Question 1

Trout Corp., Kirgo Ltd., and Sturgeon Inc., three of the leading construction companies in the United States, have decided to join hands and create a new cement manufacturing company.According to their agreement, Trout Corp.will have 50 percent equity, Kirgo Ltd.will have 20 percent equity, and Sturgeon Inc.will have 30 percent equity.In this given scenario, Sturgeon Inc.is referred to as a ________.

Accepted Answer

Sturgeon Inc. only holds 30 percent equity in the new cement manufacturing company, making them a minority joint venture partner.

Question 2

What is an equity alliance?

Accepted Answer

An equity alliance typically involves one company taking an ownership position in another in order to collaborate and share resources. This can be beneficial for both companies, as they are able to leverage each other's strengths and work towards a common goal.

Question 3

Which of the following types of alliances can be formed between a company and a foreign government?

Accepted Answer

D

Question 4

Wholly owned operations abroad inhibit a company's ability to pursue a global strategy.

Accepted Answer

Wholly owned operations abroad provide a high level of control and coordination, allowing a company to better pursue a global strategy. They offer the ability to standardize operations, products, and services across countries, resulting in cost savings and improved efficiency.

Question 5

Alliances that are carried out through contract rather than ownership sharing are called ________.

Accepted Answer

Non-equity strategic alliances are partnerships between two or more companies that are based on a contract rather than a formal agreement to share ownership. In these alliances, each partner retains independence and control over their own operations while collaborating on certain aspects of their business, such as joint ventures, shared technology or marketing campaigns. Cultural, equity, and transmodal strategic alliances are not based on contract alone.

Question 6

France's Thomson Electronics combined with China's TCL to form TCL-Thomson Electronics.Thomson owns 33% and TCL owns the remaining 67% of TCL-Thomson Electronics.This is best described as a(n)________.

Accepted Answer

This is an example of an equity strategic alliance, where two companies form a partnership and share ownership in a new entity. In this case, Thomson and TCL combined to form TCL-Thomson Electronics, with Thomson owning 33% and TCL owning 67%.

Question 7

Working partnerships between two or more companies across national boundaries and increasingly across industries are referred to as global strategic alliances.

Accepted Answer

Global strategic alliances refer to partnerships between companies across national boundaries and industries.

Question 8

A ________ is a new independent entity that is collectively created and owned by two or more parent companies.

Accepted Answer

A joint venture is a new independent entity that is collectively created and owned by two or more parent companies. The other options are related to different types of foreign investments, but not specifically to a partnership between parent companies.

Question 9

Which of the following is NOT a typical reason for forming cross-border alliances?

Accepted Answer

Testing marketing campaigns overseas is not a typical reason for forming cross-border alliances, whereas the other three options (avoiding import barriers, sharing R&D costs and risks, gaining access to specific markets) are common motives for such alliances.

Question 10

Alliances are also known as ________.

Accepted Answer

Alliances involve partnering with another organization to achieve a common goal, which requires cooperation and mutual benefit. Thus, alliances are a type of cooperative strategy. Competitive strategies typically focus on outperforming rivals through tactics such as differentiation or cost leadership. Relational strategies focus on fostering long-term relationships with customers, suppliers, and other stakeholders. Virtual strategies involve leveraging technology to create new products or services, such as through e-commerce or digital platforms. While some alliances may involve elements of these other strategies, the primary focus is on collaboration and cooperation with the partner organization.

Question 11

Runnerz Inc., a leading manufacturing and retail company that designs and develops footwear and apparel, has signed a contract with a particular courier service for managing the delivery process.The courier service is required to deliver goods from the factory to the warehouse, to customers, and also to collect customer payments for the goods.This is a typical example of a(n)________.

Accepted Answer

Runnerz Inc. has signed a contract with a courier service for managing the delivery process, which is a type of non-equity strategic alliance where companies collaborate without actually merging or acquiring each other's stakes. The courier service is providing a service to Runnerz Inc. by delivering goods and collecting payments, but it is not taking any ownership of Runnerz Inc. or its assets.

Question 12

A joint venture is a situation in which two or more partners have different relative ownership shares in the new venture.

Accepted Answer

The answer of A joint venture is a situation in...

Question 13

All of the following would be examples of international joint ventures EXCEPT ________.

Accepted Answer

The joint venture in option D involves two companies from the same country, Venezuela, hence it is not an international joint venture. Options A, B, and C all involve companies from different countries participating in joint ventures.

Question 14

________ are transition mechanisms that propel the partners' strategies forward in a turbulent environment faster than would be possible for each company alone.

Accepted Answer

Cooperative strategies are partnerships where two or more companies work together to achieve a common goal. In a turbulent environment, these strategies can be highly beneficial for propelling the partners' strategies forward faster than they would be able to do alone. Cooperative strategies can help partners to pool resources, share knowledge and expertise, and spread risk, enabling them to develop new products or services more quickly and effectively. Cooperative strategies can take many forms, including joint ventures, strategic alliances, and partnerships, and can be highly effective in helping companies to navigate complex and uncertain business environments.

Question 15

Most global manufacturers have equity alliances with suppliers, sub-assemblers, and distributors-forming a network of internal family and financial links.Risk-sharing is often the motive behind equity alliances.

Accepted Answer

This statement is true. Many global manufacturers form equity alliances with suppliers, sub-assemblers, and distributors as a way to share risk and create internal financial links.

Question 16

A merger is a transition mechanism that propels the partner's strategies forward in a turbulent environment faster than would be possible for each company alone.

Accepted Answer

A merger allows companies to combine their resources, expertise, and knowledge, which can lead to increased efficiency and effectiveness in executing strategies. This can give them a competitive advantage and help them navigate a turbulent environment more successfully than they would be able to as separate entities.

Question 17

A(n)________ refers to a JV among companies in different countries.

Accepted Answer

The term "international" signifies involvement of companies from different countries in the joint venture, which is the case for option A - international joint venture. Option B, equity joint venture, refers to a type of joint venture where partners share ownership, while option C, global joint venture, is not a commonly used term. Option D, transnational joint venture, could also be an appropriate choice, as it also implies involvement of companies from different countries, but "transnational" tends to emphasize the cross-border nature of the venture more than "international."

Question 18

Which of the following is the most beneficial aspect of an international joint venture?

Accepted Answer

The most beneficial aspect of an international joint venture is that the partner's local contacts and markets will be utilized. This allows the business to establish a local presence and gain access to the partner's established network, which can save time and resources in market entry and increase the likelihood of success in the foreign market. The other options (A, B, and D) do not represent beneficial aspects of an international joint venture.

Question 19

Alliances can be formed for various purposes, e.g., sharing technology, marketing, or production joint ventures.

Accepted Answer

Alliances can indeed be formed for various purposes including sharing technology, marketing or production joint ventures.

Question 20

________ are partnerships between two or more firms that decide they can better pursue their mutual goals by combining their resources as well as their existing distinctive competitive advantages.

Accepted Answer

Strategic alliances are partnerships between two or more firms that combine resources and competitive advantages to pursue mutual goals. Greenfield investments involve building new facilities from scratch, foreign subsidiaries are full-fledged and independent entities established in different countries, and turnkey operations involve a company handing over a fully operational facility to another company.

Quiz 7: Global Alliances and Strategy Implementation