Question 1

The total package of products that complement each other is typically referred to as a:
A) product mix.
B) product class.
C) product placement.
D) product platform.

Accepted Answer

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Question 2

Compare and contrast the three different levels of strategy.

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Question 3

List the strategic goals that a firm can accomplish through M&As. Explain at least one of them.

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Question 4

In which type an alliance do two firms agree to support each other's activities in some manner, where the agreements are strictly informal with few, if any, legal protections to enforce the agreements?
A) Subcontracting alliances
B) Joint ventures
C) Licensing arrangements
D) Informal alliances

Accepted Answer

The description given is that of an informal alliance where firms have an understanding to support each other's activities in some manner but there are no legal protections to enforce these commitments.

Question 5

Which of the following usually means that the firms will partner to produce and sell a given product or service?
A) Turnkey project
B) Exporting
C) Merger
D) Strategic alliance

Accepted Answer

A strategic alliance is a partnership between two or more firms to jointly produce and sell a given product or service. This allows for the sharing of resources and expertise, while reducing individual risks and costs. A turnkey project refers to a contractor or vendor providing a complete project to a client who only has to turn a key to start using the project. Exporting involves selling products or services to foreign customers, and a merger is a combination of two or more companies into a single entity.

Question 6

Typical barriers to entry in the acquisition of a new business include all of the following EXCEPT:
A) government hostility toward outside firms that market their product in a country but do not produce it there.
B) distribution channels where wholesalers are unwilling to take on new firms.
C) low levels of customer loyalty in the area.
D) a geographic area where the best retail locations are already taken.

Accepted Answer

The other options (A, B, and D) present clear barriers to entry, such as government regulations, difficulty in accessing distribution channels, and limited physical space for retail locations. However, low levels of customer loyalty can actually serve as an opportunity for a new business to differentiate itself and attract customers away from established competitors. Therefore, option C is not a typical barrier to entry.

Question 7

In terms of the factors motivating a firm entering into an M&A, which of the following is true?
A) Smaller firms are more willing to pursue an M&A because it limits their financial exposure.
B) In high-risk environments, firms are less likely to want to commit resources necessary for an M&A.
C) Managers like M&As in entering developing countries if the systematic country risk is high.
D) M&As are a good way to test a new market and to see if two firms can share technology effectively.

Accepted Answer

In high-risk environments, firms are often hesitant to commit the significant resources required for mergers and acquisitions (M&As) due to the uncertainty and potential for loss. This makes them less likely to pursue M&As in such contexts.

Question 8

U.S.-based Unigen Pharmaceuticals has aggressively taken over worldwide suppliers of the delicate plants needed for their pharmaceutical and nutritional products. This is an example of:
A) horizontal merger and acquisition.
B) conglomerate diversification.
C) vertical integration.
D) horizontal monopoly.

Accepted Answer

Unigen Pharmaceuticals has acquired suppliers that are involved in the production process, which is an example of vertical integration.

Question 9

In a(n) _____, two or more firms both put some resources into a new, separate entity.
A) equity joint venture
B) subcontract
C) licensing arrangement
D) consortia

Accepted Answer

An equity joint venture is a type of collaboration where two or more firms contribute resources to create a new entity, which is jointly owned by all of them. The ownership share is usually proportional to the resources contributed by each partner. This arrangement is common in industries where complex and costly projects require pooling of resources and expertise, such as in the development of new technologies, infrastructure projects, or international market entry. Subcontracting refers to hiring another firm to perform a specific task or component of a project. Licensing involves giving another firm the right to use a company's intellectual property, such as patents or software. Consortia refers to a group of independent companies or organizations that work together on a specific project or initiative.

Question 10

The most important dimension along which alliances can be differentiated is the _____ of the alliance.
A) mutuality
B) formality
C) professionality
D) emotionality

Accepted Answer

The formality of an alliance is a key dimension that differentiates alliances, as it determines the structure, legal agreements, and governance involved.

Question 11

Which theory states that the recognition that those who own firms and manage them are now separated, and thus the agents may act in their own best interest rather than that of the firm?
A) Agency theory
B) Contract theory
C) M&A theory
D) Attribution theory

Accepted Answer

The agency theory highlights the separation of ownership and management in modern firms. It suggests that agents (managers) may act in their own self-interest instead of working in the best interest of the firm's owners (shareholders), which can lead to conflicts between the two parties.

Question 12

Which of the following is characterized by several organizations joining together to share expertise and funding for developing, gathering, and distributing new knowledge?
A) Subcontracts
B) Joint ventures
C) Consortia
D) Licensing arrangements

Accepted Answer

Consortia are characterized by several organizations joining together to share expertise and funding for developing, gathering, and distributing new knowledge.

Question 13

Write a short note on the data-gathering step of planning.

Accepted Answer

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Question 14

Briefly describe strategy. How does it differ from strategic planning?

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Question 15

What are the major challenges facing strategic alliances? Explain.

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Question 16

Define mergers and acquisitions. How do they differ?

Accepted Answer

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Question 17

What are the advantages of vertical integration?

Accepted Answer

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Quiz 4: Strategy Fundamentals and Corporate Strategy

The total package of products that complement each other is typically referred to as a:

Compare and contrast the three different levels of strategy.

List the strategic goals that a firm can accomplish through M&As. Explain at least one of them.

In which type an alliance do two firms agree to support each other's activities in some manner, where the agreements are strictly informal with few, if any, legal protections to enforce the agreements?

Which of the following usually means that the firms will partner to produce and sell a given product or service?

Typical barriers to entry in the acquisition of a new business include all of the following EXCEPT:

In terms of the factors motivating a firm entering into an M&A, which of the following is true?

U.S.-based Unigen Pharmaceuticals has aggressively taken over worldwide suppliers of the delicate plants needed for their pharmaceutical and nutritional products. This is an example of:

In a(n) _____, two or more firms both put some resources into a new, separate entity.

The most important dimension along which alliances can be differentiated is the _____ of the alliance.

Which theory states that the recognition that those who own firms and manage them are now separated, and thus the agents may act in their own best interest rather than that of the firm?

Which of the following is characterized by several organizations joining together to share expertise and funding for developing, gathering, and distributing new knowledge?

Write a short note on the data-gathering step of planning.

Briefly describe strategy. How does it differ from strategic planning?

What are the major challenges facing strategic alliances? Explain.

Define mergers and acquisitions. How do they differ?

What are the advantages of vertical integration?