Question 1

Firms in slow-cycle markets can use alliances to enter restricted markets or to establish franchises in new markets.

Accepted Answer

Yes, firms in slow-cycle markets can benefit from strategic alliances to enter restricted markets or to establish franchises in new markets. This can help them to quickly gain a foothold in these markets, as well as access to new resources, technology, or expertise. Additionally, alliances can provide opportunities for joint research and development, cost-sharing, and risk-sharing, which can help firms to improve their competitiveness and innovation in slow-cycle industries.

Question 2

Synergistic strategic alliances focus on economies of scope rather than economies of scale.

Accepted Answer

Synergistic strategic alliances seek to leverage complementary resources and capabilities between partners to create additional value, often through expanded product or service offerings. This focus on scope allows for increased efficiency and competitiveness, rather than simply focusing on increasing the size of operations (i.e. economies of scale).

Question 3

Using business-level strategic alliances to hedge against risk and uncertainty is most common in the slow-cycle markets.

Accepted Answer

False

Question 4

The advantages of alliances designed to respond to competition and to reduce uncertainty are more temporary than those developed through complementary alliances, such as vertical and horizontal strategic alliances.

Accepted Answer

Complementary alliances, such as vertical and horizontal strategic alliances, are developed to create a long-term competitive advantage through sharing resources and capabilities. On the other hand, alliances developed in response to competition or uncertainty, such as defensive or non-equity alliances, are more temporary in nature and do not create a sustainable advantage.

Question 5

Research in the airline industry suggests that tacit collusion reduces service quality and on-time performance.

Accepted Answer

Tacit collusion, where competitors coordinate their behavior without formal agreements, can lead to reduced incentives to improve service quality and on-time performance in the airline industry. This is supported by research conducted by the Department of Justice and other scholars in the field.

Question 6

Nonequity strategic alliances exist when two or more firms join together to create an independent firm.

Accepted Answer

Nonequity strategic alliances are formed when two or more firms collaborate without forming an independent firm. They remain separate legal entities but work together to achieve a common objective, such as sharing resources or entering new markets.

Question 7

According to the chapter Opening Case, IBM has specific performance-related objectives (such as developing leading-edge chip technology) that it wants to accomplish as it engages in an array of cooperative arrangements.

Accepted Answer

The chapter Opening Case states that IBM has specific performance-related objectives that it wants to achieve as it enters into cooperative arrangements, including developing leading-edge chip technology.

Question 8

Mutual forbearance is a form of explicit collusion between firms in which competitors avoid attacking rivals they meet in multiple markets.

Accepted Answer

The answer of Mutual forbearance is a form of explicit...

Question 9

In a vertical complementary alliance, firms share some of their resources and capabilities from the same stage of the value chain to create a competitive advantage.

Accepted Answer

In a vertical complementary alliance, firms share some of their resources and capabilities from different stages of the value chain to create a competitive advantage.

Question 10

Firms in standard-cycle markets seek to gain economies of scale through cooperative alliances.

Accepted Answer

Firms in standard-cycle markets face intense competition, and in order to stay competitive, they often seek to gain economies of scale through cooperative alliances with other firms. This allows them to cut costs and improve efficiency, which can in turn lead to greater profitability and market share.

Question 11

The primary responsibility of the franchiser is to transfer capital to the franchisee.

Accepted Answer

The primary responsibility of the franchiser is to provide the franchisee with a proven business model, training, support, and ongoing assistance. Capital may be provided, but it is not the primary responsibility.

Question 12

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.

Accepted Answer

Tacit collusion is more commonly used in highly concentrated industries as it is easier to coordinate actions and there are fewer competitors to monitor. This often leads to even higher prices for consumers.

Question 13

Of the four business-level cooperative strategies, the competition-reducing strategy has the lowest probability of creating a sustainable advantage.

Accepted Answer

The answer of Of the four business-level cooperative strategies, the...

Question 14

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.

Accepted Answer

This statement is true. A firm can gain a competitive advantage through corporate-level cooperative strategies that meet the criteria of being valuable, rare, imperfectly imitable, and nonsubstitutable. These strategies can include partnerships, alliances, joint ventures, and collaborations with other companies to achieve common goals. By leveraging the strengths of each partner, the firm can create value and gain a competitive edge in the market.

Question 15

Franchising is most attractive in concentrated industries.

Accepted Answer

The answer of Franchising is most attractive in concentrated industries....

Question 16

Cooperative strategies may involve firms who are competitors.

Accepted Answer

Cooperative strategies involve firms who are competitors working together to achieve mutually beneficial goals.

Question 17

Strategic alliances are cooperative strategies between firms that combine their resources and capabilities to create a competitive advantage.

Accepted Answer

Strategic alliances involve firms working together to combine their resources and capabilities to gain a competitive advantage. This cooperation can involve various types of agreements and partnerships, such as joint ventures, licensing agreements, or research and development collaborations. By working together, firms can access new markets, gain access to new technologies, and achieve economies of scale that may not be possible on their own.

Question 18

The probability of alliance success is increased when partnering firms internalize successful alliance experiences.

Accepted Answer

Internalizing successful alliance experiences allows partnering firms to learn from past successes and apply those lessons to future alliances, increasing the probability of success.

Question 19

Although growing in popularity with small and medium-sized firms because they can gain economies of scale, large companies tend to avoid strategic alliances.

Accepted Answer

Large companies often engage in strategic alliances with other large companies to share resources and expertise, reduce costs, and gain access to new markets. However, they may carefully consider the potential risks and benefits before entering into such partnerships.

Question 20

Acquisitions are the most common cooperative strategy used in standard-cycle markets.

Accepted Answer

The answer of Acquisitions are the most common cooperative strategy...

Quiz 10: Cooperative Strategy Emea Edition