Question 1

Which of the following types of alliances can be formed between a company and a foreign government?
A) international joint venture
B) equity strategic alliance
C) non-equity strategic alliance
D) global strategic alliance

Accepted Answer

D

Question 2

Alliances in which two or more partners have different relative ownership shares in the new venture are called ________.
A) cultural strategic alliances
B) equity strategic alliances
C) non-equity strategic alliances
D) transmodal strategic alliances

Accepted Answer

Equity strategic alliances involve partners with different ownership shares in the venture. Cultural strategic alliances involve partners from different countries or cultures coming together, while non-equity strategic alliances involve partners without ownership stakes in the venture. Transmodal strategic alliances involve partners from different modes of transportation (e.g. air and sea).

Question 3

Trout Corp.,Kirgo Ltd.,and Sturgeon Inc.,three of the leading construction companies in the U.S.,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(n)________.
A) minority JV partner
B) majority JV partner
C) sole proprietor
D) franchisor

Accepted Answer

Sturgeon Inc. is referred to as a minority JV partner because it holds less than 50% equity in the joint venture.

Question 4

A ________ is a new independent entity that is collectively created and owned by two or more parent companies.
A) subsidiary
B) joint venture
C) greenfield investment
D) turnkey operation

Accepted Answer

A joint venture is a new independent entity created by two or more parent companies, with ownership and control shared among them. A subsidiary is a separate company owned and controlled by another company. Greenfield investment refers to building a new facility from scratch in a foreign country, while a turnkey operation involves a company providing a completed project or facility to a client, who can then start operations immediately. Neither of these options involve shared ownership.

Question 5

Which of the following motivates a company to form cross-border alliances?
A) to regulate and favor domestic companies
B) to gain rapid entry into a new and consolidating market
C) to remove exporting barriers for domestic companies
D) to allow local companies to gain access to international products and services

Accepted Answer

Companies may form cross-border alliances to gain rapid entry into a new and consolidating market. This allows for the sharing of resources, capabilities, and knowledge, which can accelerate market penetration and increase competitive advantage. Options A, C, and D are not necessarily motivators for forming cross-border alliances.

Question 6

________ are transition mechanisms that propel the partners' strategies forward in a turbulent environment faster than would be possible for each company alone.
A) Cooperative strategies
B) Entry strategies
C) Options strategies
D) Competitive strategies

Accepted Answer

Cooperative strategies involve collaboration and sharing of resources and knowledge between partners to achieve mutual goals. In a turbulent environment, these strategies can help propel the partners' strategies forward at a faster pace than if they were to operate alone. This is because the partners can leverage each other's strengths and capabilities, which can reduce costs, increase efficiencies, and enable the partners to access new markets or technologies. Entry strategies are focused on entering new markets or industries, while options strategies involve creating flexibility and adaptability in response to changing market conditions. Competitive strategies are aimed at gaining a competitive advantage over rivals, but may not necessarily involve collaboration with other companies.

Question 7

Which of the following is a pitfall of cross-border alliances?
A) increase in the number of existing competitors
B) disputes over management
C) convincing expatriates
D) finding local skilled employees

Accepted Answer

Disputes over management can arise in cross-border alliances due to differences in business practices, cultural values, and decision-making processes. This can lead to conflicts and hinder the success of the alliance. The other options are not directly related to pitfalls of cross-border alliances.

Question 8

According to David Lei,the single greatest impediment managers face when seeking to learn or renew sources of competitive advantage is that ________.
A) good venture partners are hard to find
B) technologies change very rapidly
C) partners can become competitors
D) governments can be fickle

Accepted Answer

Partners becoming competitors is highlighted by David Lei as a significant challenge for managers because it directly impacts the dynamics of competitive advantage by potentially turning allies into rivals in the market.

Question 9

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)________.
A) non-equity strategic alliance
B) turnkey operation
C) greenfield investment
D) international licensing agreement

Accepted Answer

This is a typical example of a non-equity strategic alliance, as Runnerz Inc. has signed a contract with a courier service to manage the delivery process, without sharing ownership or any equity stake in the courier service.

Question 10

Joint ventures are often the chosen form of multinational firm alliances because they ________.
A) provide greater control of proprietary technology
B) increase the level of competition between partner firms
C) enhance the specific skills of the personnel
D) enhance the rewards of the firm

Accepted Answer

Joint ventures allow multinational firms to have greater control over proprietary technology as both partners collaborate and share resources and knowledge to achieve a common goal.

Question 11

Which of the following is NOT a typical reason for forming cross-border alliances?
A) to avoid import barriers
B) to share R&D costs and risks
C) to gain access to specific markets
D) to test marketing campaigns overseas

Accepted Answer

Testing marketing campaigns overseas is not a typical reason for forming cross-border alliances. The other options - avoiding import barriers, sharing R&D costs and risks, and gaining access to specific markets - are common reasons for companies to form cross-border alliances.

Question 12

Alliances are also known as ________.
A) competitive strategies
B) cooperative strategies
C) relational strategies
D) virtual strategies

Accepted Answer

Alliances refer to partnerships between two or more companies to achieve a common goal or objective. These partnerships involve joint effort and resources, making them collaborative or cooperative strategies, hence option B is the best choice. Option A- competitive strategies, involves competition among firms in an industry; option C- relational strategies, involves building a long-term relationship with customers and stakeholders, while option D- virtual strategies, involves utilizing online or digital technologies to create value for customers.

Question 13

Which of the following factors has the maximum influence on the success of multinational firm alliances?
A) form of governance chosen
B) introduction of new competition
C) differing national cultures
D) cumulative learning of partner

Accepted Answer

The form of governance chosen for an alliance significantly influences its success, as it determines how decisions are made, resources are shared, and conflicts are resolved.

Question 14

________ 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.
A) Greenfield investments
B) Strategic alliances
C) Foreign subsidiaries
D) Turnkey operations

Accepted Answer

Strategic alliances 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.  Greenfield investments involve building a new facility from scratch in a foreign location. Foreign subsidiaries are separate legal entities that a firm sets up in foreign countries to conduct business there. Turnkey operations involve setting up a facility overseas and providing the client with a fully operational facility.

Question 15

Globe Cars,a leading automobile ancillary firm in China,has decided to form a global alliance with Fulda,a German tire manufacturing company.Which of the following is a primary challenge that Globe Cars is most likely to face in this alliance?
A) existing competitors
B) risk of investment
C) extreme trade barriers in China
D) differences in national cultures

Accepted Answer

Differences in national cultures can pose a significant challenge in forming and managing global alliances. In this particular case, Globe Cars, a Chinese firm, is forming an alliance with a German company, Fulda. Chinese and German cultures may differ in areas such as communication style, decision-making processes, and business etiquette, which may lead to misunderstandings, conflicts, and ultimately affect the success of the alliance.

Question 16

SoftCorp and TechGig,upcoming software companies in San Diego,have decided to create a new and independent telecommunications company,ST-source.Each parent firm has agreed to have 50 percent equity in the new company.This is an example of a(n)________.
A) e-business
B) subsidiary
C) franchise
D) joint venture

Accepted Answer

This scenario describes a joint venture, where two or more companies come together to create a new business entity. In this case, SoftCorp and TechGig are collaborating to launch ST-source with equal ownership.

Question 17

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)________.
A) turnkey operation
B) acquisition
C) international licensing agreement
D) equity strategic alliance

Accepted Answer

This is an equity strategic alliance, as both companies have entered into a joint venture where Thomson owns 33% and TCL owns 67% of the newly formed TCL-Thomson Electronics.

Question 18

Alliances that are carried out through contract rather than ownership sharing are called ________.
A) cultural strategic alliances
B) equity strategic alliances
C) non-equity strategic alliances
D) transmodal strategic alliances

Accepted Answer

Non-equity strategic alliances are those alliances that are carried out through contracts rather than by sharing ownership. This type of strategic alliance is based on a specific project or product, and the companies involved maintain their independence and separate identities. Examples of non-equity strategic alliances include licensing agreements, distribution agreements, and supply agreements.

Question 19

A(n)________ refers to a JV among companies in different countries.
A) international joint venture
B) equity joint venture
C) global joint venture
D) transnational joint venture

Accepted Answer

An international joint venture is a partnership between two or more companies from different countries. It is a common way for companies to enter new markets and gain access to local knowledge and resources. Equity joint ventures involve the sharing of ownership, profits, and losses, while global and transnational joint ventures are broader terms that can also refer to partnerships between companies within the same country or region.

Question 20

Which of the following is the most beneficial aspect of an international joint venture?
A) the international partner receives the entire profit
B) the responsibility of risks is solely taken by the international partner
C) the partner's local contacts and markets will be utilized
D) the entire cost of production will be borne by the local partner

Accepted Answer

The most beneficial aspect of an international joint venture is that the partner's local contacts and markets will be utilized. This can provide the local partner with access to new markets and customers that they may not have been able to reach on their own. Additionally, the international partner can benefit from the local partner's knowledge and expertise of the local market. The other options listed do not provide any significant benefits to either partner.

Quiz 7: Global Alliances and Strategy Implementation

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

Alliances in which two or more partners have different relative ownership shares in the new venture are called ________.

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

Which of the following motivates a company to form cross-border alliances?

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

Which of the following is a pitfall of cross-border alliances?

According to David Lei,the single greatest impediment managers face when seeking to learn or renew sources of competitive advantage is that ________.

Joint ventures are often the chosen form of multinational firm alliances because they ________.

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

Alliances are also known as ________.

Which of the following factors has the maximum influence on the success of multinational firm alliances?

________ 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.

Globe Cars,a leading automobile ancillary firm in China,has decided to form a global alliance with Fulda,a German tire manufacturing company.Which of the following is a primary challenge that Globe Cars is most likely to face in this alliance?

SoftCorp and TechGig,upcoming software companies in San Diego,have decided to create a new and independent telecommunications company,ST-source.Each parent firm has agreed to have 50 percent equity in the new company.This is an example of a(n) ________.

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) ________.

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

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

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