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Exam 11: Strategic Alliances

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Question 51

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When a firm cannot realize the cost savings from economies of scale all by itself,it may join in a strategic alliance with other firms so that together both firms will have sufficient volume to be able to gain the cost advantages of economies of scale.

A) True
B) False

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Question 52

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Capabilities theory suggests that an alliance will be preferred over going it alone when an exchange partner possesses valuable,rare,and costly-to-imitate resources and capabilities.

A) True
B) False

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Question 53

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________ theory suggests that under conditions of high uncertainty,firms may be unwilling to commit to a particular course of action by engaging in an exchange with a firm and will choose,instead,the strategic flexibility associated with alliances.

In a ________,cooperating firms create a legally independent firm in which they invest and from which they share any profits that are created.

Although joint ventures between firms in the same industry ________ collusive implications,research has shown that these kinds of joint ventures are ________.

In general,due to the intangible nature of knowledge,firms are not able to use alliances to learn from their competitors.

Learning race dynamics are particularly common in relations among large,well-established firms.

Tacit collusion exists when firms coordinate their pricing decisions not by directly communicating with each other but by exchanging signals with other firms about their intent to cooperate.

Discuss to what extent acquisitions can be a substitute for alliances and identify four conditions under which alliances will be preferred to acquisitions.

eBay's agreement with ________ is the most likely to be susceptible to holdup.

When one firm makes more transaction-specific investments in a strategic alliance than partner firms make,that firm may be subject to a form of cheating called ________ that occurs when a firm that has not made significant transaction-specific investments demands returns from an alliance that are higher than what the partners agreed to when they created the alliance.

The use of strategic alliances to manage economic exchanges has grown substantially over the last several years.

As long as the cost of ________ to enter a new industry is less than the cost of ________,an alliance can be a valuable strategic opportunity.

Which of the following is a limitation of the reputational control of cheating in a strategic alliance?

Research suggests that ________ are the type of alliance where existence of transaction-specific investments often leads to holdup problems.

Research indicates that the most common reason that alliances fail to meet the expectations of partner firms is

In an alliance,a holdup occurs when a firm that has not made significant transaction-specific investments demands returns from an alliance that are higher than what the partners agreed to when they created the alliance.

________ exist(s) when firms directly communicate with each other to coordinate their levels of production and/or their prices.