D. give later entrants a cost advantage over early entrants. The commitment associated with a small-scale entry makes it possible for the small-scale b)Strategic alliances usually lead to one of the firms losing its relational advantage. curve and location economies. The costs and risks associated with doing business in a foreign country are typically: A. low in an economically advanced nation. C. It is a specialized form of licensing. If a firm can realize location economies by moving production elsewhere, it should avoid: A. exporting. _____. A. A. B. He partners with Loumang Inc., a fabric manufacturing company, to develop certain customized inputs. D. exporting; joint-venture, If a high-tech firm sets up operations in a foreign country to profit from a core competency in B. chartering Answer questions from your audience about the feature and how to use it. B. Firms within the network could result in inbreeding of ideas. D. increased profits, Plateus Inc., a software company, has a website that gives detailed information about partnering processes for firms that seek collaboration with Plateus. A firm takes profits out of one country to support competitive attacks in another. D. Turnkey contracts, The main advantage of _____ is that it gives the firm a much greater ability to build the kind of B. collateral bonds A. True False True B. Lower research and development costs and marketing costs than other firms Through this measure, J.L. the alliance partner. D. How profits will be split between Teal and White, A graphic design firm and an advertising firm form a contractual alliance. A. Turnkey contracts WebA drawback involved in using cross-border strategic alliances to enter new foreign markets is that: some of the firm's proprietary know-how may be appropriated by the foreign partner The Mansion Hotel Group purchased Red Brick Hotels for an estimated value of $120 billion. Strategic alliances can make entry into a foreign market difficult. It helps a firm avoid the development costs associated with opening a foreign market. them. Firms engaging in a _____ with a local company can benefit from a local partner's knowledge of the host country's competitive conditions, culture, language, political systems, and business systems. A. turnkey B. licensing C. greenfield D. acquisition, Patents, inventions, formulas, processes, designs, copyrights, and trademarks are all forms of _____. Which of the following is an advantage of establishing a joint venture? Licensing; franchising D. venture capital, A _____ entails establishing a firm that is owned together by two or more otherwise independent True False, Firms entering a market via a wholly owned subsidiary must bear all the costs and risks associated with the venture. D. An input agreement, John requires 500 shirts of a particular fabric and quality. C. Firms outside the network widen the scope of research solutions. Which of the following is true of wholly owned subsidiaries? Which of the following is being exemplified in this scenario? C. A distribution agreement Drew's Cafe Inc. and Cuppa Corp., two local coffee chains, combine resources to enter the global market. The fixed costs and associated risks of developing new products or processes are borne by . C. economies of scale. The contract includes the conditions under which the contract will be closed and the consequences of closure for each partner. B. What is the effective annual yield? There is little incentive for the franchisee to build a profitable operation as quickly as possible. while it has the Skip to document Ask an Expert Sign inRegister Sign inRegister Home Ask an ExpertNew D. The dependency level between partners is low. While it has the financial resources required to enter the new market, it lacks the expertise and technical knowledge required to establish itself in the new industry. other forms of adverse government interference. whether to enter on a significant scale. A. Jades Inc., which manufactures the packages required for finished products of Hues \text{Quantity of direct labor used}&\text{850 hrs. D. promotional development costs, A large-scale entrant is more likely than a small-scale entrant to be able to capture first-mover C. It is required if a firm is trying to realize location and experience curve economies. B. B. provides the ability to achieve experience curve and location economies. It avoids the threat of tariff barriers by the host-country government. Give your reasons. Which of the following is one of the reasons why acquisitions fail? A. transportation Voting rights clauses True False, A joint venture is often politically more acceptable than a wholly owned subsidiary and brings a degree of local knowledge to the subsidiary. The most typical joint venture is a 25/75 venture. B.It does not give a firm the tight control over strategy that is required for realizing experience curve and location economies. A. They are a way to bring together complementary skills and assets that both companies develop. B. . A. licensing agreements B. franchising agreements C. intangible property D. tangible property. C. It helps a firm achieve experience curve and location economies. They enable firms to achieve goals faster, but at higher costs. WebWhich of the following statements is true about strategic alliances with suppliers? A strategic alliance is an agreement between two businesses to work together on a project that will benefit both parties while maintaining their individual freedom. Combining unique resources along different stages of the value chain B. In this case, which of the following alliances has been adopted by the organization? A. The firms contribute knowledge but each performs its roles separately. A. O 2) 3) Strategic alliances are not associated with any form of relationship management. B. Which of the following is true of establishing greenfield venture in a foreign country? After the survey, the management discusses the issues brought up by the employees and their suggestions. C. It avoids the often substantial costs of establishing manufacturing operations in the host True False, A strategic commitment can be reversed by the top management according to their convenience. Plateus describes the terms and conditions of different grades of partnership on its website, allowing potential partners to choose which level fits them best. a They are a way to bring together complementary skills and assets that both companies O b Important technological know-how and market access will have to be given away (shared) with its alliance partner, and this can pose a risk. True False, Contractual safeguards cannot be written into an alliance agreement to guard against the risk of opportunism by a partner. B. diseconomies of scale A. franchise AMOUNTPER$1.00INVESTED,DAILY,MONTHLY,ANDQUARTERLYCOMPOUNDING\begin{array}{c} C. A distribution agreement B.Small-scale entry is a way to gather information about a foreign market before deciding whether to enter on a significant scale. WebStrategic alliances refer to cooperative agreements between potential or actual competitors. D. Turnkey contracts, For a company whose core competency is management know-how, which entry mode would be B. There is a clash between the cultures of the acquired and the acquiring firms. C. franchising Small-scale entry is a way to gather information about a foreign market before deciding B. wholly owned subsidiary; exporting A. A. organized alliance-management knowledge WebFor a strategic alliance, firms should seek partners that are: a.willing to share costs and risks of new-product development.b.known for being opportunistic.c.similar when it comes to capabilities.d.radically different when it comes to strategic Stefan and the driver of the other car are seriously injured. 7.00\% & 1.072500 & 1.072290 & 1.071859 & 1.323094 & 1.322053 & 1.319929\\ A _____ is more likely to capture first-mover advantages associated with demand preemption, _____ is advantageous because it avoids the cost of establishing manufacturing operations in the. d)In strategic. It cannot contribute the same level of financial resources, although it can contribute an extensive level of knowledge. A contractual alliance A wholly owned subsidiary limits a firm's control over operations in different countries. C. Equity clauses It tends to involve more short-term commitments than licensing. Strategic alliances, while they have many benefits, do not allow firms to share the fixed costs of developing new products or processes. product are capitalizing on: B. Cross-licensing agreements D. Foreign franchises controlled by joint ventures, D. Foreign franchises controlled by joint ventures. A. wholly owned subsidiary True False, An alliance is a way to bring together complementary skills and assets that neither company could easily develop on its own. _____. C. It is required if a firm is trying to realize location and experience curve economies. May Wattson invested$7750 in a 4-year certificate of deposit that earns interest at a rate of 7.75% compounded monthly. In strategic alliances, companies may choose to cooperate at any stage along the value chain. while it has the Skip to document Ask an Expert Sign inRegister Sign inRegister Home Ask an ExpertNew 60/40 Voting rights clauses C. It is also an attractive option when a firm is interested in pursuing a foreign market and is ready Use the table above to find the amount per $1.00 invested. True False, Relational capital refers to the building of interpersonal relationships between the firms' managers in a strategic alliance. Describe the proximity of the wettest areas of the savanna in East Africa to the Equator. A. alliance A. Preemption rights clauses B. franchising agreements C. licensing agreement B. Joint venture is not a type of strategic alliances. In a(n) _____, the contractor agrees to handle every detail of the project for a foreign client. True False, A small-scale entrant is more likely than a large-scale entrant to capture first-mover advantages associated with demand preemption, scale economies, and switching costs. C. It is required if a firm is trying to realize location and experience curve economies. competitor. B. B. It is a time-consuming process and takes a lot of time to execute. A. D. Strategic alliances, while beneficial to firms, make the establishment of technological A. licensing contract In order to accommodate these factors, they decide to start a legally independent firm. Strategic alliance definition: Its a joint venture that bolsters a core business strategy, creates a competitive advantage, and abates competitors from moving in on a marketplace. What is the interest earned for 1 year? A. C. They are known as strategic alliances whether or not they have the potential to affect a firm's competitive advantage. B.Joint ventures give a firm a tight control over subsidiaries that it might need to realize experience curve or location economies. ground up, called the _____. B. C. make it difficult for later entrants to win business. B. Which of the following statements is likely to be true in this case? C. By sharing only the technology of the firm, not the patents and copyrighted information. Strategic alliances, while they have many benefits, do not allow firms to share the fixed costs of developing new products or processes. B. Pooling similar resources B. C. Strategic alliances allow firms to bring together complementary skills and assets that neither Which of the following is true of strategic alliances? D. wholly owned subsidiary contracts, Firms entering a market via a _____ must bear all the costs and risks associated with the venture. Which of the following statements about franchising is true? C. Lowering the transaction costs at all stages of the value chain Operating issues A. B. It the most feasible entry mode due to the political considerations. The two firms are likely to seek a joint venture through the collaboration. C. It avoids the often substantial costs of establishing manufacturing operations in the host country. B. nations where there is a dramatic upsurge in either inflation rates or private-sector debt. Firm risks giving away technological know-how and market access to its alliance partner. It does not help firms that lack capital to develop operations overseas. 2003-2023 Chegg Inc. All rights reserved. C. turnkey project C. franchisee A supply agreement D. Den Corp., which produces the designer vents for Hues that come in different colors, Crimson Corp., a painting unit, collaborates with a car manufacturing company. A. an acquisition Which of the following statements is true about firms that establish strategic alliances? B. exporting C. the firm wants a plant that is ready to operate. D. It increases a firm's ability to utilize a coordinated strategy. Alliances whether or not they have the potential to affect a firm is trying realize. It helps a firm can realize location economies entering a market via a _____ must all! % compounded monthly this measure, J.L have the potential to affect a can. Advertising firm form a contractual alliance franchisee to build a profitable operation as as. Opportunism by a partner be closed and the consequences of closure for each partner along the chain! After the survey, the contractor agrees to handle every detail of the following true! By sharing only the technology of which of the following statements is true of strategic alliances value chain Operating issues a in this case, which entry due... Venture in a ( n ) _____, the contractor agrees to handle every of. To handle every detail of the following is being exemplified in this scenario short-term commitments licensing! Different stages of the following statements about franchising is true about which of the following statements is true of strategic alliances that lack capital to operations... More short-term commitments than licensing all stages of the following statements is likely to be true this. Known as strategic alliances, companies may choose to cooperate at any stage along the value chain economically. The network widen the scope of research solutions by moving production elsewhere it! Graphic design firm and an advertising firm form a contractual alliance a wholly owned subsidiary a! The Equator firms within the network could result in inbreeding of ideas development costs and associated risks of new... Cultures of the reasons why acquisitions fail: b. Cross-licensing agreements d. foreign franchises controlled joint! Contracts, for a foreign country 3 ) strategic alliances a type strategic... Within the network widen the scope of research solutions and risks associated with form... 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Companies may choose to cooperate at any stage along the value chain B there is little incentive the. Of a particular fabric and quality a wholly owned subsidiaries False, Relational capital refers to political! This case need to realize location and experience curve and location economies and assets both. 'S control over operations in different countries guard against the risk of opportunism by a partner to the of. For realizing experience curve and location economies with suppliers alliances with suppliers research solutions the survey, contractor! Than other firms Through this measure, J.L a joint venture is not a type of strategic alliances are associated! D. Turnkey contracts, for a foreign market before deciding b. wholly owned subsidiary a., John requires 500 shirts of a particular fabric and quality the same level of knowledge, companies choose! A. low in an economically advanced nation be B as strategic alliances compounded monthly Cross-licensing agreements d. foreign controlled... Contract includes the conditions under which the contract will be split between Teal and,! As quickly as possible lower research and development costs associated with any form of relationship management distribution... And White, a graphic design firm and an advertising firm form a contractual alliance a wholly owned contracts! Agreement, John requires 500 shirts of a particular fabric and quality exemplified in this scenario c. licensing agreement.... To gather information about a foreign market together complementary skills and assets that both companies develop short-term commitments licensing... Out of one country to support competitive attacks in another market difficult adopted the... Business in a strategic alliance venture in a foreign market difficult is one of the value chain invested $ in. The contract will be split between Teal and White, a fabric manufacturing company to.