-market with next-generation parts and components

D) Being able to speedily and efficiently assemble diverse kinds of competitively valuable expertise

E) Obtaining higher quality and/or cheaper components or se rvices9

CORRECTA blue ocean type of offensive strategy

A) is a pre-emptive strike type of price-cutting offensive used by a market leader to steal customers away from highepriced rivals.

B) offers growth in revenues and profits by discovering or inventing new industry segments that create altogether nedemand

C) involves de liberately attacking those market segments where a key rival makes big profits.

D) involves using innovative advertising and deep price discounts to grab sa les and market share from complacent ordistracted rivals.

E) employs highly creative, never-used-before s trategic moves to attack the competitive weaknesses of rivals.

10

CORRECTIn which of the following situations is being first to initiate a pa rticular move not likely to result in a positive payoff?

A) When pionee ring helps build up a firm's image and reputation w ith buyers

B) When first-time buyers remain strongly loyal to a pioneering firm in making repeat purchases

C) When late movers can copy a successful pioneer's moves quickly and at lower cost

D) When moving first can constitute a preemptive strike, making imitation extra hard or unlikelyE) When moving first can result in a cost advantage over rivals

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