Deck 9: Cooperative Strategy

Question 1

Strategic alliances involve firms with some degree of exchange and sharing of resources and capabilities to co-develop, sell and service goods or services.

Answer 1

True

Question 2

Synergistic strategic alliances allow firms to expand into new product or market areas without making an acquisition.

Answer 2

False

Question 3

Slow-cycle markets are markets in which a firm's competitive advantages are shielded from imitation for relatively long periods and in which imitation is costly.

Answer 3

True

Question 4

In some industries, competition is increasing between large alliances rather than between firms.

Question 5

Non-equity strategic alliances exist when two or more firms develop contractual relationships to share some of their unique resources and capabilities to create a competitive advantage.

Question 6

Tacit collusion tends to be used as a business-level competition-reducing strategy in highly concentrated industries.

Question 7

Cooperation in slow-cycle markets is extremely rare, especially in emerging markets.

Question 8

Franchisors are able to reduce their financial risk because franchisees invest some of their own capital in the local venture.

Question 9

A competitive advantage developed through a cooperative strategy often is called a collaborative or relational advantage.

Question 10

Tacit knowledge is learnt both through experience and by observing competitors.

Question 11

In a horizontal complementary strategic alliance, one firm enters a non-equity strategic alliance with another to help in the design, manufacture or distribution of its products.

Question 12

Complementary strategic alliances, competition response strategy, competition avoidance strategy and uncertainty avoidance strategy are the four types of business-level cooperative strategies.

Question 13

A stable alliance network is formed in emergent industries to stimulate market demand.

Question 14

Franchising allows a corporation to maintain high levels of centralised control.

Question 15

Dynamic alliance networks are often implemented to facilitate a firm's internal operations.

Question 16

Franchising is a particularly attractive strategy to use in concentrated industries.

Question 17

Explicit and tacit collusions are the two types of collusion strategies.

Question 18

In a collusive strategy, two or more firms cooperate to decrease prices below the fully competitive level.

Question 19

A network cooperative strategy involves of a group of related firms that are committed to accomplishing independent goals.

Question 20

Joint ventures are the most popular cooperative strategy used in standard-cycle markets.

Question 21

As a form of cooperative strategy, ________ alliances are more likely to create competitive advantage and earn above-average returns.

A)complementary strategic
B)competition response
C)competition-reducing
D)consolidation

Question 22

________ is a competition-reducing collusive strategy in which firms avoid competitive attacks against those rivals they meet in multiple markets.

A)Explicit collusion
B)Tacit collusion
C)Multi-market contact
D)Mutual forbearance

Question 23

Horizontal complementary alliances commonly focus on:

A)decreasing the purchasing power of consumers
B)the development of just-in-time inventory systems
C)long-term product and distribution opportunities
D)lobbying government to deregulate the industry

Question 24

Which of the following cooperative behaviours is the least likely to contribute to alliance success?

A)Actively solving problems
B)Being trustworthy
C)Constantly monitoring the progress of the alliance
D)Consistently pursuing ways to combine partners' resources and capabilities to create value

Question 25

Which of the following is not a reason to form strategic alliances in slow-cycle market?

A)Gain access to a restricted market
B)Maintain market stability
C)Gain access to complementary resources
D)Establish a franchise in a new market

Question 26

Which of the following is not a form of non-equity strategic alliance?

A)Joint ventures
B)Licensing
C)Supply contracts
D)Distribution agreements

Question 27

A type of cooperative strategy where two or more firms cooperate to increase prices above the fully competitive level is often referred to as:

A)network strategy
B)corporate level strategy
C)collusive strategy
D)cooperatives

Question 28

Business-level cooperative strategies can help reduce uncertainties associated with:

A)market development, technological development and product development
B)technological development, the political environment and regulations
C)market development, product development and the political environment
D)regulations, cultural differences and product development

Question 29

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

A)take advantage of opportunities in emerging market countries
B)more quickly distribute new products
C)overcome trade barriers and learn new business techniques
D)share risky R&D investments

Question 30

The use of alliances:

A)is unlikely to yield success if partnering firms are headquartered in the same country
B)may be too restrictive to facilitate entry into new markets
C)usually increases the investment necessary to introduce new products
D)between firms located in different international markets is increasing

Question 31

Which type of strategic alliance is the best at passing know-how between firms?

A)An equity strategic alliance
B)A joint venture
C)An non-equity strategic alliance
D)A primary cooperative strategic alliance

Question 32

Of the four business-level cooperative strategies, the ________ has the lowest probability of creating a sustainable competitive advantage.

A)uncertainty-reducing strategy
B)competition-reducing strategy
C)competition response strategy
D)complementary strategic alliance

Question 33

Opportunistic behaviours surface either when formal contracts fail to prevent them or when an alliance is based on a false perception of partner trustworthiness.

Question 34

Firms use one of two primary approaches to manage cooperative strategies: cost minimisation and profit maximisation.

Question 35

A non-equity strategic alliance exists when:

A)two firms join together to create a new company
B)a contract is granted to a company to supply, produce or distribute a firm's goods
C)two partners in an alliance own equal shares in the combined entity
D)the partners agree to sell bonds instead of stock in order to finance a new venture

Question 36

When partnerships are designed to take advantage of market opportunities by combining firm assets to create new value, they are engaging in:

A)competition-reducing strategies
B)competition response alliances
C)uncertainty-reducing strategies
D)complementary strategic alliances

Question 37

Which of the following is not a reason to form strategic alliances in standard-cycle markets?

A)Learn new business techniques
B)Maintain market stability
C)Establish better economies of scale
D)Gain market power

Question 38

The two types of complementary strategic alliance are:

A)vertical and horizontal
B)macro and micro
C)outsourcing and insourcing
D)top and bottom

Question 39

Which of the following is not a reason to form strategic alliances in fast-cycle markets?

A)Maintain market leadership
B)Overcome uncertainty
C)Speed up new market entry
D)Establish better economies of scale

Question 40

Firms in ________ markets cooperate to pool resources and gain market power.

A)standard-cycle
B)slow-cycle
C)fast-cycle
D)hyper-cycle

Question 41

Describe franchising as a form of corporate-level cooperative strategy and the roles of the franchisor and franchisee within a franchising arrangement.

Question 42

Stable alliance networks will most often:

A)be used to enhance a firm's internal operations
B)appear in mature industries with predictable market cycles
C)emerge in industries with short product life cycles
D)emerge in declining industries as a way to increase process innovations

Question 43

Which of the following is not a risk of cooperative strategy?

A)Inadequate contracts
B)Misrepresentation of competencies
C)Failure of partners to use complementary resources
D)Governmental antitrust policies

Question 44

Identify and define the three different types of network cooperative strategies.

Question 45

Define cooperative strategy.What types of cooperative strategies exist? Briefly explain each.

Question 46

What are the two key reasons for firms to develop a strategic alliance?

Question 47

Explain the rationales for a cooperative strategy under each of the three types of basic market situations (i.e.slow, standard and fast cycles).

Question 48

Firms entering into synergistic strategic alliances are usually able to attain:

A)economies of location
B)economies of scope
C)economies of scale
D)learning curve efficiencies

Question 49

Identify the four general types of business-level cooperative strategies and the advantages and disadvantages of each.

Question 50

Identify the three types of corporate-level cooperative strategy and the advantages and disadvantages of each.

Question 51

What are some of the competitive risks associated with cooperative strategies?

Question 52

Franchising is a particularly attractive strategy in:

A)fragmented industries
B)emergent industries
C)mature industries
D)monopolised markets

Question 53

Which one of the following is not a commonly used corporate-level cooperative strategy?

A)Diversifying alliances
B)Franchising
C)Licensing
D)Synergistic alliances

Question 54

Dynamic alliance networks work best in industries:

A)in which technological innovations are introduced frequently
B)that are mature and stable in nature
C)in which the coordination of product and global diversity is critical
D)that are characterised by predictable market cycles and demand

Question 55

Describe collusive strategies as a form of competition-reducing strategy.

Question 56

Franchises are a popular strategy for global growth because they help firms:

A)overcome the problems of competition for retail space
B)dampen competitive rivalry in the industry
C)reduce market uncertainty
D)gain access to technologies that they had difficulty developing on their own

Question 57

In general, cross-border alliances are more ________ than domestic alliances.

A)profitable and R&D-intensive
B)complex and riskier
C)contract-driven and focused
D)common and useful

Question 58

When using business-level and corporate-level cooperative strategies, a firm primarily aims to develop alliances that:

A)enhance its reputation in the marketplace
B)are long term
C)will reduce its political risk
D)have a high probability of increasing its strategic competitiveness

Question 59

Why are cooperative strategies often used when firms pursue international strategies? What are the advantages and disadvantages of international cooperative strategies?