Question 1

Which of the following is NOT a strategically beneficial reason why a company may enter into strategic partnerships or cooperative arrangements with key suppliers, distributors, or makers of complementary products?

Accepted Answer

Enabling greater opportunities for employee advancement is not a strategically beneficial reason for a company to enter into strategic partnerships or cooperative arrangements with key suppliers, distributors, or makers of complementary products. The other options listed are all potential advantages of such partnerships, such as expanding into new markets, developing new technologies and products faster, improving supply chain efficiency, and overcoming limitations on scale economies and production costs.

Question 2

Entering into strategic alliances and collaborative partnerships can be competitively valuable because

Accepted Answer

The answer of Entering into strategic alliances and collaborative partnerships...

Question 3

Experience indicates that strategic alliances

Accepted Answer

The answer of Experience indicates that strategic alliances
...

Question 4

Relying on outsiders to perform certain value chain activities offers such strategic advantages as

Accepted Answer

By relying on outsiders to perform certain value chain activities, a company can reduce its risk exposure to changing technology and/or changing buyer preferences. This allows the company to focus on its core competencies and leave certain activities to other companies that may have more expertise and resources in those areas. Additionally, it can help the company to become more flexible and agile, as they are not tied down by the costs and resources necessary to perform certain activities in-house.

Question 5

An alliance becomes "strategic" as opposed to just a convenient business arrangement when it serves all of the following strategic purposes EXCEPT

Accepted Answer

Contracting out certain value chain activities to outside vendors may be a convenient business arrangement, but it may not necessarily serve a strategic purpose such as building or enhancing core competencies, blocking a competitive threat, increasing bargaining power, or opening up new market opportunities.

Question 6

The formation of a new corporation, jointly owned by two or more companies agreeing to share in the revenues, expenses, and control, is known as

Accepted Answer

A joint venture is the formation of a new corporation by two or more companies agreeing to share in the revenues, expenses, and control. The other options, such as a limited liability company, partnership, sole proprietorship, and S corporation, are different legal structures for businesses that do not necessarily involve joint ownership by two or more companies.

Question 7

Strategic alliances are more likely to be long-lasting when they involve

Accepted Answer

Strategic alliances are more likely to be long-lasting when they involve collaboration with suppliers or distribution allies, or when both parties conclude that continued collaboration is in their mutual interests. This is because these collaborations are based on a mutually beneficial relationship, leading to a higher likelihood of trust and commitment between the partners. Other factors like resource weaknesses, experience with strategic alliances, cultural differences, and R&D collaborations may be important, but they are not as critical as the mutual benefit and trust between the partners.

Question 8

Which of the following is NOT one of the benefits of outsourcing value chain activities presently performed in-house?

Accepted Answer

The benefits listed in options A, B, C, and E are commonly cited as advantages of outsourcing activities. Option D, however, is not a typical benefit of outsourcing, as it refers to access to end users and market visibility which are typically enhanced by in-house activities such as marketing and sales.

Question 9

Which of the following is NOT a typical reason that many outsourcing alliances prove unstable or break apart?

Accepted Answer

The answer of Which of the following is NOT a...

Question 10

The best strategic alliances

Accepted Answer

The best strategic alliances are highly selective and focus on specific value chain activities to obtain a competitive benefit. This allows companies to leverage their strengths while minimizing potential risks and drawbacks.

Answer: B
 Strategic alliances that aim to create an industry key success factor can help companies gain a significant competitive advantage in the market and change the industry's overall dynamics.

Answer: D
 Strategic alliances that involve joint R&D efforts can be highly beneficial, as they allow companies to develop new technologies more affordably and efficiently than if they worked alone.

Overall, the best strategic alliances are those that are carefully selected to meet specific business goals and objectives, and that enable companies to leverage their resources and strengths to achieve a competitive advantage in the market.

Question 11

Which of the following is NOT a factor that makes an alliance "strategic" as opposed to just a convenient business arrangement?

Accepted Answer

Obtaining additional financing on better credit terms may be a convenient business arrangement, but it does not necessarily make the alliance strategic. The other options (A-D) are all factors that make an alliance strategic as they relate to important company objectives, competitive threats, market opportunities, and core competencies or competitive advantages.

Question 12

Outsourcing strategies can offer such advantages as

Accepted Answer

Outsourcing can lead to the benefits of obtaining higher quality and/or cheaper components or services, which can improve a company's ability to innovate and reduce its risk exposure. Other options are not directly related to advantages of outsourcing, such as differentiation strategies or entry into foreign markets, or they may not be as applicable to outsourcing, such as greater use of strategic alliances and collaborative partnerships. While outsourcing may give a firm more direct control over the costs of value chain activities, this is not necessarily a primary advantage of outsourcing.

Question 13

Companies racing against rivals for global market leadership need strategic alliances and collaborative partnerships with companies in foreign countries to

Accepted Answer

Strategic alliances and collaborative partnerships with companies in foreign countries are important for accessing critical country markets quickly, gaining inside knowledge about unfamiliar markets and cultures, and accessing valuable skills and competencies that are concentrated in particular geographic locations. This helps companies compete in the global market and stay ahead of their rivals. Options A, B, D, and E are not as relevant or effective strategies for global market leadership.

Question 14

Strategic alliances are

Accepted Answer

Strategic alliances are collaborative formal arrangements where two or more companies join forces and agree to work cooperatively toward some strategically relevant objective. While they can help with developing new technologies and products, reducing costs, and insulating a company from the impact of competitive forces, the primary definition and purpose of strategic alliances is cooperative collaboration for strategic objectives.

Question 15

Which of the following is NOT one of the key benefits of employing an outsourcing strategy?

Accepted Answer

Outsourcing can create a risk of losing important capabilities and expertise, which can harm the firm's competitiveness and market success. This is a potential drawback rather than a key benefit. The other options (A, C, D, and E) are all recognized benefits of outsourcing, such as improved focus, reduced risk exposure, increased flexibility, and access to specialized skills or cost advantages.

Question 16

Outsourcing the performance of value chain activities presently performed in-house to outside vendors and suppliers makes strategic sense EXCEPT when

Accepted Answer

Outsourcing can limit a company's ability to quickly and efficiently assemble diverse kinds of expertise. When a company outsources value chain activities, it relies on the expertise of vendors and suppliers rather than its own employees. This can limit the company's ability to adapt to changing market conditions or to integrate new technologies or processes quickly. Companies that choose to outsource should carefully evaluate the potential benefits and risks of outsourcing versus keeping certain activities in-house.

Question 17

A company racing to seize opportunities on the frontiers of advancing technology often utilizes strategic alliances and collaborative partnerships to

Accepted Answer

Strategic alliances and collaborative partnerships can help a company master new technologies and build new expertise and competencies, establish a stronger beachhead for participating in the target industry, and open up broader opportunities in the target industry. By partnering with other companies, a company can leverage their strengths and resources to achieve these goals, reducing overall risk and raising entry barriers into the newly emerging industry. These partnerships do not necessarily discourage rival companies from merging or acquiring the partner companies, and they are not aimed at defeating competitors that use broad differentiation strategies or achieving global low-cost leadership.

Question 18

The big risk of employing an outsourcing strategy is

Accepted Answer

Outsourcing has the potential to lead to the hollowing out of a firm's own capabilities, which can be detrimental to its competitiveness and market success. This happens when a company becomes too reliant on outsourcing and loses touch with activities and expertise that are fundamental to its operations and strategic objectives. This can put the firm at a disadvantage when faced with competitors who have maintained more control over their value chains.

Question 19

Which of the following is defined as a formal agreement between two or more separate companies in which they agree to work cooperatively toward some common objective?

Accepted Answer

A strategic alliance is a formal agreement between two or more separate companies in which they agree to work together to achieve a common objective. The companies remain separate entities but collaborate on projects or business activities to further their mutual interests. A joint venture involves the creation of a new entity, with its own legal structure, by two or more companies. Vertical integration and forward integration are typically used to describe a company's internal growth strategy, while outsourcing involves the transfer of business activities to an external vendor.

Question 20

Which of the following is NOT one of the factors that affects whether a strategic alliance will be successful and realize its intended benefits?

Accepted Answer

Minimizing the amount of resources committed to the alliance is not a factor that affects the success of the alliance. Factors that do affect success include picking a good partner, ensuring mutual benefit, living up to commitments, and having a streamlined decision-making process.

Quiz 6: Supplementing the Chosen Competitive Strategy: Other Important Business Strategy Choices