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Exam 9: Strategic Alliances

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Question 21

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Describe five tools that firms can use to reduce the threat of cheating in strategic alliances.

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The five tools firms can use to reduce t...

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Question 22

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Discuss to what extent acquisitions can be a substitute for alliances and identify four conditions under which alliances will be preferred to acquisitions.

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The acquisition of other firms can be a ...

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Question 23

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What is the connection between strategic alliances and real options?

As long as the cost of ________ to enter a new industry is less than the cost of ________, an alliance can be a valuable strategic opportunity.

In comparison to strategic alliances, joint ventures increase the threat of cheating by partners.

Identify the conditions under which a strategic alliance can be rare and discuss the role that complementary resources can play in the rarity of strategic alliances.

Two possible substitutes for strategic alliances include

When one firm makes more transaction-specific investments in a strategic alliance than partner firms make, that firm may be subject to a form of cheating called ________ that occurs when a firm that has not made significant transaction-specific investments demands returns from an alliance that are higher than what the partners agreed to when they created the alliance.

To the extent that a strategic alliance is based on ________ relations, it will make the alliances costly to imitate.

In one study almost ________ percent of the managers in entrepreneurial firms felt unfairly exploited by their large-firm alliance partners.

When information asymmetry exists between firms that currently own assets and firms that may want to purchase these assets, the selling firm will often have difficulty obtaining the full economic value of these assets.

Research on international joint ventures suggests that the existence of transaction-specific investments in their relationships makes these agreements relatively immune to holdup problems.

The use of strategic alliances to manage economic exchanges has grown substantially over the last several years.

Research shows that as many as ________ of all strategic alliances do not meet the expectations of at least one alliance partner.

Adverse selection in a strategic alliance is likely only when

________ exist(s) when firms directly communicate with each other to coordinate their levels of production and/or their prices.

Although joint ventures between firms in the same industry ________ collusive implications, research has shown that these kinds of joint ventures are ________.

When potential cooperative partners misrepresent the skills, abilities, and other resources that they will bring to an alliance, this is a form of cheating known as adverse selection.

One of the reasons why the benefits that accrue from a particular strategic alliance may be rare is that

If TeleCo were to enter into a strategic alliance with a partner that promised it could deliver a high quality wireless infrastructure when in fact the potential partner had neither the skills nor abilities to provide this infrastructure, TeleCo could be said to be impacted by